The Economy
If you are a Republican the economy is in shambles and headed for disaster. If you are a Democrat, the economy is simply working its way out of COVID and improving. If you are neither (like me) it isn’t easy to know the truth. I decided to do some research and here is what I found:
As 2/3rds of the country was fully vaccinated COVID restrictions were eased and demand increased significantly. Suppliers had significantly reduced employees, inventories, and production during the last half of 2002 and through 2021 were slow to gear up while demand accelerated. Higher Inflation was inevitable (regardless of who was in charge) and will continue until our ability to supply gets back to normal.
How do we measure the condition of the Economy? Actually, several factors are important including GDP (I prefer GDP per capita), unemployment, the stock market, inflation, and recently the invasion of Ukraine. Following is an examination of each.
GDP in $ Trillions
Year Nominal Real Change Factors
2016 $18.745 $17.73 11.7% Presidential race
2017 $19.543 $18.144 2.3% Tax Cuts & Jobs Act (TCJA)
2018 $20.612 $18.688 3.0% Deficit spending
2019 $21,433 $19,092 2.2% Trade war
2020 $20,893 $18,384 -3.4% Covid-19 pandemic
2021 $22,996 $19,427 5.7% Covid-19 vaccine
Unemployment Rate
Month Year Rate
| June 2016 4.9% | 4.9 |
June 2017 4.3%
June 2018 4.0%
June 2019 3.6%
June 2020 11.0% (COVID)
June 2021 5.9%
June 2022 3.6%
S & P 500
Month Year Index Change Rate Change
June 2016 2,083
June 2017 2,434 351 16.9%
June 2018 2,745 311 12.8%
June 2019 2,890 145 5.3%
June 2020 3,102 212 7.3%
June 2021 4,238 1,136 36.6% Rebound as COVID eased
June 2022 3,899 -339 -8.0% Inflation driven
Inflation Factors
Oil Exports, Imports & Production
Trump and Boebert’s Oil Spin – FactCheck.org
Export 8.5 million barrels per day 57% of what is produced
Import 7.9 million barrels per day
Most of our imports are from Canada
how much oil does USA produce – Search (bing.com)
14.8 million barrels per day
COVID stimulus checks
3 authorized in 2020
2 sent in 2020 and 1 in 2021
Originally the 3rd was for $600, but it was increased to $1.400 in March of 2021
Ukraine Invasion
“Russia’s invasion of Ukraine will slow global growth and raise inflation. J.P. Morgan Research views the macroeconomic impact largely through the commodity markets, while the financial linkages between Russia and the rest of the world are comparatively smaller.”
Inflation rate
(Trump >>>>>>>>>>>>>>) ( Obama >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>)
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
| 4.70% | 1.23% | 1.81% | 2.44% | 2.13% | 1.26% | 0.12% | 1.62% | 1.46% | 2.07% | 3.16% | 1.64% |
(Biden >>>>>>>>>>)
2021 2022 est.
4.69% 8.8 – 9.1%
Conclusions
All factors considered the economy is about where we should have expected it to be regardless of which political party had the advantage. Inflation is primarily a supply and demand issue (COVID facilitated) and it will moderate over time. My biggest concern is workforce availability. Without immigration, we have negative population growth. We need to establish an easier legal process to secure much-needed immigrant workers. Additionally, we need to correct the distribution of income and wealth inequity. As GPD increased by 100% over the past two decades real middle-class family income only increased by 8%