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this post was submitted on 13 Dec 2023
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I'm with you in spirit, but keep in mind the US is still making tons of income overall as a nation - GDP is, and has been, trending up for a long time. That money's going somewhere.
It's like if we all ran/worked in a business and saw we're making tons in profit but we were then being asked (regularly) to take a pay cut. It ain't right.
That said, yes we all need to learn to live with less because it ain't getting fixed for at least another generation or two, if ever
That’s because GDP has been inflated to high hell. Military spending and real estate both contribute to GDP as well - notice how high both of those things are in the US?
CPI is a better indicator of a nation’s economy and we’re over 300 points with a lot of industries underperforming and overspending with a CPI ratio of less than 1.
Also there is a way in which GDP can be rigged via rigging the Official Inflation rate.
You see, GDP is first calculated nominally (i.e. in today's $) and then the Inflation rate is used to "deflate" it into real terms (i.e. turn it into something directly comparable with previous years because the effects of the dollar losing its value over time have been removed), thus creating what's called the Real GDP, which is the Official one we get.
In this, the lower the official inflation rate the less the deflation and hence the higher the Official GDP that comes out of, and thus if the official inflation rate is less than the real inflation, then part of inflation (the difference between the official one and the reality) mathematically results in higher GDP numbers than reality.
Knowing this, notice how for example a 1960s salary that was enough for a house, a car and the whole living costs of a family of 5, if inflation adjusted to today's money (i.e. converted into a supposedly equivalent amount using exactly the very inflation index we've been talking about) results in a amount that's barelly enough for a single person to rent a small appartment.
Judging by how what those inflation indexes tell us is the same money today and in the 60s not buying anywhere are much now as it did back then, I would say that the inflation index has been consistently understating inflation over the years, and the reason for doing that is at the top of my post: lower official inflation => higher official GDP.
If I remember the numbers correctly, in the late 70s in the US 24% of corporate revenues went into salaries, whilst by 2012, that was down to 7%.
Or putting things differently a little less than 50 years ago, roughly 1/4 of the money people spent ended up as income for workers, whilst by 2012 that was down less than 1/14th.
It's hardly surprising that people who work for a living (i.e. the vast majority of people) feel a lot poorer now, given that every time they spend $1 and it circulates around in the Economy, 93 cents gets captured by people who live of making money from having money (i.e. from owning investments) and taxes, whilst only 7 cents find their way back to people who work for a living.
Given that taxes for the wealthiest have actually de facto come down since the 70s - thanks to lower top tax rates and the rise of things like tax havens and transnational tax evasion schemes - guess who is getting the extra 17 cents that half a century ago went to workers ...
And here we go, asking what seem to be the real questions