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Economy Weekly: Week of February 10, 2020

​​​​​​​The Majority Leader’s Office is now sending a weekly e-mail highlighting economic statistics and news that Members can use as they discuss the state of the economy and how House Democrats are working to spur economic growth, support job creation, and raise wages for the people.

QUOTE OF THE WEEK: “Trump’s budget is a tremendous fraud — and it lays tremendous waste to his promises. Remember when he said he would eliminate the federal debt, or at least halve it, during his presidency? His new budget proposes to add another $3.4 trillion by 2024 to the debt on top of the $3 trillion Trump has already added, by piling on $1-trillion-a-year budget deficits during a peacetime expansion. Under Trump’s latest plans, the debt would keep mushrooming until at least 2035 — by his administration’s own rosy projections… Recall his repeated promises not to ‘touch’ Social Security and Medicare? Even as the elderly population swells, his budget calls for removing half a trillion dollars of funding from the Medicare program over 10 years, including $135 billion from Medicare prescription drugs, and tens of billions from the Social Security program. In 2015, he promised not to touch Medicaid, either. Now he wants to cut it by $920 billion. He was going to give Americans health care ‘much better’ than Obamacare. But he has proposed no such thing and now his budget calls for cutting spending on the program by $844 billion… Oh, and remember his vows that his tax cuts would grow the economy by 4 percent, 5 percent or even 6 percent? Last year it grew at 2.3 percent, and his new budget, even with the rosiest of assumptions, projects 2.8 percent for this year. Yet the budget would also devote another $1.4 trillion to extending those tax cuts, primarily for the rich. A tremendous fraud, indeed.” [Washington Post Op-ed by Dana Milbank, 02/10/2020]

STAT OF THE WEEK:  Americans are running out of money before each paycheck. “For about a third of Americans, this is a regular financial stress, with 32% running out of money before their next paycheck hits…. About 31% of respondents earning over $100,000 also regularly experience a budget shortfall before payday. For many, it’s the rising cost of living — including food, housing, education and medical expenses — that creates the squeeze. Over the past year, basic costs increased by 2.3%, according to the Bureau of Labor Statistics’s Consumer Price Index. The cost of medical care rose 4.6% in 2019, the largest year-over-year increase since 2007, the BLS reports. Housing also jumped 3.2% last year, while education expenses rose 2.1% and food prices increased about 1.8%. For others, it’s stagnant wages. Real wages effectively remained stalled last year, showing only a 0.2% year-over-year increase, according to the Payscale Index. But looking longer term, Payscale found median wages, when adjusted for inflation, actually declined 9% since 2006.” [CNBC Make It, 2/12/20

ECONOMIC NEWS YOU MAY HAVE MISSED:

  • Trump’s budget panned for using fantasy economic projections and not balancing in 10 years. “When Trump released his first budget proposal, it projected that the deficit would fall to $456 billion by 2021 and disappear by 2027. His administration brushed aside critiques that its projections were unrealistic and relied on overly optimistic economic projections. Monday’s proposal put the 2021 deficit at nearly $1 trillion, and Trump’s White House is predicting that it will take 15 years to eliminate the deficit. It is still relying on the same cheerful economic predictions it has used in previous budgets, which are significantly higher than those projected by the Federal Reserve, the Congressional Budget Office and Wall Street banks. ‘Even with rosy economic assumptions and proposed spending discipline that flies in the face of recent experience, the president’s budget would still be in deficit over the next 10 years,’ said Robert L. Bixby, executive director of The Concord Coalition, which advocates for lowering the debt.” [The Hill,  02/10/2020]
  • Student loan debt is higher than credit card debt. “…The country’s unpaid student loan debt has long surpassed credit card debt or auto loan balances, and is second only to mortgages. The average balance today is around $30,000, up from $10,000 in the 1990s. As student loan bills have climbed, incomes haven’t. The average hourly wage in 2018 had no more purchasing power than it did in 1978, according to the Pew Research Center. That math backs many borrowers into a corner. ‘I have to either pay my rent and get health care, or pay down my loans,’ said [Sandy] Nurse, who got her bachelor’s degree in political science from Emmanuel College in Boston. ‘It’s one of the reasons I don’t even think about having children. How can anyone afford it?’” - [CNBC, 2/12/20]
  • The Coronavirus’ impact reaches our global economy. “The economic casualties from China’s coronavirus epidemic are mounting as Asian and European auto plants run short of parts, free-spending Chinese tourists stay home and American companies brace for unpredictable turbulence. That’s just the start of a financial hangover that is expected to linger for months even if the flulike illness is soon brought under control, economists and supply chain experts say. The Chinese epidemic’s aftereffects will probably cause the global economy to shrink this quarter for the first time since the depths of the 2009 financial crisis, according to Capital Economics in London.” [Washington Post, 02/13/20]
Distribution channels: U.S. Politics


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