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Originally Posted by aztec61 Wolf, measuring economic health mainly by the stock market and/or the deficit is myopic. People or companies that own significant stock are a small minority of the US population.
The real economic indicators for the average Joe-on-the-street are wage & employment levels vs. cost-of-living, as well as bankruptcy and housing foreclosures, lack of health care, etc. That's where the rubber meets the road for everyone I know.
Of course, I haven't hung out with Bill Gates or George Soros or Oprah or Alan Greenspan lately... |
That depends. You cannot measure the stock influence by the people who own it. Because indeed that's a very small minority. However the companies on the stock markets generate cash flow, provide work, pay taxes, contribute to the National Product, etc.
When a large company you work for is not doing very good you can immediately see that on the stockmarket. Far earlier in fact than the possibility of you losing your job because of the companies bad results. Recession or better, getting out of it, influences the people a lot later than a company. It's only after a company signals an increased quarter profit and/or it is anticipated by speculators that its stock value increases. A company can only get significantly better profits through the sales of the products, of which other companies and ultimately the consumers are responsible for.
During a recession, every company has a harder time getting their revenue and the weaker ones go bankrupt. A lot more companies disappear during a recession. Those companies over time and somewhat combined create an empty space in the market. Those empty spaces are quite rapidly taken by other companies. Which are new ones or the ones that remained because they were stronger. When this situation has largely taken place the economy does better. More people are getting jobs and less people lose theirs. But this takes time.
When the regular citizen notices a worse climate and fears a recession, then that recession has already been going on for a while. And evidently, when a recession is coming at an end that doesn't mean that the majority of the people already feels that. However, it has already been quite clearly noticable by the stockmarket.
Your government has also been spending a collosal amount of resources on the defense budget. This money could be spent differently. You cannot spend that much on defense and expect the average American not to feel it.