I think we should start separating discussion of “The Economy” from “human prosperity and wellbeing.” Because they are essentially two different things, only slightly related.
The Economy can grow wildly while normal people are poor, suffering, and barely holding it together. I don’t care if corporations are doing great or if the GDP is high, if everything I need costs 3X what it used to and Im not sure if I’ll be employed next week.
While you are probably right in that The Economy, technically is growing, it doesn’t feel like it to normal people I know.
> I think we should start separating discussion of “The Economy” from “human prosperity and wellbeing.”
Do you think Americans' prosperity and wellbeing is tanking?
We can still look at quantitative and qualitative data.
The Economist ran a story in July "What is the richest country in the world in 2025"[1] in which they compared economies in three different ways: GDP per person at market exchange rates, Adjusted for price differences, and Adjusted for prices and hours worked.
Against those three metrics, the US is ranked in 4th, 7th, and 6th positions.
Even these statistics may need further interpretation or further adjustment (the article does a great job explaining why adjustments are needed for places like Saudi Arabia, Turkey, Ireland, Luxembourg).
> While you are probably right in that The Economy, technically is growing, it doesn’t feel like it to normal people I know.
Pew's research shows that most Americans rate the US economy negatively, with a strong partisan divide. 44% of Republicans and Republican-leaning independents rat the economy as excellent or good (up 8 points from April) while only 10% of Democrats and Democratic-leaners say so.
Arguments for "better off" than, say, 3 years ago: strong job market, economic growth, reduced debt burden.
Arguments for "worse off" than, say, 3 years ago: high cost of living.
Notwithstanding the pessimism and the visible fact that people are not as economically strong as a pre-pandemic (but certainly much more than 2007 - 2008), I don't know that I would say the US economy is "tanking" OR that Americans are becoming destitute.
I don't have access to read the article, but I wonder if they are looking at the median or the average. Averages don't tell the complete story like distributions do. When you just measure averages, a room with 1 person who has $10M plus 9 people who have nothing has the same prosperity as a room with 10 millionaires.
Thank you. It’s driving me crazy that everyone is just pointing to research and numbers, partly manufactured numbers at that. Go outside and talk to a few real people and see how they’re fairing maybe…
While consumer debt is at or near historical highs, it is in and of itself not a problem (broader economic risk).
What you need to look at as well is debt burden ratios and repayment behavior, not just raw totals.
Household debt service ratio (the share of disposable income spent on principal + interest payments) is well below historical crisis peaks (e.g., 2007–2008), suggesting households are currently spending a smaller share of income on debt payments than in past stress periods.
While total household debt is at record levels (~$18 trillion+), debt as a share of income or GDP has not reached past crisis peaks like 2008.
That means debt growth hasn’t outpaced income growth as dramatically as in previous crises.
However, delinquency rates, especially for credit cards and student loans, are elevated, nearing or exceeding long-run highs outside recessions.
Mortgage delinquency rates remain lower than unsecured debt categories, but have ticked up slightly. Because they're relatively stable, it mutes broader systemic risk for now.
"The percentage of subprime borrowers – those with credit scores below 670 – who are at least 60 days late on their car loans has doubled since 2021 to 6.43%, according to Fitch Ratings. That’s worse than during the past three recessions – during the Covid pandemic, the Great Recession or the dot-com bust."
"America’s current subprime delinquency rate is at the second-highest level since the early 1990s. The only time it was higher: this past January. Cars are being repossessed at the highest rate since the Great Recession of 2008 and 2009."
It is nonetheless true that to interpret such a chart as the one the GP posted you must at least mentally discount it for both population (which is +11% since 2008, the last consumer credit calamity) and the value of dollars (which are now ~67¢ vs. 2008). Debt service as fraction of HH income is in some ways easier to interpret.
Anyway, even clicking through to the PDF linked from GP's front page shows that every metric of US consumer credit is at or near all-time bests.
The old problem with metrics like GDP, is that they consider the whole but not the parts, it is kinda saying that I and Musk have billions in wealth, but I am in debt.
> The old problem with metrics like GDP, is that they consider the whole but not the parts, it is kinda saying that I and Musk have billions in wealth, but I am in debt.
Does this mean you also think that "the (US) economy is tanking" OR do you agree with me that the economy is NOT tanking?
He saying that using a single metric like GDP isn't sufficient for claiming that the economy isn't tanking. The economy != GDP. For many regular people, it's terrible right now.
See my other comments in this thread that surfaces other metrics like: debt burden ratios, repayment behavior, GDP per person at market exchange rates, Adjusted for price differences, and Adjusted for prices and hours worked.
I'm not saying that Americans aren't under more economic strain than a few years ago (pre-pandemic), excluding 2007 - 2008.
However, I think if someone is going to claim the economy is tanking OR that Americans are fast becoming destitute or something extreme like that, you gotta give some quantitative data to back up that claim.
Those metrics are all aggregate ones. A group containing Bill Gates plus one destitute homeless person $1M in debt has great metrics of that sort. Total debt is a tiny fraction of total income. Income per person is huge, and doesn't stop being huge when you adjust for price differences or hours worked or anything else you care to adjust for. But that destitute homeless person with a $1M debt is still destitute and homeless and $1M in debt.
I haven't commented on "repayment behaviour" because your other comments don't actually mention that. Maybe there's something behind one of the links you posted that explains what you mean by it. I did have a quick look at the not-paywalled ones and didn't see anything of the kind.
(The above isn't a claim that actually the US economy is in a very real sense tanking, or that not-very-rich Americans are heading for destitution, or anything else so concrete. Just pointing out why the things you've been posting don't seem like they address the objection being made.)
One thing I've learned in this near half century on this Earth...
People always think the economy is tanking. I've heard "not in this economy" as an excuse every single year of my adult life. In retrospect, even in the boom years.
If you look at all quarters in a chart it's not substantially different from the patterns we saw last year. We're just 2 quarters from when we posted a GDP contraction 1% lower YOY (this quarter is 1% higher YOY).
I'm not sure that the rest of the economy really is "tanking" but OK. Are you implying it's distasteful to discuss success from a big company in such dark times?
Google could really easily be a purely rent seeking business but they are innovating, and if you are worried about the economy then this should seem like good news.
You don’t believe the recent economic numbers? I’m not disagreeing with you, just curious about other takes (and generally very skeptical of funny money printer go burrr economic things vs real economy meaning real output).
There has been a lot of discussion on this recently in the blog-o-sphere. All conclusions I've seen so far are that the economy is basically fine and maybe people's expectations have risen (I'm oversimplifying). I'm also quite eager to hear different conclusions, because there is a lot of cognitive dissonance on the economy right now.
There's definitely an aspect of rising expectations (e.g., everyone and their dog having a late-model smartphone). There's also an aspect where some of that is mostly unavoidable (e.g., accessing my HSA now requires a very late-model smartphone -- something I can avoid complying with for now by just finding a better place to transfer my money, but it's a worrying trend -- to achieve the same QoL as in the early 2000s I have mandatory nontrivial overhead).
It's really not just that though. A lot goes into it, but one observation is that the relative increases in wages and prices isn't distributed evenly. Some examples:
- A lot of people are legitimately substantially better off than they would have been a few decades ago. I literally never have to worry about money anymore when thinking about our purchases (for everything but a house with a big yard, which we still can't safely [0] afford without moving). I'm not alone.
- That's not true of everyone, even my next-door neighbors. I know people splitting a studio apartment and still struggling a bit. They have good jobs, and even splitting the apartment their post-tax, post-rent pay is $7.20/hr. That's fine enough I suppose, but they'll literally never be able to save for a home of any quality in the area in their entire lives using only a single income. It'll take them awhile to afford a home anywhere.
- Suppose you have a couple young kids. That places hard bounds on how much money you need to make even for childcare to make sense to get up to two incomes in the first place. I've known plenty of people with PhDs and good jobs who quit to take care of the kids for financial reasons, supporting the household on just the higher-earner's pay.
- A lot of small towns haven't seen the same increase in wages as the rest of the country but have seen the increase in prices. My hometown saw an increase from $10/hr to $20/hr in what a great wage is over the last 25 years. CPI only went up 1.9x in that time, but the same caliber of house went up 3x, and the staples people used to eat (like ground beef) went up more than 3x as well. They're correctly observing that they have less take-home money (because of 3x increased rent), that take-home money doesn't go as far (they can't eat the same foods they could 25yrs ago), and it definitely doesn't go as far if you want to do something like save for a house (it's an extra 4+yrs of post-tax, post-rent income to pay for a house, assuming you could devote all of it to savings instead of groceries and whatnot).
I'm not sure exactly how to quantify who's struggling and why at a macroscopic level, but I guarantee they're real and that it's not just an increase in expectations.
[0] It depends on your relative risk levels, but if you're not convinced the gravy train will last forever and are concerned about locking up all your assets in a depreciating vehicle then you need to be a bit more frugle with your choice of home.
