Peter Schiff: Political Rhetoric Vs. Economic Reality


Just over a week ago, President Trump delivered the State of the Union speech. The president gave a speech with a decidedly optimistic tone. This was certainly welcome with the increasingly fractured and divided American political landscape. But it’s important to focus beyond the political theater and take a hard look at where the US economy really is and where it is heading. Unfortunately, the political rhetoric doesn’t always line up with economic reality.

As Peter Schiff has said on numerous occasions, President Trump has taken full ownership of the current bubble economy. In doing so, he’s setting himself up as the fall-guy when things turn sour. Peter put it in pretty stark terms during an interview with Stock Pulse at the Vancouver Resouce Investment Conference.

He is so caught up in this bubble now in the stock market. He’s branded it … The stock market has a big ‘T’ on it for Trump, like one of his buildings.”

So, how exactly does the political rhetoric coming out of the Oval Office stack up against the current economic realities?

Dan Kurz at DK Analytics provided a pretty good breakdown of some key issues where the positive talk doesn’t line up with what’s actually going on.

1. What used to be an ugly stock market bubble that would be pricked by higher interest rates, according to candidate Trump, is now proof that president Trump is doing a great job. Yet, the S&P 500 is currently trading nearly 25x EPS, the broader Wilshire 5000 Index has rocketed higher, and margin debt is nearly $600 billion – a record.

2. In the interim, a recession, which is way overdue, will crush earnings; US aggregate debt rises between $1 trillion and $2 trillion a year; and interest rates are rising smartly, which will pummel valuations if it continues, especially with a recessionary EPS downdraft of 50% plus being likely in the near future based on precedents. (We review such a scenario in some detail in posts #25 and #24, wherein we quantify the rising interest rate impact on the S&P 500’s NPV and wherein we remind investors that markets are “reversion beyond the mean” machines, respectively.)

3. What used to be a fake unemployment rate when Trump was a candidate is now lauded as the “real deal,” even as the civilian labor force participation rate of 62.7% hovers near four-decade lows and two or three low-paying, no-benefit part-time jobs swell the employed ranks while full-time positions continue to be culled. This is insincere.

4. During the address, Trump also stated, “Under my administration, wealth is starting to return to America instead of leaving it.” Mr. President, sadly the opposite has been happening, at least so far, as evidenced by a continued rise in the US trade deficit, a substantial portion of which is due to rising oil import prices (and no, Donald Trump, we are not energy self-sufficient. We remain net importers of oil, and our gap could expand as the fracking bubble collapses). Once again, the president’s claims here are misleading at best.

5. President Trump talks a lot about regulatory reform liberating businesses to hire and invest. According to the American Action Forum outfit, regulatory relief of $560 million p.a. from Executive Order 13,771 (two struck for every new regulation or “reg”) can be expected. While praiseworthy, this is but a rounding error compared to an estimated $2 trillion-plus in annual regulatory compliance costs for US economy. While a sharp reduction in federal register pages (where federal rules and regs are published) from Obama’s “out the door” bloat looks promising, we wonder how any true or lasting reforms can be achieved until regulatory agencies are shut down and statist/leftist bureaucrats are fired, esp. given the risk that the GOP control of the fed government could prove only temporary — which Trump himself recently warned about.

6. Trump protectionism – a disconnect. On the heels of going to Davos and touting that America is again open for business thanks to tax cuts and regulatory reform, Trump was quick to slap high tariffs on solar panels, washing machines, and on select steel imports. Three issues here: first, lots of stuff just isn’t made in America anymore, so higher tariffs line government pockets and hurt consumers and producers alike — such as those installing foreign made solar panels that stand to lose customers or those using cheaper foreign steel in high value-added finished products that are exported — while they raise inflation. Second, raising tariffs on US imports will quickly result in higher tariffs on US exports. Third, we all know what can happen to the global economy if countries get into trade wars. It’s spelled Smoot Hawley, revisited and the 1930s depression.

7. Speaking of policy destructiveness; bloated federal government spending is up 3.8% year-over-year and is set to increase faster as Trump touts various new spending initiatives from (what will sadly ultimately prove to be) pork barrel, crony infrastructure projects to “offensive capacity” military spending growth de facto financed by the “rest of the world.” In the interim, tax rate reductions will pressure tax receipts. Finally, weaker economic growth will dramatically increase government spending on welfare and transfer payments. Talk about a perfect deficit-widening storm dead ahead! And this is before secular challenge known as an aging society and its impact on public sector solvency! Is any of this discussed, much less addressed, in Washington D.C.?

8. We could see a $1.5 trillion – $2 trillion plus dollar federal deficit within a few years if not sooner. And if the Fed really sells $600 billion of Treasuries a year, at what price — how high of a yield — will investors and the rest of the world be willing to soak up between $1.5 trillion – $2.6 trillion worth of US Treasuries possibly coming on to the market annually for a time?

9. The above is of particular concern as the rest of the world finances a US goods and services deficit that averages about $500 billion a year and expanded to $600 billion in 2017. Meanwhile, America is a net debtor nation to the tune of $8.4 trillion. In such a world, when you openly state that the US government would welcome a weaker dollar in a period of low interest rates, great external financing dependency, a weakening currency, and rising inflation, you are driving away potential investors and thus de facto raising the cost of borrowing, especially if sentiment shifts or confidences wanes. And, by the way, if currency debasement helped to reduce trade deficits, America, having the tailwind of a dollar that has fallen about 80% since Bretton Woods dollar-gold standard was terminated nearly 47 years ago, should have huge annual trade surpluses by now in place of gaping deficits.

10. You cannot simultaneously grow a spendthrift federal government, cut taxes, and then be sanguine. You can’t grow spending by $300 billion-plus, reduce tax revenues by an estimated $280 billion, and add it to a $666 billion deficit and over $21 trillion in debt and expect good things.

11. In short, Trump is NOT leveling with the American people in terms of what really needs to be done for the benefit of future generations who will otherwise be hobbled by mountains of debt and the related financing costs, namely: focus on cutting government spending, achieving a balanced budget, aggressively pursuing litigation reform (US liability costs are 2.6 times the EU average), securing long-lasting regulatory relief, and pursuing the solid money that Andrew Jackson pursued when he killed the second US central bank. Noteworthy, the portrait of Andrew Jackson, who Trump greatly admires, adorns the oval office.

12. America is some $68 trillion in debt when combining federal, state, corporate, and individual/family level debt. US GDP is nearly $20trn. Each one percentage point higher borrowing costs from abnormally low interest rates increases America’s cost of funding by roughly $680 billion p.a. (most debt, including the US government’s, is not long-term in nature, thus susceptible to higher refinancing costs if interest rates keep rising). In fact, if the average cost of borrowing rose by just two percentage points — say 10-year Treasuries yielded 4.8% — the US’s financing cost would quickly soar by $1.36 trillion or by 7% of GDP.

13. As we have stated and written, markets are reversion beyond the mean machines. And given the mountains of debt we have accumulated, both solvency and inflation risks (in terms of printing even much more money) suggest that we could easily have a 10-year Treasury that someday yields 7.8% or 8.8% — recall that we exceeded 15% during Volcker’s “tough love” in the early 80s with a fraction of the debt. Five percentage points higher funding costs than today would raise America’s aggregate borrowing cost by roughly $3.4 trillion p.a. from current levels, or by 17% of current GDP. A non-starter. Our point: given the huge indebtedness, relatively feeble manufacturing capacity, and income and debt constrained consumers, higher interest rates could easily choke off and even reverse the positive impact of lower tax rates because they are financed by yet more debt instead of through government spending cuts.

14. Sadly, too many of Trump’s policies will ultimately rely on the very printing press that has gotten us deeper and deeper into debt, into yield starvation, into huge misallocations, into cratering productivity growth, and into accelerating solvency risks and inflation risks. Inflation is the largest stealthy property thief for the average person, and especially for retired folks, who are dependent on a fixed income stream and bond investment returns.

15. Year-over-year wage growth is 2.4% overall and but 2.2% in supposedly robust manufacturing while inflation is picking up, the housing bubble has eclipsed the 2006 highs, and mortgage rates are rising briskly — in short, housing is increasingly unaffordable for most Americans. In a related sense, we wonder how a 65-year low in the unemployment rate and low wage growth rates are possible at the same time?

16. The personal savings rate has plummeted to 2.4% from 5.9% two years ago as record auto loans ($1.1 trillion) and student loans ($1.5 trillion plus) suggest tapped out consumers. It also implies substantial demand has been borrowed from the future, i.e., that it won’t be there this year or next. If the “consumption function” is over 70% of GDP, this isn’t an academic issue.

And in the past when confidence soared and the savings rate collapsed, things did not end well...


curbjob Fri, 02/09/2018 - 12:09 Permalink

By electing Mr Trump the American people have gone into business with him.

It would be worth while considering how previous people who went into business with him fared ?

.. or not.

GoinFawr HenryJonesJr Fri, 02/09/2018 - 12:52 Permalink

Er, why does it have to be the US imperialism or Chinese imperialism....couldn't Hawaiians simply have their own country back?

@ arby63: jeez I wonder why? (not)…


" a nutshell, this is how the United States used fake democracy to create the perception that Hawaii "belongs" to the U.S: It's 1959, and the UN has Hawaii on its official list of places that still need to be decolonized. There's an important new rule that's about to get passed in the United Nations real soon called Resolution 1514. The U.S. knew Resolution 1514 would make it much more difficult for them to maintain indefinite control over Hawaii - it would basically provide a framework by which Hawaii's future political status could be decided by Hawaiians - who obviously might want their stolen lands back. The U.S. decides that the best way to keep Hawaii from being affected by the new UN rules is to make Hawaii look more like one of its other states, instead of an occupied nation. To accomplish this, the U.S. quickly rushes a vote on statehood to ballot, and to make sure that statehood 'wins', it rigs the election. After the election the U.S. tells the UN that Hawaii's questionable status has been resolved and that Hawaii should be removed from the UN's list of colonies. That's basically what happened. "

In reply to by HenryJonesJr

Baron von Bud GoinFawr Fri, 02/09/2018 - 13:04 Permalink

The Hawaiians are always bitching, "You deposed our queen". Those people were tribal idiots killing each other before whitey showed up. Today whitey owns everything and less than 2% of the population has pure native blood. But they've got good cable, internet, and some of the best weed on the planet. How many would go back to the old ways? Zero.

In reply to by GoinFawr

GoinFawr Baron von Bud Fri, 02/09/2018 - 13:08 Permalink

Explain again why Hawaiians HAVE to go back to all the 'old ways' if they get their country back? Surely you're not so idiotic as to think it has everything to do with the melanin content of their skin..

OTOH, I suppose even if they did regress at least it would be their own choice...

And here I thought you kumbiya capitalists were all about 'voluntary associations'; guess that's just when it's convenient, how convenient.


"Those people were tribal idiots killing each other before whitey showed up."

And "whitey" isn't/wasn't exactly the same? Go on, pull the other one you usefully idiotic apologist.

Yeah, your "my neighbours were fighting, so I killed them and took all their stuff, so now they're better off because their kids have internet" isn't much of an argument.


In reply to by Baron von Bud

Baron von Bud GoinFawr Fri, 02/09/2018 - 13:20 Permalink

Personally I don't care if they go tribal again. But they'd demand the mainland pay them reparations for the next 500 years. That's what we're doing with the inner cities and Indians on the rez. In the real world might makes right. I agree that's a damn poor way to run a planet but it's human nature I guess. We're paying the price for past greed.

In reply to by GoinFawr

GoinFawr D503 Fri, 02/09/2018 - 14:09 Permalink

I find it fascinating, and telling, that you completely avoid mentioning the grandest welfare queen of them all and one that, coincidentally, has the least net positive effect for those directly paying for it and alone amounts to more than all the useful, decent things you apparently hate so much:

Dept. of 'Defense'....

So I am guessing that doesn't warrant even honourable mention for you because the slightest cut would bleed your personal shit swilling surveying pocketbook mightily, hey MICkey D503?


Everyone who works(ed) already pays(paid) into SS every single working hour of their lives: it's already theirs, asshole.

In reply to by D503

LibertarianMenace GoinFawr Fri, 02/09/2018 - 16:21 Permalink

"the grandest welfare queen of them all"


is well, you didn't guess it, transfer payments(i.e., welfare):…


SS payments aren't all theirs either. The present value of the income stream in retirement exceeds a participant's lifetime "contributions".…


"According to this calculation, past and current generations will pay $71.3 trillion in payroll taxes but will receive $93.4 trillion in benefits. Adjusting for past and future transfers from the federal Treasury, the difference between "paid-in" and "paid-out" works out to $21.6 trillion.

"The $21.6 trillion number will change as soon as we change policies whereby today’s generations pay more taxes or surrender some benefits," Gokhale said.

"But until that happens, the exhortation that today’s generations are just getting what they are due based on their forced past tax payments is incorrect. ‘We’ are to get much more under current Social Security laws — to the tune of $21.6 trillion — than we’ll pay into the system. The excess benefits are a ‘return’ on past and current generations’ taxes of $71.3 trillion — and quite a handsome return it is!""


Shad yer trap up.

In reply to by GoinFawr

GoinFawr LibertarianMenace Fri, 02/09/2018 - 18:05 Permalink

"Shad yer trap up"

Well, nObody was talking to you, but:

You. Wish.

"SS payments aren't all theirs either. The present value of the income stream in retirement exceeds a participant's lifetime "contributions". "

Actually that depends on the "contributor" and disingenuously ignores completely all other taxation, but in any case the fact remains that, at the very least, those taking something out of SS actually put something in their whole working lives, oh so unlike the MIC which only drains revenue, and never contributes. So, even if your linked 'pie chart' was precisely correct (it isn't, and I'd bet you know it), that still doesn't rebut my genuinely salient points that

  1. SS directly benefits those that have contributed; it's hardly their fault that thus far their public money managers have sucked so hard with their investment (unlike, eg. Norway's); which is the very opposite of what the nothing-but-cost of the MIC has been.
  2. The MIC yet remains wholly unmentioned as, at the very least, a premium welfare queen, by 'D503' - or yourself for that matter.
  3. THe MIC directly benefits who again, other than itself, exactly?
  4. All of the above makes is what makes it "The Grandest Welfare Queen of All", not just the dollar figure.

Besides all this you and I both know your linked pie chart is woefully short (I'd say it's in the 'less than half' ballpark, wouldn't you? - If you could afford to be honest, I mean) on what the US military actually costs/spends.

So, if you were looking for a decent place to start slashing spending with a ~clear conscience (assuming you are capable of having one) and causing the least pain for actual American people, why would you not go full-on for cuts to the MIC first, before you even began considering  downgrading granny's catfood from canned to no-name dry? (rhetorical question)


In reply to by LibertarianMenace

LibertarianMenace GoinFawr Fri, 02/09/2018 - 22:28 Permalink

"So, even if your linked 'pie chart' was precisely correct (it isn't, and I'd bet you know it),"


Well, those facts are provided by a decidedly non-MIC friendly source, so take it up with them, but let's have it your way: quadruple the MIC's official budget and it's still less than transfer payments. As always, proggies are in possession of facts that no one else can access.


"So, if you were looking for a decent place to start slashing..."


Sorry, but there are no indecent places to leave untouched by cuts. All should be subject to the knife. Oh, and don't put words in my mouth. I wasn't defending the MIC. Far from it. I'm just critical of ideology subbing for facts. But if you were honest, you'd know that.

In reply to by GoinFawr

GoinFawr LibertarianMenace Sat, 02/10/2018 - 00:03 Permalink

"I wasn't defending the MIC. "

<shrugs> now that you mention it, you do sound a bit like someone who has had a polyp plucked...

Pie schart: Maybe it's just me, but I am not certain that the amounts the state reports always line up exactly with what they are actually spending (tell us again how, thanks to leftist websites, you aren't the teeniest tiniest bit suspicious there might be vast amounts of unaccounted for funding flowing throughout most if not all gov't dept's, let alone in the DoD).

"Grandest Welfare Queen" requires a much broader, expansive definition than simply $value, in my opinion.

 Obviously even Granny's cat food grade isn't untouchable in a crisis, I never said it was, but it should be one of the very last to go rather than one of the first.

I'm talking order of operations, and you're "All, and immediately forthwith" -ing me. Yeah, why don't you go right ahead and fuck yourself with that?

It is disingenuous to neglect adding all the perfectly worthy-of-addition taxes Granny has paid throughout her lifetime to her sum of the SS equation, because that illustrates that on the whole Granny has certainly invested at least as much wealth as she eventually extracts, end of. 

 Granny and Uncle Sam's relationship has been the very opposite of any gov't program that does nothing but extract labour/wealth, and such a valuable fiscal distinction on its own warrants priority, imo.

 ie You want to wheedle and wangle about the bean counting, and I am explaining how that is irrelevant; even regardless of the balance, at least Granny isn't a complete waste of effort because she's been putting skin in the game her whole life. and her sons' and daughters' skins too, for that matter... through the military.


You couldn't even make this shit up.

In reply to by LibertarianMenace

LibertarianMenace GoinFawr Sat, 02/10/2018 - 14:18 Permalink

"Pie schart: Maybe it's just me, but I am not certain"

First honest thing you've written. Congrats.


"you aren't the teeniest tiniest bit suspicious there might be vast amounts of unaccounted for funding flowing throughout most if not all gov't dept's, let alone in the DoD)."

Indeed, but then that logic follows for every program and priority including Granny and yours, apparently. DoD information's unreliable? Then it's obviously all unreliable. And if it's off, it's off by more than a factor of four for the DoD alone, that is, if MIC accounting is THE problem. Using selective facts and reasoning are proggie tactics. Fer shame.


"I'm talking order of operations, and you're "All, and immediately forthwith" -ing me. Yeah, why don't you go right ahead and fuck yourself with that?"

Now who's had the polyp plucked? Not what I wrote, but that NOTHING should remain untouched. So we're returning to dishonesty. In that event, I suggest you take your own advice.


"It is disingenuous to neglect adding all the perfectly worthy-of-addition taxes Granny has paid throughout her lifetime to her sum of the SS equation, because that illustrates that on the whole Granny has certainly invested at least as much wealth as she eventually extracts, end of.

 Granny and Uncle Sam's relationship has been the very opposite of any gov't program that does nothing but extract labour/wealth, and such a valuable fiscal distinction on its own warrants priority, imo."


Not at all. As Granny's retired, Granny's unemployed. Working Grannys are paying retired Granny. It would be a different .guv program if those financial flows to Granny were actually derived from Granny's assets that were built from Granny's actual contributions but they're not. No matter, the payments will eventually stop sooner or later. The bean counting, as you put it, says it has to.


" ie You want to wheedle and wangle about the bean counting, and I am explaining how that is irrelevant; even regardless of the balance, at least Granny isn't a complete waste of effort because she's been putting skin in the game her whole life. and her sons' and daughters' skins too, for that matter... through the military.


Wheedling? Again, if you say so. To me it sounds like more of your polyps being...The funds, such as they are, are likely exhausted in the early 2030s about a decade and a half from now. It's more than wheedling. All these programs (MIC included, really!) are financially untenable, but hey, I'm sure everybody likes to have their personal favorite. Your preferences are the thing that's irrelevant. The numbers are so incoherent at this point, that I on other hand, have to avoid taking one. You, perhaps not. But it's ultimately pointless. Inflation or default, take your pick.


"You couldn't even make this shit up."


Then for your own sake ask yourself, why it is that you keep doing it?



In reply to by GoinFawr

GoinFawr LibertarianMenace Sun, 02/11/2018 - 15:32 Permalink

" First honest thing you've written. Congrats. " wrote after parsing my comment in order to remove all relevant context, even though it is a part of a point that you later go on to effectively, and ironically, agree with. Illustrating as clear as an azure sky of deepest summer what a patently disingenuous dickslapper you are; just another boring hypocrite, lying to yourself and thinking you're fooling everyone, even though you're not fooling anyone except yourself. Yawn.

"Then it's obviously all unreliable " yet if it is convenient you'll prance about those same 'stats' as if they somehow prop up your hollow and entirely irrelevant garbage, how convenient. It's so cute how you try to paint it as if I am trying to have it both ways, while you're the one doing all the blathering out both sides of your festering gob.

I mean sheesh, all that bloviating to unsuccessfully pass-off as 'my preference' what actually stands to reason in fiscally responsible reality (for anyone capable of reasoning) regardless of 'my preferences', yet even so you still can't come up with a single rationalization undermining the fact that granny actually put something in, and so reasonably she deserves a higher priority when it comes to taking something out, especially when compared to the DoD, which does nothing but extract value: ie the actual point of my initial reply to D503's Ms.Information, and one which you have taken such great pains to avoid addressing altogether in your silly and utterly irrelevant 'quest for precision bean counting'.

I am Jack's utter lack of surprise that you can't do the simplest of simple math on that perfectly reasonable conclusion.

Try again lumpy.

In reply to by LibertarianMenace

GoinFawr LibertarianMenace Thu, 02/15/2018 - 21:43 Permalink

Look at this idiot. Liverturdian Men-ass replies to my comment with some completely irrelevant nit-picking blather, then whines that I am dancing around his insipid irrelevance because I show it up rather than swallowing it... what a fucking buffoon.

Yes LM, the funds actually put in by Grandma every working day of her life are, by rights, certainly more hers than they are the MIC's. It's really too bad for you that such a simple, reasonable point is so difficult for you to fathom.

Let us know when there is the slightest chance that simplest of simples is getting through that insanely thick melon of yours, alright tappy MIC tapster?

In reply to by LibertarianMenace

LibertarianMenace GoinFawr Mon, 02/19/2018 - 00:04 Permalink

Oh my, such shocking language from such a small boy.

"because I show it up"

With what? Not with facts. Quadruple the reported MIC budget and it's still less than welfare. Very unlikely the official MIC number is off by a factor of 4. But let's accept your nonsense and say it is. Then the welfare budget is just as likely to be underreported and the outsized relationship between the MIC and welfare budgets is unchanged. And my point remains, the grandest welfare queen is well, welfare.

Yes, welfare. Scheduled or not, it's welfare.

"the funds actually put in by Grandma"

She doesn't put any funds in, nitwit. She's paying support. In case you hadn't heard, and it's apparent you haven't, those payments are immediately transferred to an expecting recipient. It's pay as you go. There are no assets. If it were indeed savings, you might have something. You don't.


Your arguments are unsupported by any facts. The term would be piss poor. No surprise your attempts at ridicule are as well.




In reply to by GoinFawr

william114085 HenryJonesJr Fri, 02/09/2018 - 14:59 Permalink

just wanted to point out.....those "locals" are mostly 3rd and 4th generation decedents of low-class migrants imported from the Philippines to pick pineapples.  Sadly, pure blooded Hawaiians are nearly extinct.   It's easy to recognize their differences.  Hawaiians are tall and broad and intelligent.  Hawaiian women are very attractive.....opposite goes for the Filipino mixes.  

In reply to by HenryJonesJr

GotGalt 847328_3527 Fri, 02/09/2018 - 15:00 Permalink

GAAP was around 25x earnings before the tax cut.  With the tax cut, I'm guessing S&P 500 GAAP earnings will come in around $125 - 130 so we are at 20x - 22x earnings.  Still rich, and about 25% over valued compared to history.  History never had ZIRP/NIRP and endless trillions of central bankster QE though.

In reply to by 847328_3527

Full Court Lug… GoingBig Fri, 02/09/2018 - 12:29 Permalink

Everyone and their dog realizes that US debt is far, far beyond the event horizon. In any case it is impossible to win a major Federal election without promising to enlarge the debt even more, so it's pointless to whine about it now.

The goal of any political campaign now is to at least use the debt on things that favor their party: the Dems want to spend it on gibs for brown people, and the neocons/neolibs want to spend it on wars for Israel. I give Trump credit since he at least wants to spend it on broad-based tax cuts and infrastructure.

In reply to by GoingBig

Insurrector Full Court Lug… Fri, 02/09/2018 - 15:13 Permalink

Wake me up when the tax cuts become not just broad-based but proportional.    The Center on Budget and Policy Priorities, using assessments from the CBO, the Joint Committee on Taxation, the Tax Policy Center, the Treasury’s Office of Tax Analysis, and the Institute on Taxation and Economic Policy estimates that the Top 1 percent will receive 70% of the total benefits from the Trump tax cut, with the top fifth of income earners getting half of that or 34%. And when you peel back the income layers a bit more, you will see a bulk of the 1% income earners have a huge net worth - average for the top 1% earners is over $10M net worth.  This means their money is making their money - it ain't earned.  WTF do they need the bulk of the tax cut?

And infrastructure?  Trumpturd's grand goal is to privatize it.

Your credit is woefully ill-placed.

In reply to by Full Court Lug…

Endgame Napoleon GoingBig Fri, 02/09/2018 - 14:41 Permalink

It is not just your kids. Many people get to pay the price now — especially the low-income citizens without kids who are not eligible for free or reduced-cost rent, free groceries, free monthly cash assistance, electricity assistance and refundable [EITC] child-tax-credit welfare that used to max out at $6,444 before doubled by The Spendthrift Swamp.

These citizens must compete with a ton of single-earner, part-time, legal citizens who have either spousal income or layers of welfare and child-tax-credit welfare, making it easy for them to accept low pay and illegal workers, usually a sole, male earner in those cases, working part time to stay below the earned-income limit for monthly welfare and the cut off for child tax credits. The ones working under-the-table can get the monthly assistance for US-born kids, but not the child tax credit.

At least a few people are being honest about this type of employment, which should not be included in employment numbers, not when governent is paying the major household bills of these part-time workers, while most citizens struggle to afford rent that sucks up more than half of their earned-only income without this piled-higher-and-deeper government cheese.

Wages for citizens—and tax revenue—won’t really rise until this flood of governent-subsidized part-time help is not as available to employers.

People are also going to have to revise the definition of middle class, returning to the way it was defined in the boom period after WWII. These dual-high-earner assortative mates who hoard the few decent-paying jobs in fewer households halved the middle class and pushed the definition of a middle-class lifestyle through the roof. Americans cannot afford it anymore. 

In reply to by GoingBig