The most important Chart about the American Economy you'll see this year.

originally posted by: CynConcepts
a reply to: Aazadan
That is what I am seeing in the chart provided. Something drastic occurred in and around 1977-78 and in 1998-1999. These seem to be the most current points that reflect some action that spirals the gauging. Any ideas?

Just an opinion, based on the premise that there was a hidden movement by the wealthy is that Jimmy Carter was scareing them. He set in place emergy polices that would 'disrupt' their largest income stream so they 'dug in' and feed money into their 'program'.

Speculation mostly - but putting together the things I've seen over the years - feels right. The Right, the Rich, the Authoritarians hated Jimmy Carter (and conspired with the Iranians to wrest the election from him).

a reply to: FyreByrd

Do you have a summary of his ideas on causes and solutions? His page just links me to a whole bunch of videos and podcasts which I don't have time to listen to.

My thoughts on it are that in the Ford and Carter era we saw an increase in consumer spending as the transistor era hit and many new inventions were unveiled. This caused people to spend more money, the problem is it was money people didn't have. This also coincided with women entering the work force which doubled the labor supply. In the end there was far more to purchase, while there was also a greater supply of labor on the market meaning work paid less.

New spending is an important component here because the way inflation used to be calculated is that it tracked the change in cost of goods from year to year. When new products hit the market though you're not calculating the change in value but rather the initial value going from 0 to X instead of X+Y. When this happens on a mass scale it causes inflation to skyrocket.

Rather than ride this out, Reagan changed the inflation calculations from 1982 forward which tracked the change in household spending per year. This circularly defines inflation because if raises are given out at 3%, household spending will likely also raise 3% which in turn says inflation happens at 3%. This didn't take into account credit lines though. Instead, raises would be given out at say 3% but credit lines caused spending to increase at 4%. which would create a 4% inflation rate to the 3% raise. Compound this for 30, going on 40 years and we're at the breaking point.

There is no quick fix to this, economies can only be adjusted by a percent or two per year but we can start the process so that things are better 40 years from now and the process involves changing how CPI is calculated.

a reply to: xuenchen

Then it's the fault of Republicans in the Obama era.

You can't have it both ways, xuen. And anyway, most of us realize that the parties don't just stay exactly the same.
If that were the case, it would be easy to dismiss the modern Republicans as absolutely incorrigible and insane obstructionists. Green eggs and ham, dude. Now he's running for President?

What BULL S#!T

a reply to: BuzzyWigs

Yes the Republican majority (in the House especially) since 2011 are to blame for the lower unemployment rate and the lower deficit spending.

Obama can't take "credit" for everything.

a reply to: xuenchen

oh....okay