Mr. Trump continually cites record highs in the New York Stock Exchange and record lows in unemployment as indicators of the "best economy in our history." Most economists agree that these aren't the most important indicators. In fact, there are cautionary indicators that show cracks below the surface.
At the end of the third quarter of 2019:
• Corporate earnings down 2.7 percent and investment down 3 percent;
• Corporate debt was $10 trillion (47 percent of our total economy), $4 trillion of which is due in five years, and $107 billion which is in danger of default;
• Corporations are adding debt faster than economic growth;
• Personal unsecured debt increased 12 percent to $305 billion;
• Home sales flat for the past three years;
• A survey of 554 cities reported the lowest tax collections in three years; and
• 40 percent of U.S. households cannot withstand an economic crisis over $400.
These data indicate that corporations used historical low interest rates to increase debt, so that they could buy back their own shares and increase dividends to their investors rather than investing in their employees and corporate development.
The future looks ... ?