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Gallup: U.S. economy shows no recovery

Gallup: U.S. economy shows no recovery

By Jim Clifton
Chairman and CEO of Gallup

The U.S. Council on Competitiveness asked Gallup to conduct, pro bono, a comprehensive study of U.S. growth and productivity for the Council’s 30th anniversary. We enthusiastically said yes.

A Gallup senior economist led the study. Top Gallup experts and esteemed external senior scientists reviewed it to ensure statistical and theoretical accuracy and objectivity.

Conventional wisdom — as reported in many major newspapers and media — tells us the U.S. economy is “recovering.” Well-meaning economists, academics and government officials use the term “recovery” when discussing the economy, implying that growth is getting stronger.

The study, released today, finds there is no recovery. Since 2007, U.S. GDP per capita growth has been 1 percent.

The Great Recession may be over, but America is dangerously running on empty.

Think of our country as a company, America Inc., which has more than 100 million full-time employees, with about $18 trillion in sales and $20 trillion of debt. The most serious problem facing it is no growth. In addition, America Inc. has three soaring expenses threatening to bankrupt the company and its shareholder-citizens: healthcare, housing and education.

As this report notes, in 1980, these three sectors accounted for 25 percent of total national spending — today, they account for more than 36 percent. They also account for most of the total measured inflation over the same period. And without inflation in these sectors, real annual productivity — defined as GDP per capita growth — would have been an estimated 3.9 percent instead of 1.7 percent.

My own opinion is that America Inc. is too big to “turn around” like one would a company or any other organization. There is no quick fix to something this huge and complex. But there is a long-term fix, which is to get GDP increasing to 3 percent and higher while slowing the increasing costs of healthcare, housing and education.

When real growth returns, productivity will increase, and America Inc.’s empty tank will refill.

Jim Clifton is chairman and CEO at Gallup.

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3 comments

  1. Could it because congress worries more about re-election than working to improve things? Let’s hope replacing Obie-Care gives healthcare a boost as nothing can make the sector worse at this time.

  2. Take the insurance companies out of the health care market, offer single payer, and get the middleman out of our shorts! That’s why drugs are high too. Get rid of the distributors, let the pharmacies buy direct, and give doctors
    and hospitals the funding they need … without the insurance companies. funny when you pay cash for many medical procedures, products, and services, it is a whole lot less than if you have insurance. wonder why?

  3. As long as you have politicians that believe in the failed Cut Taxes on the Rich trickle down wealth concept this downward trend will continue. Only have to look at those states that just cut taxes and hope for growth when the results of the last 30 years of following that policy has just bankrupted the states that followed the Cut Taxes to get rich policy and compare with those that had tax policy more like what we had per-Regan.
    No CEO is worth 300 to 500 times the pay of a production line worker.

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