Viewpoints Opinion pieces and speeches by EPI staff and associates. Consumer spending, fueled by mounting personal debt and a gravity-defying rise in the stock market, has set off an economic boom that has boosted job prospects and incomes across the board. Like any night out on the town, however, all good things must eventually come to an end. This time, the negative personal savings rate, the spiraling trade deficit, and the threat of a sudden drop in the stock market are the leading candidates to spoil the party.
Economists like to measure economic performance over a complete business cycle.
This avoids exaggerating the bad news in downturns or the good news in upturns. Using 1989 as a benchmark, the economy has grown substantially more productive in the 1990s, but working families have seen little of the gains. The recent good times have provided only temporary relief from long-standing economic woes facing the middle class. Over the last two decades, the playing field has shifted decidedly against working Americans, to the advantage of their employers. Congress believes that the answer to this long-term deterioration is a cut in the federal income tax.