We keep being told that we are living in one of the longest running and strongest booming economies of all time.
But the story sounds complicated. We have record low unemployment and lots of people are driving around in nice cars. We all have luxury devices like smart phones, giant televisions and outdoor recreation toys. Our children get almost anything they want like new fashion clothes, this year’s sneaker model and extra money to spend on “whatever.” Sonoma County grape prices have never been higher and our tourists keep coming by the millions each year.
But then, what about talk of tariffs and record national debt? If the economy is so good, why are so many teachers going on strike and local governments cutting some jobs? And, anyway, it takes a really good economy to afford $4 a gallon gas and $2,000 monthly housing rents. Ultimately, the answer to how good the economy is comes down to how happy one is with his or her own paycheck. Well?
When answering, “what’s in your wallet?” lots of us have to fess up and show our unpaid credit cards instead of a stack of folding money. As it turns out, our great booming economy that President Donald Trump never tires of bragging about is being buoyed by a record high $4 trillion in consumer debt. Many thousands of Sonoma County households are a health care bill, one broken major appliance or a car accident away from a financial emergency or default.
Our Sonoma County is one of the most prosperous parts of the country. But prosperity comes with a ledger sheet with many numbers, including some of the highest housing costs anywhere and other line items for student loans, car payments, daily commuting costs, child care and Comcast. Baby Boomers carry an average of 2.9 personal credit cards in their wallets and younger Gen Xers have an average credit card balance of $6,885, according to Experian. Not only do many households not have a savings account, lots of younger households don’t even have a checking account.
How strong we think our economy is also depends on many social, ethnic and ZIP code factors. The county’s population of 45,000 people below the official poverty line is over-represented by Latinos. Young families with both a mortgage and child care bills have the highest monthly debt service costs. Plenty of grandparents’ life savings have been depleted by such family emergencies as divorces, a child’s loan default or even a court case, arrest or lengthy rehabilitation.
Sonoma County and other prosperous places like San Francisco and Los Angeles are plagued with chronic homelessness. An oddity in our economy is the people with the least amount of debt are the poor and homeless. Also members of the older Silent Generation (age 75-plus) have the least use for credit cards, coming from a generation when the ethos was “pay as you go.”
The rest of us stopped paying as we go a long time ago, if we ever did. We mistake our level of prosperity for our level of consumption. We must have our SUVs, no matter if they cost more than what a small house once did. We are living in a super-sized economy where frugality is considered a sign of failure. Waste not, want not? You’ve got to be kidding.
The daily Wall Street stock market reports of climbing corporate wealth at Apple or Facebook don’t mean much to a household trying to get to the end of another month without more credit card debt. We should read the news reports about our booming economy with much more scrutiny. We won’t get a lot of honest facts about it during an election year filled with Trump boasts and Democrat attacks.
Maybe it’s time for one of those kitchen table talks.
— Rollie Atkinson