I've enjoyed driving you all crazy by just saying "I'm Gen X. Thank you." Watching you lose your mind has made me laugh. But I guess it is time to teach you history. And the point is we should be encouraged. Because we can come out of this stronger than ever if we just put in the effort and get back to work by opening our economy.
1. The current economic downturn is likely only a blip, because it was caused by a pandemic. We shutdown the economy to fight Covid and that is why we are dealing with this negative economy. Before Covid the economy was very strong. Most recessions are do to bad economic polices and poor economic productivity. That isn't the case here. The Bush/Obama recession was do to the housing bubble, subprime mortgages, increased taxes, and banking policies. The Carter recession was a result of runaway inflation, a massive energy crisis, high taxes, and decreased productivity. We can come out of this blip in the economy quickly if we just reopen the economy. The unemployment today is do to the federal and state governments forcing businesses to close. As businesses are allowed to reopen jobs will come back and come back fast.
2. During the Carter recession inflation was at a high of 13.3%. The prime interest rate rose as high as 20%. Mortgage rates were anywhere from 12% to 17%. During the Bush/Obama recession the inflation rate was at a high of just 2.7% to 3%. Mortgage rates averaged less than 5%. And today we see inflation at 0.6% and mortgage interest rates below 3%.
3. The Misery Index during the Carter recession was at a high of 19.7%. In the Bush/Obama recession it was a high of only 12.6%. Today we are at 11.75%.
4. During the Carter recession we had a massive energy crisis causing a shortage of gasoline. People couldn't get gas for their cars. During the Bush/Obama recession gas prices were higher than today, but at least we could get gas. Today gas prices are on average around $2 and America is energy independent.
5. Taxes are also much lower today compared to the Bush/Obama and Carter years. During the Obama years tax rates were at 10% to a high of 34% for individuals and 39% for corporations. During the Carter years the tax rate for individuals was at 14% to 70% and corporate rate was 46%. Today the rate for individuals is 10% to 37% and 21% for corporations. And thanks to the increase in the standard deduction 90% of Americans are paying less taxes today compared to both the Obama and Carter years.
6. And today we are seeing the stock market soaring to new record highs. The Dow and the Nasdaq have continued to break records during this downturn. And the market is an indicator of what the economy will be in the future. During the Carter recession the market dropped 40% and it took 10 years to get it back. And even the Bush/Obama recession saw strong markets that help keep the economy growing do to the internet boom
