Kamala Harris and the Democrats can continue to gaslight Americans about the economy's health all they want. Still, every American experiences the truth in real time at the gas pump, grocery store, and fast food joint. Prices are up while wages are stagnant, making things genuinely miserable for America's working families and those on fixed incomes who are forced to cope with their declining purchasing power. And their misery is measurable.
In the 1970s, economist Arthur M. Okun conceived the U.S. Misery Index to describe and quantify the level of economic distress experienced by everyday Americans. While not perfect, the index is a powerful tool to help Americans and their leaders understand the economic forces affecting their lives and the country's economic circumstances as a whole.
The index is calculated by adding the official U.S. unemployment rate to the U.S. inflation rate. Although initially coined “the discomfort index,” today, the sum of these two rates is known simply as the U.S. Misery Index. The higher the U.S. Misery Index, the more distress or misery the economy experiences as Americans struggle to make ends meet. So where does today's Misery Index stand?
U.S. Misery Index = U.S. Unemployment + U.S. Inflation
Current U.S. Misery Index: Unemployment 4.1% + U.S. Inflation 2.44% = 6.54%
At first glance, 6.54% may not seem high compared to the miserable highs of early 2022, when the index reached 12.73%. Then, however, the pandemic contributed to high unemployment, low inflation, and record-high household savings. Today, American households are draining their savings and racking up credit card debt like never before.
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As the index rises, more consumers feel frustrated and anxious about their current and future economic opportunities. As Americans feel more nervous about the future, one of two things happens: either they curtail spending or utilize credit spending, increasing their personal debt. And debt — as our leaders in Washington, D.C. don’t seem to comprehend — only adds to financial misery.
According to a Harvard Business School paper in the Economic Review, "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," being unemployed causes Americans 1.7 times as much misery as inflation. Therefore, in reality, the U.S. Misery Index should include an enhanced unemployment number multiplied by 1.7 and added to inflation. Nevertheless, like most of the government's deceptive and soon-to-be-downgraded faux joy economic numbers, that isn't how it's measured.
It will undoubtedly be interesting to see what happens to these numbers if and when former President Donald J. Trump retakes the White House on Tuesday. Only then will Americans see the accurate numbers and the lengths the Democrats have gone to hide the truth and gaslight them over the past four miserable years.
We know that Biden-Harris broke the economy, and Trump can and will fix it because he's done it before. This is yet another reason to have the uncomfortable political conversations and encourage our family and friends to vote to make America great again.
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