Newspaper article The Christian Science Monitor

A Gilded Age That Touches All

Newspaper article The Christian Science Monitor

A Gilded Age That Touches All

Article excerpt

Crime's down. Wages are rising. Blacks and Hispanics are finding jobs more easily. Governments are racking up budget surpluses. The so-called "crisis" in the Social Security system is fading. Welfare rolls are shrinking. House ownership is rising.

These are just a few of the benefits that are due to considerable degree to America's rising affluence. Prosperity is just wonderful.

"This is a much happier country than it was 10 years ago," says James Galbraith, an economist at the University of Texas, Austin.

The economic expansion in the United States, the longest ever, is 113 months old. Unemployment is hanging around 4 percent, the lowest in 30 years. Corporate stock prices, despite their volatility, remain relatively high. Americans own more than $30 trillion in assets, ranging from homes to cars.

Prosperity has changed the nature of the presidential election campaign. It centers in part on how to use the massive budget surpluses - spend them with tax cuts or employ them to retire national debt and fortify Social Security.

These gilded times have forced economists to rethink some theories. Many had held that unemployment couldn't fall below 6 percent without kicking off faster inflation.

Now, though the jobless rate last year averaged 4.2 percent, and 4 percent so far this year, inflation has remained tame. Prices for the entire economy actually rose at a slower pace in the second quarter of this year than in the first quarter. Nor has class warfare over wages broken out, as some feared.

The public may become disturbed should the Federal Reserve hike interest rates further to slow the economy and risk prosperity to stop an invisible inflation surge.

"How can they buy into that if there is a real cost in lost prosperity?" asks Mr. Galbraith.

One such gain from good times is the rise in homeownership. Of the 119.5 million housing units in the US, 70.8 million are occupied by their owners. The proportion of households owning their own homes has risen from 63.7 percent a decade ago to 67.2 percent in the second quarter. Though home ownership by blacks is lower than for whites, it's rising faster. …

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