In assessing the health of the US economy we here something over and over: "There are trillions in cash waiting on the sidelines. And sooner or later all that cash must come flooding back into the economy," therefor the US economy must be healthy.
The problem with this Trope is that 5 Trillion in cash would be about the amount of cash the Billionaire classs in the US possesses. If the billionaires are flush how does that make the economy as a whole healthy?
It's like the old joke about ten broke guys are sitting in a bar arguing over the health of the economy when Bill Gates walks in. Suddenly the average net worth in the bar is over a billion dollars. So the economic health of the patrons of the bar is excellent, right?
We also hear that the labor market it tight. Unemployment is near record lows, right? The health of the economy must be strong right?
Only there are 100 Million working age people in this country who have left the labor force. They are uncounted in the Unemployment rate. Sure, some are disabled, but a vast majority are tired of working for a non-living wage, and a living wage today that includes the cost of housing, education, health care and energy would have to be pretty damned high, especially if you have kids.
So, next time a fabulously rich analyst goes on Bloomberg and talks about all the cash on the sidelines and the great labor market, you might consider that the analyst may be talking his own book.
With the vast disparity of wealth in this country it is very very hard to assess the health of the economy.
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