No, it's not just you—the U.S. economy really is bewildering. The government says gross domestic product expanded at an annual rate of nearly 4% in the third quarter, the fastest pace in a year and a half. The stock market is still up by 4% for this year, despite a sharp 3% drop on Nov. 7. On the other hand, growth in consumer borrowing slowed unexpectedly in September. Some economists argue that the U.S. is teetering on the brink of a recession, if it isn't in one already.
Well, you do have to consider that American's real incomes are down. This is from a slightly older article from the Christian Science Monitor, but it's still applicable:
Income fell 8 percent, adjusted for inflation, for those under 35 and 9 percent for those aged 35 to 44. The numbers add new weight to longstanding concerns about whether younger generations of Americans will achieve living standards that are better - or at least equal to - those of their parents.
Although this is quite old now, this blog post on The Big Picture from 2004 still manages to give some idea about why the economy overall can be booming yet doing nothing for for the average American.
The bulk of the tax cuts were for the investor class (ie, the top 10%); As you can see, it had the expected response - it stimulated investment in the market. To stimulate the economy, you cut taxes for the spending classes - the middle class. They typically spend most of their discretionary income. That in turn stimulates manufactured goods and service consumption, which should lead to additional hiring. The trade off is less of a fund flow driven rally, and more of a better set of employment numbers.
All told, I don't believe that's the most effective way to spend a trillion dollars. As the President often says, "if you want more of something, tax it less." So, on top of middle class tax cuts, if you want to increase hiring, give companies a tax credit for new hires or health care costs or just cut the payroll tax. It's really not that complicated - when you increase your domestic headcount over a previous percentage - i.e., 2001's high number, the firm gets a tax credit. Note that overseas outsourcing or reducing US headcount will not qualify you for the cuts."
He also talks about underemployment which really hurts a lot of people. And people who like to point out how well the economy is doing simply like to point out how many people are employed rather than how muchthe employed people are making.
Anyway, there's little in the way of analysis I can offer, but if it's not clear, the point is that for individuals, the picture still isn't that great whereas most businesses are still seeing decent prosperity.