If one were to take their news solely from the presidential candidates, it could be believed that the U.S. economy is on the brink of collapse. New home buyers will require a $25,000 down payment from the government. Restaurant waitstaff must be freed from the burden of taxes on their tips. American workers and companies must be protected by tariffs on foreign goods. And so on and so on.
The reality is rather startling. The American economy, as it has been for the last 30 years, is a global marvel. According to the International Monetary Fund, in 1990, the United States made up approximately 2/5 of the gross domestic product of the world's wealthiest nations, the group known as the G7 nations. Today, more than half of the G7 GDP is American.
We are bombarded with news about inflation. Yet our purchasing power – the measure of the value of a currency when applied to a number of goods and services it will buy – is the second highest in the world. Only the Swiss get more bang for the buck (or franc as it were) than Americans. Yes, prices are higher. Inflation was inevitable post-pandemic for a number of reasons (almost a decade of artificially low interest rates followed by the pandemic followed by massive government stimulus spending, to name a few).
The challenge for economists and central bankers is to manage inflation so that prices grow at a rate commensurate with the growth of the rest of our economy. Generally, about 2% annualized inflation is considered "healthy," and is the number most central banks aim for.
The higher rates of inflation seen from 2021-2023 were a true shock to those who weren't buying groceries or gas in the late 1970s or even in 1989-1990. "Shocking," unfortunately, doesn't mean that a magic wand can be waved and make prices go back to what they were.
Were we to experience negative inflation, that would actually mean disaster for our economy, meaning our goods were worth less. Wages could also drop, and other values, like the dollar, could fall successively like dominoes. When you look for periods of negative inflation in the U.S., you'll see they took place during the Great Depression and after the recession of 2008.
Unemployment remains low. Really. Both campaigns keep telling us how many jobs the other administration has lost. Unemployment before the pandemic under Trump: 3.7% in 2019 (49-year low). Unemployment in 2022 under Biden: 3.6%. Unemployment spiked to 8.1% at the height of the pandemic which spanned both administrations. There is a "natural" rate of unemployment that refers to workers caught in transitions, either voluntary or involuntary (changing jobs, layoffs, business closures, etc.). This rate is currently calculated at 4.4%, which demonstrates a tight labor market in need of workers.
And our wages are high. Not just nationally, but state by state. In New Mexico – a poor state, right? – our average annual earnings are higher than those in Germany, Canada and Japan. Even earnings in the very poorest state, Mississippi, are higher than those in three of the most modern and advanced countries, two of which rely more heavily on manufacturing jobs than the U.S. (Japan and Germany generate 20% and 19% of their GDP from manufacturing, compared with 10% for the U.S.).
And China? China is backsliding. According to The Economist, ten years ago it was believed by many analysts that China would have overtaken the U.S. by now as the leader in GDP. In 2021, China's GDP was 75% of America's. Now it is 65%. China generates 26% of its GDP from manufacturing.
So, America is continuing to boom economically, consumers have tremendous purchasing power, our people are employed and our wages are high. China's comparative economic threat is waning. And to my mind, our last three presidents have not been great. Or even that good.
I'm not going to pick a side with regard to the economy in 2024. I would instead suggest that no matter who wins, our economy will continue to outperform the rest of the world despite harebrained and inflationary ideas coming from both campaigns.
The economic doomsaying is a lot of noise on the campaign trail and I hope the promises being made are just more noise, too. Because the one dark spot on the horizon is our federal debt, and the campaigns seem to be in a race to see who can bankrupt Social Security first (for the record, Trump seems to be winning that race: analysts project his policies, if enacted, putting Social Security in default by 2031).
American exceptionalism, despite our best efforts to blunt it with overspending and ho-hum Presidents (which in my opinion, date back to 2008), perseveres. Harris and Trump offer competing populist solutions to overstated economic "woes." It doesn't really matter who wins. We are going to be okay. Probably more than okay.
That doesn't mean we should stay home during this election cycle. Our votes matter as never before, especially down ballot, and in our 2026 midterms. Contrary to our national mindset of economic despair, we have it better than just about anyone else on the planet. Given our choices in 2024, great strides forward from the White House will not be made on the economic front, and policies are likely from either future administration that will further blunt our exceptionalism. We must look to 2026 and 2028 and Congress and our own state elections.
As our national division seems to worsen by the day, I suggest a different approach. Cheer up, I say. If the other team wins, so what? No one has broken America yet. It's not going to happen in the next four years. Vote your choice, accept the results of the majority, however slim, and seek information from all fronts about how to build the best candidates and solutions for the elections to come.
$29 trillion in gross domestic product is a cushion we can work with for another 48 months. And that's just the 2024 projection. We're growing. We're going to grow no matter who takes the oath of office in January. So cheer up, already.
Merritt Hamilton Allen is a PR executive and former Navy officer. She appeared regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican for 36 years, she became an independent upon reading the 2024 Republican platform. She lives amicably with her Democratic husband north of I-40 where they run one head of dog, and one of cat. She can be reached at
