The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year.
Total economic output in the third quarter was slightly above the maximum sustainable level of output as estimated by the nonpartisan Congressional Budget Office.
This is a measure of the economy’s potential to produce goods and services based on the supply of people working and how productive they are.
Plenty of jobs still exist in the US economy, but plenty have been lost. And the jobs that have vanished were good jobs, middle-class ones—the kind that helped families buy houses, cars, and college educations for their children. Many of the jobs were available to immigrants and workers without college degrees, and allowed them to work toward the American dream.
The revival of America’s core cities is one of the most celebrated narratives of our time—yet, perhaps paradoxically, urban progress has also created a growing problem of increasing inequality and middle-class flight. Once exemplars of middle-class advancement, most major American cities are now typified by a “barbell economy,” divided between well-paid professionals and lower-paid service workers. As early as the 1970s, notes the Brookings Institution, middle-income neighborhoods began to shrink more dramatically in inner cities than anywhere else—and the phenomenon has continued. Today, in virtually all U.S. metro areas, the inner cores are more unequal than their corresponding suburbs, observes geographer Daniel Herz.
California’s economic growth in the second quarter ranks only 35th in the nation, according to a report Tuesday from the federal Bureau of Economic Analysis.
Gross domestic product growth in California was just 2.1 percent in the quarter, second-lowest in the West, trailing Hawaii’s rank of 40th.
Real gross domestic product increased in 48 states and the District of Columbia in the second quarter of 2017, according to statistics on the geographic breakout of GDP released today by the BEA. Real GDP by state growth in the second quarter ranged from 8.3 percent in North Dakota to -0.7 percent in Iowa.
The itemized deduction for state and local taxes has become a flash point in the debate over the GOP’s tax plans.
The House and Senate proposals call for sharply limiting or eliminating the so-called SALT deduction. Critics say Republicans in high-tax states would have a hard time voting for any bill that included this provision, because the deduction is so valuable to their constituents.
And it is, to some. But many people in high-tax states get no benefit from this deduction because they don’t itemize deductions or they are subject to the alternative minimum tax, which doesn’t allow it. Another group of people get little benefit because they are subject to the phaseout of all itemized deductions that kicks in at higher incomes.