Dateline: 26 January 2017
The stock market is into new highs, but I'm pretty sure that the real economy of America is not experiencing a commensurate rise. Two bits of real-life data bring me to that conclusion.
First, I learned at my last town board meeting that my town's recent annual sales tax revenue check was down 27% from last year's payment. We formulated a budget for the town last fall, based on expected sales tax revenue of $60,000 (which was about what we got in previous years). But the actual payment, received after the first of this year, ended up being $44,000.
The way it works is that sales taxes on all retail sales in my county are sent to the state of New York. The State takes their cut and gives a portion of the revenue to the county. The county then divides the money among the towns in the county (after taking $4,000 for "administrative costs"). Towns with a bigger real estate tax base get proportionately more than the sparsly populated, relatively poor rural towns, like mine. That $16,000 shortfall is significant for my town.
The second reality check came a few days ago when I received my annual statement (for 2016) from PayPal for my business. Almost all my gross sales come to me through PayPal. It so happens that my sales total from last year was 23% less than the year before.
On the one hand, it's a little unnerving to see such a drop in my income. On the other hand, managing my business last year was so much easier and less stressful than it has been in previous years. I actually had more time to enjoy the summer, get some things done around the house, and take a short vacation in the fall.
So, I'm not crying the blues here. I'm just making an observation. From my perspective I don't think the real economy is very good at all.
Is America's economy like Wile E. Coyote in the picture at the top of this page— over the edge of the cliff and about to drop?
I don't think so. I think the Coyote is over the edge, and already on the way down.
That's the way it looks to me.