- From a regular website reader/visitor:
Your garden & bs article helped me to understand the economy more. I didn’t understand it much, still you helped a lot. Can you explain more? More details? < click here to read that original article that started it all >
I sure can! Let’s turn this into a multi-article series and talk down-to-earth economics…nah! Let’s talk about how the economy affects on the United States and our families in real terms…YES !
I will try to be clear and real…and maybe throw in little humor here and there.
Have you ever heard the saying, “figures don’t lie, but liars figure”? It is incredibly true…and especially so when it comes to explaining or even talking casually about the economy.
Here’s where the “expert” economists fail us mere mortal folks:
- They have an agenda (political ideology) and want to frame their statements to reflect that bias.
- Most economic numbers, probably all, can be manipulated to support any version of bias.
- Economists don’t apply true economic numbers to real-life for average folks…they make their statements theoretical…virtually un-understandable.
What I like to do, and will do here to the best of my ability, is:
- Use completely factual economic numbers that are valid, reliable, and defensible.
- Apply those numbers to a person’s real life and how it effects their life and family in real terms.
- Then show clear and easy to understand facts…especially trends…showing how those trends are killing, and have been killing, America for a long time.
- I will also write a pretty decent closing that might really surprise both you and me.
What I hope to accomplish through this multi-part series on economic matters is to help people understand where we’ve been, where we are, and where we may be headed if we fail to change course. And finally, if we cannot change things at the national level, I want to propose practical steps we can take to help prepare ourselves and our families, even our communities, to better endure the worsening economic challenges ahead.
Here is an example of “liars figure”…one night a couple weeks ago, on the way home from a security gig, I was listening to the radio. There was this pair of idiots folks talking about April’s inflation rate coming in at 3.8%. First off…that is a horrible number…a terrible blow to the economy and consumers…a truly bad number for families. But these imbeciles folks talked on and on about how great the economy grew by 3.8% year over year. What??????
First off…that is a totally bogus statement…a bald faced lie actually. It would be good to throw in here at this moment…these two people are rabid, far-right, republican, Trump worshipers…to a point beyond comprehension. But, that being said…their statement is still a lie. Inflation is not a sign of economic growth…not at all!!!
Here is where it could get horribly confusing…but I am not going to do that to you. I will try to be clear and simple…
- “Inflation” is a number that represents the price increase of a “basket” of goods and services. The basket used by experts is a small subset of goods and services that really doesn’t represent an average family’s actual expenses in life.
- “GDP” is the total cost of all goods and services produced in the US without subtracting inflation. It is also called “Nominal GDP”.
- “Real GDP” is GDP minus Inflation. That is supposed to be a percentage representation of the net increase or decrease…the actual growth or shrinkage, of the economy. That is what you normally hear…but that too is a false number.
- Then there is the true/actual GDP minus GDP Deflator(s). The “deflator(s)” is a better representation of the rise in the prices of goods and services (inflation)…a bit more accurate than an inflation figure. But there is no fixed and reliable definition of “deflator”…it can vary by “expert”. So its validity is also questionable.
Let me give you an example #1…
- YEAR 1 the economy produces 100 apples @ $1 each. GDP = $100.
- YEAR 2 the economy only produces 100 apples @ $2 each. GDP = $200.

Did the economy really grow? No. The country did not produce more apples, more food, or increased productivity; only the prices increased (inflation). So GDP would be up 100%, inflation would also be up 100%. But the Real GDP would be 0%…no growth, only a price increase.
Let me give you an example #2…
- YEAR 3 the economy produces 200 apples @ $3 each. GDP = $600.
Did the economy really grow? Yes. The country did produce more apples (productivity), and the prices increased (inflation). So GDP would be up 200% (some growth came from higher prices and some growth came from producing more apples), while inflation would be up 50%.
So would Real GDP be 150%? No. It turns out economic math is more complicated than simple subtraction. Economists use deflators and ratio formulas rather than straightforward subtraction because GDP growth and inflation compound together mathematically. In this example, Real GDP growth would actually be about 100%, because the economy produced twice as many apples but deflators and ratios have to be taken into account.
See how everything could quickly get screwed up trying to understand their confusing crap talk!
So we have to make it really simple for folks like you and me. Forget inflation, forget GDP…use your eyes and wallet. Remember the produce basket from our previous article < click to read >? Real produce from real stores bought by real people went up 100% (yes, doubled in price) from 2016 to 2026. That is a 7.2% average annual inflation rate. That my friend is a REAL inflation figure!
Here’s another one…gas here locally went from $3.09 to $4.69 in 6 weeks. That is 52% inflation rate over 6 weeks…or 8.6% average inflation rate per week. Whoa!!!!! That is terrible. But last year at this same time is was $3.29 a gallon. Someone could make that sound WAY worse if they tried to promote the 6-week inflation rate figure…and they would be lying to you. See last year at this time the price of gas was $3.29. So the annual inflation rate for gas here locally is only 42%. Ah, only 42%???? Yup, that is horrible enough isn’t it. But, it is more accurate.
So talking about inflation is a weird subject to try and figure out in realistic terms. And for the most part it can turn into an emotional trauma a lot of the time. The only true figure that makes any sense is how much money you have left over at the end of the month…if any. That is why I use “essentials” when I display information about economic matters…because that is what honestly and truly matters when it comes to our finances. And inflation is deeply personal…inflation is how it affects you and your family personally.
Regardless of inflation or CPI formulas, GDP deflators, Fed policy, academic models, or political spin, people ultimately experience inflation through groceries, rent, fuel, insurance, health care, utilities, and what remains in the checking account afterward. That’s why two people can hear “Inflation is 3.8%” and yet think of it completely differently.
Inflation is so deeply personal it can feel manageable or it can feel crushing…or be comfortably ignored if you are rich. When I talk about inflation it is lived reality not charts and theories presented by economists that the average person seldom understands.
So how does a person understand April’s stats? If you do a deep dive it gets really interesting. Prices rose mostly from the increase in all forms of energy. Consumer spending was up almost exclusively from the upper-income sector. Credit card balances dropped slightly due to lower & middle-income folks paying off some of their existing balance. Consumer sentiment was down…and not just down a little. It deteriorated significantly during Q1 and into April. So why would someone say the economy performed well? For only one reason…the rich folks spent a bunch of money. And that is the “K” economy effect < click here to read about the “K” economy >
Think about this seriously important fact…In April, overall household debt remained at a record high. Q1 2026 total U.S. household debt reached roughly $18.8 trillion, which is an all-time high. The increase was driven mainly by mortgages and some other loan categories, not by credit cards.
Here’s an interesting set of “dots” to connect…the average mortgage amount during that time was nearly $400,000. Well, who can afford that size mortgage? The very, very top of the middle-class and the upper-class. So it wasn’t the average US family getting a mortgage, it was the top 12% of income earners and the top 20% of the wealthy in the US. Once you connect that dot then you start to get a much better picture…The households doing a larger share of spending and buying are increasingly concentrated toward higher earners and the wealthy. And that leaves the lower & middle-class behind…and falling behind each and every month.
Now, let’s touch on GDP for a minute. Earlier I went into detail about what GDP is and how to look at different “versions” of it. Now for the gotcha…GDP is a statistical, model-based, assumption-heavy, number and heavily dependent on various adjustments. GPD isn’t like measuring the exact length of a board with a ruler…it isn’t an exact science. That’s why many folks hear that GDP is growing and/or “good”, yet they feel economically challenged and financially vulnerable.
You can hear the “experts” report strong GDP growth while families simultaneously experience rising housing costs, wealth concentration to the upper-class, healthcare pressure, stagnant wages, and declining affordability when they go to the store or the gas station. So GDP numbers are also highly suspect when using it to gauge how the economy is doing. Once again…whether it’s inflation or GDP…it is all a matter of both being deeply personal to your family situation.
Bottom line:
- Inflation is your families purchasing power…it goes up or down…you can buy more or less with your paycheck.
- GDP is pretty much meaningless when viewed in relation to your family’s financial situation. It “can” give you an idea of the country’s economy growing or not…but it seldom (if ever) is an accurate view of reality.
Okay, somebody out there will probably want to debate “real wages” increasing to offset inflation. Really? So you think rising wages offsets inflation (price increases)??? Let’s make this real simple for you…let’s use the comparison of the home prices inflating. Someone might think that wages have kept pace and homes are just as affordable as they were in 1980. Really?
Better yet…let’s compare “real wage” growth vs the price increase of all family essentials since 1980…that should make it really clear…
Can I make it any more clear? Real wage growth is NOT keeping up with inflation…not even close. Lower & middle-income families are falling behind…falling WAY behind.
Next, in Part #2…we’ll talk about wealth and the HUGE difference it makes…as if you didn’t already know. But get ready to be really, really surprised!
Watch for Part #2 tomorrow
Articles in this Series –
Related Articles –
- Article that started it all…GARDEN : Truth, Reasoning, & Their Endless BS !
- Feedback : “K” Economy
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