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Find out how good or bad your dream economy compared to today’s

Published

11 months ago

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Presidential candidates are already battling over the economy, promising to bring back the boom times or realize the prosperity that lies ahead, if only we vote for them.

But are you better off now than you were four, eight, 30 years ago?

We wanted to see how good the past really was, and how today measures up. So we pulled some important data for the past three decades to put current conditions in context. Tell us what your dream economy would look like, and we’ll tell you how your vision tracks with the real world — and what other readers thought, too.

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How much would prices go up or down in your dream economy?

You’ve probably noticed that prices have been rising. Economists and policymakers actually believe prices should increase a little bit, steadily and predictably. Specifically, they aim for an inflation rate of 2 percent each year.

Inflation especially stings now because of the spike over the last few years.

Even when inflation is where it’s supposed to be, a lot of factors contribute to it. Workers lobbying for better pay can push prices up — from there, employers might charge more to help cover their costs, and then other workers might also start asking to be paid more. Inflation can also arise from a mismatch in supply and demand: If 100 people want to buy cars, but a dealer only has 10 available, they will raise the price, knowing someone will probably want to pay it.

But you might only notice inflation when it’s higher than usual — and prices start to feel like they’re rising too fast. That’s what’s been happening lately. Inflation soared during the pandemic and worsened with Russia’s invasion of Ukraine. But the Federal Reserve has been working hard to try to bring prices back under control.

The central bank’s goal isn’t to push prices themselves down, but to keep them from rising too fast. Prices only tend to fall when the economy is in real trouble, and deflation usually brings along a slew of its own problems.

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How about wages?

Wages tend to go up with inflation. Ideally, as goods and services become more expensive, your paycheck rises enough to keep up.

But average pay has bounced around over the past 30 years. Wages fell dramatically during the Great Recession, when the financial system cratered, millions of people lost their jobs and the recovery was slow.

After the pandemic, though, pay started to pick up faster than usual because employers were desperate to hire, and there weren’t enough people coming back into the labor market to take jobs at hotels, restaurants, retail stores, airports and more. Wages have cooled a bit since but are still above normal levels.

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How would gas prices change in your dream economy?

You can see gas prices changing all the time, with big billboards at every gas station nearby. Fuel costs also make up a large share of households’ budgets, so when prices at the pump rise, it can be especially tough.

Fuel prices swing around quite a bit, even in normal times. Gas costs often rise in the summer when there’s more consumer demand for travel and road trips. And they can be tied to global factors affecting oil supply and production.

Most recently, prices at the pump soared in the summer of 2022, breaking records at over $5 per gallon after Russia invaded Ukraine and roiled global energy markets. They’ve since come way down.

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How many Americans would have $400 socked away for an emergency?

Even when the economy is doing well, a large share of the population doesn’t have more than a few hundred dollars stored away for an emergency cushion.

When the economy runs into trouble, people have an even harder time with emergencies: In 2013, in the wake of the Great Recession, only half of Americans could cover an unforeseen $400 expense. That share slowly grew as the economy continued to recover.

After the pandemic recession, an unprecedented level of government stimulus under the Trump and Biden administrations sent checks directly into peoples’ pockets and shored up unemployment benefits. That meant more people than usual could handle emergency expenses in 2021. Now that the extra support is drying up, the total is dropping again.

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What’s your dream mortgage rate?

Your mortgage rate can make or break whether you can afford a house. For most home buyers, higher rates mean higher monthly payments, even for homes at the same price.

Mortgage rates are influenced by a range of factors in the housing market. They’re also tied to the Federal Reserve’s benchmark interest rate: When the Fed raises rates, mortgage rates go up and vice versa.

Rates that seem high today were fairly normal throughout the 1990s. But the Fed cut rates after the Great Recession and kept them low for years — and then did the same after the pandemic began. That means many millennials came of age when mortgage rates were historically low, at or below 4 percent. If you’re a generation older, though, you may remember paying nearly 20 percent for a mortgage in the early 1980s.

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How would stocks fare?

The stock market doesn’t always have much to do with the economy overall. But you still probably pay close attention to it, like many people: More than half of American households do have retirement accounts, and about one in five own stock directly.

The market drops during recessions or after sudden shocks, like the Sept. 11, 2001, terrorist attacks. Stocks also took a beating in 2008, when the collapse of the housing market triggered a global financial crisis. They dropped fast when the pandemic began, but then rallied again.

Generally speaking, the stock market trends up. And now, major indexes are clinching new highs.

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How fast would your dream economy grow?

Growth looks at the value of all of the goods and services — basically, all of the stuff — produced inside the United States, and gauges whether we’re making more of it than we used to.

This can bounce around depending on what else is happening in the country or the world. Gross domestic product tanked, for example, in the wake of the Great Recession in 2008, then again when the pandemic hit in 2020. But growth also surged after both of those slowdowns — especially after the covid recession, thanks to massive government stimulus spending. Things have calmed down to more sustainable levels, but the economy is still growing at a solid pace.

Answer all questions to see your results

So how does your dream economy compare with what’s happening now?

By many measures, the economy is doing really well in the real world. There’s no recession in sight, and growth is chugging along. The stock market is near record highs and still climbing. Inflation isn’t yet back to normal levels, but the Federal Reserve is working on that, and gas prices are simmering back down, while wages — even though they’ve settled a bit — are growing faster than prices are.

People still don’t love the economy, though, no matter how good the stats look. Will a few more months of solid performance change any minds? Only time will tell.

Photos from iStock.

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Social Security plans to cut about 7,000 workers. That may affect benefits

Published

6 hours ago

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March 3, 2025

By

The Social Security Administration office in Brownsville, Texas.

Robert Daemmrich Photography Inc | Corbis Historical | Getty Images

The Social Security Administration plans to shed 7,000 employees as the Trump administration looks for ways to cut federal spending.

The agency on Friday confirmed the figure — which will bring its total staff down to 50,000 from 57,000.

Previous reports that the Social Security Administration planned for a 50% reduction to its headcount are “false,” the agency said.

Nevertheless, the aim of 7,000 job cuts has prompted concerns about the agency’s ability to continue to provide services, particularly benefit payments, to tens of millions of older Americans when its staff is already at a 50-year low.

“It’s going to extend the amount of time that it takes for them to have their claim processed,” said Greg Senden, a paralegal analyst who has worked at the Social Security Administration for 27 years.

“It’s going to extend the amount of time that they have to wait to get benefits,” said Senden, who also helps the American Federation of Government Employees oversee Social Security employees in six central states.

Officials at the White House and the Social Security Administration were not available for comment at press time.

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The Social Security Administration on Friday said it anticipates “much of” the staff reductions needed to reach its target will come from resignations, retirement and offers for Voluntary Separation Incentive Payments, or VSIP. 

More reductions could come from “reduction-in-force actions that could include abolishment of organizations and positions” or reassignments to other positions, the agency said. Federal agencies must submit their reduction-in-force plans by March 13 to the Office of Personnel Management for approval.

Cuts may affect benefit payments, experts say

Former Social Security Administration Commissioner Martin O’Malley last week told CNBC.com that the continuity of benefit payments could be at risk for the first time in the program’s history.

“Ultimately, you’re going to see the system collapse and an interruption of benefits,” O’Malley said. “I believe you will see that within the next 30 to 90 days.”

Other experts say the changes could affect benefits, though it remains to be seen exactly how.

“It’s unclear to me whether the staff cuts are more likely to result in an interruption of benefits, or an increase in improper payments,” said Charles Blahous, senior research strategist at the Mercatus Center at George Mason University and a former public trustee for Social Security and Medicare.

Improper payments happen when the agency either overpays or underpays benefits due to inaccurate information.

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With fewer staff, the Social Security Administration will have to choose between making sure all claims are processed, which may lead to more improper payments, or avoiding those errors, which could lead to processing delays, Blahous said.

Disability benefits, which require more agency staff attention both to process initial claims and to continue to verify beneficiaries are eligible, may be more susceptible to errors compared to retirement benefits, he added.

Cuts may have minimal impact on trust funds

Under the Trump administration, Social Security also plans to consolidate its geographic footprint to four regions down from 10 regional offices, the agency said on Friday.

Ultimately, it remains to be seen how much savings the overall reforms will generate.

The Social Security Administration’s funding for administrative costs comes out of its trust funds, which are also used to pay benefits. Based on current projections, the trust funds will be depleted in the next decade and Social Security will not be able to pay full benefits at that time, unless Congress acts sooner.

The efforts to cut costs at the Social Security Administration would likely only help the trust fund solvency “in some miniscule way,” said Andrew Biggs, senior fellow at the American Enterprise Institute and former principal deputy commissioner of the Social Security Administration.

What President Donald Trump is likely looking to do broadly is reset the baseline on government spending and employment, he said.

“I’m not disagreeing with the idea that the agency could be more efficient,” Biggs said. “I just wonder whether you can come up with that by cutting the positions first and figuring out how to have the efficiencies later.”

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Student loan borrowers pursuing PSLF are ‘panicking.’ Here’s what to know

Published

7 hours ago

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March 3, 2025

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Students walk through the University of Texas at Austin on February 22, 2024 in Austin, Texas. 

Brandon Bell | Getty Images

As the Trump administration overhauls the student loan system, many borrowers pursuing the Public Service Loan Forgiveness program are worried about its future.

“There’s a lot of panicking by PSLF borrowers due to the uncertainty,” said higher education expert Mark Kantrowitz.

PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of payments.

Here’s what borrowers in the program need to know about recent changes affecting the program.

IDR repayment plan applications down

Some borrowers’ PSLF progress has stalled

While the legal challenges against SAVE were playing out, the Biden administration paused the payments for enrollees through a forbearance, as well as the accrual of any interest.

Unlike the payment pause during the pandemic, borrowers in this forbearance aren’t getting credit toward their required 120 payments for loan forgiveness under PSLF. It’s unclear when the forbearance will end.

But while the applications for other IDR plans remain unavailable, borrowers in SAVE are stuck on their timeline toward loan forgiveness, Kantrowitz said. If you were on an IDR plan other than SAVE, you will continue to get credit during this period if you’re making payments and working in eligible employment.

The Education Department is now tweaking the applications to make sure all their repayment plans comply with the new court order, an agency spokesperson told CNBC last week.

It will likely be months before the Department has reworked all the applications and made them available again, Kantrowitz said.

Those who switch to the Standard plan will continue to get PSLF credit, but the payments are often too high for those working in the public sector or for a nonprofit to afford, experts said.

‘Buy back’ opportunity can help

While it’s frustrating not to be inching toward loan forgiveness for the time being, an option down the road may help, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

The Education Department’s Buyback opportunity lets people pay for certain months that didn’t count, if doing so brings them up to 120 qualifying payments.

For example, time spent in forbearances or deferments that suspended your progress can essentially be cashed in for qualifying payments.

The extra payment must total at least as much as what you have paid monthly under an IDR plan, according to Studentaid.gov.

Borrowers who’ve now been pursuing PSLF for 10 years or more should put in their buyback request sooner than later, Kantrowitz said.

“The benefit is likely to be eliminated by the Trump administration,” he said.

Keep records

Borrowers have already long complained of inaccurate payment counts under the PSLF program. While the student loan repayment options are tweaked, people could see more errors, Kantrowitz said.

“A borrower’s payment history and other student loan details are more likely to get corrupted during a transition,” he said.

As a result, he said, those pursuing PSLF should print out a copy of their payment history on StudentAid.gov.

“It would also be a good idea to create a spreadsheet showing all of the qualifying payments so they have their own count,” Kantrowitz said.

With the PSLF help tool, borrowers can search for a list of qualifying employers and access the employer certification form. Try to fill out this form at least once a year, Kantrowitz added.

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Treasury Department halts enforcement of BOI reporting for businesses

Published

10 hours ago

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March 3, 2025

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The US Treasury building in Washington, DC, US, on Monday, Jan. 27, 2025. 

Stefani Reynolds | Bloomberg | Getty Images

The U.S. Department of the Treasury on Sunday announced it won’t enforce the penalties or fines associated with the Biden-era “beneficial ownership information,” or BOI, reporting requirements for millions of domestic businesses. 

Enacted via the Corporate Transparency Act in 2021 to fight illicit finance and shell company formation, BOI reporting requires small businesses to identify who directly or indirectly owns or controls the company to the Treasury’s Financial Crimes Enforcement Network, known as FinCEN.

After previous court delays, the Treasury in late February set a March 21 deadline to comply or risk civil penalties of up to $591 a day, adjusted for inflation, or criminal fines of up to $10,000 and up to two years in prison. The reporting requirements could apply to roughly 32.6 million businesses, according to federal estimates.     

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The rule was enacted to “make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures,” according to FinCEN.

In addition to not enforcing BOI penalties and fines, the Treasury said it would issue a proposed regulation to apply the rule to foreign reporting companies only. 

President Donald Trump praised the news in a Truth Social post on Sunday night, describing the reporting rule as “outrageous and invasive” and “an absolute disaster” for small businesses.

Other experts say the Treasury’s decision could have ramifications for national security.

“This decision threatens to make the United States a magnet for foreign criminals, from drug cartels to fraudsters to terrorist organizations,” Scott Greytak, director of advocacy for anticorruption organization Transparency International U.S., said in a statement.

Greg Iacurci contributed to this reporting.

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