Our economy is an environment of “screwflation,” in which inflation is rising and the middle class is being hit with a multitude of other burdens, threatening the health of the stock market, according to Doug Kass.
Kass explains that while prices on goods like food and fuel are rising hitting weaker consumers, fundamental changes in the U.S. economy have also left the middle and lower classes disadvantaged.
Those include a housing bubble that has left many middle class Americans unemployed, technology changes that have made many jobs obsolete, temporary work which has made an income stream less reliable, globalization which has moved jobs abroad, and the rising cost of education and health care.
The result is a long-term potential threat to the U.S. retail market. The solution is cutting taxes on the middle class, more tax incentives to encourage job creation, and domestic infrastructure and energy spending, according to Kass.
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