Source: US Office of Management and Budget and Congressional Budget Office
    Corporate profits 2001- 2005: 76% increase
    Corporate profits for 2005: up 16%
    Disposable income for 2005: up 0.5 %
    Inflation for 2005: 3.4%
    Disposable income adjusted for inflation: minus 2.9%

When "experts" talk about the economy being strong, they must be looking at corporate profits. The good side is those profits may have helped the stock market from going belly-up. As it is, the US is 23rd in the world for stock price increases in the last 5 years – the United States has helped companies in other countries as the American trade deficit has grown at a grotesque rate.

Note: the government method for calculating inflation (price of buggy whips, etc.) and disposable income (weighed too much toward high income people, etc.) has been frequently criticized as understating inflation and overstating disposable income. (It's in the government's interest to paint a rosy picture.)

Consumer spending has been fueled in the past few years by home refinancing – cashing out equity to pay bills. 7.7 million of those homes were refinanced with variable rate mortgages. Already at the end of 2005, with only modest interest increases, 20% of these loans were in default two or more payments – higher only in the 1930s.

Source: Barrons (Dow Jones & Company, The Wall Street Journal)
   Wages as a percentage of personal income reached an all-time low of 61% in 2005.
    Consumer spending as a percentage of wages reached an all-time high of 158% in 2005.

The 61% figure indicates our country's total personal income is coming less and less from wages and more and more from capital gains. In other words, the gap beween the wage earner and the "capitalist" is larger than it has ever been in US history.

The 158% figure isn't much of a mystery: people are borrowing from their credit cards to buy things.

Source: the Federal Reserve Bank
    The net worth of America's wealthiest 10% rose by 6.1% in 2005 while the net worth of the poorest 10% fell an unspecified %. [I couldn't find the % decrease for the poor in the Fed report. They just said the average net worth was a negative $1,400.]

Source: Bureau of Labor Statistics
    For both 2004 and 2005, the decreases in real wages were the biggest drops on record.

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Ev-'ry morn - ing, ev-'ry eve - ning,

    A7    Em7    A7
   ain't we got fun?

A7       Em7   A7     G/B  A7   D  G
Not much mon - ey, oh but hon - ey,

    A7     D     D7
   ain't we got fun?

G   G/F#       Fdim(III) Fdim
The rent's un -  paid    dear,

    D    Bm7    B7
   we haven't a car;

E   G/F#      G     Em7
But an - y - way, dear,

      G/B          A7
   we'll stay as we are.

D      Fdim   D   D     Fdim    D
In the win - ter, in the sum - mer,

    A7     Em7   A7
   don't we have fun?

A7        Em7   A7    G/B    A7    D  G
Times are glum and getting glum - mer,

     A7      D    D7
    still we have fun.

G        G/F#      Fdim(III)
There's nothing sur  -  er:

 Fdim        E            E6       G      A7
the rich get rich and the poor get poorer.

D      Fdim    D       B7         E7
In the mean - time, in be - tween time,

    Gdim      A7    D
   ain't we  got fun?

Aloha, Larry