Why Does the Economy Feel Broken Even When the Numbers Say Otherwise?

Americans are told, repeatedly, that the economy is doing well. Unemployment is low. GDP grew at a robust 4.3 % in the third quarter of 2025, one of the fastest paces in years. Corporate profits are high, exports are rising, and consumer spending remains solid. And yet for millions of people, daily life feels more precarious, not less. Rents and home prices are still high. Health care costs are rising. Childcare is priced like a luxury. Even groceries and basic essentials put pressure on family budgets.

This disconnect isn’t imagined. It points to a deeper truth we rarely confront honestly: affordability is not the same thing as economic growth, and for decades our political and economic systems have prioritized the latter while neglecting the former.

Affordability is about power. It’s about whether wages keep pace with the costs people cannot avoid. It’s about whether consumption markets are structured to serve the public or to extract maximum profit. And it’s about political choices, who government protects, and who it leaves to fend for themselves.

Start with housing, the single largest expense for most households. Median homebuyer costs rose again in 2025, outpacing many wage gains, and rents continue to climb in most states. The Federal Housing Finance Agency’s price index shows house prices up 2.2 % year-over-year, continuing a long trend of growth.  Among the 100 largest regions in our country, 47 exceed this growth rate with some areas experiencing price growth as much as 7-9%.

Across the rental market, surveys suggest roughly 60 % of U.S. renters are “cost-burdened,” spending more than 30 % of their income on rent, with many spending around 40 %. That pressure contributes directly to economic anxiety and shrinking financial flexibility for working families.

Then there’s childcare, a cost many Americans now find more burdensome than rent in metro areas, particularly for families with multiple young children. According to recent data, the average price of childcare for two children in 2025 is roughly $29,100 per year, a 40 % increase since 2017 and significantly faster than median income growth. Child Care Aware of America’s national price data show that such costs would exceed the Department of Health and Human Services’ threshold for affordable care in most states.

Health care paints a similar picture. While official inflation numbers often headline modest increases, medical care costs are still rising faster than overall inflation, and many middle- and lower-income families are struggling with high premiums, deductibles, and out-of-pocket expenses. Reports note that insurance premiums for Affordable Care Act plans could nearly double next year as tax credits lapse, potentially pushing costs well beyond what many households can reasonably afford.

Meanwhile, necessities like food and energy have also risen faster than wages for many families, squeezing budgets from all sides. According to cost tracking studies, groceries have climbed by more than 30 % since 2019, while inflation-adjusted income gains lag slightly behind.

Defenders of the status quo often point to headline wage growth and low unemployment as proof that “things are getting better.” But averages hide reality. Many households are contending with rising costs well above inflation for essentials, while wage growth for lower- and middle-income workers remains tepid in real terms.

This is why affordability is fundamentally a political issue, not just an economic one. We have chosen deregulation over consumer protection, tax cuts over public investment, and corporate consolidation over competition. We have allowed monopolies to flourish, unions to weaken, and the social safety net to fray—all while insisting that the “free market” will somehow deliver fairness on its own.

It won’t. Markets reflect the rules we set. And right now, the rules are tilted toward those who already have the most.

A vision of affordability starts from a simple premise: people should be able to live with dignity from their work. That means raising wages and strengthening labor protections. It means building more housing and treating it as a public good. It means confronting price gouging and monopoly power. It means expanding health coverage and investing in childcare, so families aren’t forced to choose between work and care.

Affordability isn’t about handouts. It’s about whether an economy works for the many or the few. When people feel constantly squeezed, distrust grows toward institutions, toward government, and toward democracy itself. That anger doesn’t emerge in a vacuum; it’s the predictable outcome of an economy that produces abundance but distributes anxiety.

If we want to restore faith in our economic system, we need to stop congratulating ourselves on headline numbers and start asking a more basic question: can people afford to live?

Until the answer is yes, the economy is not truly strong—no matter what the charts say.

T. Michael Smith

wwwtmichaelsmith.com