A Two-Track Economy on the Edge

The no-hire, no-fire AI economy is on the precipice, with renewed doubts about an expected interest rate decrease at the December Fed meeting. October Labor Department data is still missing, and uncertainty continues to influence both markets and sentiment. Consumer confidence is plummeting—now approaching 2022 levels and marking the second-lowest reading in history.

Data is piling up showing Americans are living in two very different financial realities. The top 20%—those with significant wealth—continue spending and saving with little concern. The remaining 80% are worried about their financial future or living paycheck to paycheck. Even among the top 20%, polling shows a broad dissatisfaction with the economy overall, echoing themes we’ve seen before when strong headline data didn’t translate into positive sentiment, as noted in earlier reflections on why Americans didn’t feel the strength of the economy.

This disconnect appeared again in last week’s elections, where “affordability” was the top concern for voters. Cultural issues were not the focus. The political mood feels similar to 2023–2024 when the data looked strong—low unemployment, declining inflation, rising wages—yet Americans insisted the economy wasn’t working for them. And ultimately, the 2024 election was decided on that feeling.

With the recent government shutdown resolved for now, attention returns to unresolved issues that raised alarms earlier in the year: potential layoffs, rising health care costs, tariffs, and more. None of these have been solved, and another shutdown remains possible. Health care premium increases for 20 million Americans will become a renewed flashpoint. Temporary subsidies beyond what the Affordable Care Act originally envisioned are not sustainable solutions. The larger challenge remains: how do we make health care affordable while producing better outcomes?

It’s difficult to see a long-term solution emerging without larger structural reform. Bigger subsidies may be the only politically feasible option in the near term. But how long can that continue? And which crisis will force action first—health care or Social Security? Both systems are strained, and both are racing toward a financial breaking point. It feels like a race to the finish between turtles with no rabbits. The question is: which one runs out of money first?

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