Whenever Donald Trump talks about the economy, he always points to the same indicators. GDP is up. The stock market is up. By conventional measures, the economy appears stable, even strong.
And yet, a growing share of Americans–particularly younger ones– feel economically insecure, locked out of homeownership, burdened by debt, and unsure whether they are moving forward or falling behind. If you are in the top 1 percent, things have rarely looked better. For everyone else, the picture is less rosy.
That disconnect reflects a deeper shift in how growth is being generated, and who benefits from it.
Consider a middle-class couple in Seattle. She is a public school teacher. He is an EMT. Together, they earn a solid, steady income, enough, a generation ago, to reasonably expect to buy a modest home and build financial security.
Today, they rent, not by choice.
They have done what they were supposed to do. They have saved. They have delayed. They have watched mortgage rates rise and housing prices climb faster than their ability to keep up. Each year, ownership moves a little further out of reach. Renting, once a temporary stage, has become a long-term condition.
By most macroeconomic indicators, they are doing fine. By their own assessment, they are treading water.
That gap, between statistical strength and lived experience, is where the real story of the economy lies.
Increasingly, economic expansion is being sustained by federal deficit spending and asset-driven gains that flow unevenly across the population. At the same time, millions of Americans are making rational financial decisions, borrowing, investing, and delaying major purchases that, taken together, reinforce the very system producing that imbalance.
The result is a quiet but consequential transformation. The economy is growing, but it is no longer translating that growth into broad-based security. When that translation weakens, the middle class begins to erode.
The Rise of a Deficit-Supported Economy
Deficits are not inherently a problem. In many cases, they help stabilize the economy, especially during downturns. But the current pattern is different. Growth is becoming increasingly reliant on sustained federal spending layered onto an already uneven economic structure.
What matters is not just the size of the deficit, but where its effects land.
A significant portion of that spending works its way into financial markets, supporting asset prices, boosting equity valuations, and reinforcing wealth accumulation among those who already hold assets. Meanwhile, wage growth has been steadier but far less impactful, especially when measured against rising costs in housing, healthcare, and education.
This is not simply a macroeconomic story. It is an institutional one. As Congress relies more on stopgap measures and cedes control over fiscal direction, the structure of spending becomes less deliberate and more reactive. Over time, that weakens the capacity of the system to distribute gains broadly.
A First-Class Economy, Coach-Class Outcomes
The economy increasingly operates like a first-class cabin layered onto a coach-class society.
At the top, asset ownership drives wealth. Gains in housing, equities, and financial instruments generate compounding returns. Access to capital, not just income, defines economic security.
For the rest, the experience is different. Wages grow, but costs grow faster. Housing is less attainable. Education is more expensive and less predictable as an investment. Healthcare remains a persistent source of financial risk.
Under those conditions, it is entirely rational for individuals to behave cautiously, to delay home purchases, rely more on credit, or invest in markets where returns appear more reliable than wages.
But those same choices, repeated across millions of households, reinforce the structure. Asset demand rises. Prices climb further. Entry becomes even harder.
The system is not malfunctioning. It is responding to incentives.
Rational Choices, Distorted Outcomes
Here is the uncomfortable part.
The economy is not producing these outcomes despite individual behavior. It is producing them because of it.
People invest because they need returns.
People borrow because costs outpace income.
People delay consumption because uncertainty is rising.
Each of those decisions makes sense on its own. But collectively, they sustain a model of growth that depends on asset appreciation and debt-supported consumption.
That dynamic helps explain a broader pattern. Confidence is weakening even when headline indicators remain positive. The data suggests growth. Lived experience suggests fragility.
When Growth Stops Translating Into Middle-Class Prosperity
For decades, American institutions served as translators, converting economic growth into rising wages, expanding opportunity, and a general sense of forward movement.
That translation is now less reliable. In many cases, it has broken down.
Growth still occurs, but its benefits are filtered, shaped by asset ownership, access to capital, and the institutional pathways through which policy operates. When those pathways weaken, the connection between growth and security weakens with them.
This is why the current moment feels so disorienting. The economy is not in crisis, but the experience of it increasingly is.
The Risk Ahead
The danger is not simply economic. It is political.
When growth no longer produces widely shared gains, trust erodes. People begin to question not just outcomes, but the system itself. That skepticism does not stay contained. It spills into politics, institutions, and civic life.
An economy that grows without broad gain does more than frustrate. It destabilizes.
Because when the institutions that sustain and distribute prosperity fail to translate it into lived security, belief in the system that produces it starts to disappear.
Conclusion: Repairing the Translators
If institutions have lost some of their capacity to translate economic growth into broadly shared outcomes, the task ahead is not to recreate the past but to rebuild that function under present conditions.
That begins with Congress. Reclaiming the power of the purse requires more than procedural fixes. It requires lawmakers to accept the political costs of making choices in the open rather than deferring them through continuing resolutions and last-minute brinkmanship. Regular order, even in a polarized era, forces negotiation into view and makes trade-offs visible.
Second, administrative capacity must be treated as a public good rather than a partisan tool. Hollowing out agencies may yield short-term political gains, but it weakens the state’s ability to implement policy in ways citizens can see and evaluate. Investment in expertise, staffing, and transparent rulemaking is not technocratic excess. It is the infrastructure that connects policy decisions to real-world outcomes.
Third, the broader informational environment matters. When political incentives reward spectacle over substance, even well-functioning institutions struggle to communicate their work. Strengthening local journalism, supporting public media, and creating space for serious policy discussion can help restore a shared baseline for understanding trade-offs.
None of these steps offers a quick fix. But together, they point toward a more realistic goal. Not the elimination of conflict, but its management through institutions that once again connect growth to security, decisions to outcomes, and policy to lived experience.
That connection, more than any single reform, is what needs to be rebuilt.
Robert Cropf is a Professor of Political Science at Saint Louis University.
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