Before you discount the following chart as a load of malarkey, consider the following: 1) The chart comes from the Fed itself. In order to justify its existence, the Fed has a vested interest in making personal incomes look as good as possible. If anything, personal incomes have fallen more than this chart shows. 2) Until the 1980s, most American households had lots of kids but a sole breadwinner providing for them. These days, most households have fewer kids but need two breadwinners to survive. Considering that, take a look at the following chart and read on:
The sad trend of shrinking personal incomes is a function of the Fed's
and the Federal Government's increasing intervention in the economy.
The size and scope of the Federal Government exploded with the advent of modern liberalism vis a vis LBJs "Great Society". The government and the national debt have since grown parabolically, and a perpetually growing percentage of tax revenue has been used to pay interest on the debt instead of contributing to GDP, despite the Fed crushing down interest rates.
When the Nixon Administration decoupled the dollar from gold in 1971, it allowed the Fed to monkey with the money supply and interest rates, which has had two negative impacts on personal income: 1) It created a vicious cycle of increasingly larger bubbles and bursts. Recessions are more common than they were since the the United States abandoned the gold standard, and, with the exception of the Great Depression and a couple of recessions early in the country's history, they've been deeper and have lasted longer. 2) It's increased inflation. Up until the 1970s, inflation was negligible in the United States. Then, immediately after the dollar was decoupled from gold, inflation began to gobble up a significant amount of personal incomes.
Returning the dollar to the gold standard would reduce the Fed's ability to monkey with the economy and force the federal government to reign in spending. Then, personal incomes could return to a growth pattern. Unfortunately, neither Democrats nor Republicans are serious about cutting spending: