|
Depression. There is one hell of a debate that's been going on here--and now over on the "national" forum--about whether that is going to happen or is happening on the national level. The question for this forum is whether or not it happens in Colorado. There seems to be three scenarios:
1. There won't be a depression on the national level and there won't be one here.
2. There likely will be one on the national level, but Colorado won't feel it or it will be much shallower here than elsewhere.
3. There likely will be a national depression, and it will affect Colorado as adversely or even more adversely than the rest of the country.
My personal opinion is that we are headed for Scenario #3. I don't want this post deleted, so I will henceforth limit my comment here on the national scene to saying that enough waste, policy mischief, and stupid decisions by people all the way from John Q. Citizen to the President of the United States have been made across the nation to make a national depression inevitable. There are a ton of posts over on the Politics and Economics forums to describe that viewpoint quite eloquently.
Now, as to why I think Colorado is in trouble specifically: Much of the state economy is tied up in real estate speculation and development--the very activities that will fall first in a depression. I've said that umpteen times before, but few want to acknowledge that reality. Colorado has been also busy subdividing, paving over, and de-watering a good chunk of its ag industry--the one industry in the US and Colorado that actually has some hope of benefiting from the coming economic turmoil. Colorado is heavily reliant on tourism to sustain its economy--more specifically tourism that is very energy-dependent. With the airline industry circling the drain, gasoline approaching $4 and probably higher, and disposable income being mostly spent at the gas station and grocery store, how can anyone think that tourism is not going to take a big hit? Maybe not this summer, but probably by next winter and for a long time thereafter. Then there's that "mailbox economy" of retirees, pensions, and equity transfers into Colorado from many other--now formerly--booming real estate markets in places like California, etc. All of that money is now shrinking--either from downright deflation in the equity, debt, and real estate markets, or by being eaten up by commodity price and living cost inflation on the expenditure end. The cash cow is drying up. Finally, there is all of the other industrial and commercial activity in the state. Despite its growth in the last few years, Colorado is not an industrial powerhouse and hasn't been for several decades. If ones deducts the amount of industrial activity associated with construction and real estate development from the industrial base, there isn't a hell of lot left in Colorado. As for service and retail, it depends on the health of the rest of the economy. If the rest of the economy is a hurtin' frog, it's gonna be, too.
That leaves the energy industry to try to carry most of the Colorado private sector economy on its back. Of course, the same high energy prices that make it possible for people to make a living in that industry are the same high prices that erode the buying power of everyone else trying to live in the state. So, even that positive economic note has its negative side. And energy can't support the whole Colorado population and economy alone.
What's left? Government employment. Of course, how secure can that be with federal deficits and debt exploding--and promising to go even higher when revenues falter in a downturn/depression? As for the state and local government, they rely on the economic health of the rest of the Colorado economy for their revenue stream. In case no one has noticed, they have been essentially living hand-to-mouth during the boom. What do you suppose the outcome will be in a bust?
From the onset of the Silver Panic in 1893 until after World War II, Colorado was pretty much a state with beautiful scenery and a jerkwater economy that grew very slowly for decades. Three things made the economic growth and population growth possible in the last few decades: cheap energy and transportation, a prosperous national economy with lots of discretionary income, and a huge and disproportionate influx of federal dollars into the state. With at least two of those factors, and probably all three, facing serious and possible permanent decline in the next years, the Colorado ahead will likely behave a lot more like that Colorado of 1893-1945--very slow, if any growth, stagnant income and wages, and a stagnant or declining material living standard. All very possibly mixed in with a population that is stagnant or declining. Soon we will be talking not about how many people can or will be able to move into the state, but how many people will HAVE to move out because there is no longer any way for them to make a living here. And, no, it won't be the first time that has happened in the state's history.
|
Welcome to City-Data.com forum! Make sure to register - it's free and very quick! You have to register before you can post and participate in our discussions with 400,000 other registered members. User profiles and some forums can only be seen by registered members. After you create your free account you will be able to customize many options, you will have the full access to over 13,000 posts/day about local topics and you will see fewer ads. Within the last few months our forum was cited in an article in 15 newspaper and in a story on AOL's homepage.
05-02-2008, 03:17 PM
2K sq ft is entry level these days for a family of four.
Linear Mode
