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Let me explain why in terms of the four factors that economists use to divide up the total spending in an economy (i.e., the "aggregate demand"). In order for a recovery to occur, the sum of these factors has to rise. Here's why I don't expect that sum to rise:
1. Consumption. Wages and salaries won't be increasing, and people are too deeply in debt to spend more money without more income.
2. Investment. None of the following types of business investment are likely to increase:
a. Manufacturing investment won't increase because China, following a mercantilist policy, will keep the dollar pegged to a rate where they can prevent investments in American manufacturing from becoming profitable.
b. Construction investment won't increase because of over-construction during the house price bubble and because house prices still have a way to fall.
c. Retail investment won't increase because consumption won't be increasing.
d. Energy investment in nuclear or fossil fuel energy sources won't increase because they will be discouraged by the Obama administration and the Democratic Congress. Green energy has proven unequitable.
3. Government Purchases. Although government purchases and subsidies of unprofitable energy production will stay strong, the government can't increase its already huge deficit spending much more.
4. Trade Surplus. An improving trade surplus (i.e. more exports or less imports) would help. But I expect the trade surplus to go the opposite way because many countries, including China, will manipulate their exchange rates to prevent American exports from increasing more than American imports.
I agree with everything you say except for 2d. Still, I am going to go with the article.
I said nothing about TRUST...But their ALL getting OUR tax dollars to pay their salaries, benefits and lifestyle, they need to start working for it. We're worrying about our tax dollars going toward healthcare for others, I'm more concerned with these politicians getting set up for life for doing absolutely nothing but acting like a bunch of spoiled ignorant children.
The sooner everyone realizes that BOTH parties are nothing more than a bunch of power-hungry idiots who care more about their own well-being than the people they represent, the better off we will be.
It would be nice to fire them all and start fresh.
True, and once habits are forced to change and are reformed it is hard to break them. The days of people taking out home equity to consume are gone for many years. Welcome to the post Great Recession economy.
I will say that you haven't heard any group of small business men talking about what is about to happen to them. In fact, is happening right now. Like they can't borrow money for expansion of their business from those banks that have, as you say, recovered. I think that small businesses are in much worse shape than they were a year ago. Is that because of Bush?
No it s because we dont know when the other shoe will drop and knowing the crowd that is in their right now, it is not exactly a warm fuzzy feeling for us small business's.
TODAY IS 9-9-2009.
Don't waste your time worry about what the President of The United States will or won't do. Let's look within ourselves and see what we can do to help him turn this country around. The whole wide world has a gripe and a complaint. If We all do our part think what can happen. Will you join us.
One individual at a time, one city at a time one Nation at a time.
You only have 24 hrs in a day, use it to do something good for someone else today and see if you don't feel better about yourselves.
I believe this is the message from our President OBAMA & FIRST LADY.
What say You.
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Do something good today. 9-9-2009*****
