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Alot of the offical economic reports don't mean much to the average person.
I think the growth or recession debate, GDP, CPI, core CPI or all these things...they're used to distract people from whats really going on. A big part of the country has been in a stealth recession for a long time now. If you're working longer hours for less money, and you need debt to survive....that's not economic growth.
When I watch clips on youtube from 10 years ago, like NBA games from 96 or 97. Its not that long ago, but I think people at those games were better off than today. People didnt need all this debt, home equity loans, credit cards, refinancing etc to stay afloat.
I think you can chart the economic decline to the decline in pop culture, sports, dumbing down in the media, all kinds of things.
I think to get back to a "normal" savings rate (say 5-7%), lower debt, less reliance in refinancing, credit cards, it'll be a big adjustment downward. This whole era of credit is going to be over. 0% down.
It'd be nice if the whole world could get rich living on credit, but how is it going to last. Would you keep lending money to a country with declining education, declining industrial base, low savings, exploding deficits and debt?
I actually have more faith in Americans and America in general. In spite of our deteriorating/under-funded primary education systems, our colleges and universities are actually still highly ranked and sought after in the world.
From my experience going through higher education, I've met many people who are bright, ambitious, competitive, dedicated, entrepreneurial that were from all walks of life (race, ethnicity, social status/class, foreign, etc.). As long as America provides opportunities and attracts and invests in these kinds of people, I feel that America will do just fine.
I actually have more faith in Americans and America in general. In spite of our deteriorating/under-funded primary education systems, our colleges and universities are actually still highly ranked and sought after in the world.
From my experience going through higher education, I've met many people who are bright, ambitious, competitive, dedicated, entrepreneurial that were from all walks of life (race, ethnicity, social status/class, foreign, etc.). As long as America provides opportunities and attracts and invests in these kinds of people, I feel that America will do just fine.
-chuck22b
I agree, there are definitely some people that are very bright and ambitious. But the overall educational level is nowhere near where it should be...competing against China, India, Asia, etc.
From WWII to the 70's, we basically had the world to ourselves. Japan, Europe, China were non factors. We've spent all those gains and now the world is catching up. China now has foreign reserves of something like $1.6 trillion. And we keep racking up the debt. Its gotten too lopsided for us to reverse course quickly, too much has built up.
Well, if the U.S. economy is some 70 percent based on consumer spending, one might assume that a lot of that is not exactly on necessities. Can the economy "recover?" Only if people can and want to spend on stuff that isn't very necessary, and that would be one way to increase the savings rate.
I personally favor a WPA-style infrastructure program. If you're gonna borrow billions of dollars, it should be an investment, not a toss-off to the so-called Iraqi government (which has a surplus, by the way).
Significant blue-collar employment built up the American economy across the board. Infrastructure projects, besides being critical to the whole country, are all levels of blue collar, and by definition cannot be outsourced (unless cheaper immigrants are imported to work). The work would be local wherever it is, so communities all over could benefit from the work and incomes produced.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
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Quote:
Originally Posted by fresh_greenery
All the media and economic pundits are trying to figure out when the recession is going to end. My question is how can it end. Most people report a falling standard of living. People are overwhelmed by raising food, gasoline, energy, college costs and rising local taxes. Their wages have not risen as much as inflation. The result is people have to cut back on their spending. How can the economy ever come back if people spend and save less because of huge inflation? Is America going into a long period of economic stagnation?
If somebody were to say the truth, it would sound something like this: we are now in a GLOBAL economy. This is not longer "our" economy. And the fact is that we are now competing with people from China, Mexico, India and many other places for resources (like oil), jobs, business and even food. And the fact of the matter is that the rest of the world we are going to have to compete with does not live like we do. They do not have 2 or 3 cars in the garage, a 5000 sq foot house or Hummers and Navigators not to mention all the other stuff. Not even industrial nations live as we do. So something is going to have to give.
Even with a reduction in the standard of living, our economy can also recover by selling more exports and providing more services internationally. Making the shift from the consumer generated GDP to one that has positive or reduced negative net exports. Additionally, infrastructure spending, and additional business investments/spending would greatly boost our economy. I think those other parts need to lend a hand... the American consumer is tired.
GDP = Consumption + Gross Investments + Government Spending + (Exports - Imports)
Even with a reduction in the standard of living, our economy can also recover by selling more exports and providing more services internationally. Making the shift from the consumer generated GDP to one that has positive or reduced negative net exports. Additionally, infrastructure spending, and additional business investments/spending would greatly boost our economy. I think those other parts need to lend a hand... the American consumer is tired.
GDP = Consumption + Gross Investments + Government Spending + (Exports - Imports)
-chuck22b
The American consumer is not only tired, they are broke as well.
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