Monday, November 18, 2013

Has the US Economy Entered a Permanent Slump?

I personally don't think it has entered a permanent slump but looking at the causes of where we are might be helpful. First, wages are too low to pull our economy out of this slump. 2nd, too much money is concentrated into too few people which tends to cause "Stagnation" in economies worldwide when that happens. The very rich are better able to maintain their wealth when things are stagnant. But, to move an economy forwards you need a vibrant well fed middle class which we are losing more of every day. 

A successful country runs on it's middle class so as ours is sort of dying this tends to create a slump. If we are serious about recharging our nation we would have to go back to giant leaps like the "Space Race" forced upon us by the Cold War which brought almost infinite amounts of new technology worldwide from the space race. Even digital computers were incredibly accented and grew in affordability directly because of the space race between the U.S. and the old Soviet Union.

Also, now we have global warming and global Climate change so whether ANY crops will grow and be able to be harvested  is much more unknown on a worldwide basis as a direct result. Then on top of this you have the price of gasoline which even in the U.S. is $3 to $4 dollars a gallon. But, gasoline and diesel farm the fields, drive the food to market or fly the food to market worldwide. And every penny per gallon that gas costs more means more people won't be able to afford to even eat worldwide.

The amount of people every day falling of the "edge of the world" losing jobs or livelihoods and not being able to financially feed themselves anymore scares everyone from poor to rich worldwide. In the past people would just go live on a farm to survive. But now, often that farmland is corporate owned or has been changed into a city or slums to a city. So, there is less and less tillable land, so land becomes more expensive worldwide every day. So, this means more and more people will starve without the land and water to grow their own food on. This is becoming worse every day. So, all you need in any one country is a crop failure caused by severe weather and many people are going to starve to death as a direct result within a few months or years.

This is the real problem worldwide of the economic slump.

 

Has the US Economy Entered a 'Permanent Slump'?

Yahoo Finance (blog) - ‎2 hours ago‎
Economists like Larry Summers and Paul Krugman are arguing that the U.S. economy is not, in fact, still struggling to recover from the financial crisis of 2008-2009, but has instead entered a "permanent slump" in which high unemployment and slow growth ...

Has the U.S. Economy Entered a ‘Permanent Slump’?

Economists like Larry Summers and Paul Krugman are arguing that the U.S. economy is not, in fact, still struggling to recover from the financial crisis of 2008-2009, but has instead entered a "permanent slump" in which high unemployment and slow growth are the norm.
This stagnation, Krugman argues, will be occasionally interrupted by bubbles that will temporarily create full employment — like the dotcom bubble of the late 1990s and the housing bubble of the mid-200s. But the bubbles will then burst and and plunge the economy back into the depressing new normal.
Why might we have entered a permanent slump?
Because, Krugman and Summers say, we are suffering from "inadequate demand."
In other words, the main engines of economic spending and growth — consumers, companies, and the government — aren't spending as much as they could.
Krugman highlights one reason for inadequate demand — a slowdown in population growth. Each new American creates both spending power and productive capacity, so the rate of population growth affects the growth rate of the economy. As Krugman points out, population growth has slowed in recent years, in part because of the country's immigration policies.
Another reason for slack demand is that American consumers, who account for about 70% of the spending in the economy, are now reducing the amount they borrow instead of increasing it as they did for the three decades leading up to the financial crisis.
Because consumers aren't spending aggressively, the companies that sell to them aren't spending and investing aggressively. Instead, the companies are hoarding their cash, cutting their costs, and maximizing short-term profits.
Government spending cuts, meanwhile, have reduced "demand" from the public sector, which is further dampening economic growth.
The answer, Krugman and Summers suggest, is to somehow persuade consumers, businesses, and the government to start spending more aggressively.
But, especially in the current political environment, that is obviously easier said than done.
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Has the US Economy Entered a 'Permanent Slump'?

If you want to see the video accompanying this article click on "Has the US Economy----" just  above.


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