The U.S. Economy — In Lousy Shape And Getting Worse
How could anyone (even an economist) think the prospects for a moribund U.S. economy will improve in months and probably years to come? It’s time to stop all the “experts see hope” and “certain indicators suggest” nonsense. Time to just plain look at what’s happening and what’s almost certainly going to happen.
Housing is the traditional leader in U.S. economic recoveries. Not this time. You know all the reasons. Why bother enumerating them again here.
Consumer spending is critical to economic growth, accounting for about 70 percent of overall spending. But unemployment remains high. The jobs that are being created are mostly in the low-paid service sector. A government pump priming stimulus is not only ending, and money printing “quantitative easing” is not only set to end, too, but between a trillion and two trillion dollars is going to be cut out of the federal budget over the next decade. What will replace this economic boost? Not much.
There’s growing inflation on basics. Food, energy, health care, etc. As these prices go up, people have less to spend on other goods and services. Energy costs might moderate. Food and health care costs? Not any time soon.
The debt troubles of the euro-zone have already had negative consequences on our own banking system. And there’s no end in sight to the EU’s sovereign debt crisis.
Real political leadership to address our own government debt issues is nowhere in evidence. Instead of pragmatic solutions we’re seeing — and likely to continue seeing — timidity, stupidity, political posturing, and ideological intransigence.
To this astonishingly unappetizing man-made stew we can with near certainty expect unpredictable but inevitable environmental disruptions. Earthquakes, floods, droughts, hurricanes, et. al with their own bad economic outcomes.
This coming week we will be presented the next batch of economic reports from Washington and private sources that analysts and other supposedly prescient experts will filter through like so many priests carefully examining the entrails of a sacrificed sheep. And some will doubtless find signs that things are getting better, albeit slowly, or at worse, that we have just hit a temporary “soft patch.”
Will no one in a leadership position dare speak the truth about where we really are and where we’re really headed economically? It wouldn’t make any of us happy. True. But my, my, wouldn’t it be refreshing change?
More from this writer at http://blog.wallstreetpoet.com