The unemployed are called slackers, and the economy does not depend upon slackers.
If you go back in Time merely to the 1970’s you will see that women entered into the work in large numbers.
Current slackers are simply returning the workforce back to the Historical norm of one worker per family unit...although it isn’t going back to the 1960’s gender bias.
Which is to say, unemployment and the economy will grow. It is to be expected.
Rising interest rates are a sign that our economy has recovered.
I differ the only thing growing the economy right now is free money and when its gone so will be what little growth we have seen.
What’s driving the stock market - the Fed. Most if not all of the growth in the market over the past few years been due to the Fed’s massive QE easy money stimulus. The money had to go somewhere. You can print money at that kind of rate and not expect it to bite you in the ass as some point.
The difference between then and now is debt. Household debt today is 3x what it was in 1946 - the last and the only date in which conditions were at all similar.
Not only is the federal government in as much debt as they were in 1946 and 1947 - so are state governments and local governments. Total debt is up about 50 percent from 1946-7.
The response of the Truman government was to cut back the size of the debt and spending by around 50 percent, slashing the heavy war debt and getting the government on the right footing.
The other problem is this - look at the demographics. We are not only seeing the destruction of the current workforce (especially among those under the age of 50), we are seeing historic lows for the overall employment for this sector.
We haven’t even seen yet when the Boomers start to retire (as they have been for the last 2,3 years. The youngest Boomers are now hitting their peak earning years.
Basically, if you aren’t a boomer, this economy is going to **** you over.
Entitlement growth alone, is projected to consume 100 percent of total US revenues by 2030. This doesn’t include any spending on national defense whatsoever. Entitlements already cover 2/3rds of the entire American expenditures, and rising very rapidly.
This would, unless we see serious cutbacks around 30 percent deficits at this point. At present, under the O regime, we are looking at deficits of around 1.5 trillion dollars off revenues of about 4 trillion dollars. That’s close to almost 30 percent overspending now.
This - bluntly - cannot continue without interest rates on US T-Bills increasing.
We have seen the first move towards a higher t-bill regime with interest rates climbing from 1.5 percent to 2.5 percent. Now this might not seem like much, but this is just the beginning.
When the demographic effects start to bite (and they haven’t yet done so), what then? We are right on the cusp of this.
Who’s going to earn the money needed to pay for boomer pensions when the ratio is 1:1 or even worse, given the terrible employment numbers?
Greece has interest rates of 10+ percent.
Does this mean that the Greek economy is doing much better than the US economy?
The problem is you can’t make a prediction based on facts, or fundamentals. There is a psychological element which can make the same base fundamentals play out very differently. Right now, we are in an era where risk has not had consequence for some time, and people have been conditioned to ignore it. If there is a shake-up, and some heavy hitters begin to see their empires threatened, they will pull back to protect themselves. As they do, everyone else may get a pucker moment, and not want to be the ones left holding the bag. Almost overnight, a market which ignores bad news could become a market which panics, and everything could be different. If lending is suddenly seen as risky, you will have trouble.
I agree, there is no guarantee of a depression in the next few years, but I would not rule it out. Those cars which are selling are often leases, the educations people are getting are on credit, most of the government is borrowed, and governments are not getting out of debt. China looks precarious. Especially in Europe, one card pulled out from the wrong bank, or a hiccup for the Euro, and it could trigger a chain of events which would reverberate.
On top of it, we are in a weird psychological state where I think nobody sees any risk to anything. The Boston bombing killed or maimed how many people, and we have already forgotten about it. The Stock Market goes up on bad news. Obamacare is as foreboding as anything, and everyone knows it, but who cares? We are in a weird, risk-blind, uncaring phase which I think will change back at some point. When it does, it will have economic effect.
Plus, in the background, those slackers do affect the economy, as many are not only draining borrowed tax dollars from the government, they are also producing five or six kids, who will do the same. Did you see that girl on the Zimmerman witness stand? She will have six kids before all is said and done. The Idiocracy is real, it is consuming increasing amounts of your tax dollars, making you work harder for less reward (and subconsciously conditioning everyone to see work as less rewarding) and it will affect the economy as time goes on.
From a biology perspective, this is the r-selected environment, and it cannot last forever. The question is when it will shift to K-selection, and how harshly. I would not rule out a shift in a few years.
No, but the slackers depend on the economy.
From Kipling, a year after the end of The Great War:
In the Carboniferous Epoch, we were promised abundance for all
By robbing selected Peter to pay for collective Paul
But though we had plenty of money, there was nothing our money could buy
And the Gods of the Copybook Headings said If you don't work, you die.