Posted on 11/03/2011 12:58:34 AM PDT by thecodont
The U.S. may face a prolonged period of stagnation. That's the warning from a Reuters op-ed written earlier this week by PIMCO CEO and co-CIO Mohamed El-Erian. He worries that the U.S. could be on a worse path than Japan was when it began its "lost decade." But he ends with a note of optimism, saying that policymakers have the power to avoid Japan's fate. Both their willingness and ability to do so should worry us, however.
Why We Face a Lost Decade
What has gone so wrong that the U.S. could be in for a decade or more of sluggish growth and relatively high unemployment? The problem all began with too much borrowing -- on all levels. Consumers, states, and the federal government borrowed too much money. The problem for homeowners is particularly acute, since many now have assets worth less than what they owe due to the housing bubble. Rapidly growing student loan debt makes matters worse.
What you end up with is a troubling cycle. Unemployment is high, so consumer sentiment is low. And as a result, Americans aren't spending enough money to cause firms to hire more aggressively -- so unemployment stays high. And the debt burden Americans are under cuts spending by even more. Many are trying to whittle away at their mortgages, credit card balances, home equity loans, and student loans. Others are trying to rebuild their nest eggs. Weak sentiment combined with deleveraging is a recipe for very slow spending growth.
Housing having been the source of the bubble makes economic growth even harder. It often helps lead a nation out of recession, but this time around it is contributing zero growth.
(Excerpt) Read more at theatlantic.com ...
Did you see that line in Florida for that casino job fair? Thousands were lined up!
Unemployment is a lot higher than the government says it is.
Hope and change, I guess.
Great Googly-Moogly. You’d have to invent a new word to describe this level of stupidity.
“Unemployment is a lot higher than the government says it is.”
It’s been around 25% to 30% for several years now. Of course, I always underestimate these things, so...
I think it will be longer than a decade sadly. (See my tagline).
Welcome to America’s Lost Century.
“Unemployment is a lot higher than the government says it is.”
You’re absolutely right; here in NJ even our casinos are being hit hard. The whole thing is gringing to a halt, as discretionary dollars disappear and the places people used to spend them tighten their belts. Restaurants and stores are laying off; I was in a store where the woman behind the jewelry counter would call out on the intercom whenever customers were waiting in electronics (which a few years ago was probably the busiest department).
Obama’s media doesn’t seem to realize that no matter how low they say unemployment and inflation are, people know better and have been voting accordingly since 2009. Repeating the lie daily doesn’t make it so.
More Like: Lost Century Of Political Correctness
Using stimulus to solve our economic problems is like trying to put out fires with gasoline.
Not including the aformentioned statistic.
Where did they find this nitwit?
Yes times are tough in NJ but you wouldn’t think so if you went into the Outback by me on a Friday night.
“Yes times are tough in NJ but you wouldn’t think so if you went into the Outback by me on a Friday night.”
I see the same thing in bars; after a while you realize that our young adults have traded marriage, families, and homes for the day-to-day existence that comes with a complete lack of job security. I can’t even say I blame them, but those girls know their clocks are ticking...
“90% of all statistics are fabrications 52.6% of the time.”
I heard it was 91.3% of all statistics. Let’s have a flame war over it.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.