We are in neither a recession or a depression, but we have some serious challenges. Everyone seems to have forgotten that the economic problems of the late 1970's were similar, and nearly as serious, as the problems we are facing now. We came out of a severe recession in the early 80's and experienced the longest peacetime economic expansion in history. That expansion happened without a massive government stimulus. The government needs to step back and let the private sector reestabish an equilibrium. When that happens, we will see some serious economic growth. The U.S. still has the most technologically advanced economy in the world, packed full of capable knowledge workers.
If we are not in a depression how come number of people on food stamps are breaking record every month? If we are not in a depression how come budget deficit and trade deficits are breaking record every month, year or quarter? Bottom line is if printing reserve currency ability is taken out from USA, then we will become a 3rd world country overnight. Period
This post is a joke. Once the government stops propping up our economy with ever increasing spending(or they default) we will see a significant reduction in standard of living. There will be no expansion. Who do you expect to buy overpriced U.S. products when other countries can manufacture with 1/3 the labor costs or less?
no it wont for one very good reason. the us does not need much more growth. how many more houses or shopping malls do we need when many of the ones we have now are sitting empty. the us is a mature society. its growth days,beyond population growth, are over. we are japan no 2. an aging population who are moving into a maintenance stage. http://www.youtube.com/user/EconCat88
Indeed. We "shifted" all of that growth forward with the articially low interest rates and created such an enormous misallocation of capital that we will spend decades trying to "absorb" all of the overcapacity buildout of empty shopping malls, housing developments on the edge of nowhere and other pointless endeavours that destroyed a ton of capital. It doesn't help matters that the boomer demographic is moving into their retirement years and their consumption will ratchet down considerably WHILE the younger generations are saddled with tons of student loan debt and a terrible job market. "Growth" is nothing more than "inflation".
What are the differences between the 1930s Depression and the Depression today? In the 1930s there were no social programs such as food stamps. In the 1930s the majority of Americans did not have credit cards. The unemployed can whether the storm much easier today due to unemployment payments, foodstamps, and credit cards (keep piling on debt and pay later). Back in the 1930s; if you did not have cash then you were not getting any food. Your only option was to stand in the privately-funded soup line. This leads to even the unemployed lining up to rush into the malls for bargins - most do over-spend and have debt problems (something not found in the 1930s with mainstreet America). These differences lead to the stark differences in pictures of the two depression eras.
The difference this time around could be the danger of global contagion - markets are nowhere near as isolated as they once were.
And, you guys think that economies that are being propped up by their governments are doing well. Take some time to look at Japan's massive debt and its stagnant growth. Are you unaware of what is happening in the Euro area? Show me one instance where massive government spending has lead to sustained economic growth. Here is something that you should probably read: http://econpi.com/case-files/wfmenuprofiles/cptl-vs-soc-part-1.html. It's okay to say we have problems, but it is another to propose solutions that have no evidence of ever having worked.