Are we headed for a stagflationary period, simular to the 1970s??

Question

With the rise in gas prices, rising interest rates, and sluggish job growth, our economic climate is very simular to the 1970s. Any thoughts on what the rest of the decade looks life for the US economy??

Answer 1

There are at least two major differences between now and 1970s. One is the productivity growth, which was unusually sluggish in the 1970s and is unusually robust now. The other is demographics. U.S. population today is much older than it was in 1970s. Now keep in mind that productivity growth typically steers clear of healthcare and education, and what do you see? A (junk?) job explosion in healthcare in general and elderly care in particular. California's Employment Development Department already considers Home Health Aide to be an occupation (and a high-growth one, too), and it is likely that millions of people all over the country are going to be employed in this and similar occupations. Median annual salary for a Home Health Aide in California? $19,000.

Answer 2

Yes.

Economies move in cycles. Typical cycles are 30 years, 60 years, and 100 years. If you compare the 1900's with the Mid 1970 you can see what the economy is likely to do; forecasting.

So, in the early 1900's we were struggling with energy for our Kerosene lights , and the "Automation" was near it's birth. In the 1970's we had the energy crisis and a "Stagflation". So, we can conclude that some brilliant scientist will develop a new way to use energy that will revolutionize our lives and we will experience that period of uncomfortable "Stagflation".

Although governments and economists try to change economic outlooks the cycle periods are usually inevitable.

Answer 3

probably just as you envision it... the middle class is shrinking and people are quickly polarizing between the upper class and the working class and our government will always secretly manipulate our economy enough for it not to totally crash but I think the reality will eventually set it and inflation is going to spiral out of control... not because of gas or rising prices but because of the greed of our politicians and corporations... prices are being rasied not only because costs are higher but because they simply want to turn a bigger profit...

Congress gives itself a cost of living raise every year but they haven't given the american people one since Clinton did it in like 96... they claim it's to hold down inflation - but if they wanted to do that, they would use a lot more economically sound solutions than just telling people that it's the ME's fault for raising the price of oil.... when in reality the American gas companies are reaping their largest profits ever and meanwhile congress is focusing on the internet gambling crisis in our country.

Inflation is only really damaging to billionaires... but they want the proletariats to think that it will hurt us more. if my 500$ was only worth 400 compared to what it was in the 90's than it wouldn't matter much to me - it's still enough for rent, but Bill Gates is probably hemorraging net worth at that same thought... I think our democracy is beginning to reach the end of it's run, sadly... It's not about the people anymore, it's about the big money interest groups.

We've become the facist government we were always designed NOT to be.