What do you think about the future of U.S. economy?

Question

I don't know that much about economics, but I keep hearing that the dollar keeps decreasing in value and about outsourcing of jobs. Other people have also brought up issues about gas prices and environmental effects. The future of social security and medicare are other issues. It seems to me like not too many people are optimistic about our economy. What do you think?

Answer 1

The people who are not optimistic about the economy do not understand what made the US the #1 economy in the first place: innovation. The world has undergone greater technological change in the past few hundred years since the USA was founded than in all the years of human history prior to that point. As long as the US maintains the role of world leader in innovation (barring some major catastrophe), the US economy will keep on surging.

I am very optimistic about the US economy with one caveat: all these issues will get taken care of assuming that the government does something to reign in corporate executives gone wild. The escalating corporate executive salary is the most crippling influence by far on the economy. Almost all of our current major woes are trickle down effects of the government's failure to put a cap on CEO salaries. (Gas prices are kept high so that execs can make $200 million/year instead of 50, etc). As it stands now, CEOs and other execs set up kickback deals with the board of directors, so that the board approves outrageous pay packages and gets greased down the road. Nardelli for example, I'm sure is a master at setting up offshore accounts for these purposes; that's why the Chrysler board members jumped at the chance to get this loser. They want to get a bigger piece of the pie before the ship sinks. Millions upon millions are lost this way. Public corporations are government subsidized entities and the executives should be limited as such. Otherwise shareholders, employees, and the American public get hurt.

Answer 2

Economy the fundementals are fine, and the subprime will be corralled by market forces, and goverment maniuplation to effect the people that are hedgophiles with money, and the goverment will tell hedgophiles no more yatchts for the next five years. Economy will weather this scam like the S&L fraud like back in the 1980s. Uncle Ben is smart waiting for not dropping the interest rates because just more squeeze on subprime lenders is needed to correct bad-behavor. Markets will always correct problems like this, but main street may get manufacting jobs back in certain sectors, and FDI into the USA will improve since the dollar was overvauled to begin because of China currency rigging game. China will suffer this subprime problem a lot more than USA, or EU because there economy not effiecent in the use of capital to offset the toxic waste. Medicare needs to reformed with adjustments needed for more retirees on the program, and social security will be slowly repaired with readjusting the taxation of it, and reducing payouts to higher income people, and partial privatization may occur. Give it to 2 to 1 odds the Americans, and Europeans will recover from this mess just fine, and China will end up holding the empty bag of cash.

Answer 3

I spend a fair amount of time studying economics and the factors that affect it.

The one concern that is looming large right now is the situation with mortgage brokers and the defaulting on home mortgages. This has a NOT small effect on the US economy in that homes are not selling, mortgages are defaulting, mortgage companies are going out of business and you have a run off where there is less cash pumped into the economy...all the way down the food chain.

Gas prices are really not as big of an economical issue as the business world would like you to believe, however naturally there is some correlation. My perception of this is that it has been a great excuse for them all to bump up costs to the end consumer, which then naturally equates to less ultimate disposable income for the avg person.

Less disposable income equates to less money spent and less money spent means a tightening of the financial belt across the country. Some areas are less affected, others more, but the avg of it all shows that there is absolutely a trend that depicts one of concern.

I am not pessimistic about the economy, however, I have personally made it my objective to cut out unnecessary spending and costs right now for the next year, to weather the reduced potential cash flow that may hit any one of us. That in turn also puts less cash into corporations pockets which then means they have to identify to either cut expenses, prices or employees, or all of the above.

The consumer spending index is a huge factor...and plays a massive role in how much cash is flowing in our country. If the consumer doesnt spend, the companies cut back on production, which then creates a lag effect to their vendors, who then make less money. Its touch and go, each link of the chain then can have a 12 month delayed financial reaction, and it can cause a huge downturn in production of items for consumption on the open market.

I am trying to project a factual image of economics rather than a gross statement that implies one of doom. Its all very much connected and each link of the chain affects and effects the next, not a little and very much, alot.

Answer 4

What characterizes "American-ness" is a belief that things CAN be worked out, and almost 100% of the time, that's enough that at least SOME folks will figure out how. Right now, an uncharacteristically high percentage of US residents are so focused on their "personal" problems they are over-looking that, which means that the few standing far enough back to see that nothing has really changed are poised to make an absolute KILLING from the doubt of others.

Look at this chart: In December '02 all the "smart folks" knew we were in for BIG trouble, and got out. How smart do they feel now, four years (and 60% gains they missed out on) later?

When people are pessimistic is the best time to buy as much into the market as you can afford!

Think about it, when do you want to buy steak? When it's on sale? Or when the price is through the roof? You think people will every really stop liking steak?

Answer 5

One of the problems with the whole US culture is that we are fascinated with short-term planning and completely ignore the long term. We are always thinking about the next election, the next quarterly report, our next paycheck.

President Reagan and the two Bushes all spent money like water and gave tax cuts at the same time, as if debt simply didn't matter. Because to them it didn't. They just didn't care what would happen once they were out of office. For all the bad things you can say about Clinton, he at least saw that money didn't grow on trees and did what he could to curb govt. spending and at least point us towards a balanced budget. One of the first things GW Bush did when he got into office was to undo Clinton's work, giving more money away in tax cuts.

Bush has given away more than a trillion dollars worth of America to the Chinese through a combination of tax cuts and increased spending, and this is not counting the cost of the war in Iraq. And most of the spending was unnecessary pork, and most of the tax cuts were special cuts for rich people. Debt service, the payments we make on the national debt, is now the biggest single item in our federal budget. It is equivalent to all the income taxes paid by all the people living west of the Mississippi each year.

If China and Japan wanted to destroy America, they wouldn't even have to call their loans back, all they'd have to do is stop continuing to lend us MORE money! Our whole economy is based on constantly increasing debt!

Answer 6

The lack of optimism in the American people is the problem. The media and certain forces from the federal government are feeding this lack of enthusiasm. The economy id a cyclic thing. Bill Clinton during his administration there was a boom, the media gave him credit, but in reality this was due to certain things that occurred during George Bush Sr's administration. The economy takes time and patience to turn around. Try not to worry so much and things will get better.

Answer 7

And the great government funds somewhat would not help. properly i will deliver on the awful information yet there probable ain't a destiny. it is expected that interior the subsequent 20-30 years India or probable China stands out as the subsequent dominate worldwide leaders. India's financial device is BOOMING and that they export and bring greater effective than they import and consume. to no longer point out India's infants are among the neatest, 20% of their honor's pupils is greater effective than ALL of u . s .'s infants integrate. in basic terms time will tell, and that i do no longer ingredient our financial superpower prestige will proceed with each and every of the intake borrowing and spending + trillions spent on policing the worldwide. Our dollar can in basic terms be stretched plenty. and a marvelous form of international locations we cope with are passing law to minimize the quantity of yankee money well-known and it is as a results of inflation and our reducing value. If a worldwide foreign places money is created, it's going to be u . s .'s fault. Our foreign places money is the main used interior the worldwide and as quickly because it is valueless people who invested into us will lose each and every thing.

Answer 8

I think we need to win the damn war and get it over-with. When the US is showing strength, it reflects in the economy and the measured confidence levels (economically measures the value of the dollar and how much spending goes on by consumers).

Answer 9

Money is being used for the wrong things these days. For example, here (where I live), the city used it's extra money to build an ice arena instead of using it for things we need. It's ridiculous! The same concept is going on in the rest of the U.S. They need to think things over.

Answer 10

Bush ruined it with the stupid no sense war