4 Problems That Could Sink America's Economy: Rick Newman

usnews.com:

If we're lucky, the recession is winding down, and life will start to feel a bit more comfortable before long. But that doesn't mean things will go back to the way they used to be.

The global recession that began in America's housing market has shaken the world's economic order and possibly knocked the United States down a notch or two. The spendthrift American consumer is out of money. American wages are flat. Despite some hopeful signs, the U.S. economy could muddle along for years.

Read the whole story: usnews.com

Comments

[Wiseronenow]

When I first started reading this article, I'll admit, my mind wasn't as open, but decided to read the whole thing and this person hits it out of the park! Straight forward even though many may not like to hear it but it's realistic. Only thing I'd disagree with is that the author feels it can still turn around. I'm not as hopeful, at least not in my lifetime.

[Wiseronenow]

"Could" sink the American economy? We are there!!

[JaneQCitizen]

My gosh. That's quite possibly the worst USNews article I've ever read. What happened to the wordsmiths that used to work there? The researchers? That was nothing but an opinion piece.

Americans, on average, put in more work time than our European and Canadian counterparts, yet enjoy a lower standard of living.

I think some research needs to be done concerning the balance of profit sharing between American companies and their workers versus the profit sharing between, say, IKEA and their Swedish employees.

[Wiseronenow]

"Americans, on average, put in more work time than our European and Canadian counterparts, yet enjoy a lower standard of living".

----------­----------­----------­----------­----------­----

Not true. If we are working harder, we surely aren't working smarter.

[freddiefranks]

While the author is perhaps a bit excessive, there are underlying points made that are crucial to the debate over where the US as a nation is going. First off, the economic empire you've had for the past few decades is dead or dying, something most Americans refuse to believe.

Secondly, the attitude of "everything I want, and now!" is very much alive in the average American consumer. And while the author is probably disingenuous to suggest that Americans don't work hard, the notion that one deserves all their heart's desires, the American Dream so to speak, is not a realistic one. Others have said this, but I'll repeat: save rather than spend. Expand your education rather than try to "game" the system for a better, higher-payed job.

And I'm well aware that this is incredibly difficult to do because of the way corporate America is built up. So really task #1 is to rid Congress of its blatant servitude to corporate giants and private contractors. It's corruption, pure and simple.

[scottowego]

I agree with you. I'm not sure what to add but only to point out that I really feel for the students graduating with MBA's from college. No jobs and lots of debt. I'm sure they felt great while they were in school studying. Bubbles pop.

[freddiefranks]

Yep, but there is always hope, and the (small) comfort in knowing that you're doing something you love, something you're good at, rather than caving to the pressures of a lofty and altogether not your dream. I'm an optimist and/or a dreamer.

[siasina]

Black hole called the Federal Reserve: http://www.youtube.com/watch?v=u-54Y-A9iBo&feature=sub

[MetalCanuck]

People need to save and stop spending, do NOT listen to this article. Its because people spent to much in the first place our economy became a bubble. Since 1980 we have been living on credit bubble, it not real so the last thirty years of economic "progress" could dissappear because it wasn't built on real money or investment for the most part.

[JDJase]

stop spending = economy doesn't move

[freddiefranks]

No. While it may seem that way, and free-market radicalists believe it to be this way, saving your money does not mean it disappears from the economy. Without savings, we can't have investments.

Granted, the current system of overcunsumption will indeed weaken, perhaps even wither, but then again, it started this mess to begin with, and will at some point need to be replaced with something more sane.

[Dfndurites]

Why work when you can go to welfare and get paid to do nothing have free food let the mexicans do the work for us and we can sit around and watch Oprah and play on the internet. Work and Jobs are overtated the Goverment can pay for everything

[texastrixie]

I'm supposed to feel bad because the top 1% are having to pay for two open-ended wars? First off, most of that top 1% are Republicans and they voted for the twerp that lied us into those two wars (one of which was nothing but an ego trip for that crazy little twerp). Also, I will feel for that 1% when even 1% of their kids are those being slaughtered in Iraq and Afghanistan. It is the rest of us (and the lower on the economic totem pole the more likely to have sacrificed) whose kids are being sent home in body bags - not the precious offspring of that selfish, greedy 1%! Taxes are only money. Ask the young widow of a 22 year old army private who died in Iraq how much money she would give to have her husband back? So you won't be able to buy a new sports car, or take another European vacation? Big deal.

[urweatherman]

Don't talk to us about money savings and our fallen heroes....­.if Clinton had done his due diligence and taken care of Bin laden when we had the chance....­.there would be no wars, no body bags, and no lost countrymen on 9/11......­.the top 1% pay the vast majority of your security in this country so I suggest you just be thankful. Especially for those that have kept us safe for the past 8 years! Wise up!

[BBackSoon]

past 7 1/2 years.

[Wiseronenow]

Economist: "The economy will fire up next year, we will see a recovery."

"Why?" I ask.

Economist: "At the right times there will be new kinds of stimulus money."

"So it's like squirting starter fluid into the carburetor?"

Economist: "Sort of."

"What if there isn't any gas in the tank?"

Economist: "Then it will be a limited recovery."

Now I know why I like garage mechanics better than economists. Mechanics assume the goal is to get down the road more than a mile or so.

[scottowego]

Seems to me that if they (we) want a sustained recovery and no more bubbles, we need to stop limiting ourselves to few big industries and start increasing diversity through manufacturing. There's a reason China and other countries are growing so fast. They make things and are proud to be industrialized. We, on the other hand are like the proverbial "one horse town". We put our eggs in a few really big industries. When one has problems..­.. we all suffer.

[Wiseronenow]

Yes, but we've been doing that for as long as I can remember, and trust me, it's been long. As long as the Wall Street "mob" get their take first, we won't see those eggs diversifying any time soon, if ever, unless of course it benefits the "mob" first and foremost.. Back in the early 1700's, 93% of productivity was in argriculture. Now, it's at 3%. And, so many other jobs are outsourced. We are sk e w e d.

[jsarets]

The only problem that can sink the economy is the relentless devaluation of labor by the global financial system.

The American workforce has generated an explosive growth in productivity without a corresponding increase in real income. However, labor productivity is also exploding in the developing world where wages are substantially lower.

Businesses are spending more of their revenues on capital (debt and profit) and resources (energy and materials) while the slice of the pie left over for labor gets progressively smaller.

The industrial age has come full circle. Production is no longer a function of labor, but rather a function of wealth and property, just as it was at the dawn of the industrial revolution.

At stake is the very notion of employment, the idea that people can earn an independent living arrangement by renting or leasing their time to wealthy proprietors.

They don't need much of our time. All they need to make money is money, and we don't have much.

If labor doesn't rise up against capital, we will soon face the choice of becoming wards of the state or wards of an estate, selling not just our time but our freedom.

Wall Street will find a way to turn us into property, to make labor an asset instead of a liability.

[LibChicAZ]

Well said - this article implied American workers don't work hard enough. My friends and family work longer hours for less pay these days. We can't complain about working 12 hour days and weekends because we're so grateful to have jobs.

We can't all be entrepreneurs - most of us need to maintain our company provided health care.

[scottowego]

we are already statistics. I can imagine what you suggest happening down the road. All the infighting that's currently going on in this country over seriously pertinent matters is only weakening us.

[nofog]

Funny that the article talks about 4 items that can sink the American economy
Yet, nothing is said about the biggest hole in your boat, THE WARS
I gess that does not count, How dare we mention that, continue with
your ignorant bliss .

[hellboundtrain]

There off the books, in one way. Maybe, if we ignore them,
the horrendous costs of these things will not be noticed?

We do notice that our neighbor, friend, father, son, brother
has been sent off to war and is not now here with us.

Return safely!

[LibChicAZ]

Yes, this author implies the middle class hasn't suffered enough. Who the hell else is sending their kids to these wars? The top 2% got tax cuts in a time of war.

[BVLian]

Well Said.....Y­ou would be hard pressed to find the offspring of the wealthy in today's military. It is silent class warfare.

[scottowego]

I'm starting to think that Afghanistan and Iran are having a similar effect on our population as did Viet Nam. It's sutler to be sure. But the country is becoming more divided daily. The two main parties are at each others throats. The economy is damaged. We aren't having the riots, protests and sit-ins like the sixties experienced but I think it is tearing the fabric of our society in subliminal ways. Hope I said this correctly.

[motoGpifupleez]

We're doomed.
Work? Americans work? The immigrants will. And everyone else will complain about them.
Sacrifice? Are you kidding me? The last time a U.S. leader said the word "sacrifice" and actually meant it was Jimmy Carter and he was run out of town. Don't ever ay the "S" word to an American.
Get educated? Ha, ha, ha, ha, ha, ha, ha, ha, ha, .......
Lose the sense of entitlement? What do you think got Reagan elected? He said: "Your Americans. You don't have to do the 'sacrifice' thing'. life OWES YOU the goodies". "Credit, credit, credit"!

[swift goat pet for truth]

Hey. Pretty good.
fanned.

[LibChicAZ]

The middle class and working poor have been sacrificing. We used to be able to count on pensions, and decent wages, and affordable health care. Those were the good old days (1970's)

[Chironomid]

He's certainly right on one thing. If we think we're going to resolve our budget problems on the backs of the 1%, we're smoking crack. We're so far in hock, we're all going to have to chip in, and the sooner we get started, the less we'll have to pay later. Taxes are going to go up on virtually everybody. It's not "if", but when and by how much. This business of getting $3-6-1200 freebie checks from Uncle Sam has got to end, along with a lot of other unaffordable nonsense (like our endless string of foreign adventures, for one...).

Time to sidle up to Britain, Netherlands, and other former empires and get real.

[nofog]

MARK MY WORD, YOU'RE NEVER, I SAY IT AGAIN, NEVER GOING TO GET OUT
UNLESS YOU CHANGE YOUR WAYS WITH EARTH AND THE HUMAN FAMILY

[LibChicAZ]

Some of us are okay paying more taxes if we had faith the government would spend it wisely and stop giving contracts to Halliburton and Black Water and all the other war profiteering going on.

[urweatherman]

and ACORN.....­and the Endowment of the Arts.....a­nd other wastes of our money!

[scottowego]

Why are we going to pay more taxes to the government which will send out our tax dollars as stimulus which will wind up being spent on goods manufactured in other countries? It's like pouring money down a rat hole. Americans need to start making things again. Buy American and create American Jobs. Simple.

[themodernleader]

This is such a self-serving condemnation of Americans for the favor of the selfish and affluent that this sophomoric assessment does not deserve comment. It reads as a team effort of ideologues or superficial "men of words". U.S. News, which I subscribe, provides knowledge that is generally of such a poor quality that believing it leads the reader into a world of fallacious truth and delusion over a period of time.

[Artos]

This guy is a shill for the Corporations. What he is claiming about Americans not wanting to work is garbage. Americans want to work, they just don't want to be abused. Read the article about how business cheat their employees out of overtime pay, Workers Comp and more. For years now Businesses have done their best to cut their work force in order to skimp and save the extra for their own bonuses and salaries. They use one worker to do the job of two or three, and then when that worker becomes ill or gets injured they simply replace him/her with some other minimum wage worker. The example this writer uses of the guy who works 16 hours a day is all good and well, but lets see what his marriage and family life look like in about three or four years, that is if he still is married and has a family. Yes things will change and hopefully for the better, but not on his terms or the Corporations. Americans lost a lot during the last 60 years being herded by the Corporations like cattle at a breakneck pace, and what did it get us. The jobs are all gone anyway. The Corporations who when you apply for a job ask , "Are you a team player, are you loyal", aren't loyal to the Workers, and never have been. Where is their sense of team loyalty?

[Chironomid]

Hear, hear... Working in the US isn't quite what it used to be. If people aren't working as hard as they used to (and that's an "if"), it's not hard to figure out why. When I came up as a young man "thru the ranks", people worked hard because they were industrious, yes, but also because they were part of an organization that provided living wages and a more egalitarian salary ladder. The head of the company made a lot more than you, but not 3000X more or whatever. If you worked hard and were productive, you were rewarded. That still happens, but there seems to be a lot more arbitrary firings, restructurings, etc. that put people's years of effort and personal investment out on the street in a hot minute, too.

And a lot of our European friends seem to do quite well on 35 hr work weeks, mandated 6 weeks vacation, etc. So, busting your a$$ isn't the answer to everything.