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Economic downturn: Can the U.S. ever
recover?

The catastrophic economic downturn that began two years ago was supposed to shake up the global economy, ending an era in which Americans consumed too much and saved and exported too little.

But the recovery is being driven by a return to the very global imbalances that were a major cause of the crisis. Americans' savings rates have fallen over the past year, imports are rising faster than exports, and countries around the world are again turning to Americans to be the consumers of last resort. Read the full article.

By Jodi Westrick  |  July 9, 2010; 8:00 AM ET  | Category:  National Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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I'll recycle the Twain quote: Reports of our demise are greatly exaggerated.

Posted by: mybri | July 9, 2010 9:20 AM

Those who voted yes, are living in Obama's dream world. Economic recovery is a contradiction of Obama and where he wants to take this country. It's best to listen to Obama instead of thinking your yes vote is a vote of confidence. Obama no more wants the economy to recovery then he likes businesses. If the economy recovers, then capitalism and the free market works and Obama can't have that if he wants to transform this country to socialism. Next time listen better to the speeches Obama makes and understand where Obama wants to go instead of what he says. There can not be economic recovery because Obama wants to spend, spend, spend and when there's no jobs to back up the recovery, there's nothing but lip service.

Posted by: houstonian | July 11, 2010 1:43 AM

Yes, the economy will recover with Democrats and Pres. Obama's leadership.
Only a fool would vote for Republicans touting the same FAILED ideology that got us into this mess!

Posted by: angie12106 | July 11, 2010 3:12 AM

Unfortunately we are no longer a free country fighting budget busting, self destructive wars for our masters. We have even lost our freedom of speech.
The masters are too strong hence I see no end to our economic decline as far as the eye can see. Sad, very sad.

Posted by: qualquan | July 11, 2010 3:39 AM

We're not going to recover until we separate into Jesuslandia and the USA. All those peasants in the south like to "say" they're against welfare and taxing the rich, but that's all it is - talk. Wait until they're on their own, see how far this talk gets them.

Posted by: jontomus | July 11, 2010 4:00 AM

We will recover, but not until Obama is gone, his policies reversed and the average American begins to understand that his interests do not lie in Washington, but on Wall Street.

Central economic planning does not work. It never has, and it never will. Nevertheless, central control of the economy is what Washington has been pursuing for generations, by default under Republican administrations, by design under Democrat administrations. The greater the control Washington has acquired over the economy, the more Washington has had to establish the goals and direction of the economy, too.

From redistributive tax policy to environmental regulation, and a host of, "in the public interest," regulations in between, Washington has rendered the economy "private" in name only. Business owners and shareholders are asked to take all of the risks associated with investment and enterprise, denied the exercise of their own best business judgment through government regulation and oversight, are thwarted by government in every effort to achieve success and, when success is achieved despite Washington, its fruits are wrested from them and redistributed among a population convinced it is entitled to the labor of others.

Under Obama's administration, this business environment has achieved toxicity. Large corporations are hoarding cash (well over $1 trillion), and small businesses are not borrowing to expand or expanding with their own resources. So long as companies large and small are unwilling to bet on the future, the employment outlook will remain grim and, so long as the employment outlook remains grim, so will the remainder of our nation's economic outlook.

Average Americans are beginning to recognize that Washington is the millstone around their own future's necks, and they are beginning to agitate for smaller government and less government control over their personal prospects. They are beginning to, but their numbers have yet to reach that critical mass necessary to compel Washington to retreat from generations of intrusive and counterproductive policy.

We will truly recover when that critical mass is achieved.

Posted by: dryrunfarm1 | July 11, 2010 4:35 AM

This is a vague question and can be interpreted in many different directions. Let's look at Japan since 1990s....has it "recovered", or has it survived as a zombie economy with stiffling amounts of government debt? Has it managed to keep the growth in government debt in check, or has it kicked the can down the road? (mind you, USA has not been a saving society, unlike Japan).

It is also time to ask a more frank question: Is USA going down the path of USSR, with its uncontrolled spending, pet projects, overseas adventures, an aging population, unfunded long-term "debt icebergs" (shortfall of Social Security and pensions, Medicaid, Medicare, state budget deficits, very high fixed overhead, massive amounts of per capita energy consumption)? Time to think, long-term!

Posted by: ordak100 | July 11, 2010 4:47 AM

we will recover only if the dems are thown out of the house and senate and obama is thrown out of the whitehouse...

Posted by: DwightCollins | July 11, 2010 5:07 AM

"Yes, the economy will recover with Democrats and Pres. Obama's leadership.
Only a fool would vote for Republicans touting the same FAILED ideology that got us into this mess!
Posted by: angie12106 | July 11, 2010 3:12 AM "

the ideology that got us into this mess was the playbook of the dems to get obama elected...
and anyone who says it wasn't is lying...

Posted by: DwightCollins | July 11, 2010 6:32 AM

If the traitorous, obstructionist Republicans would stop sabotaging every effort this administration has made to pull us out of this nightmare (GOP created by the way) we would have been well on the road to financial recovery by now. Instead with their "head-up-my-ass" attitude they pursue their pathetic hope that they'll claw back some of their power and return to robbing the country blind by driving us into another Great Depression. They are terminally greedy, totally unpricipled weasels and Obama should take a very large shovel and whack them back into the hole they crawled out of. And they can take Bennie Nelson and Joey Lieberman with them when they all go straight to hell.

Posted by: Bushwhacked1 | July 11, 2010 7:33 AM

Lets see,Bush killed ten of thousands of people to try and rectify his ole mans name.Charged 5 trillion,plus the cost of the wars,plus the money he stole from social security.So all you gop lovers,GO LAY DOWN LOSERS

Posted by: southernman | July 11, 2010 7:45 AM

Everything you need to know. U.S. businesses are holding $1.8 trillion in cash right now. We have to employ 12 million Americans to get back to full employment. So American businesses could pay everyone of the 12M $75,000 a year for 2 years with just the cash they have. Why don't they? American businesses are on strike. Giving Obama and the unions he represents a taste of their own medicine.

Posted by: Peterjdennis | July 11, 2010 7:54 AM

The economy will recover. The reason why is the Republicans don't know anything about running and protecting our economy and it's people. They do know how to protect the greed of Wall Street, BP and Health Care crooks claiming their patriotic while raping your retirement. I don't want REPUBLICAN DEATH PANELS BACK IN WASHINGTON. My retirement is mine!

Posted by: rbraun2000 | July 11, 2010 7:55 AM

We shall recover — the moment the disastrously incompetent extremist anti-growth, anti-employer ideologue Prof. Oboobma announces he has unemployed himself.

Posted by: thebump | July 11, 2010 7:57 AM

Obama or Bush has nothing to do with our economic future. It is our parents and their attitude towards tough struggle for their kids to learn math and science. While American kids are playing, kids in other countries such as India, China, Singapore, Taiwan, Korea, Japan are studying. As long as the parents don't expect more from their kids, no Democratic or Republican presidens can do much to change our economic future. How many things you own are made in this country? How many solar panels are made in this country? How much semiconductors/electronic gadgets are made in this country? Stop blaming our government, Obama or Bush. It is you who need to change.

Posted by: oldandfoolish | July 11, 2010 8:22 AM

A positive attitude is the only way to succeed. No person or country can go forward with a platform of negativity. Negativity may be effective in the short term, but it will never last.

Posted by: Grandblvd03 | July 11, 2010 8:36 AM

I voted no because the "yes" should be preconditioned by an important "if". Yes the economy can recover if we stop spending tax-payers money to bail-out the very people who are abusing our economy.On the one hand the bail-out is increasing the deficit, weakening the tax-payer and on the other this money is being siphoned off to off-shore accounts further decapitalizing us. The "yes" should also accompany, if, we stop fighting endless and meaninless wars.

Posted by: acpress | July 11, 2010 8:46 AM

Unions have wrecked our competitive edge in manufacturing. They have priced us out of the market on an endless list of goods. Until we crush the Union hold on major manufacturing we are lost. How can a toy truck be produced in China, shipped halfway across the world to the U.S. then shipped across the country to a Wal-Mart be cheaper than one produced here by American workers? UNIONS that's how.

Posted by: bobbo2 | July 11, 2010 8:52 AM

OLDANDFOOLISH wrote: "As long as the parents don't expect more from their kids, no Democratic or Republican presidens can do much to change our economic future"

That is only part of the issue. Another part of the issue is a more generic term: Personal Responsibility & Accountability.

Do you NEED an new IPod? Or do you WANT a new IPod? Can you REALLY afford it? Just because they are willing to give you financing doesn't mean you can AFFORD it.

Same can be said for the new car, new smartphone, multiple 50" LCD TVs, computer, and thousands of other 'must have' products which continue to drive this country into debt.

Add to that a Government mindset which has a long term vision of those who hold the most wealth 'sharing' that with those who are unable or unwilling to work for themselves.

Look no further than the photo-op of Michele Obama working at a soup kitchen where the photographer took a picture of a homeless man chatting on a Blackberry! How is it he can afford a Blackberry yet qualify for free food at the soup kitchen?

This country is going down the drain as a result of a 'welfare system' that was intended to be a safety net (BUT HAS BECOME AN ENTITLEMENT PROGRAM) and an entire class of people who feel the Government owes them everything!

Until we return to the work ethic of our forefathers (fueled by the hardwarking immigrants of the late 1800s through mid 1930s) who worked tirelessly to bring this country as far as they did - only then will our chance for an economic recovery have a lasting chance.

Posted by: Disbelief | July 11, 2010 9:33 AM

We are spending 5 billion a month in Afganistan, we have been there for 9 years, no nation can afford this kind of spending in this day and age. How much are we still spending in Iraq? How much did the bailout cost us, the oil spill, how much are we paying for the health care of millions of Americans who cannot afford to pay for their own health care because of the high cost of private health care insurance.

How much debt do we have as a nation?

The republicans spent recklessly in Iraq and Afganistan and the Obama Admin seems to be continuing the same spending but with no real benefit to the welfare of the American people or this Nation's fututre financial well-being.

The future looks bleak and that is being optimistic.

Posted by: rannrann | July 11, 2010 10:05 AM

Creditable news sources report that investors, business owners, and consumers will NOT take a risk under the Obama administration, nor under a Democratic-ruled House and Senate.

Posted by: joesmithdefend | July 11, 2010 10:29 AM

We recovered from Reaganomics and his trickle down theory didn't we? Man, it was bad back then.

Posted by: johnb38016 | July 11, 2010 10:48 AM

Businesses will not hire until they have drastically and permanently driven down wages for the working people out here. I believe it was the overall goal of business in cahoots with the GOP and their lax oversight policies to let corporations run the country and turn us into a 2-class, 3rd world country. So, tell us again how the failed GOP policies will get us out of the messes they got us into?

Posted by: lddoyle2002 | July 11, 2010 11:18 AM

A LOUD NO!

Those who voted yes have blinders on or are full of mis directed hope.

Big money runs this country, and until they get a conscience and morals to go with it, the only recovery will be on Wall st. and those who invest in it.
They don't care one iota about America or its citizens, profits and dividends matter over people and country, period!
If they have to rape the people and pillage the land in pursuit of profits, so be it!
This mentality is in our face, with no attempts to disguise it, it is prevalent throughout industry and the financial market and STILL you voted YES!

Posted by: victorlove1 | July 11, 2010 12:23 PM

One cannot help but notice that the commentators who do not believe that Pres. Obama is making our economy stronger or more competitive give reasons. Those who think he is doing a good job are resorting to personal attacks on Bush, Republicans and other commentators. Is that because those supporting President Obama cannot find actual reasons to back him?

Posted by: SherlockHolmes | July 11, 2010 1:47 PM

HOUSTONIAN, you're the typical mindless sheep that parrots the drivel you hear from Beck and Limbaugh. Go back in your bomb shelter with your cans of beans.

Posted by: bendan2000 | July 11, 2010 3:05 PM

Businesses are intentionally restraining our economy so that their lapdogs in the GOP can gain control. They are anti-American thugs bent on destroying the American middle class for their own profit.
Sadly, if the non-rich lose hope, real turmoil will occur. The race riots of the late 60s were the result of a lack of hope on a racial basis. The GOP does not seem to understand that they are promoting violence by their corruption.

Posted by: pjohn2 | July 11, 2010 3:54 PM

The comment just below mine (only a few comments above) was the perfect follow up to my observation.

Posted by: SherlockHolmes | July 11, 2010 4:26 PM

Anyone who expected this to be quick and easy was deluding themselves. Anyone who still thinks it's supposed to be doesn't get it. But anyone who thinks this is forever is too pessimistic.

Posted by: ravensfan20008 | July 11, 2010 4:50 PM

You have your Marxist president.

Now you get to suffer through your Marxist economics lesson.

When you’ve had enough, we can get back to the days when businesses were both launching and expanding and opportunities were plentiful… but you will have to give up your jealousy for those who are successful and quit taxing away the profits they reinvest to grow their businesses and create the jobs and opportunities you say you want.

You will have to give up your obsession with outcome equality and allow people to succeed… and to fail. You will have to find a trade or profession and figure out how to make yourself productive and competitive. And you will have to retire a sizable portion of the politicians that obtain power by redistributing income to buy votes.

In short, we will have to get back to the limited government, low tax, sensible regulation, pro-growth policies that gave us 25 years of prosperity through four administrations (Reagan-Bush-Clinton-Bush) until the Democrats’ affirmative action mortgage scheme dropped a mountain of bad debt into the banking system and allowed a Marxist regime to take over Congress and the White House.

Until then, suffer and suffer good, especially all you young Useful Idiots who gave up 25 years of prosperity because you were mentally and spiritually feeble (and arrogant) enough to turn your back on the free enterprise system that made America the greatest economy in the world and buy into the failed Marxist doctrine that you were feed throughout your years in the public education system.

If you had the slightest bit of common sense, you would have realized long ago that people do not like to work for free.

They work and invest and take risks with the intent of making a profit. Since you allowed yourself to be brainwashed into believing that there is something wrong with striving to achieve a profit, you get to suffer through a period of vastly less opportunities than what has been the norm since Ronald Reagan put the country back on tract in the early 80s.

Your Marxist public school teachers and college professors (same thing really) have been trying to rewrite history for decades because philosophically they don’t like what actually works. And you bought into it.

So now you have what doesn’t work. Wallow in it.

Sooner or later, you’ll realize what the term Useful Idiot means.

Then, we can all get back to the business of America… freedom, innovation, risk-taking and making money.

Posted by: PauvrePapillon | July 11, 2010 5:13 PM

Short course on Democrats and Republicans

Democrats are the party of the poor and those who chose to remain poor.

Democrats actively seek to create more poor (in order to have enough votes to win elections).

Democrats favor economic policies that make it more difficult to get ahead.

Democrats have faith in redistribution and anti-business policies to create more dependency and more Democrat voters.

Democrats believe in and promote the idea that those who take risks to create jobs and opportunities are greedy Robber Barons who should be publicly scorned and heavily taxed.

If redistribution and anti-business policies do not create enough poor to win elections, Democrats are willing to import (legally or illegally) additional poor to expand their power base.

Republicans are the party of the rich and those who aspire to become rich.

Republicans actively seek to create more rich (in order to have enough votes to win elections).

Republicans favor economic policies that make it easier to get ahead.

Republicans have faith in freedom and free enterprise to create more prosperity and more Republican voters.

Republicans believe in and promote the idea that those who take risks to create jobs and opportunities are productive Entrepreneurs and Investors who should be admired and emulated and keep their profits so they can reinvest them to create more jobs and opportunities.

Faith in freedom and free enterprise spurs Republicans to wish to see more immigrants participate in the economy but understand that the welfare state created by the Democrats now makes this impossible without bankrupting the country.

Posted by: PauvrePapillon | July 11, 2010 5:17 PM

It's bound to come back sooner or later. I mean, in the sense that Europe recovered from the Dark Ages.

If we keep up this borrowing and spending, paying for two wars and massive domestic spending on credit, we are in for a real disaster. It's inevitable: if we keep borrowing, the debt will become unmanagable and we will default.

"Stimulating" the economy with borrowed money can only improve things in a temporary and illusory fashion. We've already seen it again and again: the government BORROWS a bunch of money and then lavishes it on the consumers in the form of tax-credits and even rebates and sales in the sector in question increase as long as the free money is available (big surprise) only to slump again as soon as the incentives expire. A few lucky people end up with cheaper cars and houses while the Republic ends up with only more debt and more interest, that much closer to the precipice.

Even the propenents of spending our way out of recession must realize that the money to do so must come from somewhere. They like to cite the Great Depression and Roosevelt's spending programs but they always seem to completely ignore the fact that in 1929 the debt was only 16.5% of our nation's GDP while by the end of 2010 it will be nearly 95%! (http://www.usgovernmentspending.com/federal_debt_chart.html) All this borrowed money MUST eventually be paid back or the Republic WILL be bankrupt.

There's no way around it and no way to avoid it other than by getting serious NOW. No more "balanced budgets" which are never really balanced in any case or "deficit reduction" that is really nothing but spending less than inflated projections. We NEED to increase revenue AND cut spending to the point that we can actually start paying down the principle.

The time is fast approaching when we will have to make a choice. Will we as a nation continue down this road of greedy irresponsibility, taxing without representation future generations, burdening them with crippling debt to finance OUR lifestyle, a road that can ONLY lead inexorably to higher debt, higher interest, insolvency and disaster? Or will we ALL grow up, recognize that we are ALL culpable, demand our government live within its means even if this means that WE must make sacrifices and pay down our debt so that we can have a solvent Republic that we can be proud to leave to our children?

We are better than this, America. Let's pay our own bills for a REAL "change"!

Posted by: andrew23boyle | July 11, 2010 5:25 PM

We won't recover from this disaster until the current crowd is out of power.

Posted by: CrystalG | July 11, 2010 6:26 PM

It will recover when we get the dems out of Washington.

Posted by: samuellenn | July 11, 2010 7:22 PM

Hopefully the results of this commission will be read and acted on by Congress. We can fault Obama, BushII, Reagan, Congress and all of the rest of us. Both parties have run up the debt, nobody is innocent and we are all culpable. Once we begin to elect leaders with a long-term plan to balance the budget and develop a sustainable economy, as well as get out of our existence as a corporatocracy (deregulation and massive corporate subsidies) we can solve this problem. Then perhaps we can achieve bipartisanship. We need to unify and approaches this problem as a national crisis.

Posted by: citizen4truth1 | July 11, 2010 7:34 PM

Great post, Citizen4truth!!!

I especially like the fact that you recognize that we are ALL culpable to some degree or another and that the solution will require sacrifice from EVERYBODY. We need to admit that to ourselves, take responsibilty, quit finger-pointing and actually start dealing with the situation in a realistic fashion that acknowledges the scope of the problem!

Have a great day and keep spreading the word!

Posted by: andrew23boyle | July 11, 2010 7:49 PM

Maybe the dinosaurs and Klansmen like Byrd will die off, it would be a Godsend.

Posted by: zcxnissan | July 11, 2010 8:14 PM

What does the word recovery mean? By the standards of most of human history, our current economy is in pretty good shape. Are we likely to see the kind of economic growth in the near future that we experienced when Bill Clinton or Dwight Eisenhower were President? Probably not. Are the problems of demographics, global competition, and automation simply going to disappear? Probably not. The many who seem to think that we have some entitlement to endless pain free exponential econcomic growth have not bothered to aquaint themselves either with the reality of human history or with the mathematics of exponential processes. One more major burst of global economic growth does seem to be a real possibility. But when it will come is uncertain and the changes it is likely to bring will be more of a problem than those we are experiencing today. In the meanwhile, what are the chances of our accepting the opportunities that we do have for some kind of slow growth and making the best of them. They don't look too good because everyone perfers to look for someone else to blame. Certainly the kind of hysteria that Erskine Bowles and Alan Simpson are promoting is just going to make problems worse. Of course that is not much different from the politicians in both parties and the technocrats at the Federal Reserve who are all in denial over the reality that their policies can't create rapid economic growth and that the excessive pursuit of that growth has made our economic situation worse.

Posted by: dnjake | July 11, 2010 8:28 PM

Big Oil and Wall Street are sitting on their billions waiting for Obama to be gone in hope that they can have their way with regulators once again.

Posted by: areyousaying | July 11, 2010 9:06 PM

The economic downturn was caused by the failure of petroleum supplies to keep up with demand and that is not going away. While growth may get a bit better, unrestrained growth is a thing of history books.

Posted by: edbyronadams | July 11, 2010 9:31 PM

The real question is will the U.S. economy return to the unreal bubble conditions of the last twenty years anytime soon?

The answer is no because after dot.com, dot.flip and now dot.gov there aren't any suckers left to exploit.

In reality then what you're seeing now is the real U.S. economy sans bubbles.

Welcome to reality. It's only going to get worse as you begin your long downward slide to parity with the rest of the world's living standards.

Posted by: politbureau | July 12, 2010 1:22 AM

Sure the economy will recover In fact the recovery has begun, but only for the already wealthy. Like the two preceding recoveries that followed the two preceding recessions, this recovery will be even slower, weaker, and more gradual than the one that preceded it.

Meanwhile we can look forward to an ineffective Democratically-controlled congress being voted out on their asses in 2010, and even then even more of them losing office in 2012. Obama will be a one-term president.

Then the Republicans can look forward to losing control of congress in 2014, with even more Republicans being voted out of office in 2016 and a Democrat resuming the office of president and doing the work that Obama should have done in his term.

It probably will be some time 2017 or 2018 before we have a real economic recovery that lifts

Posted by: johncosmo13 | July 12, 2010 2:28 AM

The canard that "Republicans got us into this mess" is absurd and needs to be challenged whenever uttered.
1. All economists agree the foundation of our current problems are all the lousy mortgages issued to people who couldn't afford them.
2. In 1998/99 Clinton pressured Fannie Mae and Freddie Mac to lower lending standards to get more low income people into homes. FM/FM proudly announced this program then and the rest is history.
Sure, this precipitated a run on things by people of all stripes, but that decision is where all of this started. Those misguided loans failed across the board. Blaming our current problems on Republicans is self-serving drivel. (BTW, I"m an Independent. I actually both parties are "clubs" which bend and twist reality to preserve themselves.)

Posted by: dogwolf | July 12, 2010 8:43 AM

Who said that the US will NEVER RECOVER? You don't thank a recovery will come about in 5 years? 10 years? 50 years? Your shortsighted pessimism does not control the arc of time.

You allow your emotion to cloud your judgment. That is a very dangerous habit that leads to false cries of "ARMAGEDDON!".

Get up. Go out. Work. Play. Participate. Spend. Sell. Live. Holed up drinking your own tears while betting on your never-ending sorrow is pathetic.

Posted by: trident420 | July 12, 2010 9:00 AM

Recovery requires a united country and with a$$es like FOX and rabid religious evangelical screechers that's not happening in my lifetime! Republicans, so enthralled in their lust for power refuse to even think about the welfare of the nation and with scarecrows like Palin, Bachmann, and Boehner this ugly party is primarily a force for evil destruction of the nation, not its recovery! Add in international restructuring which will presumably end the out sized gluttony of America in consuming world resources and a recovery is going to be painful at best! Only if the privileged 2% give up or lose their wealth to some sort of redistribution to the debt broken masses of American people will a recovery happen; and that happening is right up their with the second coming of GOD!

Posted by: CHAOTICIAN101 | July 12, 2010 9:59 AM

Look...

For those that voted yes.. perhaps you are looking at the glass as half full.

Me I look at it as half empty.

America was built on hard core manufacturing. Steel, appliances, autos, coal mining, everything thing that you OWN today was built in the USA.

Thus our parents and grandparents EARNED money working in manufacturing.

With the invention of FREE TRADE.. all that has gone over seas. Cheaper taxes, cheaper wages, cheaper materials.

Try to find a TV, Computer, a pair of pants MADE in the USA.

Those on the HILL have lost touch with America. Especially the key Democrats AND the Key Republicans.

When we have increased the NATIONAL DEBT by about 4 Trillion dollars since Obama became the President Elect. AND we are going for another 1.5 or so per years.

It is so bad in Congress and the Senate.. there is not even a BUDGET FOR NEXT FISCAL YEAR. And the Messiah is letting the HOUSE get away with this because of it is an election year.

Until You the American Voter decide to MAKE A DIFFERENCE.. There is no hope for any type of recovery.

You can complain about the Wars, about Social Security and ETC.. BUT until those on the Hill REDUCE GOVERNMENT SPENDING at the Local, State and Federal Level...

THERE IS NO HOPE FOR AMERICA AS A 'GREAT COUNTRY FOR ALL CITIZENS.

Remember every man, woman and child in the US OWES 37,000 dollars at today's present value of a dollar.

Posted by: miller515501 | July 12, 2010 10:48 AM

Do you think the U.S. will ever recover from the current economic downturn?
55% vote yes. Problem is not enough are voting with thier dollars... and too many people believe they understand economics when they have zero education in the field.

There is NO self correcting mechanism (at least as of the time I took a Masters in Econ) The economy can, and apparently has, achieved equilibrium well below full employment. Absent spending boosts It could stay there a long time. Who would do the spending to turn this around? Consumers are pretty much spending all they get already. Corporate America is hoarding in thier own best interest and will not invest until (and to the extent) a recovery is underway - classic Keynsian liquidity trap which low interest rates will not change. The international sector is something we are not likely to see relief from for.. a number of reasons... Which leaves G... government spending. Unfortunately, after watering down to appeal to the right, the stimulus (according to CBO) was too small to plug the 3 trillion $ hole in the economy.. so we have averted another great depression but, are stuck in a serious recession. Worse, the GOP will harp on the deficit and the debt (short memories since the Bush tax cuts) and Obama will move to the middle like Roosevelt did without doing enough .. Rooesevelts depression (his problem, Hoovers depression) wasn't ended until WW II pumped enough spending in to reach full employment.. We could be in this until... WWIII. Hope its not nuclear.

Posted by: mini1071 | July 12, 2010 11:50 AM

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