I wonder how our political system will survive this economic change. It's not looking good.
Honestly, I'm not surprised by this turn in the economy at all. I'm not an economist in the least, but I've been in enough other countries to know that we don't deserve to live like kings off the fat of the rest of the world. We are not entitled to all the things we think we are.
We've gotten to the place where we don't produce, we consume. And worse yet, when the world-market begins to self correct and we move down the ladder a few rungs, the government attempts to artifically prop us up.
We have a system in which so much is garanteed and so little is required, I wonder how our political system will survive this economic change. It's not looking good.
Well said. A few follow-up questions:
1) How deep does your understanding of economics go?
2) The levelling effect of economics can be counteracted; do you know how?
3) Why do you think a certain "level"-effect in societies is preferred by some people?
I wonder what do you guys think of the gold standard that we left under the Nixon administration (August 14, 1971)? Do you think that now might be a good time to think about reinstating it? (With the gold standard each dollar allocated for debt must be redeemable by a quantity of real gold.)
I'm not an economist by any means, but I do have a few thoughts on this topic that don't seem to have been brought up... The American economy, from the perspective of the corporations, isn't doing that badly; it's still registering net growth every year, quarter, month, et cetera. The American economy from the perspective of the consumer is slowly slipping into a quagmire where more and more people every month aren't earning enough to feed their family. The American economy from the perspective of the government is doing very badly, but avoidably so. Before Bush's tax cuts, we weren't in debt. Now, due to massively increased spending on things like the military and decreased revenue, we're in something like 2 trillion dollars' worth of debt. In 2007, fully 60% of the federal budget was spent on the military (mostly direct spending and some "emergency" Iraq money on top of that). The American economy from the perspective of the rest of the world is a horrible drain on it. Nearly every trade agreement the United States enters into (NAFTA is a great example) is designed to basically let massive American conglomerates exploit all hell out of the other countries. And we refuse to abandon these benefits, begin regulating our corporations, anything. To a large extent, the massive influx of immigrants from Mexico is our own fault; without the way our corporations are shafting them, their economy just might be doing well enough that people could afford to live there. Arjen: Rosseau seems like a prophet this year, doesn't he? *wince*
First of all, our debt is $9 trillion, and we've been in debt before the tax cuts. The debt is mostly due to over-the-top spending because of Iraq, pork barelling, and "mandatory spending" programs like social security.
Thirdly, an overwhelming percent of economists (something like 85%) support free trade. US corporations aren't exploiting any nations. Workers in those nations are choosing to work for higher-paying better jobs offered by US corporations as opposed to their traditional jobs. These nations are simply going through their own mini industrial revolution. The fact is that tariffs, quotas, regulation, and taxes are slowing down this painful process. I'm not saying our trade agreements are perfect, but they are better than not having any free trade at all.
The Iraq and Afghani conflicts are certainly significant factors when we look at why the US has such an immense debt.
Social security, due to the obvious issues of population demographics, was feel good legislation in the first place, and never a system that the government could sustain.
Pork barrel spending, however, is a drop in the bucket. The most damaging facet of American spending (when we look at national debt) has been military spending. Even before our war on a particular military tactic, the American public was burdened with massive amounts of debt from Cold War military spending.
Well, the fact of the matter is that we don't have any free trade at all. We have mercantilism.