US Economy shows Structural Dislocations – The Illness of Supply Side Economics
One percent of US population is now in jail. The number of Illegal immigrants is now above 24 million. Unemployment is at record highs. The US dollar is at record lows. The US Financial System risks collapse as numerous banks seen failing in 2008. Foreclosures are at record highs across the nation. The housing market is on the verge of collapsing. Over 33% of Americans are “Food Insecure”. Personal debt is at record levels. 1% of Americans are homeless including 250,000 veterans. Inflation on primary goods and services is above 10%. Americans retirement savings have lost 5% since the beginning of 2008.
These are nefarious indications of a pending crisis in America. Business lobbies continue to say, ”Stay the course, everything is fine.” Our politicians respond to these problems with patches and makeshift policies to calm the public. Anyone of these realities, individually, would require serious measures from our government but when seen as a whole point to Financial Armageddon and the end of the US as the primary world superpower.
Interestingly we continue to see these realities as single events instead of viewing them for what they are: symptoms of structural defects brought on by Reaganomics.
Defining the illness is easy. We must simply look at cause and effect. Everything we do. Every choice we make. Every law passed. They all have consequences. The alchemy of securitization (changing subprime loans into AAA rated debt) initiated to save the financial institutions following the Savings and Loan Crisis resulted in the current $1.5 trillion mortgage debacle. Free Market tax incentives resulted in moving production facilities offshore. Tax Breaks for the Uber Wealthy created the financial liquidity bubble resulting in unrealistic financial operations in publicly traded companies and CEO compensation based on a CEOs tendency to “return equity to shareholders”, better known as raiding the corporate coffers, instead of looking at the company’s capability to pay its debts and fund its future obligations.
No matter what actions we take, including doing nothing, the future will be tough. There are no free meals. Sooner or later the piper will be paid. The questions we face today will determine if America will be better for our grandchildren. We must ask ourselves if we are willing to fulfill the promise of America immortalized in the words of JFK:
“Ask not what your country can do for you, instead ask what you can do for your country!”
These are nefarious indications of a pending crisis in America. Business lobbies continue to say, ”Stay the course, everything is fine.” Our politicians respond to these problems with patches and makeshift policies to calm the public. Anyone of these realities, individually, would require serious measures from our government but when seen as a whole point to Financial Armageddon and the end of the US as the primary world superpower.
Interestingly we continue to see these realities as single events instead of viewing them for what they are: symptoms of structural defects brought on by Reaganomics.
Defining the illness is easy. We must simply look at cause and effect. Everything we do. Every choice we make. Every law passed. They all have consequences. The alchemy of securitization (changing subprime loans into AAA rated debt) initiated to save the financial institutions following the Savings and Loan Crisis resulted in the current $1.5 trillion mortgage debacle. Free Market tax incentives resulted in moving production facilities offshore. Tax Breaks for the Uber Wealthy created the financial liquidity bubble resulting in unrealistic financial operations in publicly traded companies and CEO compensation based on a CEOs tendency to “return equity to shareholders”, better known as raiding the corporate coffers, instead of looking at the company’s capability to pay its debts and fund its future obligations.
No matter what actions we take, including doing nothing, the future will be tough. There are no free meals. Sooner or later the piper will be paid. The questions we face today will determine if America will be better for our grandchildren. We must ask ourselves if we are willing to fulfill the promise of America immortalized in the words of JFK:
“Ask not what your country can do for you, instead ask what you can do for your country!”
Labels: Economy, Financial Institutions, Public Debt, Reaganomics, Trade Agreements, US Poverty
posted by Small Business USA at 11:03 AM
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