In my opinion, the only way we get a significant recovery is to increase spending once again, and right now the only option is to obtain cash through credit. The problem....americans are already up to their eyeballs in debt and so are corporations. The national savings rate is NEGATIVE and has been for some time. Increased borrowing will be a short term fix and in the long term will only serve to put us deeper in the hole.
Take out the trade deficit and our 2% GDP recently reported, falls to only 0.4%. Adjust this for inflation and you get MINUS 0.1%
According to data from Moody's Investor Service, credit repayment rates are actually decreasing. So, we are taking on more debt and paying off what we have more slowly.
Mortgage delinquincies are at the higest level since 1992. Personal bankruptcy filings rose 17% from last year. Who takes these losses? Banks and finance companies, leading to less profits, lower earnings, more lay-offs, etc.
Unemployment rate has risen from about 4% to 4.5 % in just a few months...a 12.5% increase and it's still rising.
US productivity fell for the first time since 1995. A dramatic change from our full speed pace just last year.
Ah, yes...problems in the economy? Where? |
