The Economic Future

[tamias6]

With the Financial system crashing and burning, home sales going down the tubes, and the big three asking for government bailouts, the federal government in mountains of debt and deficits and the national media painting nothing but doom and gloom, any hopes for better days ahead seems to be a pie-in-the-sky fantasy right now. But as bad as things seem right now this crises will not last forever. But it will obviously affect the future of this country in relation with the rest of the world. So this brings up the following questions.

1. Will the US economy recover from the current turmoil? If so, when?

2. What will it take to get this country back on track.

3. What will be the US's standings in relations to the rest of the world. Will it remain the world's greatest nation, a superpower, or is America's glory days over?

4. If the US does not hold its stature of preeminence after this economic crisis, will this country remain a first world nation with a decent standard of living?

Basically the point is this, does the long term future of this country bode well or should we be battening down the hatches for a bleak long term future?

[davidals]

With the Financial system crashing and burning, home sales going down the tubes, and the big three asking for government bailouts, the federal government in mountains of debt and deficits and the national media painting nothing but doom and gloom, any hopes for better days ahead seems to be a pie-in-the-sky fantasy right now. But as bad as things seem right now this crises will not last forever. But it will obviously affect the future of this country in relation with the rest of the world. So this brings up the following questions.

1. Will the US economy recover from the current turmoil? If so, when?

2. What will it take to get this country back on track.

3. What will be the US's standings in relations to the rest of the world. Will it remain the world's greatest nation, a superpower, or is America's glory days over?

4. If the US does not hold its stature of preeminence after this economic crisis, will this country remain a first world nation with a decent standard of living?

Basically the point is this, does the long term future of this country bode well or should we be battening down the hatches for a bleak long term future?

[davidals]

You have several great points. This is a potentially vast topic for a thread, because our current crisis blends a lot of solid economic screw-ups with political, ethical and ideological issues that in some way extend to just about everyone. Some of this can (or might) be fixable by political leadership, but some of it is only going to be repaired by a large number of people re-thinking everything from corporate strategies to management structures to how often you go to the mall or whether you want to do a week in Europe next summer. This demands that people actually look at how they run their lives or businesses, and voluntarily make changes.

I mention infrastructure spending because of precedents - the New Deal and the creation of the interstate system, which were (at least in the case of the New Deal) defecit spending that was undertaken during a depression with several purposes in mind, and the more I think about the feasibility of it now, I'm starting to warm up to the idea. For this to work for the long term, that re-think in values (and at least one other thing - upgrading the quality and accessibility of education) would need to occur for us to work our way out of this and regain lost strength.

I have a lot of random questions about the crisis that we are heading into: after 30 years or so of trickle-down theories and supply-side economics, is the pendulum in economic thinking heading back the other way? Or should it? Those theories seemed - to me - to largely enable a massive redistribution of wealth upwards, with various economic bubbles camouflaging corporate-level corruption. Aside from that, there were certainly random lucky beneficiaries here and there, but beyond those exceptions, those theories seem to me to have pushed us away from healthy, competitive captialism, and closer towards some sort of oligarchy, of the kind seen in parts of Latin America.

And along the same lines, we keep hearing the expression "too big to fail," as a justification for varied bailouts. This seems to me to be simply "too big." To me, a healthy capitalism is going to produce winners and losers in business, but the idea of companies so large that their collapse could suck down an economy being allowed to exist in a state of corporate nihilism, and get away with it, is phenomenal, not explainable by any reasonable variety of logic, ethics or legality. I don't think any of what we've seen thus far gets into anti-trust territory, but obviously some legal changes (of a nature that might disturb CEO's who flew into DC on private jets to ask for auto industry bailouts) should be happening, ASAP. We'll see if that does in fact happen.