Is the US economy collapsing?

Shari, our economy is in trouble, yes. I do believe that. I do not believe the rosy pictures STILL being painted in the Bush administration or anyplace else. We are in for a rough ride in my opinion. That's not to say we can't turn it around. It will take some smart people to do it, though.

Linda,
I do think it is going to get a lot worse before it gets better.

I love your cow on the fence picture, BTW! Cute!

Okay, Lex. Enlighten me, what is the upside of the housing bubble bursting and the current credit crunch? I want to see the doughnut!

The problems with the economy are largely those that happen when central planners try to manage the economy. Bush/congressional overspending has not helped much either though much of that overspending has been covered with increased tax revenue. Banks and loan companies loaned out way to much to those who wanted money for life style not real need. Any idiot that borrowed 120% on their home (unless it was a medical emergency) is arguably getting what is coming to them. The fools in the Fed printed billions more dollars to help out those foolish banks and the cost is not yet any where near hitting home. The dollar weakening is because Congress has been overspending since the late 1950s and the bill is coming due. Add to that plans in Congress to increase taxation at many levels and on different types of income which is helping scare the market more.

Considering that neither parties major candidates has any plans on reversing things it may be time to be somewhat gloomy...especially if you are planning on social security or some other government entitlement plan to be fully in place long term.

That said, prudent investments should ensure some means of security for the future. Decrease your debts and minimize your cash savings so to fight inflation. Money market accounts for liquidity and spread out your stocks and mutual funds.

All the Democrat plans involve increases in taxation on the upper 50% of the wage earners in this nation (the ones who pay 95% of income taxes). They also involve taxing foreign companies more who invest in the US. Expect more regulations from OSHA, EPA, etc to increase American competition costs and to see more import costs to promote American "trade protection" All of which will hurt the economy even more...

This country still has not totally screwed itself up and maybe a return to the gloomy 70s is just what we need to wake up. Otherwise, this cash cow is still pretty rich and the will likely stagger on in some fashion for some time to come....

Thanks for your input Charles.
All the analysts I heard lately have said it will be worse than the 70's and not as bad as 1929.

Anyone other than Lex want to rate this? It may not be great literature, but I don't think it really is a 1. ;)

Shari, I am happy to give that 10. My DH and I agree things will get worse!

Thanks Linda!

Shari.

It's a legitimate question (rated a 10), and many pundits are visibly anxious behind their doughy (to use Lex's metaphor) outlook. I don't think an ever increasing deficit, jobs being exported to India/China, ever increasing trade-deficit with China - these things don't bode well for our economy. Also, Wall Street is an important part of the economy, but it's not the whole economy.

There are very good opportunities for our economy to make serious gains in emerging industries, e.g., hydrogen energy, as well as other eco-integritive industries that turn waste into resources. Those are discussed in Hawken, et. al., "Natural Capitalism,"

http://www.natcap.org/

and featured in the "Zero Waste" segment of this Science Channel series:

http://science.discovery.com/tv-schedules/
series.html?paid=48.15232.122449.34341.1

The jobs created over the past 6 + years are service jobs paying starvation wages and the people that take those jobs will not be consumers.............so yes the economy in the USA is tanking.

Thanks for your comment Gene. I agree. The poverty data for 2006 was just released and although there was a slight decrease in poverty, it was only because people are working more than one job! The median income for full time work actually dropped!

Updated to add: 4,000 jobs lost in August
http://money.cnn.com/2007/09/07/news/economy/jobs_august/index.htm?cnn=yes

Updated to add: Home Forclosures up 36% last month!

As we see, Americans are not into saving their money and the credit card over-spending is one of the causes of the pickle we find ourselves in. The subprime mortgages are also a form of this overextension of credit, people who were deceived into believing the party would never end so spend, spend, spend. Can people turn on a dime (maybe their last) and get into the habit of saving part of their earnings for the rainy days that will recur? This seems far-fetched for people living from paycheck to paycheck but let me go on > (Big) If; Everyone who can would put into our banks whatever they can afford. This would bolster the banks ability to lend and help the economy to revive. Part of the deal would be that banks would offer a decent interest on the savings accts. and not tax the accts. Is this doable? Opinions, pls.