Are we in a recession?
I heard on NPR last week that for the first time 70% of economists now agree we are in a recession. The "common" definition of 2 negative quarters has also been questioned. They said it had validity, but there were other factors that should be figured in.
There was a BBC news item yesterday about the 100 million dollars Britain is seeking to borrow to begin to deal with the nuclear waste generated by their plants. Just like in the US, where the 3 Trillion dollar cost of the war is outside of the budget, the cost of dealing with nuclear waste is not figured into the cost of the power generated. As long as that continues, war & nuclear power will look economical on paper.
I know at home and in my business, all the costs and all the expenditures have to be figured into my budget. I haven't the luxury of borrowing from future generations to pay today's bill. Unlike the US government's economic model, when my costs go up, either my income goes up, or costs get cut.
We are now waging the second longest war in our country's history, and it is the most expensive war ever. For the first time we have not been asked to "tighten our belts" to pay for it. On the contrary. We were told to spend our way to prosperity, even if it meant borrowing against the equity in our homes. We know where that got us! We've borrowed every penny to finance this war. Well, "there's no such thing as a free war."
The decline in the value of the dollar is directly related to the amount of debt we created to wage war. The cost of oil keeps going up because it is paid for in dollars. The more the dollar is devalued, the more dollars it costs to buy oil. It is that simple. There is plenty of oil. When we have a stable economy and a strong currency the price of oil will decline. Oh, and - yes - we will be on our way out of a recession then, too.
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Comments: 13
Unfortunately, simple messages don't register with simple minds?
Thanks for painting this bleak but honest picture.
I give you credit for writing a cogent and relatively balanced article, but I don't think the issue of the value of the dollar is as simple as you say.
I have a feeling that more folks will be simplifying the message about what has gone wrong.