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The U. S. Economy Continues to Decline

Nancy Polosi at Health Care Speech Podium

By Speaker Pelosi on Flickr on July 22, 2009

Characterized by a decline in production and employment, the downward trend in America’s economics continues. The U.S. dollar, once as good as gold, has lost more than half its value over the past six years.  Even though not all households and businesses experience actual declines in income, expectations about the future become less certain during a recession and cause them to delay making large purchases or investments, hence the trend continues.

Recession or Depression

Whether or not a recession develops into a severe and prolonged depression depends on a number of circumstances. Among them are the extent and quality of credit extended during the previous period of prosperity, the amount of regulation permitted, the ability of fiscal policy to reverse the downward trend, and the amount of excess production capacity in existence.

Analyzing current economic trends the following conclusion can be drawn; the government is spending and borrowing too much money and the U. S. has too much consumption and too little production.

Current Trends

The 10 trillion-dollar national debt continues to grow as the government supplements failing companies such as General Motors, steadily increases its astronomical military spending and lowers Federal Reserve interest rates; allowing individuals contribute to the deficit by not saving money and buying goods and services on credit cards and loans. As Americans’ increase personal debt consumer spending declines.

Skyrocketing Oil Prices

In addition, oil prices are skyrocketing; the resource upon which America’s economy is based. The health care system is collapsing. Foreclosure rates are high and rapidly increasing. In fact, house values have fallen to levels not seen since the last Great Depression. Big Banks are failing; even many that survived the Great Depression of the 1930s are now collapsing.

Finally, as America is facing an all time high unemployment rate it continues to outsource, which means that millions of high-paying manufacturing jobs are lost because of cheaper production costs in China, India, and Mexico.

August 28, 2010 - Posted by | Business | , , , ,

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