I think the US economy is in really, really bad shape. REALLY bad shape.

FormerRepublican

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Sat Mar-25-06 12:47 PM
Original message

I think the US economy is in really, really bad shape. REALLY bad shape.

We're sucking billions of dollars out of the US economy to pay for the war in Iraq. This has a near catastrophic effect on our economy, where every dollar multiplies as it spreads through the economy. A previous example of the negative economic effect of war can be seen in the War of 1812, when the US nearly collapsed economically because of the costs of the war and the interference with sea trade. In the case of the current Iraq war, the pain of this "investment" of government dollars will be spread over decades because the government is borrowing heavily to fund it.

In addition, outsourcing sucks huge amounts of wage dollars from the economy which are not replaced by new job creation. So as outsourcing escalates, so does the economic pain associated with it. Joe down the street loses his job to outsourcing, so he can't in turn pay Bob the grocer, and Bob then can't pay Steve at the electric company.

Then there are the Bush tax cuts, which have forced escalating cuts in government programs, reducing the amount of government dollars spent in the economy. The rich are going to pocket their tax savings rather than increase spending, or even worse, will offshore their savings in overseas investments. So these dollars transferred from the poor to the wealthy increase our economic pain because of the way those dollars are (or aren't) spent. The poor, of necessity, spend all their dollars to cover their expenses. The rich, who have plenty of disposable income, will often let those dollars sit, or will offshore them to make even more money.

And contrary to what needs to occur to help the economy, which is more spending - what the government is actually doing is DECREASING spending in an effort to offset the increased foreign outlays of the Iraq war, and the protest of their constituency at the escalating debt. The more people scream about debt increases and spending, the more the government cuts, and the more economic pain filters through our economy.

We're seeing the economic effects in a number of ways. The growing immigration controversy is, in large part, a response to economic pain. People are suffering - from job losses, from wage cuts, from loss of benefits - and they decry the growing competition from foreign labor in response. I see this as similar to an injured person who is already in pain from being struck, who cringes from the threat of additional blows that have yet to fall.

And the injured are also reeling from the lack of traditional supports in economic downturns - food stamp reductions, non-existent welfare, lack of housing assistance, no health care, etc. And the threat of the government taking away what few supports are left - the loss of Social Security, botched pensions reform, revised bankruptcy protection, etc. So in this economic downturn, instead of a number of societal and government programs that reduce the pain of job loss and economic insecurity, we have the knowledge that if we lose our jobs, we're screwed.

IMO, this leads to a growing risk of violence if the economic situtation continues to deteriorate. A lack of government responsiveness increases the risk. As the old saying goes - what goes around comes around, and in the case of economic pain, what comes around may in the end be violence and social unrest.