So where do you think we will be as a nation economically 5 years from now?

[TwixVoy]

I said last year that my prediction for the United States was that we would have no second great depression. I stand by that prediction.

I predicted we would, however, be a poor nation. That the middle class would be incredibly small. That the little bit of wealth the common person has will be lost, and that we as a nation will continue to try to survive on credit for another decade before the system falls apart.

I still stand by that prediction. I thought back in January that there was a prayers chance things might turn around.

Now, with the recent news China will be buying far less of our debt, and watching the automakes be told to go to hell I no longer feel there is a chance of turning things around.

The BIGGEST mistake the powers that be in this country have made revolve around production. The focus for "recovery" should have been the creation of manufacturing jobs. Instead what have we seen? Hand outs to major banks while our last production centers (automotive) are told to file bankruptcy and break the unions.

Instead we should have been telling the banks to go to hell and have been using that money to build up manufacturing. That has not happened. The focus has been "Unfreeze the credit markets ASAP!" and damn everyone else to try to continue business as usual.

And you know what? It just might work. We just might be able to continue business as usual. In fact, I believe we will. But it will only delay the end result of complete collapse perhaps by 10 years.

The only thing that could have pulled our asses out of the fire would have been to focus on bringing our manufacturing jobs back home and supporting production. With the bankruptcy of Chrysler (at the same time the feds can find BILLIONS more dollars to give to mega banks) it is clear no one in power gives a damn about saving and building up production. The focus is totally keeping an economy based on consumption - and consumption on credit no less - going as long as possible.

I feel at this point our fate is clear. But again - I see no great depression number 2 for at least 10 years out. I see the average person losing whatever wealth they have at a RAPID pace, however... I expected it to accelerate and be almost complete likely within 2-5 years. I also feel that this process will be transparent to many people just like the housing bubble was.

If anyone has any other feelings about where we are headed I would be interested to hear.

[notesdev]

1. My prediction

is that we will continue to kick the economic reform can down the road until it is impossible to do otherwise (bond market dislocation), at which point it will very suddenly become clear that we are not half as prosperous as we appear to be at the present moment in time.

Timing wise, I'd say they can probably keep the game going until Alt-A resets in 2011. But there are just too many bills coming due during this next decade and we don't have nearly enough money to pay for them all.

[BlooInBloo]

2. Clearly we're doomed.

[havocmom]

3. Better

or gone

[RagAss]

4. The first party to promise to jail CEO's who outsource jobs will reign for decades !

[Mike 03]

5. Very thoughtful post. My predictions seem to change from month to month.

My general sense is that five years from now we will be in a measured, volatile, but genuine state of recovery, but ONLY because this is a simultaneous, global contraction (although, in large part, this is our fault). We will all slowly recover together (although there are major shocks yet to come).

Were we the only nation in trouble, I think it would be a much worse outlook for our country.

It's is gratifying to see posts like yours, which I consider "Big Picture", informed posts rather than the sort of reactionary, emotional posts we so often see on this tenuous issue.

[90-percent]

6. Politicians

Politicians are utterly disdainful of manufacturing and just can't get enough of the elite money handlers.

Manufacturing is the mother ship of a good economy. Loose that and you've killed the golden goose and the American Dream forever.

Damn shame, it is!

-90% Jimmy

[lib2DaBone]

7. I'm not worried about 5 years from now...I'm worried about tomorrow..

China has in effect canceled America's credit card. They are not going to buy any more Treasury Notes.. thus.. we can not continue to finance our deficit spending.

Obama's only hope.. it to bring our manufacturing jobs home. Put America back to work.

Yes, he will piss off China.. but I think China is two steps ahead of Washington. If we do not get our factories and rail systems back.. the United States as we knew it... will cease to exist. We can then kiss freedom goodbye. (What's left of freedom)

Bill Clinton Signed NAFTA.. George Bush and his buddies picked the carcase clean.

[Kolesar]

8. World oil demand will start growing, fuel prices will rise, and BAM!

American deprivation.

[OmahaBlueDog]

10. No..we'll just run cars on CNG or ethanol or soybean oil or electric batteries

...which is probably a good thing.

[Kolesar]

12. Those solutions will mean "more expensive" motoring and some people will be priced out

And not have the mobility to get to work.

[OmahaBlueDog]

9. Certain things in the US still have intrinsic value

For example, housing in Florida. It has been dropping, but if it continues to drop, foreign capital will come in and start buying the land. Same with our farmland. Same with certain natural resources we have.

At some point, the Chinese will go on a shopping spree the way that Japanese businesses did in the 80s. They will buy everything: urban real estate, movie studios, farmland, meat processing facilities, sports teams, etc. Some they'll use to serve their own interests at home, and others they'll run as profitable businesses here.

Health care will obviously be the next big employment opportunity. Baby boomers are getting old, and for 20-35 years, maybe more, caring for them will be many people's jobs.

Manufacturing wil not disappear, but it will employ nowhere near the numbers of people it once did. Most jobs will be either engineereing and programming type positions or shipping/receiving type positions as companies automate and robotize to stay competitive.

At some point, the US will start to be forced to make drastic budget cuts to service debt, and will likely take care of some of that obligation through the artifice of printing money. While I don't see Weimar hyper inflation, I see Social Security checks not rising to meet inflation and becoming meaningless. I also see us getting out of the world cop business.

I also don't necessarily see life being as dire here as some predict. Argentina's economy collapsed. So did the Soviet Union's. There were some tough times there, to be certain, but there has also been prosperity for many as well.

[Mari333]

11. a stop to both those goddamned occupations

would be a good start. until those end, we continue to bankrupt this country and bleed.

[newportdadde]

13. I think the best case scenario is we will be like Japan and have a period of flat growth for years.

I see inflation possibly being very high in 5 years. The only option left at this point it to just inflate away all of this debt for both the consumer and the government.

I do not believe in all the 'green jobs' hype, sounds like all the IT hype in the 90s and that industry which I work in is now decimated.

What we desperately need are blue collar jobs, manufacturing jobs that pay a good wage, I'm talking 45k-50k a year. Something you can raise an actual family on and not being up in your eyeballs in debt for your entire life.