With all the economic turbulence it seems that a lot bad decisions the US has made over the past 10+ years are coming home to roost. Is it remotely possible that the US in the next 10+ years will become less economically dynamic and less developed than our current state? Can we actually slip backwards?
Some promising technologies might not get venture-capital and thus not brought to market, and I expect a few years of zero or slightly-negative growth but it’ll recover.
Piss-poor time to be retiring, though.
It already has.
If you look at the kind of things used in judging the development level of a country, the USA has been slipping backwards in several of them in recent years.
[ul][li]% of students graduating from high school.[/li][li]% of people living below poverty level.[/li][li]% of people without health insurance.[/li][li]% of individual debt related to GNP.[/li][li]% of country’s wealth concentrated in hands of a few people.[/li]and the big one
[li]life expectancy! [/li]Even on such a basic item as this, in the USA it seems to have pretty much stalled, without significant changes, while it’s still going up in other countries (and not just the basket-case ones).[/ul]
If you are talking about the general level, then the US is already (and has been since WWII) at the end of the scale compared to the other civilsed western countries.
If you’re only talking about economic issues, and while I’m not a prophet, I do believe that not investing into education, relying instead on hiring students trained elsewhere; and outsourcing lower-level jobs overseas without at the same time investing into high-level third-sector jobs so people can earn a wage to buy stuff and services to keep the economy going - that these are two monumentally stupid and short-sighted trends which will both cause long-term problems.
Sure, it’s good for Nike CEOs is Nikes are made in Asia for less money and still sold for 100 $ a pair, but if they close down the local factory with several hundred employees, these are less people to buy them at this price. Ford discovered a century ago why paying the workers a living wage and giving weekends off was alos a sound economic decision, but everybody else has looked only at short-term (quarter stock market reports!) for making money.
This sentence just confused me a little, would you mind clarifying what you meant? Do you mean ahead or behind of other civilized western countries?
Thanks
I meant behind, at the bottom of the scale compared to the other Western civilisations.
If this bailout trend continues, we might be heading towards a more centralized economy, which I would consider a backwards development.
I would say it depends on how you measure economic development. I think it’s unlikely that we will have a Zimbabwe style collapse any time soon.
But I think there’s a pretty good chance that we will end up like Brazil, i.e. relatively prosperous, but with a huge underclass.
Much or most of this post is factually incorrect.
I don’t believe that measures of wealth distribution qualify as development goals. Similarly, debt relative to GNP is not a development measure. Health insurance status might be closely related, but actual delivery and access to health-care is a more important measurement of such.
http://hdrstats.undp.org/indicators/
Finally, life expectancy sure as heck isn’t declining in the United States. Rather, the most recent estimate from the CDC increased their estimate of life expectancy by 4 months in 1 year.
http://www.cdc.gov/nchs/products/pubs/pubd/lftbls/life/1966.htm
Obviously, there are social problems reflected in this data, but no ones life expectancy is going down by reputable measures.
Among civilised western countries, the existence of a strong middle class and as small as possible poor class is a sign of a developed country, while a country with a thin ultra-rich class, no middle class and the overwhelming number of population in the poor class (like Brazil) is a sign of an underdeveloped (and often along with it, corrupt and restrictive) country.
When we try to help the 3rd world countries (real help, not the US kind of aid), we aim to bring the poor people up to middle-class (relative to their circumstances) sustainence.
High debt relative to low GNP is a sign of an unstable economy and bad fiscal policy. Both of which are not signs of well-to-do country.
And every time experts talk about health care in the US compared to the other western nations, the US is highest in money spent, but low on services delivered.
But it’s still lowest compared to the rest of the developed nations, isn’t it?
If that’s true, it’s certainly not a singularly American problem. I’d encourage you to talk to the Brits, they’re more screwed in that case than we are:
http://www.grant-thornton.co.uk/press_room/amount_of_uk_consumer_debt_exc.aspx
Additionally, developed nations that declined to binge on consumer debt haven’t fared especially well in the recent economic downturn due to their prior husbandry:
Not especially. We’re right in the middle of the developed nations according to the 2008/2009 UNDP, most comparable to Denmark and Korea. Of course, this doesn’t go into subgroup analysis based upon ethnic composition. My prior linked NY Times article did. I think the conclusion is pretty clear that in terms of delivered life expectancy, the United States isn’t doing atrociously.
The current problems may rival Japan in the 1990s, as a worst case scenario. They will not be comparable to the Great Depression.
Did we slip back technologically during the Great Depression? No.
Did quality of life indicators recede during that era? Of course. But they do that during ordinary recessions as well.
Could the US be less economically dynamic in 10 years? Sure. But the US was less economically dynamic in the 2000s and 1970s than it was in the late 1990s. These things ebb and flow.
Will US per capita GDP be higher in 2018 than it was in 2007? Yes. Will median wages and median income be higher? Not necessarily. Since around 1980 a disproportionate share of economic growth has gone to the select few. These select have a strong sense of entitlement, even in the face of declining median wages. As an example, we can look to the sit-in at Republic Windows and Doors. The company had recognized that it had troubles last July, but had made no preparations for its Chicago employees. The sit-in occurred because the laid-off staff wanted the law enforced: if they didn’t get 60 days notice, they wanted 60 days severance pay, as well as compensation for unpaid vacation time.
A loan was arranged from Bank of America for $1.35 million, to cover obligations to the workers. But the deal was almost scuttled when the CEO demanded that the loan “…also cover the lease of several of his cars — a 2007 BMW 350xi and a 2002 Mercedes S500 are among those registered to company addresses — as well as eight weeks of his salary, at $225,000 a year.” The bank balked at this. Finally, the CEO relented.
The (sub)point: modern corporate chiefs have an extensive sense of entitlement, even when their performance is substandard or dishonest. I’m not saying that it has always been this way. But then again, during the 1945-1980 era, the benefits of economic growth were widely shared.
So, yes, the nation as a whole could become less economically developed over the next 10 years. But by the broadest measures I don’t think it likely.
The trend is clear. We are going to have a wealthy class and a poor class. The middle class is rapidly disappearing. When productivity kept increasing and wages stagnated or dropped. the extra money went straight into the upper classes. The ownership society has made out very well.
There will be inventions made improving manufacturing processes. There will be inventions made improving autos in every way. there will be improvements made in braking, filtration, fuel pumps, stamping ,engines and many other components. They will not be made here.
If the climate lets CEOs and Wall Street get away with it, I am concerned that they will find a way to profit from lack of development, and thus encourage it to persist. Somebody always makes money in hard times, but by definition it is always a tiny few.
The education industry is also to blame-educational standards keep dropping, even as we spend more and more money on it. I think the professional politicians like this, as an ignorant electorate is easy to manipulate. Take this idiocy about “creation science”. The rest of the world looks on (incredulously), as we teach superstitious nonsense instead of science.
The politicians encourage this, because it diverts attention away from their own criminal activities, and as long as they keep feeding money to the teachers unions, everybody is happy.:mad:
Well, empirically we might take issue with that.
Stock markets tend to perform better in Democratic than during Republican administrations, probably because GDP growth is higher as well. Cite. So while I trust that some members of the donor class would benefit from hard times, most would not.
ralph124c: Whatever, but educational reform affects very long-run growth prospects, more than it does over a 2-10 year horizon. And let’s not forget that the Democratic rank and file are pretty happy to see Blago and Jefferson go, while the Republican base did not particularly mind the torture/Iraqi profiteering/US Attorney firing shenanigans conducted the Bush admin. So let’s not be blind to the fact that some politicians are a heck of a lot more corrupt than others.
And finally, Obama is facing an enormous accumulation of broken and fractured economic institutions. He will be lucky if he can patch half of them over the next 8 years, even given zero malfeasance (which of course will not occur in any large bureaucracy).
As usual the same people step up to the plate. If anything the country is going forward with tech growth. China is freaking out right now because of failing toy factories.
We will be fine in the long run.