Bloomberg Writes: The U.S. Economy Is Turning European
The U.S. economy is getting as bad as Europe at bouncing back from recessions and generating jobs, and a decrease in societal trust may be a big factor, according to a research paper presented today at the Brookings Institution.
The paper is called “Amerisclerosis? The Puzzle of Rising U.S. Unemployment Persistence,” and it’s by Olivier Coibion of the University of Texas at Austin and Yuriy Gorodnichenko and Dmitri Koustas of the University of California at Berkeley.
Amerisclerosis is the economic version of atherosclerosis, also known as hardening of the arteries—a disease that contributes to heart attacks and strokes. In the 1980s, economists coined the term Eurosclerosis to describe Europe’s malfunctioning jobs market. The U.S. is going the same direction, the authors say.
Amerisclerosis. Seriously??? Is that the best US Economist can come up with?
I am not sure why so many smart people find it so difficult to understand our current economic environment and/or lack of economic growth/improvement. It is as easy as 1-2-3.
1. We exist in an artificial Credit Finance Economy: Meaning that whatever recovery we have seen was financed not by real money, but “out of thin air” printed money to sustain the US Economy and to prevent a collapse/recession. The velocity of that money is slowing down now and the US Economy will soon roll over into a recession.
2. Robotics and Outsourcing: Brace yourself over the next 10-20 years. Whatever jobs robots can do or that can be outsourced will disappear over that time frame. Nothing can be done about it. With real unemployment/underemployment already as high as 15-20% in the US, it doesn’t bode well for the overall economy.
3. Structural Problems: There are so many that I will just mention a few. Attempted currency debasement, healthcare, artificially low interest rates, unemployment, housing bubble, cost of education, car sales bubble, etc…. Of course most of these can be directly tied to issue #1 above.
Until these 3 issues are dealt with, the US Economy is not going anywhere. The only way to deal with it is to stop insane fiscal policies by the FED and the Federal Government and let the US Economy go through a severe recession and defaults.
Unfortunately, no one in the US Government has the balls to do just that as they all practice their can kicking ability. Since that is the case I would expect the US Economy to slowly decline over the next decade to further deteriorate the American standard of living.
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