Economic indicators we should be worried about
Enjoy this unlucky top 7
We all want to hear good news; it’s human nature. Perhaps that’s what the Obama administration and current Federal Reserve leadership are playing off of as they paint a picture of America’s economy in real recovery. But the reality is that many things still could go wrong before we’re out of the woods. Your payday loans bloggers finds this opinion piece in the Nieman Watchdog to be interesting, so he will summarize the top 7 for your economical viewing pleasure. Here are your top 7 signs that the economy could still mess up, friends!
- The middle class is disappearing – People are feeling better about their 401(k)s lately, but homeowners are still struggling with negative equity. Not only that, but they borrow $.25 to $.30 for every $1 equity increase. Since home prices are still way down, middle class homeowners are largely still up the creek, and millions more are living paycheck-to-paycheck, according to Harvard Professor Elizabeth Warren.
- You want this recovery done WHEN? – Ben Bernanke says the signs of recovery are already there, but there are people who fear that’s just a result of the massive stimulus package. A Washington Post column asserts that “The surprising strength of the bounce-back testifies to the wisdom of the underlying strengths of the U.S. economy and the success of the policies, but is likely to peter out as the stimulus begins to wear off and the inventory correction is completed.”
- We may only be putting on a band-aid – Obama has even said this himself. Stop adding to the debt, he says. But the Watchdog columnist worries about a lack of demand. Credit and housing used to be America’s big economic growth areas. Now what’s going to get people (investors) excited? People are still holding on to their money, says Nobel laureate economist Joseph Stiglitz. No spending could mean a double-dip of recession.
- How would we dig out of another recession? – Interest rates have already been lowered; zero percent is not a possibility for the Fed. Would bailout and stimulus money be there again, after how unpopular Obama’s plan was the first time around?
- Throwing away the crutches too quickly – New York Times columnist Paul Krugman notes that President Roosevelt and the Fed were a bit too hasty when they declared an end to the Great Depression in 1937. They jumped back on the reducing the deficit wagon before the wheels were secure, and the wagon lurched off the road again for a while.
- Pumping the system could be what has stocks up – And how long will that last? Foreign investors swooping in on the weak dollar helped, as have nearly zero-interest loans. But there’s no solid sense that this will continue, says the Watchdog.
- Wall Street hasn’t been slapped hard enough – Which could mean they’ll have every intention of playing their games again. Obama may have called Wall Street a Ponzi scheme, but they’re still wearing their “too big to fail” pants. The president’s stance toward banks has now become less aggressive, leaving the door open for a repeat performance of much of what got us into trouble in the first place. On CNBC, economist Simon Johnson admitted that it will be “exciting” to see whether America can have back-to-back financial crises.
Does that sound exciting to you, payday loans blog readers?