Friday, December 27, 2013

Is the American economy really improving?

As the sun sets on another year there are signs that the American economy is strengthening. Job data continues to improve, exports are rising, and the housing market in some areas is picking up. OF course, with all of the good data there's equally bad, stagnant housing markets in most areas outside of city centres (if you don't count the likes of Detroit and other cities facing bankruptcy). Bankruptcies have peaked, but that may be because there's nobody left to declare. The debt continues to rise and is perhaps the greatest achilles heel to the entire economic operation. With the mounting debt, and the inevitable need to raise the magic ceiling number again, America is still stuck in a fundamental economic climate that sees money creation (lending) as the primary means to generate consumption (get the economy moving). Flooding the market with dollars and keeping the interest rate low will continue to spur development, but without a worldwide uptick in consumption (Europe buying more, and emerging markets), it may be all for not. It's also crucially important to balance fiscal spending with unnecessary spending. Where can we cut? Services seems to be the place where msot are seeing the pinch, but what about the golden egg called the military? Are there dollars there ot be had and is there enough cuts and income for America to actually run a surplus. Funny how we never hear discussion about that word--surplus....

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