

Angst in the United States - What's wrong with America's economy? - sasvari
http://www.economist.com/node/18620710

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hga
I'm pretty sure the recent sharp rise in angst is due to inflation. The job
situation is of course bad, but it doesn't hit the employed _that_ hard.
Pretty much _everyone_ in the middle class and below is getting slammed with
inflation at the gas pump and grocery checkout line. And I at least am seeing
small but significant in total increases in most of my monthly bills (rent,
electricity, water and sewer, AT&T DSL, medical insurance).

This is classic '70s stagflation (Phillips curve is again failing, inflation
is not resulting in more jobs) for pretty much the same reasons, for those of
us who were around back then and paying attention it's nothing new but roughly
as unpleasant.

A lot of people think we've also reached a preference cascade as to the
reason(s) but that's perhaps beyond the scope of this discussion.

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wil2k
This gives a good background:

The Secret of Oz:

<http://www.youtube.com/watch?v=7qIhDdST27g>

"No, today, in our crazy money system, the government has to borrow our money
into existence and then pay interest on it. That's why they call it the
National Debt. All our money is created out of debt. Politicians who focus on
reducing the National Debt as an answer probably don't know what the National
Debt really is. To reduce the National Debt would be to reduce our money --
and there's already too little of that."

"No, you have to go deeper. You have to get at the root of this problem or
we're never going to fix this. The solution isn't new or radical. America used
to do it. Politicians used to fight with big bankers over it. It's all in our
history -- now sadly -- in the distant past.

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trevelyan
> Both times the United States bounced back, boosted on the first occasion by
> Paul Volcker’s conquest of inflation and on the second by a productivity
> spurt that sent growth rates soaring in the mid-1990s even as Japan stalled.

In the late 1990s the usual chime was Robert Solow's observation that
"computers show up everywhere but the productivity statistics". It wasn't
until after 2001 that business investments in IT began to pay off in
productivity growth (which became one of the dominant explanations for the
jobless recovery at the time).

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Adam503
All America's working capital is being hoarded outside the US economy by the
rich. There's no capital left to flow the economy.

