Take away the government spending, and the housing bubble, we’ve probably had little or no real growth since the ‘.com’ crash. All the while we were off-shoring productive jobs like mad. Now the rot is being exposed.
Good post.
One California economist used to warn that all of the economic activity in this State after the year 2000 was equal to the amount of mortgage equity withdrawal. One the house-as-ATM fantasy exploded the rot underneath was exposed. The housing bubble masked the longer term damage that off-shoring was doing to job prospects.
You’re right; when you look at dying “post-industrial” states that have lost their tax bases to other more business-friendly states, you can draw a parallel to what is happening on a national level (with other less-regulated nations). When viewed in that light, you understand how bad off this country is (and don’t bother looking for signs of the coming recession - we’re still in one).
Those who are fortunate enough to still be working are having their salaries “adjusted down” to the new normal through currency devaluation. Take any product in a supermarket (I would use gasoline as an example, but the left has a whole slew of excuses for those price increases), and think of how many of them you could buy with one paycheck five years ago - and now think about how many of them you can buy today. The whole mantra that there is no inflation is probably just used because one thing is actually falling in price - our homes.
Nor has Bernanke, Krugman or any central planning acolyte shown that we will ever grow our way out of this, especially in this globalized economy.