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9 Things About The U.S. Economy That Should Scare You To Death

Dec., 16, 2016

9 Reasons The U.S. Economy Remains In Big, Big Trouble

Image source: Pixabay.com

NEW YORK — Despite all the optimism generated by the election and recent stock market rally, there remain many signs the U.S. economy is in big trouble.

In fact, there are several good reasons to believe that a downturn or even a major economic crisis is right around the corner. Here are nine reasons why the United States might be on the verge of a major economic crisis.

1. The strong U.S. dollar. It may be hard to believe, but a strong dollar can create major problems for the U.S. economy. The dollar is at an eight-year high against the Chinese yuan (six yuan to one dollar), which makes Chinese goods cheaper on the world market than American. This increases the price of U.S. exports, such as agricultural goods. Some U.S. manufacturers may have to cut production and eliminate jobs because of lower exports. Another effect is that there will be less investment in the U.S., because investors can buy more in other nations with cheaper money.

2. Higher interest rates. Much of the recent economy recovery has been fueled by lower interest rates, but rates are suddenly climbing back. The rate on a 30-year fixed mortgage was 3.54 percent in September and 4.13 percent in November. Higher interest rates means fewer mortgages, less new construction and fewer jobs. It also means less business activity because it will be more expensive for businesses to borrow money. That can translate into fewer jobs and less demand for raw materials.

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3. Inflation. The rate of inflation in the US doubled between July and October. Inflation was .8 percent in July but rose to 1.6 percent by the end of October, the U.S. Bureau of Labor Statistics reported. One factor driving inflation is the strong U.S. dollar. Inflation can affect interest rates because the Federal Reserve might raise them in order to stop inflation.

4. A new real estate bubble. Average home prices in the U.S. hit a record high of $191,780 in September, the Corelogic Case Shiller 20 City Home Price indicates. Prices have not been that high seen since July 2006, right before the beginning of the financial crisis. The situation is worse in certain cities such as Seattle and Denver. Home prices in Seattle have increased by 11 percent over the past year, creating a serious housing shortage.

5. Technological unemployment. Large numbers of jobs are being lost to digital processes, automation and robots. Walmart, America’s largest private employer, is eliminating 7,000 accounting positions in its stores. Those employees used to count cash and process invoices in the back office. Now the cash will be counted by machines and the invoices will be processed by a computer at Walmart’s head office. Many other employers will follow suit as robots and computer algorithms do more jobs such as driving trucks cheaper. For example, Uber recently tested a semi that drives itself.

9 Reasons The U.S. Economy Remains In Big, Big Trouble

Image source: Pixabay.com

6. The student loan crisis. Americans owe $1.2 trillion on student loans, but payments are only being made on 40 percent of those obligations. News reports indicate that many younger people are putting off buying things like homes and cars because they need all their money to pay off loans. Others are even forgoing marriage and children because of the debt.

7. Wage and income stagnation. Household incomes for at least 50 percent of the U.S. population (around 117 million people) have not increased since 1980, the Washington Center for Equitable Growth reported.

8. The mass closing of stores. Macy’s has plans to shutter 100 of its department stores. Sears, which owns Kmart, closed 80 Kmart stores in July and has plans to shut down another 64. Walgreens might close up to 500 stores. There is speculation that Sears Holdings might declare bankruptcy or shut down completely next year. That company operates 1,687 Sears and Kmart stores.

9. The public pension crisis. State and local governments owe workers and retirees $4.798 trillion in pension obligations but have only $3.7 trillion in assets to cover that bill. To make up the $1.91 trillion they will either have to cut pension benefits or government services.

Americans had better be ready for economic turmoil.

Do you agree the economy is in trouble? Share your thoughts in the section below: 

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16 comments

  1. I gave up trying to discuss these facts with people along time ago. Most people just don’ want to know or hear about it. You can see their eyes twitch as their brain starts shutting down. Now, I listen, mostly for ammusement.

    • In the land of the, well, you fill in the blank. I can remember when the United States was strong, the world was a stronger place… Everybody in many countries wanted American goods. Today, who wants who and what!

  2. You can bet your last dollar however that welfare, food stamps and other government giveaways to the unwashed Will continue until the bank is completely empty. And let’s screw the veterans some more while we are at it.

    • the stats show that the military industrial complex out stretches food stamps and welfare off the charts and there is 9 trillion missing from the pentagon. those guys who are pumping out money from the federal reserve created from nothing are having a good time with the fools money

  3. Wow, good catch there chief! That will surely fix the problems ahead. Get in the game skyler.

  4. People will only believe what they want to believe. Nobody wants to believe how bad it really is.

  5. People will only believe what they want to believe. Nobody wants to believe how bad it really is or whats about to happen. Just like the roaring twenty’s { spend till it hurts somebody else will pick up the tab. That’s what the media keeps telling everybody and that’s what they want to hear. Then they will be the first to ask how this could have happened. Ya keep voting in the morons you’ve been for the last 40 years. Trumps going to do what he can but he’s only human and osoma has been purposely trying to destroy this country from day one.

  6. If you haven’t seen these movies check them out: The Emperors New Clothes (an English documentary about what occurred in Britian during the housing crisis) as well as The Big Short (a movie about the people who saw the problem occurring and ended up making millions off of it). These films both clearly tell you whose responsible for economic fiasco’s that occur: Bankers. More specifically, greedy bank owners who don’t play by the rules.

    In the big short it’s explained that mortgage loans were given out to not only those that were approved to pay back, but also those with less reliability, eventually these individuals would default on their loans and in turn a chain reaction occurred. Both movies make a point however on the outcome, by showing that these individuals KNEW what was occurring, and instead of being held responsible for their actions by causing the loss of BILLIONS of dollars (5 billion if I remember correctly) only ONE individual was arrested and tried for fraud. The rest of the bank owners, took HUGE paycuts, as well as bonuses, and then retired to the place of their choice. Not one of them ever saw the inside of a court or even got fined for their actions.

    Another example is Bernie Madoff, that man was in charge of the stock market, he was even the Director at one point while his Ponzi scheme was taking place. No one thought he could be capable after all he was a “good man”. Later on hundreds of people lost everything they had because it turned out he didn’t actually have any of their money available!

    It isn’t about the working individuals or those who are on welfare, or even illegal immigrants taking jobs. It’s all about the bankers and how much they have. The reason we will have another economic collapse is because we don’t learn from our mistakes, we don’t charge those who do illegal activities like banking fraud, and we don’t read enough about terminology in the banking world. To be honest, most of what I have heard bankers say is just crap, dressed up to sound great! Remember, banking is the number one money making aspect of the US culture, banks spend more money in a single year on getting YOU to buy their product, than any other commodity or service! After all, everyone one likes to use credit, its the hottest selling thing, a little card that has money that doesn’t exist on it, but you pay back for it in the end. Banks made 14 million dollars in late fees along in 2013, so banking is quite profitable.

    So, if you really wanna change the US economy, then fire the bankers who do stupid illegal activities, and hire those that will do things the legal way.

    • no guy will do things legal way, legal way is a scam like the millon american indians killed, and the millon slaves killed by jew master slaves, what do gerge washington by houses, land slaves with borrowed money , so when is time to pay, he said, hey brother we need kick the british, i want to keep all free all slaves, i believe the british need to pay reimbursment for my war, i want keep that money toom, i raven i take off the ice of every body in my way, you see the law was make after the guy kill, steal, kidnaping and so on keeping you to make same thing.

    • Good observation

  7. I believe thothers of us in the top 2 % need to look at the forest and quit getting lost looking at the current trees. We are and have been killing America. So much has been taken away because of Greed.

  8. The real problem isn’t our economy it’s the Central Banks, like the Federal Reserve that has taken charge of our countries money and has destroyed it’s value. The claim that our dollar is stronger couldn’t be farther from the truth, but when compared to a basket of currencies around the world the dollar is stronger what does that even mean lol….

    In reality our dollar has become weaker, it takes far more dollars now to buy the same things it did decades before. So is the price of goods going up or is it the valuation of dollars make it seem so? The whole system is rigged and we are trapped we cannot escape it. Corporations have been allowed to affect policy and laws within our democracy that has given them a tool far stronger then a single vote, it is the dollar itself that has been used to cripple the democracy itself and as a result the whole system is out of balance and we are in essence living our lives based and controlled by the 1% who control the money and therefore we are no longer a democracy because no matter who is voted into office they are done so only because of the contributions of these 1% who pay for all the exposure we the voter consume by internet, tv, radio, social media, colleges, etc… we are being fed our views we are not making choices for ourselves we are simply following the masses much like sheep follow within the herd. It is only a few brave people who attempt to break free to enjoy true freedom while the rest of us simply believe we are free when we are not free at all…

    If we do not get money out of politics we can be assured that our democracy will eventually be entirely controlled by the people who hold the money which is pretty much where we are but they still haven’t gained full control just yet, when the gun rights are stripped then we will fully be sheep and we will be forced to do whatever they tell us to do.

    • TheSouthernNationalist

      You’re right, when I was a child back in the sixties, we could go to the store and buy just fifty cents worth of candy and it was a bag full! You cant do that in todays times.

      Money has lost its value.

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