akuma587 said:
The national debt. It will cripple our economy in the next few decades. Our currency will simultaneously inflate and depreciate, thus hurting our position throughout the world market. The infinite line of credit we have written for ourselves (as well as the ludicrous amount of outstanding debt held by the public) will all come crashing down once our national debt gets too high. |
Granted that the national debt will pose a massive problem, but I see nothing about it that's not insurmountable. It's certainly been higher, both in relative and absolute terms (again, the 70's spring to mind). Note that under the Clinton Administration we were able to eliminate a national debt that was roughly on par with what we're now experiencing. Note also that we're currently spending tens of billions of dollars on Iraq: eliminating that revenue drain will prove to be a massive aid for combatting our national debt (although unfortunately the earliest that will happen is in mid-2009).
No, the biggest problem we face does not have to do with energy (as you yourself addressed) or the national debt (not directly, anyways). Instead, our hurdle is the Baby Boomers, who are set to retire very, very soon in large numbers. Fortunately for us, we've been replenishing our population via immigration and the birth rate, so we won't be hit as hard as Japan or Europe in this regard. Unfortunately, politics being what it is, we're also committing massive amounts of resources towards the elderly already, and that commitment will only deepen as time goes on. In short, we have a political problem coming up very shortly.
Fortunately, political problems can be fixed politically; tighten our belts appropriately, and the damage won't be overwhelming. I believe that the political capital required to do so won't show up for a few more years, unfortunately, but I do believe it will appear before the damage proves irreversible.
I don't think things are only going to get gloomier, I think things will eventually go up again (as I stated in an earlier post, how it's the nature of a free market), however I also think things are going to get worse before you get better.
As for what I think is going to happen that can bring you down. Well, just exactly what's going on now. The credit crunch will claim more banks and such. Meanwhile, the rising oil prices will keep raising the costs of goods and services. The rise in cost of goods and services means that less people will be able to afford to pay them, this means that companies will need to downsize to keep profitable, this means that unemployment goes up, which means that now even less money can be spent on goods and services.
It's basically the reverse of the cycle of prosperity.
Fair enough, and for what it's worth I agree with your short-term view. I was speaking of the long-term outlook, and I erroneously assumed you were as well. My apologies.
