06-26-2009, 01:31 AM
*
Ever since the recession of the early 1980âs, I was expecting a marked decline in Americans standard of living. With globalization and NAFTA which shifted a great deal of manufacturing offshore and the sorry state of American education and the social disintegration that has accompanied it, it seemed to me our standard of living would have to fall.
I can identify at least five things that moderated, and to some extent, masked the decline:
1. The importation of cheap goods, which made declining incomes go farther.
2. Ultra-low interest rates that made borrowing easier.
3. Government programs that went hand in hand with low interest rates to encourage unwise borrowing.
4. A willingness on the part of most Americans to use debt as spackle to fill in the gaps created by the inevitable decline in their collective standard of living.
5. More families with two wage earners instead of one. Not everyone would agree, but in my opinion if two people must work to provide a standard of living that was once provided by one - there has been a noticeable decline in standard of living - feminism and womenâs liberation not withstanding.
In fact, if you look at the post World War II expansion and correlate it with the rising American national debt since then, it wouldnât seem unreasonable to assert that the rising standard of American living since the Great Depression was almost wholly the result of deficit spending (if you exclude the period after World War II when a war-ravaged Europe and Asia were rebuilding their manufacturing which was virtually destroyed by the war.
Soâ¦what magic wabbit do you suppose the mini-mes in Washington are going to pull out of their bag of tricks this time? Bonnie Fwank just produced it. After the all that has transpired, he once again proposes âeasing up on borrowing.â
Ever since the recession of the early 1980âs, I was expecting a marked decline in Americans standard of living. With globalization and NAFTA which shifted a great deal of manufacturing offshore and the sorry state of American education and the social disintegration that has accompanied it, it seemed to me our standard of living would have to fall.
I can identify at least five things that moderated, and to some extent, masked the decline:
1. The importation of cheap goods, which made declining incomes go farther.
2. Ultra-low interest rates that made borrowing easier.
3. Government programs that went hand in hand with low interest rates to encourage unwise borrowing.
4. A willingness on the part of most Americans to use debt as spackle to fill in the gaps created by the inevitable decline in their collective standard of living.
5. More families with two wage earners instead of one. Not everyone would agree, but in my opinion if two people must work to provide a standard of living that was once provided by one - there has been a noticeable decline in standard of living - feminism and womenâs liberation not withstanding.
In fact, if you look at the post World War II expansion and correlate it with the rising American national debt since then, it wouldnât seem unreasonable to assert that the rising standard of American living since the Great Depression was almost wholly the result of deficit spending (if you exclude the period after World War II when a war-ravaged Europe and Asia were rebuilding their manufacturing which was virtually destroyed by the war.
Soâ¦what magic wabbit do you suppose the mini-mes in Washington are going to pull out of their bag of tricks this time? Bonnie Fwank just produced it. After the all that has transpired, he once again proposes âeasing up on borrowing.â