Weather Report: Economy America — Some Observations & Questions

ECONOMY AMERICA–SOME OBSERVATIONS & QUESTIONS: In the Weather Report here at PrudentHome, we usually try to present what we think are some important stories from various news and blog sources to inform the reader about the “weather” that may be coming over the horizon. Occasionally we comment on these stories but today, just a couple of days before America’s biggest holiday, we’d like to drop the news and raise some observations (along with some inherent questions) about what’s going in America. Here goes.

The solutions to America’s current economic crises seem designed to correct the failures (or absence of solutions) of the U.S. government during the “Great Depression” of the 1929-1939 era. Perhaps it might be instructive to note that the America, and indeed the world, is a far different place from that decade:

1. America in the 1929-1939 decade was a much more homogeneous society in terms of religion, culture, ethnicity, and values (many would describe our country today as “balkanized”). We were a far more independent people individually, and as a nation.
2. The economic structure of our nation was one based on production. It was far more agricultural and even then, more industrial. Today, ours is essentially a consumer economy (70% ) coupled with a small industrial base. Two percent (+/-) of our country feeds the rest along with a substantial and growing percentage of our food derived from imports.
3. Our money lacks any specie backing. It is essentially a fiat currency.
4. In the referenced past, we were a nation with relatively small private and national debt. Our imports came close to or were exceeded by our exports. Today we are the worlds largest debtor nation requiring more than $2 billion per day of externally borrowed money to meet our current bills. Our people carry privately, one of the largest debt burdens in our history. Our imports exceed our exports by nearly ¾ of a trillion dollars per year. We currently have a coming budget shortfall if a trillion dollars. Our “promises- to-pay”, both for domestic programs and foreign debt combined, exceed 60 trillion dollars by some estimates. By almost any rational measure, we are as a nation, economically bankrupt.
5. During the “Great Depression” we were involved in no foreign wars to speak of while today we are informally involved in at least two with sub rosa conflicts almost beyond number.
6. The world population was about half of what it is now during our last depression with a lot more natural resources both domestically and externally.

The above are just a few of the differences that immediately come to mind when we think about our current economic crises vis a vis the Great Depression. And while there are others, those already mentioned raise serious concerns for us as to whether or not the “fixes”, implemented and proposed, will work. I guess that’s why PrudentHome recommends individual family preparedness as an insurance policy against the uncertain future.

Until after Christmas then, keep your eyes on the horizon.