Thursday, December 17, 2015

Getting to a Better American Reality .... Seeing is Believing ... The Effects of Aging, Debt, Globalization and Government

The U.S. economy continues to be relatively weak compared to its historical rate of growth, even though it's improving, albeit much too slowly. And it looks like this slow-go pace will continue indefinitely as forecast by the Fed yesterday when it announced its first increase in interest rates since 2006.

Other than President Obama, the rest of our vote seeking politicians are debating about what to do about immigration, ISIS, Iran, Syria, Russia and domestic terrorism right now, and that is as it should be.

Even setting all that aside, we have other huge and serious domestic societal issues needing our nation's immediate attention as well, and those problems aren't centered on climate change or race relations. Neither, however, do they depend on the cooperation of the rest of the world for us to be able to address them successfully. We clearly have it within ourselves to face facts and do what needs to be done domestically, both for future American generations and for ourselves. But will we?

So let's talk about the four issues that all the vote seeking politicians aren't talking about.

They are as follows: (1) the effects of a rapidly aging society, (2) untenable and growing debt levels, and especially in government, (3) the effects of global competition, both on jobs and wages and (4) uncontrolled government spending.

When considered as a connected whole, they result in a society which must use much of its income and other resources to pay for legislated entitlements (Social Security, Medicare, Medicaid, municipal and state public sector pensions and health care benefits, and interest on the outrageously high government debt, as examples), a society what has fewer workers entering the workforce and therefore able to pay for those guaranteed entitlements, a society which can pay less to those workers due to global competition, and a slow growing and weakened job creating economy attributable to growth in the unproductive public sector at the expense of the more productive private sector.

The Bleak Reality Driving Trump's Rise is subtitled 'Workers with low or middle incomes sense a deep and alarming economic shift' and offers this sobering and eye opening analysis:

"In a world of mobile capital and global labor markets, we have not figured out how to maintain jobs and incomes for workers with modest education and skills. . . .

Over the next decade, the service sector will provide 95% of all the new jobs. Manufacturing, which shed more than two million jobs between 2004 and 2014, will shrink by an additional 800,000, to only 7% of the workforce. Of the 15 occupations with the most projected job growth, only four ask for a bachelor’s degree; eight require no formal education credentials; nine offer median annual wages under $30,000.

Few Americans know these statistics, but most of them are living the reality they represent. Since the beginning of the 21st century, the economy has ceased to work for households at and below the middle. A recent report from the Pew Research Center finds that the median income for middle-income households is about where it was in 1997. For lower-income households, median income stands where it did in 1996. . . .

Baseline macroeconomic projections offer little hope that the next decade will be much different.... Bureau of Labor Statistics projects annual growth of only 2.2%. This reflects a dramatic slowdown in the growth of the labor force. Between 1994 and 2004, the workforce expanded by 12.5%, compared with a projected 5% in the coming decade. The reason is straightforward: With an aging population reaching retirement age, departures from the labor force nearly counterbalance new entrants.

In fact, we are undergoing a historic demographic shift. Throughout the 1990s, the entire baby-boom generation was between 25 and 54 years old—the prime working years. Starting in 2001, the oldest boomers began aging out of that range. By 2019, every baby boomer will be 55 or older, and the share of Americans in prime working years will continue to decline. . . .

From labor unions to the family, institutions undergirding working-class security have weakened. The U.S. remains immensely powerful, but it no longer bestrides the world like a colossus. The 9/11 attacks 14 years ago smashed the post-Cold War Americans’ confidence that the continent was safe from attack; the Dec. 2 San Bernardino slaughter has reawakened this sense of vulnerability.

Economic anxiety, demographic resentment and fears for physical security make a toxic combination." 

Summing Up

Facts are stubborn things.

And facing those facts squarely is a prerequisite to getting to a better reality.

Being able and wiling to recognize our current reality will enable us to do what's necessary to change that current reality and together create a better one.

Government officials acting alone can't and won't get the job done.

Only We the People can do that, by acting as individuals in a safe and secure nation of equals, and by making wise choices with respect to how we choose our priorities based on both today's reality and the future reality we seek and deserve, both for ourselves and future generations.

That's my take.

Thanks. Bob.

No comments:

Post a Comment