Recently, I saw a scary article: Can Anyone Steer This Economy? [yahoo.com]. Here's a quote:
"Sometime next year--perhaps around Christmas 2007, if current trends continue--the U.S. will hit a milestone. For the first time in recent memory, the cost of imported goods and services will exceed federal revenues."The article talks about how little of an effect recent government action (tax cuts or the huge number of interest rate hikes) has had on the economy.
"Since 1995 imports have risen from 12% of gross domestic product to about 17%. And foreign money finances about 32% of U.S. domestic investment, up from 7% in 1995. In other words, the U.S. is more open to the global economy than ever before, and the links run in both directions. Now many of the levers affecting the U.S. economy are located not in Washington but in Beijing, London, and even Mexico City."
The article also asks some difficult questions, such as if household wealth is higher than it was 10 years ago, but income is down, are we better or worse off? And what can even be done about it?
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