The U.S. and its Stressed Economy

The typical symptoms of stress in the economy and currency are dominating the U.S. scenes of finance and politics. The problem is common: deficits in a major scale of the federal government, an unbearable and literally non-payable national debt, a foreign-held debt which is growing rapidly, levels of private debts which are unsustainable, confiscatory taxation, inflation rates which are of high structure, and a productivity decline across the board. Nonetheless, only a few understand that these cutbacks are strongly related and rooted, and they damage the viability and value of investment portfolios of all Americans directly. These situations haven’t appeared on the horizon and demanded our attention recently. They have been occurring for a long time, they have been devouring the base of the American economy at a steady pace: the U.S. dollar value. The vast majority of the Americans are wishing and hoping that this deteriorating dilemma will just plainly become non-exsistent, but we all know that this won’t occur. It’s more probable that the problem will get worse.

The same way that our bodies adjust to the cold and become inured, our minds have become numb by the repeated, common rhythm of statistics that show that our economy is in a critical state lately.

In 1970, the budget deficit was a low two point eight billion dollars. By December of 2003, it had gotten to a high level of four hundred seventy-seven billion dollars – one hundred and seventy times the 1970 chart.

• The federal rate debt accumulated in 1970 was of four hundred seventy-six billion dollars. It challenged the seven-trillion dollar mark in December of 2003. This doesn’t include the off-budget items, such as social security in long terms and medicare obligations which expand these figures in multiple amounts.
• In 1970 the import and export rates were roughly equaled. 1975 was the last time the U.S. ran a surplus in trade. By the end of 2003 the estimate of the trade deficit was that of a dismal estimate of four hundred-ninety billion dollars for that year.
• The United States has changed from being the world’s greatest creditor nation on the face of the earth to becoming the world’s greatest debtor nation. In 1970, the United States debt held by people from other countries was a meager 12.4 million dollar rate. By December of 2003 it reached an astounding 1.5 trillion dollar rate. The dilemma of foreign held debt has gotten so tight that many experts doubt if the United States will be able to reach its own monetary policy in the future, or if the dollar is now hostage to the people who give us foreign credits.
• False political claims that we have inflation under control. The present consumer price rates has increased immensely to four hundred-ninety percent since 1970.
• Many political parties have failed to inform that since 1980, individual tax collections by the government which do not include Social Security, has increased three hundred-fifty percent on an annual basis over the 1970 figure while proclaiming that the consumers of the U.S. are in their best state, on the meantime the median income has increased only two hundred-forty percent. Putting it in other words, taxes have increased almost 1.5 times quicker than the income. This fact gives us an explanation why the American installment debt is past two billion dollars, and the reason why it takes two incomes to give us the lifestyles that one income gave us in the Sixties, the low savings rate, and the non-increasing gross national product. If we add Social Security and payments to Medicare to that ratio, the gap between tax collection and income would be much wider in a substantial rate.