Our outlook for the economy is borderline apocalyptic. We have this massive consumer infrastructure that has to get unwound and an economy that has come to depend on consumer spending as its lifeline.
Consumers represent more than 70% of GDP. This is a problem. This is the problem, and no one is talking about it. Our GDP is too big for consumers to be able to sustain this much of it. Just look at the fact that consumer savings, which used to range around 7% to 8% have fallen into negative territory for the past few years. This is not sustainable. The current meltdown is helping to prove that.
Now consumers are faced with increasing employment risk and job losses, and on the horizon, we are predicting that the impact of the massive debt being piled onto the national balance sheet will suck the value out of the remaining dollars in their pocketbooks. We will only mention here that there is $40 trillion in unfunded liabilities (Social Security and Medicare that are still looming).
We cannot go on forever consuming and not producing, and it is folly to believe we can. How did we ever get into a position in which consumers represented over 70% of the GDP? We most certainly had a national leadership who were utterly asleep to what was happening.
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I'm really not one of those who worries about the cost of Social Security since the financial burdens of the elderly are simply not going to go away whether or not you have a Social Security program or not. Everybody is going to get old. And I certainly don't think any elderly person is getting rich off of social security.
Health insurance is another matter, however. I just saw the report that the US spends about $2.4 trillion a year on health care, or about $7,900 per person. Sorry, but there's no doubt in my mind that the average American is probably not even getting a tenth of that amount in-- true health care services-- on an annual basis.
Both the government and private industry in America are running the most inefficient health insurance and health care system in the history of humankind.
The Federal government alone is already spending enough money on health care through Medicare and Medicaid alone that they could actually give every man, woman, and child in America more than $2000 every year for their health care without raising any taxes. And that doesn't even include the hundreds of billions of dollars of matching funds that the States have to kick in.
Marcel F. Williams
http://newpapyrusmagazine.blogspot.com/
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