Watch out below. The US economy is slowing and Europe remains mired in the longest economic downturn in modern history. If debt was a problem four years ago, the situation is far, far worse today. Meanwhile, GDP has gone nowhere -- in the US and in Europe. This means that debt as a percentage of GDP has skyrocketed in the western world and there is no prospect for this skyrocketing to slow in the future. In fact, it is a virtual certainty that debt will outpace economic growth for generations to come.
Not a pretty picture.
Meanwhile, the US economy is slipping. Part of this is the continued hammering of the financial sector by the Obama Administration. Extorting fines for trading errors, which no one thought to be a crime until Eric Holder came along, is taking a huge toll on the financial sector. It's not just the dollars that Wall Street is shelling out to Holder, the atmosphere in Wall Street is different. Wall Street is looking inward and hunkering down, hoping to outlast the most anti-business Administration in the history of the country.
Employment gains are negligible and that won't change either -- in the US or Europe. Why hire someone if you the add-on government costs are more than you pay the new employees and where firing people is a crime in Europe and is increasingly a crime (or a shakedown event) in the US. This hiring avoidance is especially severe among the those without Ivy educations. That's why those with Ivy educations don't really care. They will be okay in the new economy.
The US economy is now poised to protect the rich and the powerful and the connected. As the Wall Street Journal today notes, some of the most prosperous public companies in the US -- the solar companies -- are creating instant billionaires -- in businesses that will never be able to run at a profit. But, government subsidies bilked from unsuspecting taxpayers are providing the loot that makes this scam work.
It is now all about connections, not about energy, hard work and imagination. The liberal dream is coming true. The mighty American economic engine is shutting down and the wealth of the powerful and the mighty and politically connected is protected. As for the Americans looking to improve their economic situation, they are out of luck. The health care rollout is a great example of how the Obama Administration views the average American. The Obama folks could care less. They party on while Americans are losing their health insurance and facing massive cost increases for a new Obama system which delivers far, far less in actual health care.
This is a pretty pessimistic outlook, but it is hard to see what turns this around.