The word around the globe is that the world's largest economy is in distress, experiencing a wide variety of illnesses, from stagflation to possibly recession. Indeed, the problems with the US economy are significant, and it is not an exaggeration to say that the country needs sound and strong policies to ameliorate the impact. At the same time, it requires strength and resilience from the authorities, institutions and general public. The variables leading to the current condition of the patient will be covered at some point of time; how bad its remnants are, will depend on resilience and the willingness of the powers that be to develop and enforce new strong policies.
The US economy has been astoundingly and consistently strong for over 100 years, with a few notable exceptions. With the advantage of vast natural resources, the enterprising spirit of Americans and strong commitment to scientific and medical research and technology, the US has reached enviable heights when compared to the rest of the world. But 2003 to 2007 was a period of dangerous `excess'—be it in consumer spending, the purchase of more than one home for investment purposes, or greed of investors in the financial markets. These excesses changed consumer behaviors, expectations and perceptions in a negative fashion, leading to lower savings rates, trade deficits and an overleveraged American household. |
