Is The Economy Broken?

Dollar Down - Credit Wrecked - Obama's LegacyIs the economy broken? I keep hearing – and hearing, and hearing, and hearing – how the US economy is broken, but is this really true or is the truth that the US economy has been broken for decades and what we’re painfully experiencing is it fixing itself?

It seems to me that latter possibility is far more likely true than the former.

How Is The Economy Broken?

There’s a plethora of ways that all levels of the US economy have been broken for many years.

  • Fiat currency. Our money is solely backed by the “The full faith and credit of the United States Government.” Yeah, it seems that faith in the US Govt.’s credit is waning.
  • From individuals to the federal government we’ve been living beyond our means for decades. We’ve become a culture of debt.
  • We’ve mistaken money for wealth. Complex financial vehicles have replaced goods as the basis for America’s economy but they’re fictions based upon ether. What does America still produce?

These three longstanding, fundamental flaws in America’s economy are just a sampling of what’s been wrong for a long time. There are many more and even just the three above have myriad examples and far ranging negative effects.

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4 Responses to “Is The Economy Broken?”

  1. PiedType Says:

    Saying our economy is broken implies that somehow we broke it and may or may not be able to fix it. Frankly, I think the economy is far too large and complex to be broken or fixed by the actions of any one or two administrations. We legislate stopgap measures (with good or bad results), global markets shift, natural disasters occur, people panic, etc. No way we’ll ever control everything. The economy as a whole is its own boss; for the most part we’re just along for the ride. The markets and the economy are generally self-correcting over time if we’ll just be patient and behave responsibly.

  2. jonolan Says:

    Saying our economy is and has been broken doesn’t actually imply that we can fix it. It may fix itself as it seems to be doing now – though that sort of “settling” or “market correction” is painful in the extreme.

    We could, however, try to correct our own inputs into the economy which would, in turn, correct our needs for outputs from it that it can’t sustain.

  3. PiedType Says:

    Agreed. To me a basic tenet of behaving responsibly is not spending more than you have. Individuals can’t get away with it and neither can governments. When you’re in over your head, as we are currently, you do two things: you stop spending and you look for ways to increase revenue/income.

  4. jonolan Says:

    That’s the way it should be. In the case of the federal government though, they seem to need a 3rd-party manager to be appointed over them because they’re incapable of stopping their spending excesses, meaning increased revenues won’t help them or us.

    They’re like to the people who got consolidation loans in the old days and then went out and re-maxed the credit cards!

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