What type of U.S. economy lies ahead?

What we need is these bums on Wall Street and people like MSNBC to take huge paycuts. We need the major sports to cut these down on what these thugs are getting paid. What we need is people like Crammer and Madoff off the street, we need a lot less on snake oil salesmen. Got these cute babes on TV reading a telpromter and don't really have a clue what their saying. Who does the hiring of these babes, wearing dresses so you can almost see France. Then you got the slime press like New York Times reporting storys that latter prove to be unfit for print, they have gone so far left that the folks who have been keeping them afloat for years are backing out. Good riddens to them.

This is not a page from Huxley, rather it is a very unique economic failure, created by numerous mistakes, over more than a decade of time.
We started shipping jobs overseas and thus, eroded our manufacturing base. The free trade agreements benefited upcoming nations, but damaged or destroyed our lower end factories. These were not high paying wages, nor were they large operations, but on the scale of the entire country they employed many thousands and provided income to sustain communities. Most of the people that enjoyed these jobs are not capable of being retrained into rocket science. This has application for the young that are still in the educational system but this hardly means that every student is a Harvard prospect. Germany has been trying this system for years and it does not work well.
What lies ahead is a mess. We cannot resurrect the vacant factories. We cannot change the downward spiral of real estate as it is worldwide in scope. This will eventually bottom on it's own.
What is ahead? Deflation followed by Inflation. More job loss. This is a certainty.
The only way out of this mess is for the leaders of the major economic countries to agree on singular policies - attack the problems one a time as this is too big for any one nation to do alone.

MADEOFF WITH ALL THE MONEY.

So true Michael. Get rid of congress and get rid of the Fed and get rid of the IRS and shrink this government. Give back states rights.

Here is the problem people. The country has been in this slow burn since WWII. Why? The GDP in manufacturing was 50% of the economy. We supplied much of the world with our products for them to rebuild their factories and economies after the war. By the late 1970's they became our competitors with newer factories and cheaper wages, we just couldn't compete with that. Companies started closing here by the hundreds of thousands. Now we are in single digits for manufacturing GDP economy. With wages being slashed by the one's that are left, where will people get the money to buy houses, cars, food, pay taxes and every day expenses? I say they can't. And the $4.50/gallon gas finished them off. You must remember the average hourly wage in the U.S. is $13.50/hour. So, we tried the service style economy. Shuffling papers won't work as you can see now. The fix? There is none. Get used to the 1930's lifestyle. Take this to any economist and he will agree.

Bill Hedrick

Everyone is taking it on the chin...no raises, cuts in benefits, even the CEOS (some) are forgoing the year end bonus...lots of sacrifice....but.....Congress voted themselves a 2.8% salary increase...for doing nothing!
yes it will be an interesting year!

if the auto workers worked for lower wages like the rest of the workers in the country. we might be able to buy one of the pieces of crap the big 3 try to shove down our throats. the average big 3 car isn't worth one third of what they ask for it. let the freaking crooks, big 3 and their union workers go down the drain.
overpaid assembly workers ruined this country.

It is not wages they have to increase. It is the inflationary cost of goods and services that they need to bring down.

That warm, foul smelling yellow liquid that is running down your employer's leg onto your neck, where your employer's foot is placed, and rolling down to your face is the natural result of .."trickle down economics".... The unions have been systematically destroyed, not cleaned up as they needed to be rid of corruption and politics. We were sold a bill of goods, Propaganda. NAFTA, GAT, etc, etc.Unbridled capitalism (free trade, de-regulation, union busting, etc.) will always result in a slave labor work force for the corporations because that is what they ultimately want to have because it is more PROFITABLE. Corporations do not care about people. We have been had, lied to for decades by the politicians that the corporations own. Now, what are we going to do about it? Nothing?..................... Then total enslavement is coming.

can this country overcome this time ? i was trying to give my family a better life. But I made ONE mistake, I bought a house as an investment. the bank should of never gave me the loan, i should of never accepted the loan. I am not trying to take the blame off my self. But those people in those positions, just like credit card companies - should of not given a person a 400000 house loan and 75000 in open credit, while making 70000 or others making less a year. They got greedy and knew it was wrong. Those mortgage and credit card companies are paying the price now, but the employees are the ones who are really suffering. God bless...

Expect the Dow to rally (short) but will bottom out to 7,500 (maybe less)...despite of these so called "bailouts" there is no easy way and short cut to heal this beaten economy...(American greed coupled with GWB/company were to blame)....Obama should focus on jobs creation and stimulus package to the american people to stabilize the job market then maybe we can see a slow and solid turn around late 2009 or early 2010..good luck to all.

The US financial structure needs to be changed completely. In the past FED fight the inflation with short term interest rate, and that does not work any more from the experience of current credit crunch. If the banks do not want to lend due to lack of confidence about if they can sell the debt to investors , then , the economy will be in trouble , like what we are in now, it does not matter how low the short rate will be. With the new system, inetead of lending the money to the banks to make loans, the FED should also as th buyer of the mortgage backed debt with the money lended to the banks, the banks roll should be as a middle men
. The borrowers pay the monthly P&I directly to the FED . If the FED made $30Trillium loans to the borrowers, with 3% of 30 year loan, FED can receive $60 Trillium at the end of 30 years , the profit from the browers can be used for many projects , such as the medicare reform , education, social security ...etc . In our current system, the debt were sold to private investors, and if the investors stop investing, our economy will be in serious trouble, and the interest payment from the US borrowers were earned by the private investors, instead of by the government , and that induce additional trade deficit for the US if the investors come from overseas. Since most American families buying their homes by borrowing, the mortgage is a major part of their monthly budget, to reduce the financial burden of American families, FED should set the long term rate at 3.5% and make it stable for the long run so that it will not cause boom and doom in the economy and fuluctuation in American families' financial burden and American families can be more predictable on their family budgets. In the past the FED conduct a policy of fighting inflation with the short term rate. When the economy is good, FED raised the rate quickly to fight inflation, which cut inflation by 1% but increase the American's mortgage payment by 100%, you save 200% in gas and food per month, but increase your mortgage payment by $1000 per month, no wonder we are having millions of homes being foreclosed now. Example , in 2003, FED dropped the short term rate to 1% but increase the rate from 1% to over 5% from 2004 to 2006, which trapped many families into a financial deep hole. If you buy a car with your credit line when the FED short term rate was 1%, you are in trouble when the rate was raised to 5% , and if you buy your house when the short rate was 1% and which will be adjusted in 3 or 5 years, then you are also in big trouble if your income was not increased during that period. This up and down in rate caused a lot of unstability in the economy , as well as the US currency and make millions of American's family unpredictable , and caused the up and down of the economy from time to time and millions of American families got hurt badly. Instead of fighting inflation, FED should fight for the stability of interest rate and let the inflation to balance itself by supply and demand , the rule of economy. When things are getting expensive, people will consume less, and the price will drop, while things are getting cheaper due to more supply than demand, things will get expensive, just let the economy works the inflation out .

As to the future economic growth, the natural growth of population per year in US is about 1%, so, even the consumption did not increase, the US economy will grow by 1% at least per year due to the natural growth of population. As economy improves, and people recovers on the confidence of their future, people will continue spend, that is the human nature, if you have money , you want to spend to have a better life which will not change, unless your income did not grow . So, to grow the economy, the government must grow the income of people , especially the middle class who are the majority of the US consumers. A country can never prosper if the middle class is shrinking

Most of the inflation is caused by manipulation in the commodity market, not caused by the FED's interest. Example: We were in a recession since the end of 2007, and the oil price hit all time high at $147 per barrel in July of 2008. If the oil price is influenced by supply and demand, why the oil price hit the top eight months after we are in a recession and did not reflect immediately ? The oil price did not drop dramatically till Bear Stern and Leeman Brother collapsed, why ? it is because as Leman brother collapsed, the manipulators , such as the wall street investment institutions, such as Goldman Satch, Merry Lynch, the oil rich countries started to withdraw their money from the commodity market immediately to protect their investment , which caused the collapse of oil price from $147 all the way down to $37. Even now, the worldwide economy was shrunk by 5% , how can the oild price drop by 75% in no time even the demand was dropped by 5% ? This proved that the oil price was completely controled by manipulation , not because the demand of China or India . The real price of OIL should be around $50 per barrel even after the economy fully recovers . We will have more stable oil price once this economy recovers, because some manipulators from wall street has been sinking to the ocean forever.

When 90% of the people do not have much left to consume , this country will be down.
When 90% of the working people are squeezed on their income , not enjoy the fruit of economic growth, the middle class will shrink and the country will go under.
When thousands of American companies are out sourcing their production to overseas and cut millions of jobs in US and squeezing domestic employees, these companies will find that no one in US can afford their products anymore no matter how much discount they will give to the consumers, American consumers are getting poorer and poorer due to the job out sourcing and salary cutting.
When a country did not manufacture anything, and imports , majorty of the products from overseas, we know the industrial base of this country is eroding and heading to collapse.
When millions of Americans give their savings in 401k, or private savings to the wall street for gambling, we know that the majority of Americans will file for bankruptcy , it is just a matter of time .
When US government lost the power to print free money anymore due to loss of the economic power, and military power , we know that is the time the collapse of this empire. We are now one step away from completely collapse.