Smart Americans are now cautiously saving money and spending less. In the long run this will eventually lead to more investment but in the next decade, the US gross domestic product would not expand any more than 2% per year. With the continuously rising unemployment, the crippled real estate sector and restricted bankers policies, the New Year apparently does not seem to be giving any good news for the country. U. S. New Year does not seem to be ringing in any good news for the country as the growth of the economy still seems shady.
With the housing and commercial real estate still very much depressed, it is almost impossible to robust recovery. Another big reason for the coming bleak decade would be the enormous national debt which is (officially) $12 trillion (or $73 trillion, unofficially). The outstanding consumer credit has indeed decreased, however, it is still as much as $2.5 trillion which is 20% of the total yearly spending in the US economy.
The past few months the media has been pumping good news, saying that the economy is actually recovering. But the truth is, the “recovery” in the past 6 months in 2009 was only triggered by the government stimulus spending which will fade away very soon into 2010. Economists are warning that the large national debt that is still accumulating in order to counter the crisis will be a major problem for the U.S. economy in the future. They also cautioned there could be a new crisis down the road unless the U.S. regulatory system is improved.
The only good news for the US is that China and India will continue to drive the world’s economy forward which will eventually help the US.
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