Many people are watching a slight uptick in our manufacturing here the United States, and although we really haven't seen a net gain in jobs, at least it's not as bad as we thought it would be. No, we aren't out of the woods yet, and things still look pretty bleak especially considering the deficit spending of over $1.3 trillion a year the federal government level - all of the economic stimulus has done some good, but mostly we've inflated our Asian neighbors, and helped their economies immensely after the 2008 economic crash. Okay so let's talk shall we?
Even with all the stimulus and trade deficit flows into Asia, today, it hasn't been enough, Asia still needs more inflow, and they are hoping to grow their economies to overcome any of their own shortfalls. They're relying on the United States, the last economy still robust and strong standing to buy all of their products. That's nice, but we can't hold up the whole world, nor should we borrow money to inflate it.
If you think the crisis in Europe has taken a severe toll on exporting counties in Asia, you haven't seen anything yet. Right now South Korea, Taiwan, China, and Japan are watching their exports collapse here in the summer of 2012. In fact, on August 12, 2012 the Wall Street Journal had an article titled; "Trade Slowdown Squeezes Asia - Effects from Chinese Falloff Ripple the Region; Crisis Management Should Be Stressed," by Alex Frangos which had some rather dismal graphs showing the drop off in export numbers in July and August of 2012 - ouch, I mean they are really off a cliff it seems.
Yes, one could blame some of it on the Typhoon season, but it's more than that, much of it is about what's happening in Europe right now with their crisis, but rest assured there is more to this story, and an unknown future, as if those nations didn't have enough to deal with already. Now then, many economists believe it is time for Asia and Europe to pony up and stimulate their own economies, they can't do it on the back of the American economy anymore.
Due to our high unemployment rates we could very well have regime change in US, but make no mistake it doesn't matter who's elected, in 2013 there will be severe budget cuts, and we have to bring things back into a reality check. It may hurt a little bit here at home, but it's going to hurt much worse for our trading partners in Asia and in Europe. There is no easy fix, and the money flow isn't coming back fast enough, further the investment flight to safety isn't coming in the buying of goods and services. Europe wants to grow their economies, but they have no buyers, Asia wants to do the same thing, but we can keep buying from them and still provide more jobs for us.
China's rapid growth year-over-year and their lopsided trade practices, along with their currency manipulation has in essence painted them into a corner, and their Asian partners aren't far behind them for some of the same reasons, albeit to a lesser degree. If you'd like to talk about all this and take the dialogue to a higher level you may shoot me an e-mail. Meanwhile, I ask that you please consider all this and think on it.
Lance Winslow has launched a new provocative series of eBooks on Economics. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net
Article Source:http://EzineArticles.com/?expert
Source: http://newsandsocietyblog-economics.blogspot.com/2012/09/when-us-stops-its-deficit-spending.html
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