In what way is the economy "bad" right now?

Question

Explain it to me, because I honestly don't see evidence of it... stores are still selling out of products (i.e., Best Buy didn't have the computer my nephew wanted) and all the restaurants in town are jam-packed on Saturday.

Is it just the oil prices??? Enlighten me, please.

Answer 1

if you are talking about the US economy, we are trillions of dollars in debt. you don't need a college degree in economics to know that's not a good thing.

Answer 2

From the Equalizer:  I do apologize for coming off like a jerk, it's just a rough time right now and I wish I wasn't so affected by it.  I wouldn't wish financial hardship on anyone including you.

I lived in FL when three hurricanes (the precursors to Katrina) came through and wiped out a lot of my town and my home completely.  I moved to CO where I live now and no one here who hadn't been through a natural disaster could understand that trauma either.

I shouldn't blame others for not having experienced some of the things I have.

The person who replied to your question after I did really summed up the situation well.

Best of luck in all you do.  Take care  

Answer 3

People are losing their jobs, that is about the only bad aspect of it right now.  We are still seeing a lot of goods being sold, especially what would be considered luxury goods that people don't need, such as HDTVs, new computers, video game systems, and this is the most profitable summer for box office movies ever

Answer 4

The inflation rate is higher for low income people because they spend a larger fraction of their income on gas and food than the average consumer which is used for CPI number given out by the government. In some rural areas  they are spending as much  as 20% of their income on gas and buy almost no high tech product who's prices are falling.  Food prices  where I live are increasing especially things like milk, meat and eggs but much less  for processed foods and in restaurants  where the cost is due to labor not inputs. This combined with wages that  are increasing slower than even the official inflation number and worry about job loss due the rising unemployment rate makes the economy feel bad. There is also the uncertainty  of the effect of the problems in the financial markets which has even economists worried that  the economy may  yet crash big time and the decline in the value of the dollar of over 20%  make everyone less than pleased with the economy.

Answer 5

The avg family of four owes $700,000 in personal and government debt.

US is $54trillion dollars in debt, okay?

Go watch "IOUSA" it's a documentary in theatres NOW. Wake up.

And to the guy above me, the MBA. You're argument is pretty articulate. But I have to point out the fact that you said we attacked Iraq for no good reason. That's a slightly flawed statement. Iraq broke the dollar treaty with OPEC in 2000. He began accepting Euros at a loss for oil. If the other OPEC countries were/are to follow Saddam's path by ditching the dollar, we lose status as having the world's reserve currency. And the end of American economic leadership. It WILL happen.

When oil is unpegged from the dollar, things are going to get very dicey.

Answer 6

You need to look at even your experience this way. The fact that BEST BUY did not have enough stock available, shows shrinking policies of businesses during these turbulent times.

When you say is it only oil prices affecting, that actually encompasses almost everything. In a regular market, whenever the price of a commodity increases (say your hair dryer, television, cell phone, etc.) you always have a substitute, so one company increasing the price does not mean you got no other option. Also, if many companies increase the price of the same product, there are a lot of products you can still do without, or in some cases, you can do without for a certain period of time.

However, OIL is one such product, that has no real substitute that can be used swiftly if the prices increase. Also, EVERYBODY needs it. If you consume less oil, yer neighbor will consume yer share. And I am speaking on a macro-level, if US consumes lesser oil in 2008 than it did in 2007 (because people are saving on car gas and airlines are saving on fuel gas), that same gas saved is being bought by other nations.

Hence, it is not that if you save some gas, the nations selling it don't have a buyer. That is where the problem lies. Oil is one product that always has a buyer.

Hence, when oil prices increase, all your other items prices increase along with it. Because the cell phone or the grocery that has been delivered to your local store, has consumed oil to reach there by rail, road or air.

Hence, when you say is it just oil prices, that actually means food prices, car prices, daily prices affecting every single person.

Besides this, the US has other problems going on (which are either directly linked to the oil crisis or indirectly linked). For example, the dollar is weakening, because people are now beginning to trust the EURO currency more than the dollar. Also, the emerging economies like China and India are threatening the market importance of US as an investment area.

People now have money to invest in many other places than just US. Hence, if I have an extra million dollars to make use of for business, and I am looking for a stable country to invest it in, my options (like the 1990s) are not limited to US or UK. I can look elsewhere, where fast paced development is in place too, or sometimes even better than US or UK.

Hence, the money that would otherwise have flowed into the US , most likely, like in the 90s, is now going elsewhere.

This global trust, the economic, financial trust that people have had in the US is shaking. War is one of the reasons too. People just can't trust US like they used to, anymore. A country that can go on and attack another country without a solid reason, is not the best country to do long-term business and friendship with.

So you see, its a combination of factors that are leading to the US economy weakening. For a long time now, US has been taking money from other countries, purely due to that trust. This is why you and I have had all sorts of luxuries, everybody (almost everybody) owns a car, phone, and so on.

People with bad credit still get to own a car and a phone, not so the case in other countries. Somebody has got to pay for that bad credit. That money is coming from other countries. Now, those countries are holding back, and investing elsewhere - to SAFER destinations. Safer in economic sense, or even literally.

I've tried to explain it to you in a layman's language :)

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OMG lol, layman only means, someone who is not a professional. I did not know if you belonged to this field, so I explained it in a non-professional manner. It is not a derogatory term lol. But then again, to each, his own!

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Answer 7

Consider yourself lucky. I am kind of irritated that you can't see it, but at least you are asking about it.

Companies are laying off hundreds of employees;  I am a Paralegal and lost my job through no fault of my own.

People all over the country are losing their homes because they can't pay their mortgages.

The cost of wholesale production (purchasing materials, processing them, shipping them has gone up 10% in the last month.

I don't know how old you are, but anyone that goes grocery shopping can easily see an increase in pricing of all food items.

As I typed this my anger grew because I really don't see how you could be so naive.

Please watch the news or read the paper, gosh it gets me that I am unemployed and worried about my future, while people like you have no idea about the hardship that middle class America is facing.

I suppose that ignorance really is bliss and that the rich just keep getting richer.

I apologize for being mean, but your question genuinely got to me.