What do economists mean when they say the economy is shrinking?

Question

I also hear the phrase "wealth in America is shrinking or contracting", does that mean there is less money to go around?

Answer 1

No.  There is still money is circulation.  The thing is that the amount of workers entering the economy is outstripping the availbility of jobs.

Answer 2

It means America isn't PRODUCING much of anything anymore.

And the "wealth shrinking" thing means that the top 2% of the country controls about 80% of the wealth.

THAT is not sustainable.

Answer 3

I agree with rigtheous.

Answer 4

Kind of.  It means that there is less total money going around.  The less you spend, the less profit somebody else makes, and the less they can spend, etc.   Also, it refers to the international balance of trade,  where the things you buy from other countries, results in the profits going to that country, and benefiting them instead of you.  

This is why the bank industry problems are so critical.  If the banks don't have the money for loans to people and businesses, then products can't be made or purchased, and the economy becomes that much smaller.

Profits need to be made, and kept in country.