In Order to Have a Long Term Recovery, There Must Be Major Structural Changes to the U.S. Economy

What is the long term cure for the United States economic problems? Major structural changes in the economy are needed.

I can just hear the laughter by the economists in the President Obama administration. “What are you talking about? The economy is already recovering,” they say.

The stock market confirms that the economy is recovering. Since March of this year, the markets have soared.

Most companies are seeing improved earnings. JP Morgan and Goldman Sachs each reported record earnings. IBM and other tech companies far exceeded income expectations.

Many corporate professionals in our country are paying close attention to a potential economic recovery.

Many are concerned about their job security. They would love to see an improving economy to increase their company’s financial stability.

A few years ago, I wanted to retire but couldn’t afford to make that move. With the stock market crash and the decline in residential values, many corporate professionals find themselves in the same boat.

Others are moms and dads who want to work from home. They want to spend more time with their children.

This is why I write articles on the economy. I feel that it is important for these people to understand, not just the current status of the economy, but also where it is headed.

I feel that we are in for a long, tough recovery. If you are a corporate professional, I recommend that you have a job backup plan, a Plan B. I started one not too long ago when I was working in corporate America.

By sticking to my job backup plan, I was able to retire from my Chief Financial Officer position. I probably went through many of the same things you are going through today.

You have many alternatives to consider. Your choice may be difficult.

I decided to get very good training in internet marketing. I was able to continue working at my regular job while getting this training.

As of June 30, 2009, our economic downturn has lasted 19 months. The Great Depression lasted 43 months.

Unemployment numbers are still rising and are the worst since the Depression. Although retail sales and housing numbers have improved over the last few months, they are still the worst since 1945. Consumer confidence, which rose for a few months, has now fallen for two months in a row.

Unemployment numbers and industrial production are at the worst levels since 1945. Housing starts, although slightly improved in the last few months, is worst than any time since the Depression. Consumer confidence is now falling again.

Even though it was reported that the Gross Domestic Product increased by 3.5% in the third quarter, we have only seen the benefits of President Obama’s massive spending plans. When we start paying for these plans through higher taxes, higher interest rates, and inflation, the economy will struggle.

How can it be the solution? We have yet to experience the cost of this massive spending – higher taxes, higher interest rates, and inflation.

So if throwing massive amounts of money at the problem, along with excessive borrowing, is not the answer, what is? My answer is not what you want to hear.

I hate to say this, but the cure lies in further suffering. It means more foreclosures, more bankruptcies, and more loan defaults.

This process will take a long time. Businesses and families are fighting to stay afloat. Individuals are trying to hold onto houses they can’t afford.

I wish there was another way. But weak businesses must be allowed to fail. Families burdened by too much debt must file for bankruptcy and lose their homes to foreclosure.

However, the longer the federal government tries to prop up these failing corporations and families, the longer this cure and the structural changes in the economy will take.

The U.S. government has taken steps to save failed corporations and debt-strapped homeowners through bailouts and stimulus plans. This will only prolong the time it takes for these major structural changes to take place.

Our nation has built a massive amount of debt. It will simply take a long time to pay off this debt and get us back to some sense of normalcy.

The federal government believes that stimulus and bailouts are the answers to our financial problems. They are Wrong.

It’s frightening when the second most powerful person in the country, Vice President Joe Biden, makes the very “wise” statement, “We have to spend money to keep from going broke.” You need to consider that “sage” advice as you try to meet your personal financial obligations each month.

His internet marketing business has allowed Scott Hubbard to retire from his Chief Financial Officer position of 25 years. His primary business provides a guide to building wealth online. This business presents the personal financial education that individuals need to make good decisions in economic downturns, as well as in bull markets. You can reach Scott by calling toll-free at 877-878-4036 or by email at Scott@ScottHubard-Consulting.com.