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2008 International Goan Convention
Toronto, Canada
Early Bird Discount Registration closes March 31, 2008
http://2008goanconvention.com/registration.html
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I believe the current down turn is not unlike some of the previous downturns we
have seen in the recent past (as in the last few decades). I agree with Mervyn
that the worst is yet to come.
Over the last decade, the US has gone through an unsustainable consumption
and spending binge that temporarily increased economic growth at the expense of
its long term viability. This was done, both, at the government (federal)
level as well as at the consumer level.
Some facts:
* Federal debt has increased from around 4.5 Trillion to close to 9 T in the
last 8 years. This does not include the anticipated long term (for war vets)
costs of the Iraq war which will come in around 2T, not to mention the other
unfunded liabilities like medicare. The present US government, which has talked
about fiscal responsibility has in fact, engaged in the largest increase in
government spending in over 4 decades.
* US consumer savings rates have dipped to less than 0% in the last two
years. In other words, US consumers are spending more than they are earning.
* Except for a brief spurt in the mid to late 90's, the average hourly
inflation adjusted wage has actually been decreasing gradually for the last two
decades. This may seem contrary to the fact that per capita inflation adjusted
incomes have increased during the same period. This can be explained by two
factors: (i) increased participation of women in the work place (dual income
families) and (ii) longer working hours. Right now, both these components are
close to being maxed out, so unless the US starts putting its children to work,
the US can expect declining inflation adjusted per capita incomes moving
forward. When trade adjusted for currency devaluation/PPP, the drop will be
even more significant. Who would have thought that the Canadian Peso would be
worth more than the US$!
* US unemployment rates are officially pegged at around 5%, which looks
really good. However, this number is based on the fraction of people "actively
seeking employment". Another metric would be to look at the fraction of the
eligible working age population (of ages 24-55) that is actually working. Here
the number looks pretty bad (~13% unemployed males) and is close to its highest
level (15%) in over 3 decades. In the early 1980's it was around 8%. Based on
this metric, the unemployment rate within the eligible male population has
actually increased by more than 50% over the last 30 years.
* The US has in general, experienced higher levels of GDP growth than the
average growth experienced in the EU over the last two decades. This can be
explained by two factors: higher levels of immigration/population growth to the
US and, for the last decade, the housing bubble that led to greater domestic
spending. If one subtracts these two factors, US economic growth was actually
at the same level as the EU. Perhaps, the US has not been the paragon of
economic growth afterall.
Coming up next, what is in store for the US economy.
Marlon
Mervyn Lobo <[EMAIL PROTECTED]> wrote:
Secondly, the US govt has moved its priorities from controlling inflation
and/or stimulating the economy. The area they are now concentrating on is
supporting stock prices.
They are doing this by:
1) Printing more money.
2) Spending it like drunken sailors.
Any Goan getting paid in US dollars is hurting. Real bad. AND the worst is yet
to come.
