Economy
The United States dropped in the Global Competitiveness Index ranking for the fourth year in a row because of exploding debt and deficits even as liberty-minded Switzerland maintained its top spot, according to an annual survey published by the World Economic Forum (WEF). Having placed fifth last year and first in 2008 before Obama assumed power, the U.S. economy continued its downward spiral, slipping to an embarrassing seventh place in the most recent 2012-2013 rankings. Even Sweden, famous for its massive government and high taxes, ranks higher than America.
According to the WEF survey, the American economy’s sharp decline in recent years is due to, among other problems, a lack of trust in government and politicians — especially by businesses — as well as declining macroeconomic and political stability. More important to the latest drop in the rankings this year, however: increasing fears over the U.S. economy’s fiscal health as the federal government continues to borrow more than a trillion dollars per year with no end in sight.
Federal Reserve Chairman Ben Bernanke signaled that the Fed would return to another round of “quantitative easing” (QE) in his August 31 annual address from Jackson Hole, Wyoming, a speech that also claimed economic success for the Fed's past two QE purchases of federal debt securities.
The hyperbole surrounding the White House's announcement yesterday of much higher fuel economy mandates is in sharp contrast to what consumers really want.
For the last decade, household incomes have been declining steadily, and the American middle class is being squeezed. In fact, barring a very dramatic change in political sentiment, the American middle class — the chief source of productivity and vitality in America for centuries — will likely be compressed out of existence.
Federal Reserve Chairman Ben Bernanke is expected to give his annual Jackson Hole speech on August 31 while the world waits in anticipation. They are likely to be disappointed.
In past years, the invitation-only event hosted by the Kansas City Fed in Jackson Hole, Wyoming, has been an opportunity for Bernanke to suggest future Fed policy actions. In 2010 he said that a second round of stimulus — called QE2 for Quantitative Easing Round Two — was likely, and in November the Fed began its purchase of another $600 billion of long-term debt securities.
Since then little has changed: Unemployment remains significantly above eight percent, the housing market remains largely moribund, gross domestic product remains barely positive, and consumer confidence is waning.
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