Economic Endgame

The American standard of living has been inflated by debt, and is going down. But I predict the reduction will be experienced in a higher cost of living, not permanently high unemployment. More competition for scarce resources from developing areas in the rest of the world, given a falling dollar, is one reason. The second is a growing inability to import cheap goods from abroad, requring them to be made in the U.S. at higher prices as described here.  If we succeed in inflation our way out of our debt/pension disaster rather than defaulting en-masse, the trend will merely accelerate.

There is, of course, a good side to this as well — more moderate skill jobs could be available in previously declining mid-sized metros, such as those upstate. Warren Buffett's investments in railroads appears smart, given the need to save energy and the possibility of growing domestic production. Unfortunately New York's rail freight system isn't what it was, or could be. In any event read the article, because while the timing may be off, I agree with the premise. And it will run right into labor force shrikage as the baby boom retires. If you really need it, better buy it soon.

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