The answer to this question depends on who you ask. The government and a few economists believe we are, but the factors that control the growth of our GNP tell a different story. At best our current anemic growth is fragmented which means some of the economy is starting to show signs of recovery while other areas show little or no improvement.
Let’s exam a few factors that are having a negative effect on the US recovery.
Obama care- This universal health care plan has become the most discussed and criticized entitlement program of the year. Whether you agree or disagree as to what the bill represents, everyone will eventually come to the realization that the additional costs to implement this plan will increase the tax burden on every tax payer. Adding to the total cost of the plan will be the increased cost of insurance coverage for those forced to replace their current insurance plan. The total effect of this health care plan is expected to dampen the overall economic recovery for at least the next few years.
The plight of the middle class- In spite of all the efforts in Washington, the middle class is losing ground financially. For example, their current purchasing power was better in the 1970’s than today, due to increased inflation and stagnant wages. In the meantime, the rich are getting richer because of the increasing value of stock investments resulting from a propped- up stock market that reflects the Federal Reserve Banking policies; and the financial ability to buy choice property at reasonable to low interest rates. This scenario is totally contrary to the efforts of the present administration to bolster the middle class at the expense of the rich. The point is however, without a sound financial middle class any recovery will stall.
The unemployed-- The unemployment rate will continue to be high as long as today’s workers are unable to match their skills to the requirements of available jobs. Overall jobs have become high tech with openings only in specific areas that often fail to match the skills of those workers currently searching for an opportunity. In some cases certain jobs will never return due to technical changes, increased productivity, and out sourcing of work abroad. Small businesses which hire the majority of workers are still struggling with higher costs and increased regulations at a time when Obama care is looming on the horizon.
The mood of the nation- As long as the Obama administration continues to stumble through scandals, changing directions and ineffective leadership, the attitude of the country will continue to be pessimistic. This trend is troublesome when you consider that over 50% of any recovery is based upon optimism where people believe that problems can be overcome.
Every economic recovery problem mentioned above has a solution. To find these solutions however, requires government leadership that overcomes the current political divisiveness and joins the nation together into one common goal leading to economic growth.
Can we do it- of course we can - it just a question of when!
The views expressed in this article are those of the writer and are not to be used to resolve other problems. For more information on jobs and business startups, visit our Web-site at Compass Strategies.com