Zandar's Thought Of The Day

People ask me "Hey Zandar, what's a 'lost decade' look like, anyway?"

And I go "You just went through one."

Keep in mind that another one of these is kind of a best case scenario, because the worst case scenario involves a prolonged contraction of the economy and continued 10% unemployment or worse for years.  What does that mean?  The lean years are here, especially for Gen X.

Americans "just have to go down in their living standards" after years in which their living standards soared in part based on foreign credit which is no longer there," said University of Munich economics professor Hans-Werner Sinn. Jacob Frenkel, Chairman of JP Morgan Chase International, urged the United States to rein in entitlements as part of a "political deal" that recognizes reality. 

Austerity is coming, folks.  Major cuts in social spending are all but assured, just at the point America will need that spending the most.  That means the coming liquidation of excess capacity to the "new normal" levels of production, growth, and labor:  double-digit unemployment, decreasing home ownership levels, increasing wealth imbalance, and a lot of Americans living on the edge getting pushed into the abyss.

A whole hell of a lot of us are going to suffer as a result, while the wealthiest among us will gain even more.  That's just as unsustainable as the debt loads that people rail against, and the result will not be pretty.