Economic Turmoil on the Rise at the End of 2010

The job prospects are slim and people's incomes even less. Fear of another recession has gripped the nation as intellectuals and government officials scramble to find new ways of propping up the economy. Even President Obama has ended the war in Iraq and has turned his attention to the economy and its needs. Recent economic news may be a little disheartening.

The subject of the national economy can deaden a good time faster than finding out you lost your wallet after you just got your $150 dinner bill. Ninety-three percent of Americans are very concerned with the state of the economy and ninety-one percent fearful of the country's future (Buhr, 2010). They have good reason to be fearful as the nation's prospect damper in light of the recent growth in Germany and China.

Some important indicators of a new round of recession and declining economic security have risen recently. Of particular interest are the investors of the country, including the U.S. government, that have decided to move short-term investments to longer one's in hopes of maintaining gains in the future. In essence, they have given up on short-term profits and are now thinking ten or more years down the road. "In this environment, holdings of long-term paper will not only serve as a safe haven but an asset whose value appreciates significantly" (Hosington & Alban, 2010).

The recent decline in oil prices may be an indication of less need for oil in manufacturing, households, and automobiles. It is possible that such decline could be related to the public outrage at BP and their billions of dollars spent on clean up. This could have an impact on the awareness of the social costs. However, continued trends of oil decline are likely to be associated with manufacturing and declining household wealth.

Even worse investors are moving their money overseas. The money is not being invested as heavily in the U.S. as it was in the past. "There has been a change in the overall investor dynamic...there are more and more investors, especially in the U.S., investing internationally" (Lauricella & Kansas, 2010). This creates a short-term problem whereby money that would normally be used to expand business would not be coming to the U.S. In essence there will be less jobs and cash available.

Even immigrants are finding it better to stay home then try and cross the border to the U.S. Their fear is that they won't be able to find a job once they get here. Illegal immigration has declined from approximately 800,000 people in 2005 to 300,000 people annually in 2009 (Jordan, 2010). When impoverished Mexican immigrants stay home you know you have a problem.

Some countries like China and Germany have experienced almost double digit growth recently. These countries are prime spots for investors. They are receiving the cash, the jobs, and the tax income to reduce debt. China currently is one of wealthiest cash rich countries in the world and may overtake Americans economy in the next couple of decades.

One factor that should be considered is that the U.S. is a major superpower and it doesn't turn on a dime and it doesn't typically slow down with lightning pace. The ups and downs are often very gradual despite what we have seen in the recent past. Infrastructure improvements, educational improvements, reduction of debt, and employment improvement are just some of the long-term strategies that are needed to get everything moving again. Government officials should be focusing on medium and long-term growth instead of immediate growth which requires over maneuvering problems. Buhr, T (2010, September 3^rd). Fox News Poll: Little Confidence Obama Can Fix Economy or that McCain Would Have Done Better. Fox News. Retrieved September 3^rd, 2010 from http://www.foxnews.com

Jordan, M. (2010, September 3). With Jobs in the U.S. Scarce Illegal Immigration Slides. Wall Street Journal CCLVI , No. 54.

Lauriecella, T. & Kansas, D. (2010, September 1). Currency Trading Soars. The Wall Street Journal, vol. CCLVI, No. 53, A1.

Von Hosinglton, V. and Alban, J. (2010, August 31). Fund Managers Flee Equity Risk and Double-dip fears. Rueters News. Retrieved August 31^st, 2010 from http://www.rueters.com