I love hearing all the economists and politicians talking about coming out of this recession this quarter or next quarter, or next year. But when really? They all have zero clue as to how long it will last.
I still hold the same opinion as before; this is going to be a long one. Kinda like what Japan has been going through these last two decades.
The high paying manufacturing jobs are gone. Period. They’re not coming back anytime soon, our cost of doing business is too high. Wages, taxes, health care, etc. etc. any business worth its salt is going overseas because it’s cheaper and easier to produce their products.
The jobs started leaving during the recession in the early 1990’s, coincidentally the same time credit started to become easier. You see while people didn’t have the high paying jobs they once did, they still wanted to live the same way, hence credit, and more credit. Governments did the same thing, Reagan and Bush Sr., cut taxes and started debt spending like crazy. In Canada Mulroney realized that we were becoming a service economy and brought in the GST, resulting in a win fall for Jean Chretien. Hell it could have been an NDP government in, and they would have seen a win fall.
Business, specifically car companies talk of freeing up credit, that’s not what we need. What we need are good high paying jobs. What good is credit, if you can’t pay it down?? People making $14 an hour can’t have a house, a car, electronics and vacations somewhere warm, except on extreme credit. Credit that can never be paid down. So unless we really fix the problem of not having good paying jobs we are going to limp along living on new credit, until the bill comes due again.
I don’t have the solution, but I do know that huge government debt spending is not going to solve the problem in the long run. Good paying jobs are what we need.