The United States has been teetering on the edge of economic
problems, in my opinion, for quite a while, contrary to the
statistics that the government is so happy to produce showing
that GDP and productivity is growing. I never bought into the
fact that things were actually getting that much better since
the early part of 2000. Here in the state of Michigan, we are
experiencing the highest rate of unemployment than any other
state in the nation. Gas prices hit $3.50 a gallon today. Now I
fear that this country faces a very frightening moment in its
history. Katrina has done more damage than we could have ever
imagined. It has done far more than the 9/11 terrorist attacks.
The U.S. Senate has just passed an emergency bill for $10.5
billion dollars for assisting the states devastated by the
storm. Though necessary, it will have long-term effects on US
debt for decades. Meanwhile, the price of gas and oil has soared
greatly in days. (Actually, it has been on a path to reach $3.00
for quite some time.) How will this country react to all of
this? Where are all of the homeless going to live? How long will
it take to get oil production back to its normal levels before
the storm? These are all important questions that will determine
the economic future of this country for some time. We are
dangerously close to miring ourselves into another recession
very quickly. And I don't know if there are any answers to the
problem. President Bush spoke today urging consumers not to buy
gas unless necessary. Is this a predecessor to the rationing of
gasoline that this country faced in the 1970's? If so, consumer
confidence will definitely decline sharply. I believe that many
people are already facing economic problems with rising debt and
the possibility of a dangerous housing-bubble that is ready to
burst. Now this tragic event has pushed the country to a point
it has not been experienced since 9/11. If the price of gasoline
continues to climb, consumers will have less disposable income
to spend on other things. In fact, I wouldn't even define it as
disposable income. For many people, the money that is necessary
to spend on gas and heating fuel will mean less money for
clothing and food. Others may not be able to make debt payments.
This is just the beginning, unfortunately. Alan Greenspan better
take notice that now is not the time to raise interest rates any
further. Inflation is not an issue any more. The reason there is
inflation is not because of "too much disposable money or high
salaries" but the fact that the rising cost of fuel has caused
the CPI to rise. As for the gasoline issue, I still believe much
of it is a case of price gouging rather than one caused by
demand being greater than the supply. Examples of this can be
seen everywhere as gas prices vary greatly from gas station to
gas station within the same counties within the states. The sad
part is that many people are touting the possible economic boon
that will arise when the devastated gulf states need to be
rebuilt. Not only is this callous and cold as many people suffer
today from lack of medicine, water, food, and shelter, but
should not be looked upon as an economic opportunity. Let us
hope that the many nations that the US helps whenever they are
in need choose to help us in our time of need. And let us hope
that our government is paying attention to the events that have
transpired in New Orleans as people are desperate for food and
water. Basically, there is a mini-revolution going on. By the
way, why hasn't Martial Law been imposed in the area. We need
strong leadership right now in this area to stop the chaos and
help these people. When people have lost everything and have
nothing, they have nothing else to lose by stealing and looting.
Dire economic times could have the same effects across the
country. Robberies and gas station run-offs are becoming
predominant in the area that I live in already where official
unemployment is near 20 percent but closer to 30 or 40 percent.
Let's all remember the suffering that is occurring throughout
the country, especially those affected by Katrina. Please donate
to the Red Cross and Salvation Army if you are able to. Even
though many of us are financially hurting, remember that many
are worse off than ourselves.
**************************************** Copyright 2005, Jason
Liptow, webmaster of Social Studies Made Simple
About the author:
BA in Social Studies and MSBA in Operations Management from
Madonnna University, and teaching certification from Saginaw
Valley State University. Webmaster of
www.socialstudiesmadesimple.com.
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