Reasons Why The U.S. Economy Downfall In 2016

Many voices have made themselves heard lately, that seem to portray a catastrophic and apocalyptic U.S. economy downfall in 2016. There are many voices that cry out “destruction” and “annihilation” in the upcoming years, and I couldn’t help but notice that some just seem to exaggerate and blow everything out of proportions, while others seem to make sense. But is it really true, is our rock-solid economy really spiraling out of control? It sure seems like it. And for those of you that think that we have a rock-solid economy, you’d better think again. There are A LOT of things fundamentally flawed in our very own backyard, especially in the realm of finances. Sure, there a plenty of people that will assure us of the contrary, like they’ve done so many times before. Plenty of brokers, fund managers or analysts will rise up saying that there’s nothing wrong at the moment and that we’re on the right path to “economic nirvana”. They’ve done so right before the Great Depression and they’ve done so before the collapse in 2007 – 2008. But the numbers don’t lie. And if these numbers don’t improve as fast as possible, we risk reaching a point of no return.

Many Americans are “financially-challenged”

For various reasons, Americans seem to be making less money but at the same time find themselves spending more and more
with each passing year. The not-so-hot income that the average American pulls in, doubled by an avid consumerism which
translates into an insatiable appetite for compulsory shopping makes it nearly impossible for the average Joe to set some money aside for emergencies. According toNeighborWorks America, about 34% of American adults have no money put aside for emergency situations; 72 million Americans have no emergency fund to help their cause in case they’re in between jobs or in case they have unwanted expenses. Financial experts advise that for an average American to be in the clear in case of need, he should put aside about 15% of the gross income per month. But it seems that the not many are willing to listen to reason in this case, particularly not in the U.S. Getting those nice retirement cruises or a solid financial aid for your kids to start them off well in life won’t happened without putting some money aside.

The average American’s financial status is a real issue, but it’s not all to do with whether people will save their money or not.  About 70% of the U.S. GDP (gross domestic product) is a direct result of consumer spending; so in order to keep the economy stable, you’ll need some serious and STABLE consumers. Americans are serious consumers all right! But how stable are they really? For how long will they keep spending big money without feeling the repercussions? It’s hard to tell. The nation’s economic wellbeing is dependent of the people’s spending power. But at the moment, things are not looking to good, as more and more people are resorting to credit and loans, because of their inability to meet the current prices. And this is all because the economy is still in recovery mode, that’s true; but how long till we get there, IF we get there?

Inadequate measures 

There have been many attempts to fix the problem along the years. But the only approach has been, apparently, was to continue flooding the economy; the Federal Reserve kept pumping trillions and trillions in an attempt to “drown” whatever it is that was hitting in the very core of our economy. And as you can plainly see, it has not worked. The wages in the U.S. still remain stagnant, the national debts are still at their highest, interest rate are still rising and financial security and instability raised its ugly head (in 2008) there was no immediate recovery plan other than to start spreading food stamps. What’s really worrying is that things do not seem to be getting better, but actually worse. And this is because our economy is directly correlated with the world’s economy, which truth be told, is not doing to good either. Ever since the collapse in 2009 (when they got hit the hardest), Europe hasn’t been able to fully recover, as the economies of countries like Spain, Portugal, Italy and Greece have been going downhill ever since. In a big portion of Europe’s unemployment rate seems to be plummeting at a fast pace, while in others places (UK, Scandinavia) the situation seems to be better.

It’s a sad and scary fact knowing exactly where we stand on the economical map of the world. And what’s more worrying is that, as long as things stay the same and most important economies stay down, most probably so will we. Things have been gradually deteriorating and if you don’t believe me, take a look around and ask yourself if everyday life is better than it used to be. Once you’ve answered yourself, take a grip and prepare yourself for the worst, because this looks like it’s going to be a rough ride.

By Alec Deacon