For those now in their 30s, Kenneth Rogoff has bad news. "It will be terrible for you," the Harvard University economics professor told a young German at the World Economic Forum in Davos. "Germany's debt is exploding, the population is aging," he said. "And to be honest, I think your country is going to have average growth of just 1 percent in the coming years."
Rogoff went on to say that, should Germany wish to begin making inroads into its mountain of debt, there is no way around strict savings measures and significant tax increases. "It will be very, very painful," Rogoff said, adding that it will take at least a decade, and possibly many more, for Germany to pay down its debt.He wasn't the only one in Davos with a dark vision of the future. Many countries could be stricken with the "Japan illness," Robert Shiller, a behavioral economist at Yale University, told SPIEGEL ONLINE. Following a financial crisis in the 1980s, Japan's economy remained in the doldrums for years as trust in the economy's ability to recover evaporated. Few were willing to take risks, sapping the Japanese economy of its life blood, said Shiller. "Such a situation could take hold in many regions of the world."
Such prognoses raise questions about the recent global economic recovery, modest though it may be. Is a second recession just around the corner, part two of what some warn could be a "double dip?" In the fourth quarter of 2009, the US economy grew by an impressive 5.7 percent -- but how durable are such gains?
'Historically Exceptional'
One thing is clear: 2010 presents steep challenges to the world economy. "There is an illusion of normalcy," Rogoff warns. But that illusion, he points out, comes largely as a result of the immense amount of money pumped into the economy by governments around the world. The result -- massive public debt across the globe -- is "historically exceptional," Rogoff says. The only comparable situation can be found during the Great Depression, he points out.
I don't know why an aged population is a concern. Just raise the qualifying age to 70 or something like that.
ReplyDeletePeople are living longer today. These government retirement programs were never designed to support people well into their 80s or 90s.
6:17 Rising the retirement age will only postpone the problem....
ReplyDeleteAnd who's fault is it?? The folks who stole all the money are now stealing your future, your dignity, your life. Unbelievable really.
ReplyDeleteA major point that requires explanation.
ReplyDelete"Japan's economy remained in the doldrums for years." That is not accurate. The Japanese Nikkei, or stock market index, peaked at about 39,00 approximately 20 odd years ago. It has never recovered. Currently it is at half that valuation and is preparing to enter another depression. Their economy has not yet recovered from the "doldrums."
Our last memorable depression began in 1929. The stock market peaked in price and did not recover that price level until about 1954.
Again, let previous economic and world history serve as your guidepost for future preparations rather than popular rhetoric.
Assist others, act with honor, and endure all things to the end.
Oh. I see, 10:02 is the same person who posted at 9:56 and is just a bitter troll.
ReplyDeleteBye bye troll. Time to go back under your bridge.
Only in America so you see ugly people (of ugly character) who will post defamatory things in order to discredit someone, just because they don't like what the editor writes about.
ReplyDeleteIf you don't like this blog or don't believe there is an economic collapse, then WHAT IN THE HELL are you DOING AT THIS BLOG? Find something better to do you DAMN TROLL!!!!!!!!!!!!
Even retirees now and future, have it bad. Cost of living, no raises, low interest on savings and inflation in general will cause people to spend less as utility bills go thru the roof and all types ins. goes up. The elitists have stole every ones future.
ReplyDeleteI very much like 7:56pm.
ReplyDeleteAssist others, ACT WITH HONOR, and endure all things to the end.
Sir or Madame, I salute you.
:)
10:12pm, I think it's obvious that some of these trolls that are disparaging EA are doing so because they have a fealty to some collection of individuals that do not have our best interests in mind and are perhaps even being paid to do so, as per an article on blacklistednews.com talking about how the current 'regime' is going to hire internet trolls to offer 'contrarian' views.
ReplyDeleteDepartment of Orwellian Bulldinky.
1010 and 1012 are the same troll
ReplyDeleteOur situation is like the movie the sixth sense. The kid saw dead people b/c he was already dead and didn't know it. Well, our economy is essentially dead and many just haven't accepted it or fully realized it yet.When that light bulb goes off in the head of the masses, look out!
ReplyDelete