America’s Economic Future Is Worrisome

Just as U.S. President Barack Obama vigorously promoted a $447 billion jobs plan, including steps such as reduced taxes and increased infrastructure investment to boost employment and to stimulate the economy, the U.S. Census Bureau’s recent report makes one anxious about the economic future of the world’s richest country.

According to statistical data from the report released by the U.S. Census Bureau on Sept. 13, “Income, Poverty, and Health Insurance Coverage in the United States: 2010,” America’s poverty rate increased from 14.3 percent in 2009 to 15.1 percent in 2010, the highest level since 1993. The number of people who have sunk into poverty (according to America’s official definition, it defines an individual whose yearly income is less than $11,139, or a four-person household with a yearly income less than $22,314) is up to 46.2 million, the highest number in the 52 years that the census bureau has been issuing data. The median household annual income was reduced from $50,599 in 2009 to $49,445 in 2010, a decline of 2.3 percent. The number of people without medical insurance reached 49.9 million last year, 900,000 more than the year before, representing 16.3 percent of the total U.S. population.

The situation reflected by the census bureau’s numbers is even more severe than many economists anticipated. It shows that the so-called economic recovery, after hundreds of billions of dollars were injected into the economy in 2007 to remedy the sub-prime mortgage crisis, in fact didn’t have any actual significance, because the great majority of Americans didn’t benefit from it at all.

A high long-term level of unemployment is another serious problem that America faces. America’s most recent employment figures from August show that the increase in jobs that month was zero. Unemployment remained at the high level of 9.1 percent. President Obama wants to use the jobs bill to resolve the problem, but the proposal he put forth to tax the rich met opposition from the tea party and the Republican Party. On Sept. 13, in New York state’s midterm congressional election, the largely unknown Republican candidate Bob Turner unexpectedly defeated a Democratic candidate from an influential political family, David Weprin, in a district that has been solidly Democratic for 88 years. This unexpected victory will undoubtedly further strengthen the Republican Party’s bargaining power, causing the Obama administration even greater difficulty as they promote their jobs bill.

Year after year of high unemployment will inevitably bring about a decrease in American income. In fact, reductions in the American median annual household income have already been occurring for several years, though a situation like the 6.4 percent decrease from 2007 to 2010 hasn’t been seen since the Great Depression in 1930. Continuously decreasing income and inability to find employment will necessarily affect the Americans’ consumption ability. Acting as the world’s largest market, a decrease in America’s consumption ability means a decrease in imports. This will impact those economies that rely on exports and are critically dependent on the American market, including many newly developing economies.

Compared with Europeans, dependent on long-term, high-cost welfare systems and ridiculed as “lazy-bones,” Americans, heavily influenced by the “Mayflower” Puritan spirit, are very hardworking. Thus, it takes several generations of Americans’ hard work to get rich and realize the “American dream.” But under the power of economic globalization, these past few years, with American companies either moving factories offshore or outsourcing services, more and more Americans have been caught in the “I want a job, but I can’t find a job” predicament. Over time, increasing numbers of people are unemployed, more and more people are impoverished, and those in need of emergency relief are even more numerous. Not long ago, because he didn’t have health insurance, an unemployed American man couldn’t afford antibiotics and died from a brain infection caused by an inflamed wisdom tooth. This is an accurate portrayal of the suffering America’s lower class lives through.

The globalization spell that caused America to face this disaster in essence is logical, which follows after the globalization of capitalism, every economy in the world will follow capitalism’s rule to “use the least capital to achieve the greatest profit” to operate. This spell is something that every economy will confront, and China is no exception. In the electronics industry, because of the slowdown in the global economy, employees have lost the opportunity for overtime work, and 30 percent of their salaries. This is the spell in effect.

Whether or not America’s economic difficulties will lead to the appearance of a “second recession,” the indicator is fairly obvious now. Compared with the global financial tsunami triggered by America’s sub-prime mortgage crisis a few years ago, if a global economic recession again appears, it may be even more severe, because the American economy is weak and Europe is facing a debt crisis. The growth engine that prevented the global economy from sinking into a depression last time, China, is investigating joining forces with Brazil, India, Russia and other rising economies to aid Europe. Whether it will be effective, and to what degree it can be effective, still remains to be seen. What is certain is that every country, benefiting or suffering under globalization, must work together in order to break the curse of this spell.