Why is the US economy bad right now?

Answer 1

There are so many aspects of the overall economy and how good or bad it is doing at a given time that it would take many pages to explain it all. One reason that the economy is struggling is the "Global War on Terror". OIF and OEF in Iraq and Afghanistan respectively has already cost upwards of $3 Trillion and is increasing everyday. The NAFTA or North America Free Trade Agreement is another big player on the dwindling U.S. economy. Golbal corporations are moving their companies out of America into third-world countries where they pay the workers next to nothing to make their products. Then they ship their goods to the U.S. where they are not charged tariffs on their goods. This allows them to keep prices lower then their U.S. competitors. Which in turn puts the companies that do stay in the U.S. out of business. Therefore workers lose their job and unemplyment rates increase.

Picture an economy as a circle. There are three main groups that make up the economy:

1. Service providers
2. Workers
3. Consumers

The service providers either make, grow, or provide some kind of good or service. The people that make up that company contract their labor to that service provider for an agreed upon price. Consumers are the people that buy the goods and services from the service provider. So the more service providers, the more workers. Workers take their money and spend it on goods and services from the service providers. The more profit they make, the more goods they can produce and the more they can pay the workers and so on. Less service providers means less workers which means less consumers.

That is the skinny on the economy right now. Although there are many other areas that could be covered including illegal immigrants, taxes, prison population, social services, imoprt surplus, oil, government spending, health care, etc.