Is the Game about to Stop?

By Reich, Robert B. | The American Prospect, April 2008 | Go to article overview

Is the Game about to Stop?


Reich, Robert B., The American Prospect


THE PROBABILITY OF ANOTHER GREAT DEPRESSION is no higher than 20 percent, but that's too high for comfort. American consumers don't have the buying power they need to absorb the goods and services the U.S. economy is capable of producing. This is likely to mean fewer jobs, which will force Americans to pull in their belts even tighter, leading to still fewer jobs--the classic recipe for recession. That recession may turn into a full-fledged depression if fiscal and monetary policies can't make up for consumers' lack of buying power. There's reason to worry they cannot because consumers are in a permanent bind. They're deep in debt, their homes are losing value, their paychecks are shrinking.

Under these circumstances, the usual remedies won't work. Tax breaks for businesses won't generate more investment in factories or equipment because demand for their products is dropping. Temporary fixes that give households a one-time cash infusion won't get consumers back to the malls because they know the assistance is temporary and their problems are permanent. They're likely to pocket the extra money instead of spending it. Additional rate cuts by the Federal Reserve Board might give consumers access to somewhat cheaper loans, but there's no going back to the easy money of a few years ago. The values of houses and other major assets are dropping faster than interest rates can be lowered. Growing numbers of homeowners owe more on their mortgages than their homes are now worth.

We're reaping the whirlwind of three decades during which Americans have spent beyond their means and most of the benefits of an expanding economy have gone to a small group at the very top. The nation's median hourly wage is barely higher than it was 35 years ago. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. The rich can't keep the economy going because they devote a smaller percentage of their earnings to buying things than the rest of us: They already have most of what they want. Instead of buying, they're more likely to invest their earnings wherever around the world they can get the highest return.

Some say well and good. They think our consumer society is unsustainable. They argue Americans should learn to accept a lower standard of living and American business must adjust to a smaller domestic economy. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Is the Game about to Stop?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.