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The State of the Globe 2004/05: The U.S. Economy — Teetering on the Brink?

Will the U.S. continue its upswing despite growing imbalances?

December 29, 2004

Will the U.S. continue its upswing despite growing imbalances?

While the United States exerts itself in far-away Iraq, many people wonder whether the U.S. economy is not really the one that needs laser-like attention. So far, happy-go-lucky attitudes have worked. But people wonder: How much longer will it last?

"In my lifetime, we will have gone from the Greatest Generation to the Profligate Generation to the Bankrupt Generation."
(Thomas L. Friedman, New York Times columnist, December 2004)

“The loans will come due for America’s children and grandchildren, whose earnings may just well be stamped — ‘Payable to the Bank of China’.”
(New York Times editorial, September 2004)

“I love India. I love the Indian people. But the idea that we can sacrifice an American family to create jobs overseas is insensitive beyond belief.”
(CNN anchor Lou Dobbs, March 2004)

“Today’s popular demon is foreign competition. Forty years ago, it was automation.”
(David Wessel, Wall Street Journal columnist, April 2004)

“Not only has the United States turned increasingly to offshore production platforms and labor markets in recent years, it is now outsourcing its saving as well.”
(Stephen Roach, chief economist at Morgan Stanley, November 2004)

“You’ve got to believe there’s a Santa Claus to believe there’s no cost for the gifts under the tree.”
(Diane C. Swonk, chief economist at Bank One, October 2004)

“We are running out of stimulation.”
(Bill Gross, chief investment officer of Pimco, January 2004)

“The only time the politicians will tackle the deficits is if they can’t sell the bonds.”
(Seth Glickenhaus, founder of a money management firm, June 2004)

“America is now on the comfortable path to ruin.”
(Headline in the Financial Times, August 2004)

“The U.S. has branded itself as the land of economic opportunity and investment returns — and that branding sticks. Frau Schmidt in Munich sees herself as investing in the American dream — not lending money to the U.S. government so that it can increase its spending.”
(Jim O’Neil, Goldman Sachs economist, December 2003)

“We’re spending over 99% of what we earn — and are shocked to find we can’t pay for retirement.”
(Geoffrey Colvin, senior editor-at-large of Fortune magazine, March 2004)

“I’m working two hours a day just to pay for the gas to get me to and from home.”
(Bob Sherwood, U.S. motorist, March 2004)

“We have wrung out most of the savings from labor, but energy is something that can still be cut back.”
(Neal Elliott, American Council for an Energy-Efficient Economy, May 2004)

“The biggest barrier to solutions is our nation’s attention span.”
(Carly Fiorina, Hewlett-Packard chief executive, January 2004)

“An old cliché proclaims ‘I’d rather be lucky than good’. Happily, during most of the 20th century, the United States was both.”
(Todd G. Buchholz, author of “Bringing the Jobs Home,” January 2004)

“When you hear that Intel, IBM and Goldman Sachs plan to move high-end jobs to China and India, what’s going to be left here — restaurants?”
(Senator Charles Schumer (D- NY), January 2004)