How will things change over the next 10 years?
December 1, 2006 2:56 PM Subscribe
Do you foresee an improvement or decline in the average standard of living in the U.S. during the next 10-15 years, and why?
I pretty much know the Metafiltery opinions on this issue, but I'd like to consider both the positive and the negative and hear from all sides. What forces do you think will shape the economy in the next 10 or 15 years, catastrophic/radical events aside?
I pretty much know the Metafiltery opinions on this issue, but I'd like to consider both the positive and the negative and hear from all sides. What forces do you think will shape the economy in the next 10 or 15 years, catastrophic/radical events aside?
This post was deleted for the following reason: crystal ball hypothetical filter
BST: surely you're thinking about quality of life, which is a more subjective measure than standard of living (although measuring the standard of living is by no means completely objective!)
posted by muddgirl at 3:09 PM on December 1, 2006
posted by muddgirl at 3:09 PM on December 1, 2006
That's an extremely tough question. On one hand, you have a whole lot of problems:
- housing bubble that looks scarily close to bursting
- a war that is destabilizing the Middle East (on top of all the other instability going on there), driving oil prices up
- very little progress on reducing oil dependency.
- health care still sucks
On the bright side, you have:
- a change of leadership in DC (which may favor the lower classes)
- a growing awareness of the problems with health care, energy policy, etc
- better medical treatments are always becoming available. (whether they're available to everyone is another question...)
So I'm very concerned, but I'm an eternal optimist, and believe in the power of technology and science to make our lives better. With that in mind, I'll weigh in on the side of improvement.
posted by chrisamiller at 3:10 PM on December 1, 2006
- housing bubble that looks scarily close to bursting
- a war that is destabilizing the Middle East (on top of all the other instability going on there), driving oil prices up
- very little progress on reducing oil dependency.
- health care still sucks
On the bright side, you have:
- a change of leadership in DC (which may favor the lower classes)
- a growing awareness of the problems with health care, energy policy, etc
- better medical treatments are always becoming available. (whether they're available to everyone is another question...)
So I'm very concerned, but I'm an eternal optimist, and believe in the power of technology and science to make our lives better. With that in mind, I'll weigh in on the side of improvement.
posted by chrisamiller at 3:10 PM on December 1, 2006
Well let's HOPE the single person car idea will finally get the hard look it merits. Stupid idea top to bottom. If it was gone the money needed for roads would be free to go to better uses.
So let's all hope that changes. I don't think the American version of capitalism will end well for those of us here now.
The sad part will be watching the old mindset types making every single error possible while this all goes down.
Before I get jumped here, never driven a car; never will, 57 years so far , IT CAN BE DONE.
posted by Freedomboy at 3:16 PM on December 1, 2006
So let's all hope that changes. I don't think the American version of capitalism will end well for those of us here now.
The sad part will be watching the old mindset types making every single error possible while this all goes down.
Before I get jumped here, never driven a car; never will, 57 years so far , IT CAN BE DONE.
posted by Freedomboy at 3:16 PM on December 1, 2006
I'm a general optimist. Barring unforseen catastrophes like the overthrow of democracy or capitalism in the US, I think that the standard of living and quality of life will both increase, as they generally have for the last 200 years. There are some fine economic managers in charge of the Fed, the government really isn't any more incompentent than they have been, and technological innovation continues to chug along merrily.
My only real cause of concern is our ballooning federal trade deficit, and associated ballooning federal debt. China sort of has our balls in a bind, here, and there's not a lot we can do about it.
(are you asking if we're headed for another Great Depression? That's pretty unlikely, considering the general damping of the economic boom-busts that led to such ridiculous highs and lows).
posted by muddgirl at 3:30 PM on December 1, 2006
My only real cause of concern is our ballooning federal trade deficit, and associated ballooning federal debt. China sort of has our balls in a bind, here, and there's not a lot we can do about it.
(are you asking if we're headed for another Great Depression? That's pretty unlikely, considering the general damping of the economic boom-busts that led to such ridiculous highs and lows).
posted by muddgirl at 3:30 PM on December 1, 2006
Standard of living will continue to improve, and for the reason it has continually improved: productivity increasing faster than population.
America's economy is well-tooled to do two things: employ the vast majority of labor capacity, and consume its economic output. When productivity increases (more output per hour of labor) faster than population, each individual will have on average more to consume.
The forces of increased productivity -- technology, globalization -- and saturation consumption -- credit, advertising, flexible consumer distribution and pricing -- are implacable, so the only wild card that could upset would be a dramatic decrease in labor capacity utilization.
I personally think -- and here's where it's getting into opinion-land -- that capitalism is well-enough tuned that we can't see a "natural" failure of labor capacity utilization such as we saw in the Great Depression. And when even the pinkest of European social democracies are cutting down dole time and deregulating work rules, I doubt that even a President Obama with a solid Democratic congress could mess with the American system of incentives.
posted by MattD at 3:35 PM on December 1, 2006
America's economy is well-tooled to do two things: employ the vast majority of labor capacity, and consume its economic output. When productivity increases (more output per hour of labor) faster than population, each individual will have on average more to consume.
The forces of increased productivity -- technology, globalization -- and saturation consumption -- credit, advertising, flexible consumer distribution and pricing -- are implacable, so the only wild card that could upset would be a dramatic decrease in labor capacity utilization.
I personally think -- and here's where it's getting into opinion-land -- that capitalism is well-enough tuned that we can't see a "natural" failure of labor capacity utilization such as we saw in the Great Depression. And when even the pinkest of European social democracies are cutting down dole time and deregulating work rules, I doubt that even a President Obama with a solid Democratic congress could mess with the American system of incentives.
posted by MattD at 3:35 PM on December 1, 2006
Decline.
There is a gradual, but definite shift in economic power from West to East.
Russia and China are both aligning together against the US. The Middle East isn't thrilled either. Africa seems to be a wild card, but China is pretty active in the region while the US is focused elsewhere. Who the hell knows what's gonna happen in South America. So there are lots of political forces acting against US interests. Even if not allied, these disparate energies can drain US attention away from more important objectives.
Technological breakthroughs aside, the primary economic driver over the next decade or so will be energy or, more specially, it's cost.
Both China and India are industrialising rapidly, those folks have watched enough Hollywood films to want the good life with all the trappings and they aren't gonna let their governments stand in the way. So now you've got another two billion or so people on the earth, wanting things. They've got money too, so now you've got increased demand and supply for more manufactured things is by no means infinite. So prices rise. Only problem is, we've been buying their crap for so long they've got most of the money. Not good.
Unless the US makes some overwhelming technological advances in the near term, given all the economic imbalances at present its hard to see much growth. Without advances, technology has a way of becoming mainstream, common place. When I think advanced technology, I no longer only think "America".
Economic imbalances can be corrected over time - look at Japan, for example - but we're talking some ten or so years if not longer.
So odds are decline.
posted by Mutant at 3:45 PM on December 1, 2006
There is a gradual, but definite shift in economic power from West to East.
Russia and China are both aligning together against the US. The Middle East isn't thrilled either. Africa seems to be a wild card, but China is pretty active in the region while the US is focused elsewhere. Who the hell knows what's gonna happen in South America. So there are lots of political forces acting against US interests. Even if not allied, these disparate energies can drain US attention away from more important objectives.
Technological breakthroughs aside, the primary economic driver over the next decade or so will be energy or, more specially, it's cost.
Both China and India are industrialising rapidly, those folks have watched enough Hollywood films to want the good life with all the trappings and they aren't gonna let their governments stand in the way. So now you've got another two billion or so people on the earth, wanting things. They've got money too, so now you've got increased demand and supply for more manufactured things is by no means infinite. So prices rise. Only problem is, we've been buying their crap for so long they've got most of the money. Not good.
Unless the US makes some overwhelming technological advances in the near term, given all the economic imbalances at present its hard to see much growth. Without advances, technology has a way of becoming mainstream, common place. When I think advanced technology, I no longer only think "America".
Economic imbalances can be corrected over time - look at Japan, for example - but we're talking some ten or so years if not longer.
So odds are decline.
posted by Mutant at 3:45 PM on December 1, 2006
With our national debt reaching completely unsustainable levels, China will eventually decide to cash in the bonds we have sold them and go with the Euro instead. When that happens, this country is going to sink into a depression. The standard of living is going to drop drastically and it will be very hard for us to dig ourselves out. But whoever the president is at the time will probably start a war to jump start the economy and give us all some place to channel our rage.
posted by HotPatatta at 3:46 PM on December 1, 2006
posted by HotPatatta at 3:46 PM on December 1, 2006
If the housing bubble bursts, would that actually be a bad thing for the average American? Who would it hurt?
People who purchased homes before the big run-up and either owned them outright or held reasonable mortgages might actually be better off because their taxes might come down, and they might actually have a reasonable chance of trading up again. People who didn't own homes would have an easier time of buying one. People who bought at inflated prices, but didn't have ridiculous financing would still have homes and similar amounts of disposable income. People who borrowed against their homes appreciated value wouldn't necessarily be in terrible shape as long as they could continue to cover the payments. It seems to me that the hammer would only really drop on people who overleveraged themselves on the assumption that prices would continue to rise. Those people definitely exist, but are there really that many of them?
Personally, I'm optimistically pessimistic.
posted by Good Brain at 3:49 PM on December 1, 2006
People who purchased homes before the big run-up and either owned them outright or held reasonable mortgages might actually be better off because their taxes might come down, and they might actually have a reasonable chance of trading up again. People who didn't own homes would have an easier time of buying one. People who bought at inflated prices, but didn't have ridiculous financing would still have homes and similar amounts of disposable income. People who borrowed against their homes appreciated value wouldn't necessarily be in terrible shape as long as they could continue to cover the payments. It seems to me that the hammer would only really drop on people who overleveraged themselves on the assumption that prices would continue to rise. Those people definitely exist, but are there really that many of them?
Personally, I'm optimistically pessimistic.
posted by Good Brain at 3:49 PM on December 1, 2006
"Please provide me with new music, preferably available for download" gets axed as chat, this stays, ..... (not that I am asking this to be removed, it is already starting to get interesting)
posted by caddis at 3:51 PM on December 1, 2006
posted by caddis at 3:51 PM on December 1, 2006
the average standard of living will continue to increase as it has been doing for the last few thousand years.
posted by sophist at 4:26 PM on December 1, 2006
posted by sophist at 4:26 PM on December 1, 2006
Demographics are a key factor.
Gareth Morley, writing in 2004:
Over the next 10 or 15 years, even if there's no economic crisis, I would guess that the median standard of living will decline.
By the way, if you look at median household income in the US, it's been stagnant for a long time, despite growth in GDP. Between 1969 and 1996, it rose only 6.9% in real dollars, i.e. 0.24% annually.
posted by russilwvong at 4:30 PM on December 1, 2006
Gareth Morley, writing in 2004:
I can't take much comfort in the fact that the predicted demographic crisis has not yet happened. The Baby Boom (defined as people born between 1945 and 1960) is currently between 43 and 59 years old. In other words, at the highest earning point of their life cycle, and still too young to put big demands on the medical system. The first post-war baby turns 65 in 2010. By 2020, most of the Baby Boomers will be out of the active workforce and will be heavy users of medicare and other defined benefits of the welfare state.Further discussion.
The point is not to panic and make changes to our system that make it less cost effective. The point is that we have fixated on the fiscal surplus/deficit when we should be focusing on the actuarial deficit implicit in our current system of benefits and taxes. As Paul Krugman put it, we (in all the Western countries) are like a professional couple in their fifties: we are not planning adequately if our incomes barely exceed our expenditures, let alone if we are actually borrowing money.
Over the next 10 or 15 years, even if there's no economic crisis, I would guess that the median standard of living will decline.
By the way, if you look at median household income in the US, it's been stagnant for a long time, despite growth in GDP. Between 1969 and 1996, it rose only 6.9% in real dollars, i.e. 0.24% annually.
posted by russilwvong at 4:30 PM on December 1, 2006
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posted by BrodieShadeTree at 3:03 PM on December 1, 2006