US Loses Most Competitive Economy to...Swiss?
By Number Six
Wednesday, September 27, 2006 at 03:14 PM
Yeppers, according to Bloomberg via Raw Story......
The U.S. lost its position as the world's most competitive economy to Switzerland as budget and trade deficits prompted a slide to sixth in the World Economic Forum's annual rankings.
Um, budget and trade deficitis, eh? Like importing oil and crap from China, eh?
The decline in U.S. competitiveness adds to questions about the outlook for the world's largest economy as economists at JPMorgan Chase & Co. suggest its potential for growing without inflation is fading and as the expansion shows signs of slowing.
``The U.S. has now been running twin deficits for many years and there is an increasing concern that they are creating a vulnerability in the economy,'' Augusto Lopez-Claros, the forum's chief economist, said in an interview.
Still want to know where this "boom" is they keep talking about...
The report is the latest to signal of concern with the fundamentals of the U.S. economy. JPMorgan economists led by Bruce Kasman last week published a study which concluded the economy's so-called potential growth rate has slowed to 2.7 percent from 3.5 percent at the start of the decade. The productivity of U.S. workers also faded last quarter, increasing at an annual rate of 1.6 percent after a 4.3 percent gain the prior three months.
Such deteriorations come as the economy starts to slow following a housing slump. Prices of existing homes in the U.S. fell last month for the first time in 11 years as sales declined to the lowest level since early 2004, the National Association of Realtors said two days ago.
``Raising productivity is the driving force behind the rates of return on investment which, in turn, determine the aggregate growth rates of an economy,'' Lopez-Claros said in the report. ``A more competitive economy will be one which will likely grow faster in the medium and long term.''
Falling prices will make it harder for consumers to tap the equity in their homes, a major source of cash in recent years. That may pose a risk to their spending, which makes up 70 percent of the economy.
Apparently, this is a somewhat optimistic report. Lessee, nobody's had a real pay raise since Raygun, we've a spendthrift king in power...yeah, that's optimistic, alright.