How To Survive a 'Zombie Economy'

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Given the limitations of personal observations, I nevertheless hazard some small experiences.
I have met several women over 50, who are on the edge of loosing their house. A generation with fewer retirement assets, and a history of being the main economic parent. Which leaves a grim future for - mostly divorced- women , a substancial group over 50.
The other group I noticed is the tail end of the baby boomers. A history of boorwing to spend, now forced to face a backlog of debt.
With a history of expecting a lifestyle beond their historical means.
The latter generation again includes divorced women, this time with early teanagers, or preteen age offspring.
A future middle class moving economically downward?
Just musing, but concerned.
Ben Brugmans
Pittsburgh PA

Ben Brugmans of PA 10:17PM September 12, 2010

Sadly, this article was spot on. However, the only thing to worry about is that economists are just now realizing how bad the economy is (they are typically slow to be won over to new facts and changing assumptions) what if they have gotten it wrong again and the U.S. is even worse off than this article suspects?
Another thing that this article didn't mention is the growing inability for the Fed to keep enough money flowing in the economy--the essential antidote to the crisis. Keeping interest rates low provides some cushion for banks, businesses, and consumers which are willing to borrow and does spur some people to refinance rather than default. However, the effect of low interest rates is offset by already high rates of debt by many individuals, firms, and government and very tight credit standards. Combined with low spending levels by investors and firms the low interest rates don't seem to solve the puzzle of how to jolt the economy back to normal.
Government spending isn't helping either, since the government already has unsustainable levels of debt. It can't borrow anymore without seriously jeopardizing itself and the taxpayers who must ultimately payoff those bonds.
The other element of the puzzle that isn't mentioned here is the effect of China's policy of pegging the Yuan so low compared to the dollar. That policy effectively prevents all of the dollars American's spend on Chinese goods from recirculating back into our economy--since the Chinese don't spend them, they just loan them back the U.S. by purchasing treasury bonds. This has a HUGE effect on the economy which the government could solve by being more aggressive with the Chinese on trade--in spite of their needed cooperation on other national security issues. It's time this issue went back to the WTO and big 20. The Chinese Yuan is still way too low compared to the dollar. It does not operate in a "Free Market" regardless of what Chinese officials say.

Plebus of VA 10:35AM August 26, 2010