Top 10 reasons why USA economy is down

Why USA economy is down?

Understanding and acting. 2On the long Run:The loosing dollar will help the US economy to grow, because it will lead to higher competitiveness in the foreign markets as US products will become cheaper worldwide.Will this be the "end" of big corporations?I seriously don’t know.

But as technology advances and market entry barriers get lower we will see that entrepreneurship will play a dramatic role in the future of any economy worldwide. However, a large middle-class must exist, it is important to reduce disparities and create incentives for entrepreneurs. (Michael Porter article) hbswk.hbs.edu/item/2165.html [hbs.edu] The way I see it:

1.Open the door to immigrants.

2.Drop the war on Iraq.

3.Raise the dollar premium (raise the fed rates)

4.Create a national plan for reducing energy consumption

5.Reducing energy waste in houses, transportation,

6.Invest in commuting and tax car traffic within cities.

7.Create a deadline for automobile companies to adopt hybrid cars

8.Reduce the disparities of income in US population, by adding more taxes to the high incomers and reducing taxes in the lower income levels.

9.Create limits for federal states debt.

10.Regain credibility in foreign markets by dealing international policies through UN.

Another reasons:

Price increase in raw materials:

Bio-ethanol – The usage of Bio-ethanol leads to increase in price of raw materials (food) in the short run, while the production does not adjust to meet the growing demand. This affects food prices and drops purchase power.

Gold – refuge for instability when currency is instable

Silver– refuge for instability when currency is instable

Oil – due to war, instability and to the continuous increase of consumption. This is way looking into environmental issues is useful. US is the biggest oil consumer in the world.Defaults in sub-prime market. Is this really an issue ? Reason behind the default rate in sub-prime:US Dollar volatility is now higher and investors demand higher premium this higher risk. Dropping the rate will only lead further losses in US Dollar.

No reason to fear, the financial market will consolidate. Mergers and acquisitions will keep on happening until the system reaches equilibrium.

Housing market. US government controls the demand by issuing green cards.

So I would like to say that The USA economy is now a critical position but the situation will change after the election 2008.