The United States economy: on the edge or over the cliff?

Abstract

Cypher poses the fundamental question of whether the United States economy can avoid a depression or not. The author focuses on the growing unemployment in the country, which in the context of a system of social programs battered by thirty years of Reaganism can easily translate into social instability, manifested in various forms. Cypher offers several causes of the crisis: growing productivity coupled with stagnant wage growth, the outsourcing of the manufacturing sector, and the tendency towards overproduction. Profits were retained in the rentier class, while the middle and working classes, faced with greater costs of education, housing and healthcare, fell ever further into debt. The response of the Obama team has been quick and audacious, but a great danger exists in that the conversion of his economic advisors, proven neoliberals, to a form of pseudokeynesianism, will be short lived, and that in the face of the pressure of a misinformed and scared population, anti-cyclical measures may be reversed, deepening the economic contraction.