The world economy had a reality check in the 2007-2008 financial crisis and things have not been the same since. We have seen companies that have been around for a century go out of business just like that. It is still not yet time for us to breathe and from the way i see it this madness will continue for some time. Other businesses are being formed and the tech disruption still continues. I think before the smoke clears the damage will be enormous but the question is what will the world actually be like. This times are very uncertain and no one knows if this will stop anytime soon. These are some key points to not for why this entire economy sounds funny.
The labor participation rates and the new business formations are not at all time high and yet we still see rosy economic numbers. The economic data we receive depending on how every one analyzes it will give you the picture based on your level of understanding and the real observations made. Some people will tell you to take for the hills and that something is about to fall from the sky. There are more millennials graduating from college with debt levels rivaling home mortgages. Its almost like a common story that millennial grads share among themselves.
Companies no longer see an incentive in hiring lots of people because most processes can be automated with the aid of technology workers have also become a lot more efficient. Government debts are at an all time high and so are corporate and consumer debts which accounts for the sluggish mood in the economy. When you have an economy that is sluggish because any dollar spent poses a problem it becomes hard to get it going. There are serious investments that need to be made in the infrastructure yet government is already wrestling with how to pay its debt down.
Regular people will like to go out and have a good time with their friends and families. Including shopping for some thing nice and new yet already have debts not to mention jobs that are not well paying. Some of these head winds i have mentioned have created a vicious economic cycle that is stalling real economic growth and development. Solving this problem will require some compromises and serious sacrifices that has to be made. Question is who is prepared to make such sacrifices and for how long will it take to clean up the mess that has been decades in the making. We are just having a rude awakening in what we have been doing wrong for years. By the way we have not yet learned anything yet and until we start learning to face this reality, the global economy might fall off the cliff.
