Uh Oh: USA Today Brings Up The D Word

by William Teach | July 16, 2010 1:34 pm

Ah, it looks like the media is finally staring to notice what Obama and the Democrats’ policies, added on top of the recession, are a bad idea, though they do tip toe around the Dems malfeasance

.….Such outright wage declines hint at deflation[1] – a generalized drop in wages and prices. The last time that happened in the United States: 1931-33, when prices fell at an average annual rate of more than 8%.

The consumer price index fell for the third straight month in June, dropping 0.1%, the Labor Department said Friday. Less expensive energy bills were a big factor behind the drop. Prices for some food items and airlines fares also fell.

“I think deflation is a very real threat,” says Richard DeKaser, president of Woodley Park Research in Washington, D.C.

Sometimes, deflation can help consumers, but, in the long run, wages decrease badly, and people have no money. If only we had some people in government who understood how an economy works.

Meanwhile, over at the NY Times[2], Floyd Norris discusses how to tell when a nation’s economy is at risk. Yeah, ours is in deep doo doo.

  1. ….Such outright wage declines hint at deflation: http://www.usatoday.com/money/economy/2010-07-16-deflation16_ST_N.htm
  2. NY Times: http://dealbook.blogs.nytimes.com/2010/07/16/norris-how-to-tell-a-nation-is-at-risk/?scp=1&sq=how%20to%20tell%20a%20nation&st=cse

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