It has been more than 18 months since the financial meltdown started. Several arguments have been made from both capitalists and the anti-capitalists , both communists and non-communists and others. One side claims it as the total failure of capitalism while the other defend it is not so.
American economy was widely considered as very strong and although there have been glitches here and there, it is still considered superior and robust. However, the economic downturn in 2008/09 has challenged this status quo.
Is the American economy still stronger ? Will it come out of the worst economic crisis it has faced since the Great Depression of 1930's ?
The answer is not necessarily.
The savings rate of Americans is among the lowest in the world. Consumerism is the mantra for the companies and the US government also follows the same. The govt. feels bad if the consumers don't buy things as they are expected to - spend and more spend. Also American business executives and government are always obsessed with such data - unemployment, consumer index, market sales, etc., etc. . Nowhere is the world, media chews more data than in US. Every first week of the month or new quarter, millions of graphs/data is sliced, diced and sold to the viewers.
These all means the market is more spending-driven thus resulting is almost zero savings. To add more fuel to the fire, the American family system collapsed during the same time resulting in more individualistic thought and lifestyle than ever.
A man saves for two reasons - one, fear about future requiring a margin of safety either for the person or the family, and two, when people take a holistic view of money and avert consumerism to follow a simple and minimum lifestyle. An American doesn't worry about his future nor he raised a family to worry about them. Nor he can live a holistic lifestyle because he never heard of it.
Since a typical American doesn't have a family to run, he never cared about his parents or older generation. Who else will care? Ans: The US government. Health care became a burden to the US government whereas the family system should have born it. To make things worse, health care was not available to all Americans also.
Unemployment is a problem to any country as its wastes human resources, productivity and also offshoots crime, fraud, etc. But there exists a different perspective in the US - if more unemployed are there in the country, they will buy/consume less and market will be down. A truly enterprising idea of a enterprising country.
Also constant wars costing trillions (http://costofwar.com/) has only made things worse.
Nett Result: The American federal government, has borrowed large amounts from external sources since the 1980's. This has accumulated to over 13 trillion dollars of external debt by 2009.
Inspiration:
India's well-known economic expert - S. Gurumoorthy's talk at the 30th annual reader meeting of Tughlaq weekly on 14 Jan 2010 in Chennai, India
Sources:
1.https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html
2.http://www.globalresearch.ca/articles/FRA501A.html
3.http://en.wikipedia.org/wiki/Economy_of_the_United_States