The economic storm clouds are gathering over the state of the US economy. Globally, China, along with the Euro sector, is experiencing a massive economic slowdown. The two conflicts raise serious doubts about the future of geopolitics as they appear to be creating a divide within the global economy. The confluence of situations and events is comparable to a derecho forming in the Upper Midwest that will have devastating impacts on agricultural interests across a geographic distance. Let’s look at some of the headwinds that are on the U.S. economy’s watch list.
Student debt
One hundred billion dollars in student debt to be paid off will put pressure on consumer confidence, particularly among millennials. The ability to buy a home, buy a car and cover everyday expenses will become more difficult, which is estimated to reduce economic growth by up to three-tenths of a percent.
Labor strikes
Labor strikes in many sectors such as the automotive industry, Hollywood and now transportation in Canada are impacting production and the movement of goods and services. Will the workforce ensure that their organizations and institutions are no longer globally competitive?
Budget dead ends
Whether it’s over the federal budget or negotiations over the farm bill, the standoffs are hurting American consumer confidence and companies’ ability to make long-term investments. With the presidential election just a year away, this is only being amplified by general media, social media and now artificial intelligence (AI). It is becoming increasingly difficult to distinguish what is fact and what is fiction.
The erosion of governance
The erosion of governance and the ability to compromise for the common good is becoming increasingly difficult. In post-speaking discussions, many people suggested a new category on the ballot: none of the above! I giggle and somewhat agree. Again, without effective leadership, making both short- and long-term decisions becomes much more difficult.
In the next article, we will continue our discussion about the headwind variables and a possible economic setback.
P.S
On the positive side, the economic expansion since the 1980s has lasted longer, nearly 90 months compared to an average of 58 months since the Great Depression. Economic recessions since the 1980s have been shortened to just over six months compared to the 11-month average since the Great Depression.
David Kohl’s opinions do not necessarily agree with those of cornsoybeandigest.com or farm progress.
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