Tuesday, May 13, 2008

topsy-turvy economics

This is brilliant. An editorial in the AARP Bulletin tells how much our economic well-being has deteriorated in the last 12 months: One Year Later, a New World.

The piece says the world is complex, fully interconnected, and volatile, enhancing the need for individuals to do what they can to ensure their own financial security. Here's the main graphic and excerpts:

In just 12 months, unemployment has risen from 4.5 percent with a growing workforce to 5.1 percent and a shrinking workforce as millions stopped seeking jobs. The average price of a gallon of gas has jumped 53 cents to $3.44, and crude oil has nearly doubled from $64 a barrel to

$115. Inflation is growing; medical costs are growing faster. Stock prices have dropped nearly 15 percent, and housing prices have plummeted more than 10 percent, part of a spiral of delayed payments, defaulted mortgages and home foreclosures. Banks and lenders around the world are in full retreat.

The U.S. trade deficit and the federal budget deficit continue to mushroom, and the national debt is $9.4 trillion—up 10 percent in a year. And the value of the dollar has fallen another 15 percent, driving the cost of imports ever higher and shaking the confidence of foreign investors.

If there is turmoil in the markets, there is chagrin and anxiety at home. Amid all the statistics, it is workers, home-owners, spouses, children and grandparents who feel the impact of this wrenching sequence of events—in lost jobs, postponed retirement, reduced wealth, delayed medication, lower confidence.

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