The "New Normal" For the U.S. Economy

[30ashopper]

The "New Normal" For the U.S. Economy: What Will It Be? - Brookings Institution

Once the dust settles from the economic crisis of 2007-2009, we are likely to enter a period of new normality, with lower household debt, higher personal savings, and less consumption as a share of Gross Domestic Product. The effects of this transition will ripple through both the domestic and the international economy. At home, some of our bloated retail infrastructure will disappear as businesses shift their focus to producing more for export. Abroad, countries that have depended on exports to fuel economic growth will have to shift toward domestic consumption, which means lower savings rates and a diminished appetite for U.S. government debt, putting pressure on U.S. fiscal policy.

While the broad direction of change is clear, the magnitude is not. To get a sense of the range of possibilities, it?s useful to take a long view.

A great read detailing how we got here, and what the current assumptions are on changes in consumer behavior and how they will affect things moving forward.