The Great Economic Transition

by Tom Binnings, Summit Economics, LLC

Tom Binnings

Tom Binnings is a senior partner with Summit Economics, LLC, which provides research and consulting services in applied economics, public policy, municipal finance and business strategy development.

Most economists agreed that the stimulus and strong actions by the central bank were successful, however we have three to four more years to go before we recoup jobs lost. We are just surpassing the number of jobs we had in 2000.

There are six factors causing the state of disequilibrium in our economy and impacting national growth and well-being -  energy, demographics,  federalism, consumerism, technology, and globalism. The tipping point happened when we entered the turn of the millennium. We are now about a third to half way through this transition period before a new equilibrium can provide a sense of long-term economic security for Americans.

This is not about China taking over but about the demise of Western Europe from economic dominance replaced by North America. The US comprises 25% of the global economy and has a culture of business innovation, which has successfully merged with government sponsored research and development to better assure our national defense. Globalism supports the growth of private retirement investment and provides cheaper goods at a cost to low-to-mid skilled jobs, giving the middle and lower middle class a double whammy.

Technology spurs growth initiative and risk taking, which encourages investment and lending, and the economy expands rapidly. However, when it comes to an end and there is a lull, the technological displacement greatly impacts the lower- to middle-skilled labor pool. Look around at where jobs are being lost due to technology - toll booth operators, cashiers, traffic cops, etc. The last time we saw significant technological displacement was in the 1920's in the agricultural and manufacturing sectors with Henry Ford's production line.

History of US Debt

When Baby Boomers began making their way through the labor force in 1980, it started a 20-year period of easy credit. Everyone could 'consume now and pay later' causing the GDP to grow from 62% to 72% since 1960. Over the next twenty years, the next generation will have more stagnant incomes, as well as high levels of student loan debt which is not dischargeable through bankruptcy. Until we pay down and earn more, consumption will be constrained.

While most of the current deficit is due to lower revenues and higher expenditures resulting from a major economic downturn, it's a precursor of things to come under our current Social Security and Medicare paradigms. This is the real concern for the next 10-years. Lack of economic growth will create more financial stress in the short-term and make it difficult to lower the debt to GDP ratio. Immediate extreme austerity would be very harmful to the economy, yet ignoring austerity is also not an option.

 Progressive Drawing - Amount in the Pot this week was $170; Steve Hall drew a red and returned the $5. Next drawing will be 03-Mar-12 with an estimated pot $210.00 and 1 blue and 4 red remaining. Odds of drawer winning is 20%. In this 61st week of drawing, $3,020 has been collected for the Club.

90th Birthday Celebration for the Kiwanis Club of Greeley- Scott Ross announced that the Kiwanis Club of Greeley will celebrate their 90th Birthday on March 21st and you are invited to attend. Reservations are on a first come basis. Guest of honor is Kiwanis International President Alan Penn and First Lady Jeri Penn.

MHKC Mixer - MARK THE CALENDAR Mar 9, 6-8:00 pm for the MHKC Quarterly Mixer held at the Woodmoor Barn. The Mixer is for All members, so come one come all. Cost is $5. New members since Nov 2011 are free.  

Steve

Steve Stephenson gave an overview of the Rocky Mountain District Mid-Winter Conference that took place in Longmont. Eleven Club members attended the Kiwanis Rocky Mountain District Mid-Winter Conference in Longmont, Colorado February 17 & 18, 2012.

Max Williams, District Youth Services Coordinator, conducted a forum on Youth Services. The Club's new Club Display System was utilized for the first time at the Conference receiving many favorable comments.

Club members Jim Taylor, Marian Taylor and Jo Carroll were honored by the District Foundation for their support and contributions to the Foundation by the award of Noris A Lusche Fellowship Awards. Stephen Plank conducted the February Division #4  ( 6 Clubs) Council meeting in conjunction with the Conference.

The focus of the Conference was leadership training, education, exchange of ideas, and access to Club operations materials and tools

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