[Wildbill]

While many of your points are quite valid, I think you are jumping a little too far off the boat here. Yes the economy isn't at full capacity or really all that near it, but lets not confuse this with bad times. Unemployment is not too far from what economists thought was equilibrium not that long ago. I think the nature of the job cuts is such that we are finding intractable unemployment developing for the short term. What is wrong is that a lot of the people that are getting laid off are rather talented individuals that have a lot of specialized skills. That is great for the economy, but not so great for the person involved. These people have jobs to go to, but often you find that many of these people are very specific or picky about what they want to do. Call it the downside of the free agent nation. Instead of looking for a good job or career, the free agent wants something that will specifically fill his/her needs in personal development and interest...at an attractive salary to boot. In the meantime a lot of these people have a decent cash horde left over and are in no hurry to take anything less than what they want. This leads to the perception that unemployment is terrible, but indeed it is not. It is quite clear this is a major problem because look at where a lot of the umemployment is bad now. San Jose is over 7%, Seattle and Portland are seeing drastic increases in unemployment, DC suburbs are seeing growing problems...simply put the tech centers are slumping because of this problem. Of course it gets worse since tech is where a lot of the trouble exists, but in reality tech is not a huge piece of our nation's industry or GDP. Its a major driver of other things, but simple things like healthcare and construction employ and provide money to a lot more people than high tech ever will. These fields are steadily growing in most areas and recessions aren't all that common for either. As for the income growth numbers, I think you buy into the bias that seems to come out with every report. There is always some "BUT" thrown into it by the media spinmasters. If the income growth is coming from OT, so what??? If the income growth was coming because Bill Gates gave away money then so be it, the bottom line is more money in people's pockets. These are the same spinmasters that talk about how the unemployment rate went down, BUT the economy seems to be at a standstill. What??? How do these two facts get to be compatible? They have nothing to do with each other. This is like the fallacy that if Wall Street is doing bad the economy is doing bad or companies are losing money. There is no direct connection, especially when you always try to make something bad out of something good. Just start paying a little more attention to how they so wonderfully do this. People have called me a fool, but just watch it for yourself. You will be amazed at how much negative spin they try to slip into any bit of news that has the inkling of being seen as positive or even neutral. Just think about it "retail sales are up, BUT its the 0% interest factor" or how about "the ISM number (manufacturing catch-all number) is at 52.3, which indicates manufacturing is GROWING, yet its lower than it was X periods ago", and my favorite "the trade deficit is improving, BUT only because the dollar has devalued over the last 3 months". I mean come on, does every bit of good news have to have a disclaimer on it? Notice the spin, notice the media's seeming infatuation with bad news?

Further, I think your consumer debt number is quite misleading and quite a few economists have pointed out this very fact. Two issues have made this seem a lot worse than it is. One is the quest for miles or points, the use of credit cards has seen huge growth by people using them merely to gain points or even just plain ole float. They pay them off monthly or at times carry a balance, but its not credit being used on anything more than groceries and haircuts among other things. The second is that credit includes effects of home values. As home values go up mortgages and equity lines of credit increase. Also in times like these, people worry about emergencies and set up equity lines of credit "just in case". With home values up, these lines of credit are far higher than they were even a couple years ago. Add to this people that increase their loans by cashing out some funds when doing a refi and you are certainly going to see higher debt usage. While these amounts may not grow, they all are probably here to stay at these levels and analysis has to be done with this in mind.

As for the Fed, I am not one that believes they are set to cut rates. I think they all quietly realize that any moves they make are unlikely to produce a desired result. What moves they have left have to be saved for a true need and what the economy faces right now is not a true need. Sluggish growth may not make people happy and sure it sucks to be unemployed in good or bad times, but I just can't see how this media induced gloom can be misconstrued into desperate times. The situation just isn't that bad. Some areas are hurting, but most are holding their own. So much is focused on the bad, but the reality isn't that at all. Even if the economy saw 2% growth over the next year, we almost certainly would be better off because inflation will be nowhere near that amount. To really get booming, to really see a growth spurt the solution is quite simple to state, but hard to get; the rest of the industrialized world needs to grow or at least keep pace with the 2-3% growth. That is something that seems far off for now.