The problem facing everyone is a loss of American demand. Americans don’t earn enough income, they have no savings and foreigners are refusing to lend them any more money. Americans are losing equity in their homes, their stocks and their pension funds. When Americans stop spending on domestic or foreign trinkets and automobiles, companies have the option to export those items somewhere else. When Americans stop spending on services, the companies close their doors. The majority of Americans work in the service sector. This is not the 1970’s, this is not the lost decade in Japan. When Americans stop spending and the service sector shuts down, unemployment will rise dramatically as the downward spiral is re-enforced.
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