How Screwed is the World Economy?

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It seems as though we are seriously screwed when it comes to the economy.
10%+ unemployment rate in the USA
Nearly 40 million people on food stamps
GM, CITI, Toyota and numerous other huge companies are having record loses
The Stock Market went from over 14000 in 2007 to about 6600 now.

The other problem is, as people lose jobs, that means less money to by products which means more job lay offs, which means even less money in economy, which means less sales, which more job lay offs, and the cycle keeps going down and down.

As the US buys less, this significantly hurts production in Asia, Europe, and the rest of the world, which means the same thing will happen to them as to us, causing a world economic recession.

The question is, how big is this? And how bad will it get?
Remember, a Depression does not mean things look like 1933. It means we lose about 25% + of our previous wealth, and unemployment is 11% or greater for a period of more than 2 or 3 years.

It's kind of difficult to find a job at least, but I think that for me it is mainly due to location and excess supply of available workers. I'm going to start college this summer, taking up accounting, something that is supposed to be in high demand. I'll start as a bookkeeper after I get my associates. Being unskilled labor tends to minimize the ability to get a job, so I'll learn a skill.

I'm going to continue through with accounting until I have a master's in finance and pass the CPA exam, but I cannot get the experience without a first job in the field, of which there are three banks in my small town to possibly work for, a handful of small businesses, plus around 4,000 possible customers for me to help with their taxes during tax season. I think I'll be okay.

If the God Damned Government would let GM, CitiGroup and A.I.G. go under (as they should) instead rewarding their principle officers for being incompetent we would hit bottom after which there is only one way to go --- up. In addition, the lessen that incompetence will NOT be rewarded might catch on. The very thought takes my breath away!

Can anyone here explain the insanity of stealing money from the public (that is what taxation is) to give to the likes of A.I.G. so that they can keep on loosing the money? It makes no sense to me, whatsoever.

If you look at the real economy, that is the plant, physical capital, data, and the skills that people possess, they are all intact. The only thing inhibiting the operation of our economy are the rules of transaction and the enforcement of debt. That latter can be modified by bankruptcy procedures. When a party is so hopelessly in debt he can never repay, then he is declared a bankrupt. His assets are seized and sold, and the debt-holders take a hit and then go one to better things. Businesses do fail. There has never been a day when some business did not fail. But the country goes on. The economy functions. Some people are hurt, but given people who took a bath and lost because debt was canceled can be given some relief through tax breaks. Life can and will go on. Once the debt holders realize they are out, there worry and panic can cease and they can begin to think about what to do next.

Paralysis is the enemy here and allowing bankruptcy for bloated and corrupt corporations can bring the end of paralysis sooner than later. We have a leaky life boat (so to speak) from which leakage can be bailed at a certain rate. When the leakage exceeds this weight then we have to jettison some of the cargo. If we don't we all drown. Better a few should go under than all.

Instead of "lending" (which is really giving) money to the likes of G.M. we should fire ever last person in upper management, put the company in receivership and maintain the technical staff and workers so they can get back to making cars. This way the assets of the company retain some value and more capable companies can buy them (at depressed prices to be sure). An arrangement can be made, that companies who buy the assets will be given tax breaks if the retain some of the workers in employment. Let Toyota, Honda buy what is left of G.M. and make some cars. Tell the U.A.W. that they are out of luck and all those juicy benefits will cease or diminish.

G.M. has not been a serious manufacturer of auto products for the last thirty years. What they make is sh*t. Time for them to sink.

ruveyn

Thanks for the advice, it will be a pain for sure if my funding is cut off. It is what I want though: a job that is regular and doesn't discourage attention to detail. If it will take extra effort, then I'll do it. As of this year the FAFSA has qualified me for grants and subsidized loans, since I'm now considered "independent" due to my age. If I start college ever, this year would be the best probably.

As for the economy, I think it is a moderate recession. It's not going to change overnight though, regardless of any politician's promises. Employers actually like these conditions as far as I've noticed, since they can pick and choose whoever they like, and any employee who gives any trouble is just as valuable to them as the next guy off the street (at least for retail and other service industry jobs).

I agree that GM should just be left to crash and burn, instead of getting all these handouts. Everyone knows American cars are beyond crap, anyway. You wanna go German for quality cars.