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After speaking with Mr. Morreale, we have included the Q&A that was conducted to gain further perspective of the current state of the economy.
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Q: What are the negative side effects of the current state of the economy and how will this
affect us in the coming years?
A. There are positive and negative side effects of the current state of the economy. On the positive
side, we are handling the economic shock of the COVID-19 pandemic very well and the
economy is still growing. We are also making stride sin expanding the number of people
vaccinated and thereby slow the spread of the present and future COVID viruses. Our innovative
technology keeps advancing and bringing to u grater productivity and further expansion. If we
can provide and fund the incredible need for upgraded and innovative infrastructure, this will add
to the strength of our economy. At this point, we still have the number one economy in the
world.
On the negative side. The new macroeconomic policy of using increasing federal deficit
financing for new initiatives, could lead to difficulties later on in financing and paying off our
national debt. The danger here is further inflation and the loss in the value of the $, and its
acceptance as a stable international currency. A third problem is the loss of one-and-one-half
years of schooling for our students. This could lead to a poorly prepared college age student
population and in a decline in the quality of education received by them. This could then lower
our labor productivity and the national economic growth rate.
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Q: How can the stock market be reaching record highs during times when the economy is
so unbalanced?
A: The stock market is still a good reflection of investor trust in the strength of the U.S. economy.
We should remember that the stock market is always projecting out 6 months ahead. Moreover,
the U.S. economy though at times unstable, is still very strong in the world economy. With
China’s new restrictive economic policies and its slowing economic growth rate, they are losing
ground to the U.S. and will take longer to catch up to the U.S. So the U.S. stock market will
continue to attract both foreign and domestic investors.
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Q: What should people be looking for, is the bear market coming and when? What needs
to happen for the market to tank?
A: It is not clear that a bear market is on the horizon. We should remember that the stock market has
gone through many ups and downs over the past century and yet has maintained an average 8%
growth rate per year despite these changes. So, we always must take a longer-term view and not
get caught up in short term fluctuations. What would make the market “tank”: possibilities
include tremendous instability in the world economy, a war between the U.S. and China, a sharp
and increasing price of natural resources leading to accelerating inflation and/or a severe
economic impact of climate change and global warming.