Susmit Kumar, Ph.D.
Nikkei average went up to about 39,000 in December 1989, but after the crash it hovered around 15,000 during the lost decade of 1990s. In the last several years it has hovered around 10,000. Several economists, including Nobel Prize winner Paul Krugman, are fearing a similar lost decade for the U.S. economy, too, which would cause Dow Jones to hover around 4,000, leading 401K to become 101K. As a majority of firms have stopped pension options, the future for the entire country seems very bleak, especially because of the unsustainable debt of the government.
Although conservative sycophants claim Reaganomics a success, it remains a bogus economic theory funded mainly by China and Japan (please read my article “Reaganomics – A Bogus Economics Paid by China and Japan”). Due to this bogus economic theory, federal debt has exploded to a level that in the very near future will hand the government the problem of funding the Social Security System, Medicare and Medicaid. While making comments on the Tea party’s claim of Obama being a socialist, MSNBC news anchor Chris Matthews said that we have the largest socialist programs, like Social Security System, Medicare and Medicaid, in the world, and nobody, even republicans or Tea party members, want to touch any of these. He further said that if we do not have these programs, then our cities would be like the slums of Calcutta.
If Dow tanks to 4,000, making 401K to become 101K for retirees, then the last three decades of Reaganomics will show its true colors, i.e. by reducing the size of government, they have destroyed the only source, people might have in the hours of need.