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October 6, 2012

Column: By many measures, U.S. economy still sinks

Slip slidin’ away ...

Why does America seem to be slouching? Multiple measures have found this country going down, down, down since President Barack Obama’s inauguration.

The Geneva-based World Economic Forum (WEF) ranks nations on competitiveness. When Obama came to power, America had dominated this contest for at least three years. The U.S. quickly stumbled from first place in 2008 to second in 2009, fourth in 2010, fifth in 2011, and seventh today.

After examining 144 countries, WEF said this Sept. 4 about America’s economic performance:

“The United States continues the decline that began a few years ago, falling two more positions to take seventh place this year. Although many structural features continue to make its economy extremely productive, a number of escalating and unaddressed weaknesses have lowered the US ranking in recent years ... The business community continues to be critical toward public and private institutions (41st).

In particular, its trust in politicians is not strong (54th) ... Business leaders also remain concerned about the government’s ability to maintain arms-length relationships with the private sector (59th), and consider that the government spends its resources relatively wastefully (76th). A lack of macroeconomic stability continues to be the country’s greatest area of weakness (111th, down from 90th last year).”

After Standard & Poor’s humiliating downgrade of U.S. sovereign debt on August 5, 2011, America has suffered two more demotions. Egan-Jones, one of nine rating agencies “nationally recognized” by the Securities and Exchange Commission, lowered America’s debt from AA+ to AA last April, and from AA to AA- last September 14. Egan-Jones previously had chopped America’s long-time AAA debt status to AA+ on July 16, 2011, foreshadowing by more than a fortnight Standard & Poor’s higher-profile downgrade.

Egan-Jones said the Federal Reserve’s Argentine-style money printing — most recently via its $40 billion-per-month exchange of mortgage-backed securities for freshly minted cash — threatens to pound the dollar as thin as phyllo dough.

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