Has America’s Economy Entered the “Coffin Corner”?

by Fabius Maximus
Wolf Street

By Editor, Fabius Maximus, a multi-author website with a focus on geo-politics. This is a shortened version of two articles that originally appeared here and here.

Growth slows in the developed nations due to several factors, as debt levels rise. Have we entered the “coffin corner” where we cannot grow sufficiently fast to service our debt?The US economy has repeatedly failed to resume normal growth after the crash. But potentially worse is the decline in long-term growth estimates.

Our plight: our maximum growth rate slowing to our stall speed.

In January 2011 the Federal Research estimated the long-term growth rate of the US economy at 2.5 – 2.8%. By June this year, their estimate had fallen to 2.1 – 2.3%. Years of low investment by the private and public sectors, a decaying education system, rising debt levels, and demographic headwinds (an aging society) — all are slowing America’s growth.

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