Economic & political chaos -- which country (US or UK) has a more stable future?

The news in both the UK and the US is pretty bleak at the moment -- the US is increasingly divided and deadlocked and tensions are running high in the UK across a huge range of issues, exemplified by today's strikes, and the economies of both countries are sluggish at best.

Looking past the doom and gloom, what signs of hope do you see, and which country do you think is more likely to be able to pull itself together and avoid long-term meltdown?

Opinions welcome from people on both sides of the Atlantic, and from across the political spectrum.

I don't know, but it is really worrying. We're trying to decide where will be the best place to raise our son and neither option is looking too hot at the moment :/

Same here -- each time I look at one country with any degree of scrutiny, it just starts to look impossibly busted, and then I turn my attention to the other, and...same thing. Grrr.

I think the economies are intricately linked enough that if one goes down, the other will too.

I think that the US is currently going thru some major difficulties which are exacerbated by the fact that the Reps and Dems are constantly fighting each other.

  I am happy about one thing. There have been no skeletons flying out of Pres. Obama's closet.

I am happy about one thing. There have been no skeletons flying out of Pres. Obama's closet.

Amen! I do not see things getting much better as congress refuses to pass anything while Obama is still president in hopes that it will hurt him come re-election time. In the meantime they are screwing everyone they are meant to help. I wish we could do recall elections on all the boneheads, but that will never happen.

I don't know which one may have the best long-term prognosis. I truly think its a toss-up. The austerity cuts are ticking off people here, and the lack of true representatives who will actually lead, is ticking off people back in the US. Hopefully neither will implode, and both will come out the better for our pains.

Saying that, we are giving the US another shot and moving back there. OH received a job offer that is a £12k increase over what he was earning here back at his old company, and I have a better shot of finding a technical job back there as well. So financially for us, as long as the country holds together, I think we'll be better off there.

Art, If you can judge by the stock market today the USA is going gang busters!
If you look at consumer spending, in the US, you will see the same thing!
If you look on the webcam at Oxford Street it is bustling, so some are OK in the UK?

If you will accept an off-the-cuff reply...

I think the US is in a state of decline. Sort of the natural way of things. The challenge is to do it gracefully. I think unemployment below 5% is a thing of the past and is quite frankly unsustainable. There are ways to mitigate the harsh effects.

The UK has managed her decline about as well as could be expected. I think leaving the EU, or the collapse of the EU, would be terrible.

But the thing is, we haven't done a damned thing to fix any of the problems associated with the credit crunch. Just today it was reported that "the world's major central banks announced concerted emergency measures to underpin fragile eurozone banks and prevent the global financial system from freezing up*". We have been just throwing money - taxpayers's money - at the banks hoping it will all go away. They are putting it in their pockets. There will come a day of reckoning, and that's not just blog talk.

I am quite frankly terrified of what could happen. And pissed off when I see people focusing on crap like immigration.

*http://www.guardian.co.uk/business/2011/nov/30/central-banks-action-new-credit-crunch

Hi

I think the full time economic analysts out there could comment and explain in greater detail all the factors which go towards the economies of the USA, UK, Euro countries and the PIIGS (portugal, Ireland, Italy, Greece and Spain - who are all in severe financial problems)nations and the BRIC nations (Brazil, Russia, India and China - all 'emerging' economies that are growing fast currently).

However, if taken in context of just the USA and UK, then without any shadow of a doubt the USA will recover first. In economic terms, the world over, the 'safest' economy is the USA, this takes into account many factors as well, not 'just' the GDP numbers etc. World trade is done in US Dollars, currencies and economies are pegged to the US Dollar, the US is still the largest economy in the world.

The UK is much much smaller in comparison for many aspects and currently finds itself in a very very bad situation currently. Overall, amongst the G8 nations, it'll be the last one to 'hopefully' recover to a good extent. The reason is that for the size of the country, over the period of 1997 to the coalition government coming in, the UK spent far far beyond it's means, and borrowed way too much than it was capable of paying back - in order to rub shoulders with the big boys - USA, Germany, China. Whilst those economies have enough in reserve be that in cash reserves or trade and industry etc, the UK has nothing left to fall back on in order to help stimulate solid and useful recovery tactics. That Gold that Gordon Brown sold off very cheaply would've come in VERY VERY useful now...   one thing that really does make you think is that when Labour came to power in 97, the UK had a SURPLUS of money and reserves lying around, put simply, the UK had savings and was operating within it's means. Fast forward to the time of the change, and the UK has massive debts far beyond it's means - hence the current situation. Other countries were more sensible with their money, Canada and Australia for instance didn't have such a housing market bubble to burst, lending practices were also much tighter and encouraged sensible borrowing amongst it's population. The USA and the UK had very lax lending criteria for personal borrowing, now that it's burst, the USA still has enough of a size and potential trade to help it recover, the UK doesn't or, has much less to fallback on. That said, there are 'glimmers' of hope within certain sectors of the UK economy which will have to help the country recover - high tech industry and manufacturing and R&D are ones I read about. Related fields will also benefit as that knowledge is shared. These sectors bearing the brunt of the weight of the recovery time means they'll be over loaded and hence things will take time. To help, cuts are required to trim the uneccesary spending the previous government went way overboard with. The problem is that many of the UK population have grown accustom to everything being provided by the government and there's a distinct train of thought in UK culture that the government owes people everything. So people still want all that 'spend' that was done in recent years on borrowed money and cause a fuss when now, it can't be delivered. Hence, when you look at all the previous recessions, it comes down to the Labour Party messing things up very badly and putting the UK on the brink of economic collapse, and the Conservatives having to make unpopular cuts to balance the books again - power flip flops between the two and will most likely continue to happen. Perhaps in a few years when a General Election is called, Labour will get back into power and it'll wonder what to do when there's no money to borrow...

I know the above is showing I'm one for the conservatives out of the two parties that'll realistically, ever govern the UK. I'm ok with that, it's not like all the conservatives are totally good either, both parties, and UK politics as a whole won't really ever 'change'.

So that leaves the bigger question posed here, from individuals point of view and things which are very important in many peoples and families minds. What of the future? - If you are lucky enough to have a more stable career, that's suitably well paying and most importantly, looking likely to be in demand over the next few years and perhaps even decades, then do consider the UK. Else, if not, then look to the USA to come out of the current situation first, the UK will follow (amongst the G8/G20 then the UK will certainly be last or one of the last to fully recover) as per points above.

Disclaimer - the above is my thoughts and view, I'm sure an economist can shoot me down and/or show how the UK may well recover with more haste etc. I'm not looking to start a fight or anything as some points above might not agree with others, just discussing.

Dent Arthur Dent & Missjoules - You have kids and are rightly worried about their futures and outlook. I don't even have kids yet, and I'm worried for when I do! ultimately, only you and your partners/family can decide which would be better for you overall.

Hobnob - You are right, the USA and UK economies as well as all others are intrinsically linked. However, neither country will completely 'fail', that sort of possibility would be in the event of World Nuclear Power War 3, or a catastrophic event of truly gigantic proportions - in that case, we won't be worrying about what our credit card bills are! we'd all be worrying about how to survive..

Windycitywids & MikeyMike - I think Obama favours the more 'socalist' aspects of government control, which means more borrowing and spending views rather than cutbacks and tightening of belts. Perhaps the US and it's sheer economic power in the long run can sustain that 'route' of thinking, currently however it's not proving the be the way in the short term...

Bluegrass Lass - good luck with your choice of heading back to the US! you can't sniff at a £12K pay increase and the increased chances of a job in your field!

Cheers - You can judge an economy to an extent by looking at it's stock market. Consumer spending is low in the UK and USA because many people are worried and delaying purchases due to the uncertainty of their jobs etc. Oxford street is always bustling, and theres also MANY people in the USA and UK who didn't go crazy with living beyond their means and currently do have plenty or good savings/backups in place.

Sonofsailor - As per usual, the 'banks' bear the brunt of the blame. Whilst they certainly ARE a big part of the reason, so is the Government that allowed them to operate that way so it could go rub shoulders with the big boys and crucially another BIG part of the reason we're in this mess is due to individuals in the UK who also lived far far FAR beyond their means and on credit / on insane mortgages. In short, each 'sector' is responsible, but there's very very little mention of the people shouldering part of the blame...

Cheers, DtM! West London & Slough UK!

All I can say is wow!

but there's very very little mention of the people shouldering part of the blame...

The people are shouldering the blame. 100%. What part of the blame are bankers/rich shouldering? 

Hi

Windycitywids - is that wow in a good way? or a bad way?!!

Sonofsailor - I think you are getting a little mixed up?  do you perhaps mean the general population/people are 'feeling the effects' of the situation 100%?

If you look at the media, talk to people you may meet every day, you'll overwhelmingly hear people 'blaming' this situation on the Banks/Bankers and the Government. You'll hear much much less of the 'blame' being put on the population/people of the UK. However, if you take into account that many individuals in the population took out 100%, 110%, 125% mortgages, spent to the hilt on personal credit cards, took out personal loans at amounts far greater than they comfortably could pay back, those people are also partly responsible for this situation. The shocking report a few years ago, is that the UK's personal credit card debt - is more than the leading European countries populations personal credit card debt levels COMBINED goes to show just how reckless UK spending/borrowing is.

My point is, each section is jointly responsible - government, banking sector and the UK's population.

The UK looks stupid on the international level - thanks to the previous government borrowing way way more than it could pay back. So investment that 'could' have come our way from other countries has probably been cancelled or put on the back burner. So the UK as a whole, shoulders part of the blame for that. The Government cannot publicly 'blame' the banking sector or the people/population.

The Banking Sector looks stupid as they took advantage of lax rules, cosied up to and perhaps influenced the last government and milked the 'system' of as much money as possible. That sector has now reduced in size, has had layoffs, companies have shut down and people working in those companies who weren't 'bankers' have lost their jobs too. The banking sector CAN 'blame' the government to an extent, and as their reputations have taken a beating, less jobs in the industry, they shoulder part of the 'blame' for being instrumental in how things happened. The Banking sector CAN'T publicly blame the population/people.

The population/people - it's very well known now, that a very large percentage of the population took advantage of cheap credit facilities, massively over borrowed compared to their income levels, lied on self certification mortgages, used 5,6,7 and even 8 times salary multipliers to buy a property, borrowed yet more on credit cards and personal loans. After the 'good times' of getting that money, they all but forgot to pay it back. No one 'forced' people to over borrow - just their lack of realizing what their incomes were and that they actually had to pay money back! Defaulting on paying back meant house repossessions started increasing, and due to the fact the banks couldn't then re-sell those properties as they were worth a lot less and in many cases worth less than the debt owed to them by many individuals, it's what caused the wheels of the country as a whole to slow down. The people/population CAN and DO blame the banks and the government, quite vocally as well.

Many in financial related sectors know the above, as I say, publicly the Government can't blame anyone, the banks will blame the government to an extent and can't blame the people. The people will blame the government and the banks but will publicly never admit to being extremely lax with their money management.

Cheers, DtM! West London & Slough UK!

I am not feeling particularly mixed up Dennis, I was simply pointing out the fallacy in your statement "but there's very very little mention of the people shouldering part of the blame". It has been the people who have supplied the funds to bail out the banks, it is the people who are still paying taxes for reduced services, who have had their salaries frozen, who have faced mass redundancies, who have had their homes repossessed, who will have their pensions raided, who are having critical disability services axed. Certainly there has been much pain in the financial sector - among low to mid level workers, but a teller ain't a banker. The people are shouldering their load and more - and it is just beginning.

I believe in a previous thread you stated that there are many financial big wigs facing prosecution for actions leading to the crisis, if I could ask you - aside from scapegoat Bernie Madoff - can you name two? Can you site a couple of cases where penalties have been paid by a financial institutions or by a credit agency?




 

It was wow, you really have a lot to say on the subject.

While I cannot comment on the financial situation in the UK, I have a thought to with whom the responsibility for the mortgage crisis situation over here should be placed. 1) The government should have had more checks and balances on the banks here. You know the old saying that sh*t rolls downhill? Well, it all ran down on the American people in a huge gloppy stinking mess. That being said, some people are just plain stupid. One should understand that you can't afford a million dollar home making minimum wage.
I hate George W. Bush full stop. There is a special place in hell reserved for him right next to Hitler, Bin Laden and Hussein.