Pioneer Editorial: Beginning long climb out of debt
Is the economy improving?
A lot of indicators seem to think so, even though we aren't out of the woods yet.
President Barack Obama earlier this month said the economy was "headed in the right direction." He noted reduced unemployment numbers, although it is expected to reach 10 percent before hitting a peak later this year. Still, the president said "that the worst may be behind us."
Consumer saving has gone up, which is a good thing, but that also means spending remains stagnant. But the consumer frenzy for the Cash for Clunkers program at least spurred spending in the struggling auto industry. The advent of $3 billion in federal dollars helped empty car dealers lots, creating an economic recovery of its own.
The stock market seems to be on an upswing, and now we learn that factory production is also on an upswing. There even seems to be a softening in the housing market, with minuscule improvements there.
Minnesota too has seen a slower increase in the unemployment rate, a good sign if it continues.
Locally, we have a number of special circumstances that should help us weather the recession.
First, construction of the Bemidji Regional Event Center is underway, providing construction jobs and making use of local venders and suppliers.
Second, the multibillion-dollar Enbridge pipeline construction project is providing work for hundreds of local workers, and also making use of local vendors and suppliers. Still hundreds more are coming here for months, renting apartments and motel rooms, and squeezing their RVs into vacant spots in community mobile home parks.
That all means huge economic activity throughout our economy, hopefully long enough to when the overall economy moves out of recession.
The 800-pound gorilla in the room, however, is a looming federal deficit that now may approach $10 trillion in 10 years. Providing health care for all is important, but how do we pay for it? The $787 billion economic stimulus bill seems to be working to turn a corner in the economy, but how do we pay for it.
It is significant that the economy finally seems to be ready to grow again, but will it grow large enough and fast enough to cover our debts along the way?