I, The Economy, Am Coming To You

I think 0% interest rates are how low Helicopter Ben Bernanke would have to cut them to get us out of this mess. The economy is just souring on too many fronts, and it's all interconnected. We know that housing is a mess. People are barely managing to keep their homes, and they certainly aren't able to borrow against it and live off the home. As a direct result, consumer spending is in the toilet:

An already weak holiday shopping season turned out to be even worse than expected for many of the nation's retailers, who reported Thursday they had disappointing sales results for December. The poor performance raised more concerns about consumer spending, and in turn, the health of the economy.

And if you have no way of borrowing against your home, but you need to borrow to survive, or just borrow to grab some more material goods or that last Christmas present, or to keep up with your own living standard, why then you'd borrow against your credit cards.

We've just learned that credit card debt increased at an 11.3% annual rate in November. In 2005, it increased at a 3.1 percent rate. Why the jump? As Dean Baker says, "People borrow against their credit cards when they can't borrow against their homes. It looks like a lot of people can't borrow against their homes."

Meanwhile, we know that certain prices continue to soar. Gas is expected to hit $3.50 a gallon this summer, and health care costs averaged seven THOUSAND dollars a person last year. Now, that's mostly incurred by the sickest among us, but premiums and deductibles are certainly going up. And that's delivering a health care system that is decreasing in effectiveness.

A pair of researchers has just published an update that compares various countries on their rates of "amenable mortality," defined as deaths that are "potentially preventable with timely and effective health care." In 1997, the United States ranked 15th out of 19 industrialized countries. So how are we doing now?

Answer: we're now 19th out of 19. The rest of the countries have improved their performance by an average of 16%, while the U.S., that well-known engine of healthcare innovation, has improved by only 4%. So now we're in last place.

As Kevin Drum says, "This is really bad news. The chickens are coming home to roost."