Inflation: The Basics

I personally feel like many of the US manufacturing companies where sold out to allow for foreign companies to use a cheaper labor force, and the American public always looking for the cheapest price perpetuated this cycle.Corporations are in business to make money. They can't be blamed. But somehow I think the short sightedness in taking profit out stripped the jobs at the bottom shrinking paychecks Thus Banks allowing marginal income brackets to borrow into the middleclass caused bubbles bubble bubbles.I feel Americas economic troubles are deeper than just our pockets. We have wars to pay for, tremendous debt massive unemployment and a polarized government.
No one wants to go back to the stone ages and start over. So we just pass it on. I do agree that investing in infrastructure is the way to go. The economy will improve once people have money to spend again, and this will again spurn industry to expand creating more jobs. Lets see how cheap large screen TVS are this holiday season. There is a demand, just no money to buy them and banks and credit card companies arent playing that game anymore.

Hi Jon, Economics so so complicated due to the variables. One facet may have no bearing on another and yet impact some other whole can of worms.
For instance where I live is somewhat insolated from some of the current US economic crisis due to the US Army base Ft Hood. Lots of cash every month floating around. Lots of industry growth in the form of resturants and stores. But just 50 miles to the north is a completely different scenario. Since in my area there is a group of consumers with a steady monthy paycheck and some disposible income to tap, Yes the number of resturants and stores has increased and with that the number of jobs for folks to run them.
But the hotel industry here is flagging. Not to many big companies are sending employees out of they're regions for meetings and marketing or conventions. Since those dollars are not being spent here for lodging 2 large hotels here have went bankrupt with a third on the way. So all those jobs are being lost.I can not see how there can be one economic formula to fix our problems. Every state, city and town in this country will have different sets of problems. the one common thread I see is the middle class has curbed back borrowing and spending due to several impacts.
One being uncertainty, another is banks not freely lending as before, the reduction in consumer spending reduces the need for increased production. But also leads to a increase in durable goods setting on shelves and warehouses. This I assume further reduces company profits which leads to yet more job losses. The stock market reacts to all this news and the fed is putting out fires everywhere they can to no avail. I think this whole thing is one big market correction. It will take quite some time I think before our economy is stable again. My 2 cents.