The state of the economy is not as dire as it seems

Despite the recent economic wobbles, including the slow pace of job growth in May, the economy is hardly going backwards into recession. May was the prognosis of this economic recovery: slow and somewhat painful. There will be months when many jobs will be added, and some when hardly any jobs are. Much of this is cyclical: worldwide events such as the Mideast crises and Japan earthquakes will affect the economic recovery. In May and this spring, the US economy finally felt the lagging effects of those disasters. But Japan is getting back on its feet and gas prices are declining to more normal prices, and hopefully the EU and IMF will not allow Ireland or Spain to default. Altogether, problems persist for the global economy, but things are hardly bleak.

What the US must resolve, sooner than later, is its debt and budget deficit. Politicians and citizens have finally realized that the US government cannot borrow forever, and some day, just like a debtor facing potential bankruptcy, its debt will be held to account. S&P has already downgraded the sovereign debt of several countries, including the US. A sound fiscal plan for the future is a must. It will indeed be precarious how the politicians on Capitol Hill balance the current need to bolster this economic recovery (the Fed is thinking about another quantitative easing), and the long term need to secure our fiscal future. There will need to be some painful cuts to our Social Security and Medicare entitlements, but compromises and sacrifices must be made to secure the blessings of liberty for our posterity.