Second, money supply growth is decreasing. Third, global competitive pressures won't allow for much in the way of price increases. U.S. companies have to remain price competitive with foreign competitors. Fourth, wage rates are not likely to increase much. There is excess capacity in the labor market.
Budget deficits are our biggest concern.
Debt in the private sector has, as expected, begun to decline. Consumers are reducing outstanding installment debt in the short term, because of uncertainty and, in the long term, because of changing patterns of consumption. They are getting older and are starting to save more. Corporations have taken advantage of high stock market valuations to sell stock and use the proceeds to reduce their debt levels. Governments, Federal, state, and local, have not been so successful.