How does fear affect the US economy?
Question: What do you think are among the most important challenges the US economy will face in the future and what could be the possible remedies for them? My thinking is that since 9-11-01 fear more than anything else is driving the economy, The challenge is helping the people calm those fears. What do you think? Answer: I agree with you that, in the short term, fear is a very large problem. The current generation of Americans has never experienced an enemy attack inside the United States, and people naturally are a bit spooked about the recent terrorist acts. However, people can sooner or later adjust to almost anything. Look at Israel, for example, where terrorist bombings are almost a daily occurrence: the Israelis don’t like it, but they go on with their normal activities as much as they reasonably can. Americans will, too. In the longer term, the biggest challenge facing the economy is the impending retirement of the baby-boom generation and the associated costs for Medicare, So
