This paper argues that the US economy is not entering a new era of prosperity, mainly because the rate of profit remains 30-40% below its earlier postwar peaks, in spite of a 20% reduction of real wages since the early 1970s. Under these conditions, real wages are unlikely to increase very much (if at all) in the years ahead. The paper also argues that an important reason for the acceleration of growth in the US economy since 1995 is a large and rapidly increasing net inflow of foreign capital (which also precipitated the worsening depression in Asia). The final section argues that the chances of a recession in the US in 1999 are high, and that such a depression would probably propel the world capitalist economy into deep depression.
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