How to Save us from the American Depression

As an amateur economist taking his first Econ class at the University of California Irvine, I came across a concept: higher income = higher standard of living. Is this true? This is only true if we can keep the cost of living at a constant value. That's impossible, especially at a current depressive economy of the United States. We need a model to decrease prices, but keep salary high.

Hence, currently, we are chasing the standard of living of the past because of the inflation of prices. However, it's impossible. The reason behind the inflation is that businesses need to make more money due to the globalization of our economy. To make more money, businesses raise prices and cut spending. What that means is that we make the same, or less, money than before, but we have to pay more than before.

What we need to accept is that we are entering global economy. It is no longer American business competing against American business. It is now American businesses against the world. The tariff system of the past can no long sustain this trend of globalization. We have American businesses outsourcing to India, China, Europe, Mexico, etc. The point is that we are not just serving the American market. We are serving a global market.