U.S. headed for 'day of reckoning'

Heading? I think we're there, and just don't know it yet...

The United States is headed for a "day of reckoning" as oil prices and the budget deficit remain high, consumers keep spending and not saving, wages remain stagnant, housing prices rise and the working population ages, warned Robert Reich, former Department of Labor secretary in the Clinton administration.

"The American economy is going to have to inevitably make a structural adjustment (with regard to lack of consumer savings and the budget deficit), or the entire world is going to suffer," Reich, an economist who is currently a professor at the Goldman School of Public Policy at the University of California at Berkeley, said during a keynote at the IDC Directions conference here.

"American consumers are the Energizer bunnies of the global economy, but that's coming to an end," he predicted. The median wage is dropping and people have been borrowing on the equity of their homes but with housing prices starting to flatten or decline, the spending will have to stop.