NEW YORK — New York City taxi driver Richard Horne said the streets of New York are overcrowded with selfish pedestrians and drivers. “New York City is a great place to come to visit, but as far as I’m concerned, it’s a horrible place to work or to live,” Horne said during a recent cab ride. The city is filled with aggressive people and vehicles jockeying for position. Rivera has more to say about the economy, President Barack Obama, and tension in New York City in his video interview with NYC Voices.

Horne is a retired U.S. government law enforcement officer, who didn’t wish to be more specific about his previous job. The U.S. economy has been poor since mid-2008, he said. Yet, business is improving in 2010. “I can’t speak for the other drivers,” he said. “I do exceptionally well.”

Other taxi drivers would also do well if they focused on their customers and careful driving, instead of fighting other drivers.

“Most New York City problems can be solved if people showed common courtesy to each other,” he told NYC Voices.

NEW YORK — Al Rivera has been hawking goods on the streets of New York City for the past 30 years. He loves meeting people as they check out his hats, belts, socks and other items, which he sells for about five dollars. Rivera, 56, has been living in a hotel for the past 15 years. “It’s the only way to survive,” Rivera said in an interview this month. He’s a resident of the hotel, which is in the city, and feels fortunate to make a living on the streets of Manhattan.

Many days during the past 18 months, Rivera makes about $30, he said. “It’s about survival.” When consumers spent more and the U.S. economy was in better shape a couple of years ago, it was common for Rivera to make $100 a day, he said.

What’s next for the economy? Commercial real estate is hurting and will likely get worse, Rivera said. Many retail tenants are not able to pay the rent, he observed from behind his table of goods on the corner of 30th Street and Seventh Avenue on a cold January afternoon.

Rivera sells wholesale goods that he buys from suppliers from countries including China. As the U.S. dollar has grown weaker, his product choices have also dwindled, he said. Rivera shared more insights on retail, the U.S. economy and China in our video interview.

The high cost of illness, insurance and treatments is one of the key factors driving the U.S. health care reform debate in Washington. The Medical Expenditure Panel Survey, which was published last week, allows people to see just how much certain illnesses will cost them and their insurer based on age and, of course, the condition. After looking at these charts you’ll pray you never get diagnosed with diabetes, rheumatoid arthritis or emphysema.

Keep in mind that the personal costs referenced in the study aren’t necessarily coming straight from the insured person’s pocket. Employers cover the bulk of the cost, says Alan Miller, CEO of Universal Health Services. ‘It doesn’t cost that much to the individual. It certainly costs a lot for the employer to have you covered.”

This could help explain an interesting shift I’ve noticed in workplace dynamics regarding sick days. As the costs associated with illness continue to rise for employers, they’re more likely to encourage workers to use sick days. After all, it’s in the employer’s best interest for workers to recover sooner rather than later, and it’s a better way of preventing other employees from falling ill as well. Especially since the H1N1 outbreak, it seems as if co-workers are less likely to snipe about someone being out sick than they are about a sick person coming into the office and spreading their germs around.

Playing Offense Is Key to Cutting Costs

Maybe this is a sign that the U.S. is turning the corner in how we approach illness. If getting sick is costing everyone more — me, you, your company, my company and U.S. taxpayers — isn’t it in our best interest to beat the illness before it starts, as much as that’s possible?

“The U.S. health-care system has historically focused on cures for illness and disease rather than effective prevention,” Christopher Fey, CEO of U.S. Preventive Medicine, said in an e-mail. “An estimated 10% to 20% of the workforce either has, or is at high-risk for developing, a chronic condition. Subsidizing expensive interventions that treat sickness rather than prevent it is a burden taxpayers and employers can’t afford.”

Assume that’s true, are we willing to adapt? The culture in the U.S. is a long way from being proactive toward illness. The government needs to consider whether they will take a carrot or stick approach.

If there were a so-called “fat tax” or a similar tax for not being healthy in the U.S., a mob would descend on those trying to enforce such a law. As it is, some resent the police because of an occasional ticket, which is, in essence, a tax for faulty driving or parking. Imagine the outrage against the Twinkie-police.

Should the U.S. government take a more charitable route and consider reforms that encourage folks to lose weight or otherwise be healthier, they need to take into account that Americans are likely to demand no one tell them not to smoke, eat, or drink, in excess. Perhaps the U.S. should keep an eye on things in the U.K., which is testing a plan in 2010 that allows people to earn money by losing weight.

“[The government is] still fighting over what the [health care] bill ultimately will be. None of the details have been ironed out, it’s very complicated,” said Miller, who recently wrote Health Care Reform that Makes Sense.

The complexity of health care and who should pay for it could cause the debate to rage on for years. Meanwhile, I think we’re fighting the wrong side of this battle. Sure, if you lead a so-called “clean lifestyle,” you may still get sick, but is that reason enough not to be healthy? Putting a price tag on certain illnesses entices people to look at the actual expense. If a problem hits you in the pocketbook, it’s more likely to move you to action than a philosophical argument regarding the systemic cost of illness.

“Deflation is a bigger risk than inflation because it’s much harder to get an economy out of deflation than inflation,” Sheard said in an interview with DailyFinance. “You can have a burst of inflation and the central bank can always squeeze inflation out of the system. Deflation is different because deflation becomes entrenched.”

While deflation may sound good for consumers — we can buy more stuff with the same amount of money — it’s bad for the economy because growth slows and demand wanes as consumers grow cautious. Deflation makes it difficult for central banks to stabilize an economy because controlling interest rates is designed to control inflation, not deflation. As gold rallies to record levels and Australia raised interest rates this week, investors worry inflation will kick in. But Sheard says the larger concern is deflation.

Whereas inflation can be reigned in, deflation would present a more difficult problem, Sheard explained. “If a mule is galloping, you can reign it in,” he said. “If a mule is refusing to budge you can’t get it to budge. That’s inflation versus deflation in a nutshell.” If deflation occurs, consumers become pessimistic and don’t spend or borrow, he said.

Sheard says inflation isn’t a bad thing in the short term, as long as central banks, such as the U.S. Federal Reserve Bank, keep it in check. Sheard recently spoke with DailyFinance in a telephone interview from his office in New York about the U.S. economy, housing and his recession outlook. Edited excerpts of the conversation follow:

DailyFinance: If you had to guess, do you expect another economic crisis soon?
Sheard: We don’t think there’s going to be another crisis or serious relapse into recession, but it’s very hard to see a V-shaped recovery, which is what you’d normally expect after a recession. Usually the deeper you go, the faster you bounce back. The recent crisis is a once or twice in a century kind of recession.

Is the U.S. economy still in trouble?
The problem with the U.S. is consumers. U.S. households are not as wealthy as they thought they were. Home prices rose for many years with the expectation they would continue to rise. Home prices in the U.S. have fallen 35 percent and that does a heck of a lot to people’s assessments as to what their lifetime wealth is actually going to be. So homeowners have reassessed and said “I must trim my sails a bit here.” If everyone does that, even a little bit, it ends up being quite a drag on the economy.

How about housing?
The housing market we think is bottoming, but there’s still a lot of fragility. You can certainly imagine a turn of events where housing prices begin to fall again. And with unemployment at 10 percent and foreclosures at a historic high — that would be a very ugly scenario. The commercial real estate market is still in a precarious situation. The impact of consumers having borrowed when they felt quite wealthy due to higher home prices, only to discover they are not quite so wealthy, truly is having a profound effect.

What’s your forecast for economic growth?
We are expecting in this quarter, annualized growth of about 3.5 percent. For the quarter itself, that’s not bad, but after that, we’re seeing growth taper off again to two to 2.5 percent (annualized) by the second-half of next year. If you applied normal, historic metrics, the U.S. should be growing at 5 to 6 percent for the next two years. That’s simply because it has fallen so far that to get back to full employment, you need to grow above potential for a couple of years to squeeze that slack out of the system. We think that’s very unlikely. It’s going to be closer to 2 to 2.5 percent over the next couple of years and probably extending beyond that.

Any reason to be optimistic?
If you’re banging your head against the wall, it feels a lot better when you stop. So the very fact that the economy is no longer in free fall, and is bouncing back, is positive.

What kind of economic recovery do you expect?
There is a camp that is looking for a V-shaped recovery, and I think that’s very unlikely. I see more of a drawn-out, upward-sloped L-shaped recovery. It’s a V-shaped recovery where you taken the right-hand part of the V and pulled it way down towards the floor.

How did we get into the recent economic mess so quickly?
What happened, basically, was, you had a housing bubble and credit bubble, the bubbles burst and it caused the financial crisis in the economies that were directly exposed, which is basically the U.S. and Europe. That caused a collapse in demand in the U.S. and that ricocheted around the world, causing the collapse in exports and that hit everybody.

“Interest rates are artificially low,” said Michael Pento, chief economist at Delta Global Advisors in Huntington Beach, Calif. “They don’t belong at zero percent.”

If rates stay low for too long, economists including Pento are saying, a bit more loudly: Beware of inflation. If indeed inflation does spark, the economic recovery would stall and stocks would drop.

Investors are forced to buy commodities and stocks because their cash is worth less each day as the dollar grows cheaper, economists argue. “As long as the Fed continues to print money,” DailyFinance’s Dan Burrows wrote, “the U.S. continues to run a big trade deficit, and other nations move their foreign exchange reserves out of dollars, the buck has no place to go but down.”

Pento sees the Fed’s current path as one that destroys the U.S. dollar’s value and leads to inflation. That will fuel the price of gold and lead to bubbles bursting in stocks and bonds. “All of this is rocket fuel for gold,” he said, adding, “It’s the perfect place to preserve your wealth and store value.”

As interest rates stay at or close to zero, though, he said, investors are buying more gold and other commodities, such as platinum, silver and nickel. Sugar, corn and other base metals will also increase in value, according to Pento. Higher commodity prices, he said, “will continue until the Federal Reserve stops destroying the purchasing power of our currency.”

Axel Merk, president and chief investment officer of Merk Mutual Funds in Palo Alto, California, said the U.S. is trying to get out of the recession by depressing the U.S. dollar. Federal Reserve Chairman Ben Bernanke believes it’s the answer because it helped get the U.S. out of the Great Depression, Merk said. “If and when inflation does show it’s ugly head, and I don’t know when it does, the Fed won’t be able to raise rates because the consumer would crash right back down.”

That said, Merk believes the Fed may be hoping inflation perks up because it would help boost growth. Inflation isn’t ideal, he said, but is better than deflation. “If I had to pick a choice between inflation and deflation, I would pick inflation,” Merk said. “That said, there’s nothing positive about inflation. It’s a feel-good thing in the short term.” Inflation helps preserve jobs in the short term, yet works against the goal of the Fed, which is to keep inflation under control.

Former Federal Reserve of St. Louis President William Poole told DailyFinance that higher inflation would help boost home prices, but for the Fed to allow higher inflation in the U.S., “would be a horrible mistake. I don’t think they’ll do it deliberately, but they may get there accidentally.”

Not all economists are fretting about inflation appearing soon. David Resler, Nomura’s chief economist in New York, sees no danger of inflation even with rates at zero to 0.25 percent in the near future. “If we have zero interest rates 10 years from now, I’ll be very worried about inflation, but under the current circumstances, it’s no threat whatsoever,” Resler said. “Inflation expectations are stable and inflation is stable.”

Delta Global’s Pento counters by saying, “The economy is going to be weak and inflation will be high.” Who is right? Time will tell. Using history as a guide, if cash is cheap for too long, inflation will rise. If inexpensive cash sparks borrowing, economic and profit growth, while interest rates rise, then inflation would likely remain tame. In the meantime, economists say, keep one eye on the market and the other on your investments. And never stop peering ahead to see if inflation is lurking.