How US Economy Was Destroyed

Interesting reading, edgar.
I will be interested to read how other US posters respond.

I've read, watched and researched a great deal on the financial market collapse as well as current trends and various pontifications on where we're going economically.

Yea... for the most part I think you've hit upon some of the larger culprits; deregulation, lack of trading oversight, the culture of debt, irresponsible consumers, designer/poison mortgages, fraudulent financial instruments, affording corporations many of the same rights as individuals (mostly in the campaign contribution area), departure from the gold standard, etc., have all contributed to our current downward spiral.

The GOP; the conservative mindset trusts in the dynamics of a free market economy - and I believe that they often work. The more liberal economic mindset gravitates towards a more controlled economy. On their extremes, one trusts in the "entrepreneurial spirit" while the other - once again in the extreme only - sees nothing but fat cats and ripoff schemes that must be controlled. Like virtually everything in this world, I believe the best solution lies somewhere in the middle. That the answers to these economic woes must be a combination: You must allow a free market wherever and whenever possible, yet you can't let 'em run amok. Some areas of the market must be controlled and policed, lest we become even more saturated with schemes, fraud and oppression. Who here thinks - and how much sense does it make - that one answer, one economic philosophy will work for every contingency, every market or every pitfall? How silly... how short-sighted

Traditional GOP-incentives/fixes have focused on cutting tax rates and giving financial incentives for businesses, the wealthy (ostensibly in the hopes of reinvestment [1]) and removing controls to "let the best win" and also for the capitalistic "let the strong and efficient thrive - let the weak and stupid fail"-sentiment. Yes this works sometimes. The problem is this: What are the costs of letting "this or that" fail? How many people must lost pensions, health care or their life savings before regulation becomes requisite? In a responsible world those who commit fraud, poorly plan or fail reap the outcome of their idiocy; yet there's a symbiosis between producer and consumer, between one country and another, between unemployment and price controls. If we're a community - hiking up an icy slope - is it always ok to let the crook fall if we're all going to die with him?

So let's not simplify the equation too much - nothing operates in a vacuum

Each aspect of the market must be examined carefully to determine exactly how much regulation is absolutely necessary. If you want to blame the GOP, you're probably more right than wrong; however, you can only do so to the extent that you can point to things that actually happened. That we have been so conservative in the Reagan/Bush/Bushx2 years lends us the benefit of looking at conservative administration results. But I wouldn't saddle the GOP with the totality of this sin, consumers, irresponsible use of credit and our culture of consumption (combined with other factors) must also bear that yoke.

... or so I think





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1. Just as an example, prior to 1981, the most wealthy in the U.S. paid upwards of 70% income tax. Now, richest pay appx 35%; widening the gap between the wealthiest 1% and the rest of us. Now, forgetting that 70% is absurd anyway; the question is: In light of human nature and its tendency to hoard, how much of this was reinvested and how much only contributed to that gap (a gap of which, in essence, represents the most vital stabilizing factor of any economy - the middle class)?

I don't have time to post right now. Apparently this is one of those threads that gets bypassed.

I agree with much of what you said, Khethil, but I think you've missed what, in my opinion, is the biggest underlying problem with free market economies.



But we aren't a community any longer. We've embraced a global economy and now we're learning that there's a downside in doing so. We want cheap goods, unlimited access to services, and a standard of living for "all" that exceeds what the economy will support. We have entitlement programs that are unfunded, a debt obligation that we can barely keep up with, and a mandate to make sure no one feels any pain (financial or physical) with an aging population and an under-employed work force.

When we were a community we knew our bankers. They were our neighbors. They lived in the same places we did. We knew our druggist and our plumbers and our general practitioners and they knew us. They lived in our communities and we saw them at the 4th of July celebrations, at church on Sunday, and at the high school band concerts. Those days are gone - probably forever. Market forces that worked in the past assumed that those in the market had the same general goals as the rest of us - to participate in the community. That is no longer the case.

Good point - I can't say I disagree with you.

I replied in the spirit of keeping the topic rather narrowly focused (which was, for all intents and purposes, "GOP is to blame for the Economy"). As I said, I see some truth to this, but that the whole picture - the truer and wider perspective - places the ownis on a much larger crowd.

I happen to agree that part of our economic woes have more to do with what you're talking about. But that topic's so broad, so widespread and decries so many parts of post-industrial life, that not only is my message likely to be lost in some word someone found pun with, but that this view tends to be stereotyped as too radical and is rarely well received nor identified with.

Good input on my post. Thanks

I will mostly agree that the GOP is responsible for the greatest amount of the destruction of our economy, but I also blame the democrats for a) voting with the GOP on legislation that hurt our country, b) increasing our national debt, c) allowed the financial institutions to get sloppy without providing proper governance and control, and d) allowing the feds to control interest rates.

The primary issue for the GOP has been to cut taxes even while fighting two wars that continued to increase our national debt, and the reduced economy and tax revenues continued to drop. If they don't believe in paying for what is spent now to leave the debt to our children and grandchildren, what is their real goal?

It certainly has not provided the jobs they said would develop from those tax cuts.

Will add more later.

I think it is clear the Democrats carry much of the blame. I have been having computer problems and have not had time to concentrate on this thread. Still, I think it is not too late to save us from total ruin. Otherwise I would not bother starting such a thread.

I guess that depends on how you define total ruin, edgar. I think it's too late to attempt to turn back the clock to the days that the free market could self regulate. I think it's too late to pretend that we aren't fully dependent on a global economy - that we could meet our own needs even if we wanted to.

I think it's ridiculous to try to maintain our standing as the world's super-cop, and the sooner we accept that certain nations are and will remain tribal in nature, no matter how much we try to insist they aren't, the better.

I do think there's a new world order not too far down the road. I don't know what the new order will look like, but my fear is that we'll bankrupt ourselves trying to prevent the inevitable.

I agree; our country has become over-bearing in this world of politics and economics that will destroy us. Our government can't seem to understand simple logistics; no country that represents five percent of the world population can police the world. Obama's mistake was to expand our war in Afghanistan. That is a world community problem; not US's.

Reports about lower home sales and higher unemployment has been going on for several years now, but our government refuses to acknowledge these simple truths that our economy is in big trouble - and yet they stay on the same path.

It's going to get a lot worse, and more Americans are going to be losing their jobs, and the tax base will continue its downward slide.

Our government has bankrupted our country with great intent and speed.

from......
http://blog.badtux.net/2009/10/end-of-innovation.html

btw: the US economy was destroyed by the same thing upon which it was based, capitalism.