Where is the US economy headed?

@georgeob1,

I think that the Fed will signal its intent before the end of the year. The policy has helped all of the people that it could (people in a position to borrow) while it has, we agree, hurt savers. Inflation, we are told, is not a problem. It is a problem, soon to be exacerbated if the drought gets bad.
I do not share your belief about Americans in great numbers wanting to become dependent on government assistance.

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@reasoning logic,

No, all your mockery notwithstanding, I was merely pointing out that, contrary to your earlier statement (which you now appear to be backing away from), I have chosen to do different things in my life, and not all among the same path.

I do wish you would answer the questions I posed and end all these silly and increasingly tortured evasions

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@realjohnboy,

realjohnboy wrote:

I think that the Fed will signal its intent before the end of the year. The policy has helped all of the people that it could (people in a position to borrow) while it has, we agree, hurt savers. Inflation, we are told, is not a problem. It is a problem, soon to be exacerbated if the drought gets bad.
I do not share your belief about Americans in great numbers wanting to become dependent on government assistance.

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@georgeob1,

Quote:

In any event what I am seriously interested in here is just what is it you see in the normal operation of capitalism that accounts for our current very unusually slow recovery from an economic recession; our persistent lack of investment by amply funded entrepreneurs despite unusually poor returns on cash; and our partly resultant sustained high unemployment?

I am not an economist but I will share my view points about the subject with you. I do not find it unusual when a very informed republican economist shares his view points with other republicans who are not economists "that they ridicule him for sharing facts.
Do not get me wrong because I find many democrats that seem to care less as well.

Like I said I am not an economist but from what I understand this is the worse recession sense the great depression and you think that things should be turning around faster than they have? You do realize that things have been screwed up for quite some time and things may take along time don't you?

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@realjohnboy,

realjohnboy wrote:

I think that the Fed will signal its intent before the end of the year. The policy has helped all of the people that it could (people in a position to borrow) while it has, we agree, hurt savers. Inflation, we are told, is not a problem. It is a problem, soon to be exacerbated if the drought gets bad.
I do not share your belief about Americans in great numbers wanting to become dependent on government assistance.

Well that is specific. I'm less hopeful about Fed easing before the end of the year, and believe they (and we) will encounter several shocks as they do, simply because markets will quickly read the future, and the observable historical fact that it is very difficult to retain control of a very dynamic situation while easing the reins. Moreover, the highly indebted government now has a very large, continuing stake in the matter, and we can see from the several examples in Europe and Argentina how easily these questions can become politicized. I believe that before it's all over inflation will become a very large problem and the coupling of that with indexed entitlements, together with the political denial we can all see, paints a very grim picture.

I don't yet see any evidence that increased government assistance is being rejected by the American people. In the contrary, from long extended unemployment benefits, to grossly expanded Medicaid eligibility, to a doubled foodstamp program, to the looting of public pensions by public service unions, to government assumed educational loan programs, and more; I see the trough expanding rapidly and feeding an ever increasing share of the population. I would be interested to know the reasonong behind your contrary conclusion.

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@reasoning logic,

In terms of the depth of the stock market and GDP collapses the recent recession was not at all worse than most of the others we have seen since WWII. It was different in that a real estate bubble was behind it though. Lots of economists (and I'm not one either) have studied and written comparative analyses of the recoveries from this and other recessions. My impression is that the Republicans among them tend to cite the unusual nature of the current slow recovery, assignning causes in policy, while the Democrats tend to switch to the unusual nature of the "new" economy, but fail to address any causes for the unusually slow recovery.

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@georgeob1,

Quote:

In terms of the depth of the stock market and GDP collapses the recent recession was not at all worse than most of the others we have seen since WWII. It was different in that a real estate bubble was behind it though. Lots of economists (and I'm not one either) have studied and written comparative analyses of the recoveries from this and other recessions. My impression is that the Republicans among them tend to cite the unusual nature of the current slow recovery, assignning causes in policy, while the Democrats tend to switch to the unusual nature of the "new" economy, but fail to address any causes for the unusually slow recovery.

I hope that you are able to see my sincerity by me acknowledging my ignorance on the subject of economics.

If I were able to add value to your understanding of it, it would be by my ability to acknowledge that even the most informed are wrong about parts of it and if you really care to understand the subject better that most, "listen to all sides but do not favor either side.

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@georgeob1,

I won't bother to post graphs of gdp and debt as a % of gdp. Suffice it to say that gdp did not collapse. Rather, it has remained relatively stagnant. Debt as a % of GDP has risen sharply since 2005, with debt now topping a 100% of gdp.
Having said that, I must admit I am not overly concerned about debt.

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We should not be too surprised at the good economic news. The economy, and the market, have always done better under the Dems. E. g., we had a terrific economy under Clinton.

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@Advocate,

Quote:

The economy, and the market, have always done better under the Dems. E. g., we had a terrific economy under Clinton.

Jimmy Carter v Ronnie Reagan

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@georgeob1,

There's a very simple answer. The GOP has become the "No Party" where they filibuster over 90% of the legislation brought forward. That's the reason why congress' performance rating is at their lowest.

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Obamanomics continues to make our economic situation worse.

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@hawkeye10,

hawkeye10 wrote:

Quote:
The economy, and the market, have always done better under the Dems. E. g., we had a terrific economy under Clinton.

Jimmy Carter v Ronnie Reagan

Actually, the economy wasn't that bad under Carter. His problem was that he let the interest rates soar.

Reagan spent massively on a giant credit card, which tripled the national debt. Of course, the economy did just okay under Reagan with his borrow and spend approach, but not near as well as it did under Clinton, who insisted on pay/go.

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@hawkeye10,

hawkeye10 wrote:

Miller wrote:

The DOW is improving, but the economy is still sluggish...

consummer confidence is in the crapper, and I hear the exact same thing from small business owners. All of this happy-talk from government and in the media reads to me as propaganda.

True.

Unemployment is high and obamacare (!) is killing off many a small business owner.

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@plainoldme,

[quote="plainoldme"
Another way to illustrate the huge disparity: the six heirs to the Walmart fortune had a net worth equivalent to the bottom 41.5 percent of Americans combined in 2010."
[/quote]

More power to them.

The real power to wealth is through investments, if you are willing to take risk and do so with wisdom. Otherwise, wealth is usually handed down through the blood line.

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@Miller,

Quote:

More power to them.

Really?

Quote:

wealth is usually handed down through the blood line.

Would you also say more power to them as well?

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@Miller,

Quote:

Unemployment is high and obamacare (!) is killing off many a small business owner.

the things that are killing off small businesses are that margins are under are under relentless attack and the market place pace of change has become hyper. obama-care is a footnote not the whole enchilada.

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@Miller,

Quote:

More power to them.

For being born into the right blood line?

We did the away with the idea of power by way of blood lines at the start of this nation but we are sadly going back to it and in doing so turning the majority of our citizens into serfs and a very small percent of the population into royalty by way of inherent economic power.

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@BillRM,

Quote:

but we are sadly going back to it and in doing so turning the majority of our citizens into serfs and a very small percent of the population into royalty by way of inherent economic power.

lack of class mobility is the main problem

Quote:

Benjamin Franklin did it. Henry Ford did it. And American life is built on the faith that others can do it, too: rise from humble origins to economic heights. “Movin’ on up,” George Jefferson-style, is not only a sitcom song but a civil religion.

But many researchers have reached a conclusion that turns conventional wisdom on its head: Americans enjoy less economic mobility than their peers in Canada and much of Western Europe.
.
.
.

At least five large studies in recent years have found the United States to be less mobile than comparable nations. A project led by Markus Jantti, an economist at a Swedish university, found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) — a country famous for its class constraints.

Meanwhile, just 8 percent of American men at the bottom rose to the top fifth. That compares with 12 percent of the British and 14 percent of the Danes.

Despite frequent references to the United States as a classless society, about 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths, according to research by the Economic Mobility Project of the Pew Charitable Trusts. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths.

By emphasizing the influence of family background, the studies not only challenge American identity but speak to the debate about inequality. While liberals often complain that the United States has unusually large income gaps, many conservatives have argued that the system is fair because mobility is especially high, too: everyone can climb the ladder. Now the evidence suggests that America is not only less equal, but also less mobile

http://www.nytimes.com/2012/01/05/us/harder-for-americans-to-rise-from-lower-rungs.html?pagewanted=all&_r=0

once the mass smell he coffee we are fucked.

1 Reply

@hawkeye10,

But the disparity has become very extreme. Top CEO's are making over a 1,000 times what the average employee in the firm is making, and there is no justification for this. There is no arm's length transaction setting this type of compensation.

Many of the super-rich are heirs (e. g., the Wal-Mart heirs), and didn't make their extreme wealth.

The top 400 in income own more wealth than the bottom half of our population. The top 10 percent in income own 93 percent of the wealth, with the rest of the people fighting over the remaining seven (and deminishing) percent.

This extreme disparity stunts growth, and focuses too much power in the super-rich. Adverse consequences frequently occur -- did you read about France, Russia, Cuba, et al.?

1 Reply

Where is the US economy headed?

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