Where is the US economy headed?

In my opinion, the only long term answer to the economy is to be able to compete in the world market.

One factor that would help is reform in the area of taxation. I hate to support Huckabee, but it wasn't his idea originally anyway, but I think we need to revamp our tax system totally, and scrapping the income tax in favor of a retail sales tax deserves consideration for several reasons, one being it could level the playing field between products without regard to where they are manufactured. Perhaps we could bring some manufacturing of goods back to our shores. At least, they wouldn't go to other countries to avoid taxes.

Another factor is the cost of health care, insurance, etc. This is becoming a huge noose around our neck and we need to inject more free market forces back into the system to bring costs down. For one thing, we have way too many lawyers in this country bleeding the economy, including health care.

In regard to natural resources, we need to abandon failed policy of locking up resources and return to multiple use concepts. We need to open up drilling, mining, and logging, here in our own country to avoid importing so much.

Lastly, education, it needs major reform, and we need to free up the system from the death grip of the teachers unions and government run schools. Simply throwing more money at a broken system won't work.

Those are just a few major points, but in general, we have to return to total faith in the free market, as that is the only vehicle to prosperity. Government has proven over and over again that it is not.

Free trade fears on the rise
Economic anxiety has inspired a backlash against free trade, as a new Fortune poll shows, giving Democratic candidates a potent issue. Will it lead to protectionism?


" "We are the champions - of the world" may be the verse that rings out in stadiums across the U.S., but in the great game of global trade, Americans are increasingly feeling like the losers. A large majority - 68% - of those surveyed in a new Fortune poll says America's trading partners are benefiting the most from free trade, not the U.S. That sense of victimhood is changing America's attitude about doing business with the world.

We are a nation crawling into a fetal position, cramped by fear that America has lost control of its destiny in a fiercely competitive global economy. The fear is mostly about jobs lost overseas and wages capped by foreign competition.

But it is also fueled by lead-painted toys from China and border-hopping workers from Mexico, by the housing and credit crisis at home, and by the residue of vulnerability left by 9/11 and the wars that followed. Americans were willing to experiment with open borders during the exuberant 1990s. Today that mood has darkened. We are turning inward. Especially now, as the U.S. economy sputters, we are on the verge of becoming a country of economic nationalists.
http://money.cnn.com/2008/01/18/news/economy/worldgoaway.fortune/index.htm?postversion=2008011811

Ramafuchs, we are a spoiled rotten society here. And a bunch of whiners and complainers, as exemplified by the cis of the world. We would rather pay the Chinese that live in mud huts make our products, and still live like kings here. Sorry, we can't have it both ways, and we are in for a wake-up call. We are to blame, and I also blame the whiners and complainers that say we are so bad off here. The truth is we aren't that bad off, yet, but we better wake up to the fact that there are opportunities all around us, but it requires work, and we can't sit on our behind and expect to make 100 grand a year, or get off our behind once a day to go get our government check.

We also need to give up our selfish ways, and realize we can't protect 3 or 4 yellow bellied horned toads somewhere, have environmental groups sue the bejeebers out of anybody that wants to do something, and we need to quit being so selfish and drill our own country for oil instead of raping some far off land somewhere to satisfy our cushy lifestyle. Just a couple examples.

okie, Your post 3047577 is an excellent analysis and perception of our economy; and what needs to be done to improve it. I wish I had written it.

You're kidding? You have to be joking????

If that is the case, I take back what I said about you in the last post!

You don't have to take back anything; I also anticipate that what you post will be nonsensical without much insight. I have seen some of your posts in the politics threads that are also well thought out and insightful that shows you know the topic pretty well. In many of those cases, others have acknowledged your post with positive responses, and I didn't feel the need to repeat it. Just because I disagree with the majority of what you opine doesn't mean much beyond my criticisms. I always have disagreements with my siblings as the "yellow sheep" of the family. I know they still respect me for my views.

This may be a radical idea but instead of giving money to people and hope they spend it on US products . Would it not be better to institute a "WPA' program giving people meaninful jobs and at the same time repairing and rebuilding the infranstructure in the US.

I agree 100 percent with this viewpoint; it must be long-term and almost permanent for our economy to get back on track. A one time rebate will only delay what is inevitable.

Fiscal stimulus folly
By Steve Chapman
January 19, 2008

In the best of times, most members of Congress are to fiscal irresponsibility what alcoholics are to the bottle ?- unable to resist even though they know they should. So imagine how our leaders will behave once they are told that budgetary indiscipline is no longer a vice but a virtue.



That's the counsel now from some economists and all three major Democratic presidential candidates. With a possible recession looming, they insist the federal government needs to provide a stimulus to the economy by spending or rebating money it doesn't have. That will put more cash in the pockets of consumers, who will then spend it, boosting the fortunes of companies and their employees and staving off a downturn. Or so the thinking goes.



Hillary Clinton has proposed a package that includes money to help homeowners pay mortgages they should not have taken out, as well as funds for "alternative energy investments" that might fail the cost-benefit test on their strict merits, and possibly direct rebates, too. Barack Obama wants to provide immediate tax cuts of $250 per person, while encouraging jobless workers to remain jobless by extending the time they can collect unemployment benefits. John Edwards' plan includes many of the same elements.



But skepticism is in order. Any money that the government lays out, after all, will not drop miraculously from the sky. Since the federal budget is already running a deficit, those funds must be obtained the old-fashioned way ?- by borrowing. More money would be spent by those who get the help, but less would be spent by those who provide it. So the whole transaction may add up to not much more than zero.



Giving money to people, as Mr. Obama urges, is the most direct type of stimulus. Oddly, though, there are only paltry grounds to prove it actually works. In 2001, the Treasury mailed rebates of $300 to $600 to taxpaying households, something the Bush administration later credited for invigorating the economy. Later studies found people generally declined to go out and spend, preferring to save the money or pay down debt. The booster rocket never left the launch pad.



Back in 1993, by contrast, President Clinton said a fiscal stimulus was essential to revive economic growth. But Congress refused, and the productive sector somehow managed to grope its way, unstimulated, into the longest peacetime expansion in history.



In their more sober moments, economists offer numerous reasons to treat fiscal stimulus as a wasteful charade. William Gale and Samara Potter of the center-left Brookings Institution noted in a 2002 study that tax changes of the sort contemplated today have "a weak record in stimulating short-term economic activity."



Even if you believe a fiscal stimulus can work, it's unrealistic to think these plans would do the trick. Mrs. Clinton and Mr. Obama envision packages worth $70 billion and $75 billion, respectively. But that amounts to just one-half of 1 percent of our annual output. It's like giving you a dollar every time you spend $200. Would that change your total economic activity? No? Then it probably won't rev up the nation's.

Another problem is that to succeed, a transfusion of federal cash has to be timed just right. That is not easy given that (a) the legislative process often moves at the speed of continental drift and (b) the president and Congress can't agree on whether the ocean is salty.




Peter Orszag, director of the Congressional Budget Office, told the Wall Street Journal, "Most of the stimulus options under consideration would be difficult to actually get out the door in the first half of 2008." By the time a program spreads its healing balm, we may find the recession has died a natural death ?- or was never born.




So we don't know that these efforts to stimulate the economy will have the helpful impact promised. We do know that they will have one regrettable consequence: putting the government ?- and thus the taxpaying public ?- deeper in debt.




We may never reap the benefits of a fiscal stimulus, if it comes to pass. But rest assured, we'll be paying the price for years to come.

Any "stimulus" package will put our government deeper into debt, but to help our country while spending 2.7 billion in Iraq isn't even a question of priorities.

We need to put more Americans into jobs, not a one time "rebate" of taxes.

We have a 11 trillioin dollar economy; and we're losing ground fast as more banks and financial institutions reveal the degree of losses. Money is what stimulates our economy, but it has to come from jobs - not one time handouts. With jobs, people pay taxes, and the circulation of money is what creates more jobs. This is the only option available to stimulate our economy.

Au
what you had typed just above is my views. Unfortunately many have other views which will make the life more troublesome, laborious and annoying.
Thanks

Ummm...except for the fact that these WPA-like projects effects would affect too small of a percentage of the economy. Can you build a bridge or can your neighbor? Who exactly can build a bridge?

IMHO, the downside of starting these sort of projects would affect such a small number of construction workers so as to have a potentially minor economic effect. A home-builder is not build a bridge and vice-versa. So the potential effect on employment of PART of the construction industry is at stake here, and is what these projects REALLY would improve - not totally insignificant but probably not enough to move us out of recession.

Now if you are talking about TRAINING more unemployed people to build bridges and putting them in high paying jobs in construction, you might have me on board.

Is my thinking wrong? Do you disagree?

< The WPA built not only roads, bridges tunnels and the like they also built buildings
< Construction is construction , people in the industry as well as those not presenly in it can be taught.
< I should note I remember during WW2 people who didn't know a hammer from a screwdriver became almost overnight machinists,welders,shipbuilders and the like.
Regarding whether iot would help. Sure it would putting people to work and earning a salary will give people hope and put money in their pockets that through their spending will create jobs for others. It certainly will help more than a short term infusion of dollars into our tottering economy.
It will have the effect of a snowball rolling down a hill.

I should also note that these are jobs that can not be sent off shore. In addition I would hope that all materials used on these projects be products of the US.No foreign materials allowed.

But is all this (using USA based materials) a reality? At this time in America, can this sort of WPA-like project happen? Can there be such a series of corruption-free massive work projects and is there such a work ethic still there that would make all these projects be cost effective?

Ragman
kindly excuse me for my intrussion.
Are you of the opinion that USA and 30 million consumer are the best?
I can cut and paste with trillion threads.

Take care and watch the world as it is.
let us leave our decency behind when we go out of this uncongenial world.

Rama: You continually confuse me. What does the above mean and from where (and why) does this generate? What 30 million consumers (of what) do you refer?

And, finally, how does this relate to what currently is being discussed? The subject being discussed here is "Where is the US Economy Headed". Are you denying that the USA economy is the largest? Where is it that anyone said it's the best?

It only becomes a potential intrusion if you are off the subject or misdirect it by cutting and pasting. Is there something you don't understand? It greatly helps the flow of discussion if you understand and want to participate in the subject matter at hand. Is it your intent to derail the conversation?

Sorry .
Your views are that of the many around you.
my views are global .
would you please forget your intellectual views when you chat in A2K
Read this thread and assess your observation about me.
Allow me to admit my ignorance and uphold the humanity
Regards
Ramafuchs

au, I think it would be unrealistic to expect the US to produce all of the building materials needed on construction projects. Otherwise, I agree with you that out of all the options our country wants to consider to bring our economy into a more healthy state is for our government to spend it on WPA projects; roads, bridges, schools, etc.

This is the only way to increase consumer income and income taxes to help our government get out of the mess already created by the two wars, and our governments inability to control spending on pork.

In this circumstance I feel that your expression about having a global view somehow attempts to derail the discussion. Your certainly entitled to have such a view, but I'm still baffled about the relavence to the discussion. Nonetheless, I wish you well.

Pondering CI's comment about controlling pork and thinking about the quote about how to teach a pig to sing and how it always fails and only angers the pig.