Where is the US economy headed?

Congratulations to you. My apologies about liberal Democrat if you aren't, but if you walk like a duck and talk like a duck, I figured you had to be a duck.

I do not say the following to argue. I simply want an honest answer. It goes like this. And I heard Rush say this, and I agree. All my life, I hear people complaining about how bad the economy is and how many people must be suffering. But when you ask them how they are doing, they are doing just fine. For some reason, everybody seems to think people other places are doing badly. But when you go there, you find out they are doing fine but think other people are doing badly.

So my conclusion is, as Rush concluded also, people have a false sense of how everyone is doing, and that really most people are doing pretty well. Do not mis-interpret this. I fully realize some people are poor and are unemployed, but my point is that the percentage of people suffering is really smaller than the popular perception is viewed to be, and especially in the media. Bad news sells, and that really is one of the roots of the problem.

okie, Your knowledge about drug addiction and alcoholism is lacking big time. Those people who become addicted to drugs or alcohol have an illness like mental illness. No difference; they all need help. Yes, it's a choice initially, but you must understand why kids try drugs or alcohol. It's more "normal" for kids to experiment with smoking, drinking and drugs. That some gets hooked is based on illness, not because they "love" the stuff. I'm one of the lucky ones that started smoking and drinking at a later age than most; about age 21. I've had my binges, and gotten sick from too much drinking, but still drink beer at lunch, and wine with dinner on many occasions. I can go without a drink for days or weeks, because I don't have the "illness."

Some of my friend's children are not so lucky; it often destroys the family in addition to their child.

I have very little patience for racial and homophobic bigots, and somewhat more patience for ignorance if they don't remain blind to the obvious. It's not that difficult to find resources today; especially because of the internet. Use it.

I used to be a registered republican because I believed in conservative socialism. All my siblings are still all republicans, but I changed my political affiliation to independent, because I will vote for the candidate I think best meets my ideal - whether democrat or republican. I believe in small government, less intrusion from our government, and self sufficiency. I also believe in universal health care. I also believe in helping those who cannot help themselves or have had some bad luck. That's the reason I only donate regularly to only two charities now; the Second Harvest Food Bank and Habitat for Humanities.

If I talk like a duck and look like a duck to you, you need glasses and a hearing aide.

I am quite aware of the modern trend of calling this an illness. Perhaps it is a form of illness after they are hooked, but not in the same sense as cancer or heart disease. It is demonstrated over and over again that for someone that truly wants to quit, there is help for them to overcome whatever it is. If you think I am not versed on this, you are wrong. Every family is touched by most things like this, and my family is no different.

There is peer pressure when young to start bad habits. I admit that. But that still does not remove the issue from being a choice. Man is a free agent. If we wish to blame everything on someone else or something else, then we are in for bigger problems. We must teach our children that they have choices to make, and that they will live with the consequences of their choices. To simply pass things off as Oh well, they are going to do it anyway, then they will. you are not going to convince me that alcoholism and drug abuse has no personal choice component in it.

By the way, small government and universal government health care is not consistent. You must be very conflicted in your philosophy, cicerone.

By the way, I know we disagree on many things, but I perceive you to be a good person and decent. Not so with a few others here. So thanks.

okie, No conflict in my mind; we are the richest country in the world and the only developed country without universal health care.

The following from Wikipedia on addition:

Decades ago addiction was a pharmacologic term that clearly referred to the use of a tolerance-inducing drug in sufficient quantity as to cause tolerance (the requirement that greater dosages of a given drug be used to produce an identical effect as time passes). With that definition, humans (and indeed all mammals) can become addicted to various drugs quickly. Almost at the same time, a lay definition of addiction developed. This definition referred to individuals who continued to use a given drug despite their own best interest. This latter definition is now thought of as a disease state by the medical community.[

Another chink in the armor
Shifting financial winds

Joseph B. Fuller The Boston GlobePublished: February 23, 2007





CAMBRIDGE, Massachusetts: For now, the United States lies at the center of the financial world.

Over the last 25 years, foreign companies anxious to be traded on American exchanges have adopted U.S. financial reporting standards. We Americans have exported such new forms of capital as private equity and venture capital. Executive compensation at foreign multinationals has followed American precedents. So have approaches to board governance, securities and antitrust enforcement regulation.

American professional-services firms ?- in investment banking, law, accounting and consulting ?- have shaped global practice.

Americans have benefited from the United States' global ascendancy in corporate finance, strategy and governance. U.S. policy has emerged as the world's "reserve policy," much as the dollar emerged as its reserve currency. That position is now in peril.

In 2000, 50 percent of initial public stock offerings in the world were listed in America; in 2005, only 5 percent. As capital markets mature elsewhere, migration becomes inevitable. U.S. Treasury Secretary Henry Paulson and others, however, are sounding an alarm that how Americans manage their affairs has accelerated that migration.



What's occurring in America's capital markets is not an isolated development, but the most visible manifestation of a bigger problem: the accelerating erosion of American law, practice and regulation as the global economy's de facto "reserve policy." This is happening because the two precious characteristics of U.S. policy ?- credibility and practicality ?- are open to question.

Though the Sarbanes-Oxley Act was meant to improve corporate governance, certain provisions have become burdensome for U.S.-based companies. The expensive and elaborate rules for listing on American exchanges have not helped, either. Nor has the lax oversight of financial reporting and accounting practices. Nor the high-profile instances of fraud. Nor the capriciousness of America's tort system.

In response to all these developments, policy makers have called for an overhaul of the regulations that govern everything from corporate financial reporting to taking a company public. The Securities and Exchange Commission has proposed a less restrictive interpretation of parts of Sarbanes-Oxley. Paulson and the Committee on Capital Markets have blamed cumbersome regulation for discouraging companies from borrowing money, listing equity or launching IPOs in the United States.

Mayor Michael Bloomberg and Senator Charles Schumer, both of New York, issued a report predicting Wall Street would lose its position as the world's financial capital without substantial reforms.

Policy makers and business executives are asking what we can do to put the genie back in the bottle. That question rests on two false assumptions ?- that a few bungled policies have precipitated America's decline and that rectifying those missteps will reverse it.

Were the American regime to fade further, the consequences would be serious. We enjoy a significant "home-field advantage" from the world choosing to adopt our rules. Losing that advantage will hurt. Direct costs will rise as companies comply with regulations devised elsewhere. U.S. firms and policy makers will have less influence on the evolution of global standards.

We will incur other less visible but more profound costs. Jobs will disappear. Worse, business-services jobs that would have materialized in the United States will migrate abroad.

Remedial actions such as those proposed by Paulson and others will help, and we need to look for other ways to restore America's credibility.

The voices that decry America's historical dominance and applaud the development of a multipolar world of capital markets should pause for reflection. The existence of a common set of rules has powered an unprecedented period of global economic development over the past quarter-century. If the United States doesn't set the international standard, then who will? How would all fare under a "Tower of Babel" regime of mixed and incompatible standards?

What we all should realize is that, despite its many shortcomings, the U.S. regime contributed mightily to growing global prosperity. The eclipse of that regime calls to mind the melancholy refrain of an old song: "You don't know what you've got till it's gone."

au, Good article; it shows another aspect of our economy that should be included in the mix of variable to determine how our economy is doing for the long term.

Fine, if you think we can afford it and should, but I was simply pointing out that you just got through saying you were not a typical liberal Democrat because one reason being you believe in smaller government. Well, duh, what do you think universal government supported health care does to size of government? So there is a conflict in what you say you are for in terms of size of government and what you think government should do. Thats like saying you believe in staying trim, but also preach the practice of eating a half gallon of ice cream 3 times a day. If you favor smaller government, you must also advocate government doing less things and being involved in far fewer issues and programs.

In contrast, I am for smaller government. I believe the federal government should withdraw totally from k-12 education. I also believe they should minimize any involvement in health care. We could go into the many other things they should not be involved in as well, but those two are biggies.

Read this, cicerone.
http://www.brusselsjournal.com/node/128

A quote from the above:
"The American Republic will endure," Toqueville said, "until politicians realize they can bribe the people with their own money."

We are spending two billion every week in Iraq; tax money that should be spent to help our own needs first. If you could let go of your obsession to label me as a liberal democrat, you would understand why universal health care is important to all children. Over and beyond all that, there is much government waste that could well pay for universal health care.

I am also for smaller government, but there are areas of social needs that require government involvement; such as infrastructure, security, education, health care, and securing for our retirement through social security and medical. Our government has mismanaged these programs very badly - both democrats and republicans.

As for public education, that's what helped jumpstart our economy after WWII and all periods after that and transformed us into the economic superpower of the world. Many countries without education are mostly third world countries without much hope of moving out of poverty; many still earn under $1 a day income.

Those with the best educational system will be the leaders of tomorrow; unfortunately, the US is falling behind in math and science.

Look at the facts, cicerone. Social spending is growing in terms of percentage of the budget, and our federal budget continues to grow overall. Defense spending is down. Iraq is costly, but overall, the trend is down for defense spending as compared to social spending.

http://mwhodges.home.att.net/fed_budget.htm

http://www.truthandpolitics.org/military-relative-size.php

Did you READ my link? Full scale pribery of voters has been going on now for a long time. To heck with the constitution.

And you will never spend your way to educational excellence anyway, in my opinion.

okie, The BIG picture is obvious; the federal deficit is at it's highest peak which translates into more dollars going into defense; not the other way around. Did you know that a good part of the federal budget doesn't include defense? It's because the president asks for supplementals during the year. Do the math.

All that the graph shows is that the relationship of defense spending vs the overall budget; not the "value" of defense spending over that same period.

okie wrote: Did you READ my link? Full scale pribery of voters has been going on now for a long time. To heck with the constitution.

So now, you're willing to throw out the Constitution? That's the only protection we have from presidents that act like kings.

And you will never spend your way to educational excellence anyway, in my opinion.

Where do you think most people in our country get their education from?
A: Public schools.

The debate is jumping all over the place, so it is difficult to focus on one issue. Perhaps my fault as much as yours.

You cannot escape the fact, cicerone, that social spending is increasing, while military spending has decreased over the last few decades. I am talking about an overall trend that you cannot dispute.

My comment about the constitution was based on the fact that politicians are bribing the voters. The more they promise, the more they will get votes, regardless of whether it is constitutional or not. I am not talking about the leftists hollering about Bush wiretapping terrorist suspects, which is really a miniscule matter compared to the larger picture. These statements I make are based on my belief that originally senators and congressmen were intended for the purpose of representing their districts or states to vote their conscience for what was best for the COUNTRY, not for their districts in terms of bringing back pork. Pork projects are many times not what the federal government should even be doing in the first place. I often read where one of the biggest aims of house candidates is to look after their districts, translation, bring federal money to their districts. They will do this even though it might be a waste of federal dollars and not even a function of what the federal government should be doing, but no matter, there is no longer a conscience by these people when they swear to uphold the constitution. I don't think they even understand the concept. They do this so they can be re-elected time after time, and the people think this is wonderful, unfortunately.

Bringing money into the district is only one facet of the problem. They will also vote for unconstitutional social programs across the country because the people demand them and now think that is what government is supposed to do. And the sorry educational system does not educate the modern generation to think any differently.

Public schools are over-rated. I argued many pages with Parados about this. My mother learned more in a one room school house in 8 years than most high school graduates learn now. At least she writes legibly, can add and subract, and can balance her checkbook. DC spends more on education than most places and has the worst test scores, I think. I would need to look it up, but throwing money at education will not fix the problem.

You cannot escape the fact, cicerone, that social spending is increasing, while military spending has decreased over the last few decades. I am talking about an overall trend that you cannot dispute.

A: Here, try this: (simplified) $100 annual federal budget in 1950. Defense budget is 28% of $100 = $28.
In 2006, the annual federal budget is $20,000, and 12% for defense equals $2,400. Now, the question becomes what role inflation played in these two scenarios.

My comment about the constitution was based on the fact that politicians are bribing the voters. The more they promise, the more they will get votes, regardless of whether it is constitutional or not. I am not talking about the leftists hollering about Bush wiretapping terrorist suspects, which is really a miniscule matter compared to the larger picture. These statements I make are based on my belief that originally senators and congressmen were intended for the purpose of representing their districts or states to vote their conscience for what was best for the COUNTRY, not for their districts in terms of bringing back pork. Pork projects are many times not what the federal government should even be doing in the first place. I often read where one of the biggest aims of house candidates is to look after their districts, translation, bring federal money to their districts. They will do this even though it might be a waste of federal dollars and not even a function of what the federal government should be doing, but no matter, there is no longer a conscience by these people when they swear to uphold the constitution. I don't think they even understand the concept. They do this so they can be re-elected time after time, and the people think this is wonderful, unfortunately.

A: It's our fault that we continue to reelect the same people that continues to do us harm. We have met the enemy, and it's us.

Bringing money into the district is only one facet of the problem. They will also vote for unconstitutional social programs across the country because the people demand them and now think that is what government is supposed to do. And the sorry educational system does not educate the modern generation to think any differently.

A: Education requires that the majority in our society are provided with the means to learn how to read and write. Without this very basic skills, our economy will drop like a ten ton sinker.

Public schools are over-rated. I argued many pages with Parados about this. My mother learned more in a one room school house in 8 years than most high school graduates learn now. At least she writes legibly, can add and subract, and can balance her checkbook. DC spends more on education than most places and has the worst test scores, I think. I would need to look it up, but throwing money at education will not fix the problem.

A: Not all children learn at the same rate nor up to the same level. That's the failure of our school system.
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$28.00 in 1950 is now worth about $229.00.

http://www.westegg.com/inflation/
I will need to take off here, and will check your numbers later.

okie, Read this article from USA Today. It might give you a clue.

What's the real federal deficit?
How many billions (or trillions) of dollars depends on how you do the accounting
By Dennis Cauchon
USA TODAY

The federal government keeps two sets of books.

The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.

The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included ?- as the board that sets accounting rules is considering ?- the federal deficit would have been $3.5 trillion.

Congress has written its own accounting rules ?- which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.

Last year, the audited statement produced by the accountants said the government ran a deficit equal to $6,700 for every American household. The number given to the public put the deficit at $2,800 per household.

A growing number of Congress members and accounting experts say it's time for Congress to start using the audited financial statement when it makes budget decisions. They say accurate accounting would force Congress to show more restraint before approving popular measures to boost spending or cut taxes.

"We're a bottom-line culture, and we've been hiding the bottom line from the American people," says Rep. Jim Cooper, D-Tenn., a former investment banker. "It's not fair to them, and it's delusional on our part."

The House of Representatives supported Cooper's proposal this year to ask the president to include the audited numbers in his budgets, but the Senate did not consider the measure.

Good accounting is crucial at a time when the government faces long-term challenges in paying benefits to tens of millions of Americans for Medicare, Social Security and government pensions, say advocates of stricter accounting rules in federal budgeting.

"Accounting matters," says Harvard University law professor Howell Jackson, who specializes in business law. "The deficit number affects how politicians act. We need a good number so politicians can have a target worth looking at."

The audited financial statement ?- prepared by the Treasury Department ?- reveals a federal government in far worse financial shape than official budget reports indicate, a USA TODAY analysis found. The government has run a deficit of $2.9 trillion since 1997, according to the audited number. The official deficit since then is just $729 billion. The difference is equal to an entire year's worth of federal spending.

Congress and the president are able to report a lower deficit mostly because they don't count the growing burden of future pensions and medical care for federal retirees and military personnel. These obligations are so large and are growing so fast that budget surpluses of the late 1990s actually were deficits when the costs are included.

The Clinton administration reported a surplus of $559 billion in its final four budget years. The audited numbers showed a deficit of $484 billion.

In addition, neither of these figures counts the financial deterioration in Social Security or Medicare. Including these retirement programs in the bottom line, as proposed by a board that oversees accounting methods used by the federal government, would show the government running annual deficits of trillions of dollars.

U.S. Govt Debt

Year US$ billions
1910 2.6
1920 25.9
1930 16.2
1940 43.0
1950 257.4
1960 290.2
1970 389.2
1980 930.2
1990 3,233.3
2000 5,674.2
2005 7,932.7
2006 8,506.9

okie, By your reckoning, inflation increased by 8Xs from 1950 to 2006.
However, the deficit increased by 33Xs during that same period (per above chart).

The defense expenditure in 1950 was 17%, and that translates to $43 billion. However, in 2006's budget, defense spending was 5% or $425 billion. Even with your 8Xs inflation rate, we're spending more today on defense than in 1950.

I have never defended bloated federal spending. You said you were for smaller government, but you implied we needed to spend more on social needs vs defense. You named "infrastructure, security, education, health care, and securing for our retirement through social security and medical." Now, the fact is, and I find myself repeating myself, expenditures on these things have grown far faster than for defense, so what you are advocating has already been happening, cicerone.

We created the most powerful and most industrialized nation on earth before social spending experienced the sharpest growth. One example is education. We were ahead of the world on many things before the federal government spent much of anything on education. It is my opinion that we are spending too much on social programs and I think it is directly related to politicians bribing voters. There is the very distinct possibility that we will eventually kill the goose that laid the golden egg. It will take a long time, but we are already seeing the trends. It is much like a sports team after winning, they become complacent, lazy, and take it easy, and before long, someone else is whipping them. We are no longer turning out engineers and scientists to keep us at the pinnacle.

I am tired of complainers that want the government to do more for everybody. It is doing too much now, and its time, as JFK said, for us to do something for the country, instead of the country doing for us, and I would add, something for ourselves. We have forgotten something called "citizenship." Do they even teach it in schools anymore?

By the way, Social Security is a Ponzi scheme, started by FDR, and someday such schemes will collapse like a house of cards, unless it is fixed. Bush tried but Democrats blocked the effort.

Some real quick math and I didn't double check, but if correct, defense grew by about 10 times, barely over the inflation rate, while everything else grew by over 38 times, almost 5 times the inflation rate. Your numbers aren't supporting your argument very well. I just took your numbers, but I need to double check given time. I need to quit this evening.