Where is the US economy headed?

@Miller,

considering that this mess was largely caused by the failure of government to properly regulate commerce, time now to kiss the crock of **** known as self regulation away. Now, among other things, we can move to get the meat and produce indurties reregulated so that we can stop having mad cow, salmonella and other unwanted additives to our kid's happy meals.

0 Replies

Quote:

A cut in overall lending would be a complete reversal of trend. Morgan Stanley reckons that total American debt (ie, the gross debt of households, companies and the government) has risen inexorably since 1980 to more than 300% of GDP (see chart), higher than it was in the Depression. Consumers, in particular, were encouraged to borrow by low unemployment and interest rates and (until last year) rising asset prices. Their debt jumped from 71% of GDP in 2000 to 100% in 2007, a bigger increase in seven years than had occurred in the previous 20.

If consumers start to save more or borrow less, spending suffers. In the last three months, America has seen the weakest car sales since 1993, according to Bloomberg. A general decline in demand will cause businesses to shed jobs, creating further falls in demand and more bad debts.

Once started, the process is hard to stop. “What the financial and household sectors are doing is unwinding more than ten years of a credit boom,” says George Magnus, an economist at UBS. “The idea that they can rid themselves of this problem in a matter of months is pie in the sky.”

Nicely illustrating my point that our "solid" economy is built on debt, in other words sand. Those who hold our debt have the power to determine what we are allowed to do. Our debt load has been rapidly on the rise for 30 years, unwinding that debt and getting the economy solid again is going to take at least a decade.

2 Replies

@Miller,

Quote:

Time to now kiss universal health care goodbye.

There have been a spate of programmes here to celebrate the 50th anniversary of the birth of our National Health Service.

The difficulties were presented in such a way as to suggest that the USA has no chance of introducing universal health care free at the point of delivery to every citizen as a right. They were fiendish. They still are.

0 Replies

@hawkeye10,

Quote:

Our debt load has been rapidly on the rise for 30 years, unwinding that debt and getting the economy solid again is going to take at least a decade.

It is a psychological problem at the consumer level. For investment in production it is normal capitalist enterprise. Mixing up the two is a major difficulty.

What do you propose Hawk to alter the psychology of the consumer given Media's role in creating it and the methods they have used?

I think you can trace the whole problem to allowing advertising on TV. "A licence to print money", a founder of British commercial TV called it. You also have newspaper conglomerates owning what is laughably called the local paper. And strong connections between TV and newspapers. And, it hardly needs saying, the financial system.

When Idi Amin expelled the Asian minority from Uganda he gave as his reason that they were "too clever for my people."

A decade is not a magic bullet. Reform of something is necessary. If you force people to economise against their will you do nothing to solve the psychological problem. You need to persuade them not to want to squander scarce resources and Media goes broke then.

1 Reply

@spendius,

this psychological problem has its roots in the "me generation" , this "you can be anything you want to be, have anything you want to have" megalomania has ever since been promoted by the corporate class which found something to gain by doing so.....the esteem of the masses and cash.

the solution is a depression, which we shall have, either now or later. Those who lived through the last major depression, that of the 1930's, we greatly psychologically changed by it.

You are correct that if we spend a decade unwinding this mess without a depression then we will not have solved the problem. It will wait until the next crisis, which will be worse than this one and not able to be repaired with out a depression. It has become fashionable to conclude that the normal cycle of boom and bust has been rubbed out, it has not. The "Great depression" was not a one time event, it is a normalally occurring corrective measure. We will do it again, we need to do it again, so that we can relearn lessons that we have forgotten.

0 Replies

@hawkeye10,

hawkeye, Without going back to look at total debt vs GDP, I do not believe I have ever seen anything like 300%. I've always had a gut feeling that the debt - even until recent times - were within the means of correction, and not the highest in history, nor with the same economic environment that has a much higher mix of products and services which tends to protect our economy today more than in the past.

Just my gut feeling, you understand.

1 Reply

@cicerone imposter,

correct so far as I know. What that means is that once this sucker crashes the pain will be extremely harsh. The theory of capitalism will be fighting for its very life. During the great depression we decided that we could tolerate capitalism so long as it was regulated by government. We have now seen how easy it is to do in government regulation, those who have done it have attacked the very theory of government, said that government was no longer needed (you heard a lot of this nonsense from the corporate class during the Clinton years, and Bush believes it). It is impossible to know how we move forward, except to know that the idea that the markets are always right is now dead. The idea that government is not a solution it is a problem, is dead. The idea that we can have what ever we want, is dead.

2 Replies

@hawkeye10,

another thing, there is no way America does not get blamed for thus. America bullied Europe into moving away from socialism, America had a lot to do with Asia adopting deregulated capitalism. America was supposed to be the economic expert, and we lead the rest of the world down the garden path after misrepresenting our abilities. America's esteem in the eyes of the rest of the world is in free fall, and deservedly so.

1 Reply

@hawkeye10,

Gander this, hawkeye:

AP
Senate sends big spending bill to Bush to sign

By ANDREW TAYLOR, Associated Press Writer 30 minutes ago

WASHINGTON - Automakers gained $25 billion in taxpayer-subsidized loans and oil companies won elimination of a long-standing ban on drilling off the Atlantic and Pacific coasts as the Senate passed a sprawling spending bill Saturday.

The 78-12 vote sent the $634 billion measure to President Bush, who was expected to sign it even though it spends more money and contains more pet projects than he would have liked.

A few hundred billion here, a few hundred billion there, and before we know, we're talking "real" money!

1 Reply

@cicerone imposter,

cicerone imposter wrote:

A few hundred billion here, a few hundred billion there, and before we know, we're talking "real" money!

Agreed, ci. I think you are quoting me from another post? I borrowed that line from I think it was Everett Dirkson, but changed the millions in his quote to billions to fit todays value of money.

I stand corrected, I looked it up and they claim he said a billion here and a billion there..... I thought he had millions in his quote. I remember it from a very long time ago.

P.S. We may need to pretty soon not in too distant future change the quote to a trillion here, a trillion there.....

0 Replies

@hawkeye10,

hawkeye10 wrote:

America's esteem in the eyes of the rest of the world is in free fall, and deservedly so.

Now that's dam tough! Guess we'll just have to stop giving all those foreign students visas to study here. And while we're at it, guess we'll just have to stop sending billions of $$ of FREE MEDICATIONS to the poor of Africa.

0 Replies

People, the bomb is huge that could drop on the Democrats in regard to this financial crisis and they know it. That is why they demanded bipartisan support of the supposed fix, to pull the Republicans in on a supposed crisis to make them partners in crime. We need to get the information out there. Information, information, information, it is power. Fannie and Freddie, home loans, corruption, cooked books, the Dems have blocked repeated attempts by Republicans to fix the problem for years.

Somehow, we need to get McCain off of his obsession with earmarks, and get him onto something important, like the Democrats screwing up the economy for years in the housing market.

1 Reply

@okie,

okie wrote:

People, the bomb is huge that could drop on the Democrats in regard to this financial crisis and they know it. That is why they demanded bipartisan support of the supposed fix, to pull the Republicans in on a supposed crisis to make them partners in crime. We need to get the information out there. Information, information, information, it is power. Fannie and Freddie, home loans, corruption, cooked books, the Dems have blocked repeated attempts by Republicans to fix the problem for years.

Somehow, we need to get McCain off of his obsession with earmarks, and get him onto something important, like the Democrats screwing up the economy for years in the housing market.

Send him an email Laughing

This part must be painful for you guys; desperately trying to find a way to blame what's doing on on the Dems, as the public seems to be busy blaming the Republicans.

Cycloptichorn

2 Replies

@Cycloptichorn,

Conservatives still refuse what's happening in the polls that "includes" conservatives, liberals, and independents. The majority believes Obama will be better for our economy, but those are small facts that seems to go over people on these threads.

They continue to cry "wolf," but few are listening any more.

0 Replies

@Cycloptichorn,

Cycloptichorn wrote:

okie wrote:

People, the bomb is huge that could drop on the Democrats in regard to this financial crisis and they know it. That is why they demanded bipartisan support of the supposed fix, to pull the Republicans in on a supposed crisis to make them partners in crime. We need to get the information out there. Information, information, information, it is power. Fannie and Freddie, home loans, corruption, cooked books, the Dems have blocked repeated attempts by Republicans to fix the problem for years.

Somehow, we need to get McCain off of his obsession with earmarks, and get him onto something important, like the Democrats screwing up the economy for years in the housing market.

Send him an email

This part must be painful for you guys; desperately trying to find a way to blame what's doing on on the Dems, as the public seems to be busy blaming the Republicans.

Cycloptichorn

We shall see, Mr. cyclops. I want to see some people put under oath.

Go ahead and laugh, but it is liberalism that has given us this mess.

1 Reply

@okie,

okie wrote:

Cycloptichorn wrote:

okie wrote:

People, the bomb is huge that could drop on the Democrats in regard to this financial crisis and they know it. That is why they demanded bipartisan support of the supposed fix, to pull the Republicans in on a supposed crisis to make them partners in crime. We need to get the information out there. Information, information, information, it is power. Fannie and Freddie, home loans, corruption, cooked books, the Dems have blocked repeated attempts by Republicans to fix the problem for years.

Somehow, we need to get McCain off of his obsession with earmarks, and get him onto something important, like the Democrats screwing up the economy for years in the housing market.

Send him an email

This part must be painful for you guys; desperately trying to find a way to blame what's doing on on the Dems, as the public seems to be busy blaming the Republicans.

Cycloptichorn

We shall see, Mr. cyclops. I want to see some people put under oath.

Go ahead and laugh, but it is liberalism that has given us this mess.

No, it isn't. It's deregulation. If we hadn't made it legal for every business to get in on housing mortgage securities, this decline would not have spread to our financial system. And that's a fact.

Cycloptichorn

3 Replies

@Cycloptichorn,

Dow ends 777.68 down, largest drop since 9/11 in terms of percentage, in terms of actual points, much bigger than 9/11 opening day drop.

Thanks House Republicans!

Cycloptichorn

0 Replies

@Cycloptichorn,

Cyclo, You're wasting your breath and your time; all one needs to do is look at Bush's white house reports on his push to Mae and Mac to make loans easier so more Americans can own their own homes.

0 Replies

@Cycloptichorn,

Deregulation absolutely. McCain. Gramm. Dejavoodoo Satanomics. McCain played a huge role in the deregulation. And a great role in what happened today. He told the nation during the debate "sure" when asked if he supported the bailout. He met with House Republicans and failed to get them to vote sure.

0 Replies

Obama: McCain's deregulation too risky for economy By JESSE J. HOLLAND, Associated Press Writer

WESTMINSTER, Colo. - Democrat Barack Obama said Republican John McCain's long advocacy of deregulation contributed to the current financial crisis and letting his GOP rival continue those policies as president would be a gamble "we can't afford."

After the House defeated a bill Monday to bail out the financial industry but also impose new federal controls on it, the Democratic presidential candidate said that McCain has "fought against commonsense regulations for decades, he's called for less regulation 20 times just this year, and he said in a recent interview that he thought deregulation has actually helped grow our economy."

"Senator, what economy are you talking about?" Obama asked.
http://news.yahoo.com/s/ap/20080929/ap_on_el_pr/obama

0 Replies

Where is the US economy headed?

Related Topics

Quick Links

My Account

able2know