Where is the US economy headed?

@spendius,

Quite right. Well, politics has always intruded into science and economics.

Well, rjb, you now know more than I did.

@roger,

Quote:

Well, politics has always intruded into science and economics.

And we will have to hope that it always will.

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Home foreclosures up:

http://www.foxnews.com/story/0,2933,539235,00.html?test=latestnews

"Number of U.S. Foreclosures Rise 7 Percent From June to July
Thursday, August 13, 2009

WASHINGTON " The number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the escalating foreclosure crisis continued to outpace government efforts to limit the damage.

Foreclosure filings were up 32 percent from the same month last year, RealtyTrac Inc. said Thursday. More than 360,000 households, or one in every 355 homes, received a foreclosure-related notice, such as a notice of default or trustee's sale. That's the highest monthly level since the foreclosure-listing firm began publishing the data more than four years ago.

Banks repossessed more than 87,000 homes in July, up from about 79,000 homes a month earlier."

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@okie,

I was listening to an economist last night--I can't remember his name--who theorizes that as much or more than half of the mortgages the government is pushing with the hefty first-time home buyers credit will be under water by 2011 if the government continues on the course it is currently pursuing and the number of foreclosures and bankruptcies will accelerate to the detriment of everybody else.

He said you cannot fix the problem with easy credit, pork barrel, tax increases, and give away programs. It will be necessary to implement substantial targeted tax cuts and provide other real incentives for small business to again be willing to start hiring and taking some risks to expand.

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I read about the job losses this morning, bad news.

However, whether it actually works or not, Obama did include tax cuts for small businesses.

Quote:

The American Recovery and Reinvestment Act of 2009 (commonly called the “stimulus package”) was signed into law by President Obama on February 17, 2009. The stimulus package contains several provisions aimed at helping small businesses, including certain tax cuts and Small Business Administration (SBA) loan provisions.

source

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@okie,

okie, Believe it or not, foreclosures increase when more and more Americans continue to lose their jobs. That's not even Economics 101. Job losses increased during GW Bush's tenure to over 600,000 every month.

Do you have a solution to reverse this trend? If so, please contact the white house immediately, and share your solutions with them.

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@revel,

As a small business owner, I can say that the so-called 'tax cuts' were too small, too limited, too selective, and did little or nothing to stimulate growth which is the only thing that is going to get us out of the recession. So far Obama has been pretty consistently anti-business while continuing to push his keynesian economic theories which are increasing the deficit and debt by alarming and unsustainable proportions month by month.

Even the housing credit for first time home buyers ix encouraging more irresponsible borrowing and setting us up for another housing bubble a year or two down the road. Cash for clunkers is great for auto dealers but is almost certainly taking business away from other retailers so there is no net economic stimulus. And we are also building something of an auto bubble that is likely to come home to roost a year or two down the road too.

The government cannot spend us into prosperity. It needs to pull in its horns, cut government spending back to bare bones necessities, let the peole keep and use their own money, and let the economy work itself out of the doldrums. Had the government done that from the beginning, I believe we would be steadily climbing out of the recession by now.

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@Foxfyre,

Foxie, The government is not trying to spend our country into prosperity by their spending; they are trying to revive an economy that would otherwise fall into an abyss from which a turn-around would be impossible. Your view is biased and myopic that you generalize from your personal experience. Our economy is a combination of many products and services not seen before in the history of man. Those who have managed their businesses properly will have a head's up on survival. Those who didn't should go bankrupt; that's the normal basis of capitalism.

Most businesses are struggling today, because consumer spending has been dropping dramatically since this recession started in 2007, and as more people lose their jobs, they will also stop spending and many will lose their homes.

The good news and the bad news is that more people are again putting money into their 401ks, and many of the companies that stopped this benefit are planning to restart this program withing the next six months (according to the WSJ).

One of the biggest winner of this recession is WalMart; their prices are competitive, and more shoppers are looking for bargains. Most other retailers are losing business, and are closing stores.

Even Kaiser Hospital in Northern California will be laying off over 1700 workers. When people lose jobs, they also lose their health insurance, and the demand on hospitals decrease. Economics 101.

1 Reply

@Foxfyre,

Foxfyre wrote:

I was listening to an economist last night--I can't remember his name--who theorizes that as much or more than half of the mortgages the government is pushing with the hefty first-time home buyers credit will be under water by 2011 if the government continues on the course it is currently pursuing and the number of foreclosures and bankruptcies will accelerate to the detriment of everybody else.

He said you cannot fix the problem with easy credit, pork barrel, tax increases, and give away programs. It will be necessary to implement substantial targeted tax cuts and provide other real incentives for small business to again be willing to start hiring and taking some risks to expand.

Foxfyre, the idiots running the government now apparently do not understand that simply taking a bucket and dipping it into the same stale lake and pouring it out in different places does nothing to restore the lake with new fresh water. The way to fix this is to invigorate free enterprise, to allow them to create and produce new wealth, which creates jobs and wealth. Simply consuming existing wealth does nothing. Bush understood this. Obama does not. Their policies are silly.

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@cicerone imposter,

cicerone imposter wrote:

Foxie, The government is not trying to spend our country into prosperity by their spending; ....

Uh, ci, are you sane? Sorry for the sarcasm, but seriously, it is obvious that they are.

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@okie,

okie, Your analogy has no comparison to the "real" world.

How do you "invigorate" free enterprise when job losses continues to increase?

1 Reply

@cicerone imposter,

cicerone imposter wrote:

okie, Your analogy has no comparison to the "real" world.

How do you "invigorate" free enterprise when job losses continues to increase?

I have given you several proposals, all of which you either forget or ignore. First of all, we must again become competitive with the rest of the world. And energy is crucial, I have pointed this out numerous times. Tort reform, educational reform, so on and so forth, I have told you many things in the past. Meanwhile, the anti-business Obama administration continues to foster an adversarial relationship with the people outside of governemnt that actually produce something. He instead focuses on giving stuff away, or nationalizing industries for the government to run. It won't work. It never has, and it won't now, even if Obama thinks he is the messiah.

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@okie,

There are reports that France and Germany have snapped out of recession unexpectedly early ... because as economists point out , for example the German government has been able to finance an extensive system of job subsidies to keep unemployment down.

What helps here mustn't help there -but this "relative strong performances in the euro currency zones two largest economies helped pull the entire region to within a whisker of recovery" reports the (London) 'Evening News in it's afternoon edition [not online yet] (frontpage and page 4 of the "News Extra" edition)

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@okie,

okie, See Walter's post below yours for all the answers necessary to refute your opinions.

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@cicerone imposter,

Well, our conservatives (in the government) didn't really like what was done, and especially lately, quite close to the next general elections, they openly wanted to stop much of what they earlier agreed on (namely the initiatives of the Social-democrats in the government).

But now, from today onwards when the data came out, it's all of course their invention ...

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@okie,

We can't control energy or anything on your list within a fortnight.

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@Foxfyre,

Quote:

As a small business owner

Why am I not surprised you have yet again cited your own professional experiences into the debate as some kind of proof. I'll take it with a grain of salt.

Other than the two wars, we did cut back government spending down to the bare necessities plus huge tax cuts and we have seen the proof of such action which got us into this mess to begin with.

Moreover, according to the report people are knuckling down and spending less and borrowing less.

Consumers borrow less for 5th straight month as they rebuild nest eggs

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@okie,

okie, If your list is so important in controlling our current financial crisis, why didn't Bush do anything about it when oil hit over $400/barrel? You did list "energy" didn't you?

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@cicerone imposter,

He could have done more with an intelligent Congress, but he did not have one.

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From Reuters:

Quote:

Retail sales fall, new jobless claims rise
Reuters

Sales at U.S. retailers unexpectedly fell Reuters " Sales at U.S. retailers unexpectedly fell in July from June, a government report showed on Thursday, …

* Germany and France in the black Play Video Economy Video:Germany and France in the black Reuters
* MoneyWatch: Jobless Rate Soars, Retail Sales Sag

Related Quotes Symbol Price Change
^DJI 9,364.56 +2.95
^GSPC 1,008.61 +2.80
^IXIC 2,003.00 +4.28
By Lucia Mutikani Lucia Mutikani " 49 mins ago

WASHINGTON (Reuters) " Americans shopped less in July and more signed up for jobless benefits last week in a double dose of bad news for the U.S. economy just a day after the Federal Reserve said it saw a leveling out of the slump.

A Commerce Department report on Thursday showed total retail sales edged down 0.1 percent after increasing 0.8 percent in June. Excluding motor vehicles and parts, sales fell 0.6 percent in July after rising 0.5 percent the prior month.

Analysts had expected a boost to retail sales from the government's "cash for clunkers" program and predicted a 0.7 percent advance in overall July sales.

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Where is the US economy headed?

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