Where is the US economy headed?

Unemployment rates for all of U.S., for conservative Oklahoma, and for liberal California, for comparison purposes.
http://www.google.com/publicdata?ds=usunemployment&met=unemployment_rate&tdim=true&dl=en&hl=en&q=unemployment+rate+graph#met=unemployment_rate&idim=state:ST400000:ST060000&tdim=true

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@roger,

roger wrote:

I think recent gains in the DOW are related to retail sales, rather than anticipating coming elections. The volatile portion of stock market activity doesn't seem to look that far ahead.

Maybe, but I would like to review the last 3 years again with the following chart. Take a look and what happened in mid 2008 when the Dow experienced a distinct drop, and again in October November, followed by another distinct drop January, 2009. All of these I would consider the "Obama Effect," the first when Obama turned the corner against Hillary and his poll numbers increasingly showed a likely fall victory, then as the election neared and polls showed a likely victory and victory in November, then the inauguration in early 2009, all three of these points in time registered a distinct drop in the market, there is no question about his whatsoever, this is history, and it definitely bears upon the economic outlook of investors and translates into the performance of the DOW.
The last year shows a crawling back of the DOW, slowly, I think because there isn't many other options for investors and Americans are basically optimistic, but nothing very spectacular at all. I still think a likely victory by Republicans this fall will impact the market all the way along as the outlook develops. This is only my opinion, not hardened about it, economics and the stock market is a guessing game, if I had it figured out for certain, I would have quit working a long time ago and become a full time investor. The farmers in Oklahoma have always said you can gamble many different ways, one is to invest in Wall Street, another is to farm.

http://markets.money.cnn.com/cgi-bin/upload.dll/file.png?z038a100azc81e41677a35483798f93c6b05a015d3

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@okie,

As I look at the above graph, a question for folks, what is the dip in early 2010, is that the Obamacare impact, or what?

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@realjohnboy,

realjohnnyboy wrote:

Is there a spin doctor in the house? The DJIA is flirting with 11,000 with 20 minutes of trading left. Purely a psychological hurdle, but given the evidence above - in black and red, in bold type and capital letters - how can investors not realize that the economy is going to hell in a hand basket?

Because they're not realizing that stock indexes aren't saying much about about the state of the overall economy. (I have no idea why the business press is so hung up with them.)

The value of a stock is the sum of all its future profits, each discounted at market interest rates according to how far in the future they occur. Therefore, if stock prices go up, it could be because investors expect profits to increase, suggesting an improving economy. Or it could be because investors expect future interest rates to stay down, suggesting an economy stuck in the ditch. That's why the ups and downs of the stock market don't say much about the economy. Spin doctors can use them to "prove" any point they want.

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Unemployment continues to rise, taxes are about to rise and the commercial real estate
market is about to crash... I hope this isn't the kind of change Obama was talking about.

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Quote:

Grassfire Nation News Alert
Budget Deficit
4/9/2010

...

Yesterday, the head of the Congressional Budget Office (CBO), Douglas Elmendorf, said our nation's budget deficits are "unsustainable' and "can't be solved through minor changes."

Here's the full quote:

Quote:
"U.S. fiscal policy is unsustainable, and
unsustainable to an extent that it can't be
solved through minor changes".
"It's a matter of arithmetic."

The situation is so bad that Elmendorf also admitted that the CBO is beginning to study the impact of adding an entirely new tax to the federal taxing scheme: the value added tax (VAT). The VAT is expected to be the favored new tax of Obama's so-called Deficit Commission.

+ + Deficit numbers staggering

Also, recent numbers from the Treasury on the fiscal year 2010 federal budget deficit are staggering:

--A record $220.9 billion deficit in February alone

--For every dollar in taxes and other revenues
the federal government took in, the government
SPENT $3.05.

--Five-month deficit total: $651.6 billion, more
than 10 percent higher than last year's record.

--The five-month total is larger than any YEAR in
American history prior to 2009.

--The FY2010 budget deficit is now projected to
be $1.56 trillion AFTER stealing from the Social
Security Trust fund.

--The CBO projects that interest payments on the
debt will total $916 BILLION annually by the
end of the decade.

1 Reply

@ican711nm,

And to combat this, we must cut spending AND raise taxes on all levels of income. There is no other way.

Cycloptichorn

1 Reply

@Cycloptichorn,

I am proud of you. Of course, you don't get elected by making statements like that.

1 Reply

@roger,

roger wrote:

I am proud of you. Of course, you don't get elected by making statements like that.

Well, that has been my consistent recommendation for some time now. And I would add that one party is at least willing to raise taxes, while the other stubbornly refuses to even entertain the idea.

The natural riposte would be to accuse that same party of being unwilling to cut spending, but the record from the other side makes that rather weak.

At this point we have two different parties who lack fiscal discipline - but the Republicans to a far greater degree then the Dems.

Cycloptichorn

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@Cycloptichorn,

Well, yeah. I have to admit to a certain embarassment, seeing the liberal contingent having to take the Bush administration and his Congress to task for fiscal responsibility. I can't agree that the Republican party is given to greater excess. I suspect we have differences on relative importance of various spending priorities.

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@roger,

roger wrote:

Well, yeah. I have to admit to a certain embarassment, seeing the liberal contingent having to take the Bush administration and his Congress to task for fiscal responsibility. I can't agree that the Republican party is given to greater excess. I suspect we have differences on relative importance of various spending priorities.

Well, as I don't put wars of convenience high up on the priority list, I'm sure I'll agree with you on that second one. A trillion dollars down the drain for Iraq, nothing to show for it at all (except greatly inflated accounts for Republican-affiliated military industries and contractors, that is).

Cycloptichorn

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CBS had a poll recently wherein just 1% felt they paid less than their fair share of taxes. They must have called Roger and Cyclops Smile

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@roger,

roger wrote:

I can't agree that the Republican party is given to greater excess.

What about the 300 gigabucks a year from fraudulently starting an unfunded war in Iraq that did the US no good? Plus about the same amount in unfunded tax cuts that did not increase the economy's productivity beyond the rate it had already been increasing under Clinton? I'd say that was pretty excessive. I'd also say it was more excessive than the stimulus packages that will peter out when consumer and investment spending return to normal.

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@Irishk,

More than I wanted; less than my fair share.

Never cheat, but take every legal opportunity offered.

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@Irishk,

Irishk wrote:

CBS had a poll recently wherein just 1% felt they paid less than their fair share of taxes. They must have called Roger and Cyclops

If they had polled me, I would have reported exactly that. I think we all should be paying more right now.

I honestly believe that anyone who disagrees has no real understanding of our nation's financial situation, and is too short-sighted to see the problems which come with ignoring it.

Cycloptichorn

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@Irishk,

Irishk wrote:

CBS had a poll recently wherein just 1% felt they paid less than their fair share of taxes. They must have called Roger and Cyclops

Did CBS ask them if they felt they got more than their fair share of government services?

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@Thomas,

Greater.

Stimulus will peter out, but programs started tend to live forever.

1 Reply

@Thomas,

Comes to the same question, doesn't it?

1 Reply

@Thomas,

Thomas wrote:

Did CBS ask them if they felt they got more than their fair share of government services?

I'll have to get back to you on that. I'm on hold for Tim Geitner and Charlie Rangel......

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@roger,

roger wrote:

Stimulus will peter out, but programs started tend to live forever.

But the spending programs Obama started, most prominently the health care bill, are funded with taxes. That's an important difference to Bush's spending bills, and that's what makes Bush's fiscal excesses greater.

1 Reply

Where is the US economy headed?

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