Where is the US economy headed?

how much falling is that??

The 33% drop reported today from a government agency was for NEW homes sold in May. An industry group reported earlier in the week that sales of EXISTING homes fell a much more modest 3%. I assume an existing home is one that was previously owned.
Part of the drop in both categories is no doubt due to the expiration of the tax credit. Exacerbating the new home numbers could be the fact that builders are not bringing new product to market.
I am not trying to sugar coat the numbers with excuses. But I do want to toss that out as clarification.
The housing market is bad. There is no doubt about that. I don't know where the bottom is.

Depending on the market, that's another 20-30%.

Cycloptichorn

Has anyone considered that, perhaps, there is not a great need for new homes? After all, the current problem with the Spanish economy is due to overbuilding.

Last November it did the same thing. They are trying to squeeze in another but I think people are starting to catch on that stimulus isn't doing anything except pushing the problem further. Stimulus is not a solution to anything and actually it will only make things worse.

The only way this is going to fix is if either the FED gets abolished (which will never happen) or they increase interest rates so people stop borrowing and spending. Allow the housing prices to reach their equilibrium price which is probably somewhere around 60-70% less than they currently are.

But the FED doesn't want to do either one, because currently the US economy relies heavily on consumer spending. They figure in consumer spending into the GDP, but how consumers buying products equates to production is nothing short of fraudulent claims. It is Enron accounting but since it is the government doing it, it is okay and no one cares.

The Chinese recently decided to stop pegging their currency to shadow the fall of the dollar. This is a really bad sign for the US. However; I have suspected for a while now ever since the FED announced that they were going to start buying back their own bonds. How if you are broke and borrowing money, does it make sense that you would pay back your own loan with purchasing your own loan? That is nothing more than borrowing from yourself, so it is nothing more than a scam.

I bet the Chinese have stopped buying US treasuries and currently I bet that the US is purchasing every single bond issued. Which doesn't make any sense but it is the only way they can mask their "injecting liquidity" into the market. In other words, printing money or changing bank balances to reflect an increase in capital.

For every dollar that the US government spends it is borrowing 40 cents of it. If you were to ask any financial adviser if it is wise to barrow 40 cents for every dollar you spend, they would tell you, that you are insolvent.

The FED has been upset with the Chinese for quite a while because they were allowing their currency to shadow the US dollar. The reason why the FED was annoyed is because the Chinese hold a lot of US debt and the US wants to monetize it's debt with China. Basically it is an undermined way to get out of paying your debt by devaluing the dollar. So as the US prints more money the value of the dollar drops accordingly but since the Chinese are invested financially, if they were to fix their currency the amount of dollars their investments would be worth would drop along with the falling dollar.

This would mean anyone invested in the dollar would lose money. So to prevent this, the Chinese allowed their currency to fall along side the US dollar to keep the exchange rate balanced. However; doing this would also destabilize their own economy and they knew this, but have recently changed their policy and have ceased doing that. Which means trouble for the US economy.

We are running full speed towards a cliff without a bridge. The US economist are trying to tell the public that everything is fine, but that is nothing different than an airplane captain trying to keep everyone from panicking when the plane has lost all engines and is plummeting towards the ground. It is only a matter of time before impact and at the other end you'll hear them all say, "Well no one saw this coming, no one could have predicted this." It is bullshit but everyone will soak it up like they always do.

without jobs people are either on the street or living with others....families are increasingly doubled up. Also, second homes might again be part of the lifestyle only of the rich.

That's not what I am talking about but rather the poor planning AMericans have always exhibited and their Pollyannish belief in the continued growth of all market segments of the economy.

Well, the population is growing, so I imagine some growth in most market segments is to be expected, provided jobs are growing with population and salaries are staying at least steady.

Of course we know that jobs are not growing and people with jobs are seeing their salaries decrease (on average) so it makes sense why there's no natual growth right now.

When Democrats are kicked out of office.

And when that happens, within just a few days, everyone will have jobs and the prices of houses will get back up to where they were in the bubble days. We won't have to worry about using less oil. We can drill, drill and drill some more.
Consume, consume and consume some more. Spread the cities out into the suburbs. Gobble up farmland. Build more highways.
Happy days will be here again.

Responsible government does not fit the picture you are trying to paint, rjb. In the first place, much of our population growth is due to illegal immigration, so to assume that responsible government and economic health will bring unbridled growth is not exactly honest. One thing is for sure though, we need a government that does not have an adversarial attitude toward the private sector as the Democrats do. The economy is greatly influenced by future outlook and confidence, so yes, once people have reason to be optimistic, the economy should begin to improve ahead of the primary changes needed in government to bring about more healthy economic conditions.

In regard to energy, we need responsible energy development not only in oil and gas, but in coal, nuclear, as well as wind and solar and other alternatives, but allow the private sector to take the lead in those areas. Capitalism does involve consumption, as it does production, but face it, without it, the economy completely tanks, is that what you want, no consumption and no production, how silly is that? In fact, I find your comment about spreading cities, gobbling up farmland, building highways, etc. as being pretty childish, rjb, sorry to have to say that.

I agree with rjb here.

First, responsible gov't in america isn't something I ever expect to actually see. It doesn't have anything to do with democrat or republican either. I've seen both sides act equally irresponsible.

Illegal immigration is a buzzword topic which is sensationalized and used to seperate people's opinions more.
Until the left and right can agree to improve our system which allows or disallows people to become citizens, we won't see improvement. There's a giant hole that people can get sucked into here. I know people first-hand who would love to obtain citizenship. For one reason or another, they cannot. Mostly due to economic barriers.

We need to stop developing oil and gas energy. Completely. And stop on coal too. They are a thing of the past.
Nuclear, wind, solar, and soon to be hydrogen and algae power are the future.
With increasing populations and decreasing space for waste, we must turn the proverbial bus around before we fall off the cliff, not just slow it down and turn on the air conditioning long enough to wave goodbye.

Capitalism seems like a great idea, just like socialism, until you see it put into practice by the most corrupt and powerful people.

Farmland has always been one of america's staples for economy.
I don't know how it's childish to say that the sprawl of cities into agriculture lands needs to stop.
One great example is detroit and surrounding areas.
This place has been spilling further and further out since the riots, creating suburb after suburb of scared white families.
Now put yourself in Canton, MI, about 30-40 minutes west of detroit.
Welcome to strip mall, corporate chain heaven. Mcmansions, prefab neighborhoods, targets, ikeas, potbelly's, etc. Every single store is a chain.
These chains have a very negative effect on our economy, as they decrease the value of american goods and foods.

From 2000 to 2009 the US population grew by 26 million people.. Much of that was illegal immigration?

Define much. I don't think it means what you want it to mean.

About 2.6 million illegal immigrants, 2000 to 2009, would be much of 26 million total population growth in that period. More than that would be even mucher

Senate Obstructionists 'Want This Economy To Fail'

By Isaiah J. Poole

June 24, 2010 - 3:47pm ET


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"It is very clear that the Republicans in the Senate want this economy to fail," said Sen. Debbie Stabenow, D-Mich., this afternoon in reaction to the latest efforts in the Senate to block a jobs bill from coming to the floor for a vote.

Her comment during a news conference call was just one of several angry reactions to a spate of right-wing obstruction that cannot be construed as anything other than a middle finger in the face of the unemployed and the economically struggling—and a blown kiss to the wealthy.

Republicans are expected to have an opportunity to take back the insult late this afternoon and allow a vote on HR 4213, the American Jobs and Closing Tax Loopholes Act, which includes extended unemployment and insurance benefits, Medicaid support to the states, and supplemental food assistance. Senate Democrats, though, were skeptical that any members on the other side of the aisle would step up to the plate.

[UPDATE: That expected attempt to break the filibuster on the jobs bill failed by a vote of 57-41.]

Their latest failure to do so was Wednesday, when they formed a solid wall of opposition to a version of the bill that had already been seriously diluted in an effort to win one or two Republican votes.

Stabenow says what the conservative bloc is doing in the Senate constitutes the most vile form of politics. "It appears that everybody in the Republican caucus has gone purely into election mode [before] the fall. If they can stop the recovery from occurring, if they can create as much pain as possible, people will be angry and will not vote at all or will vote against those in the majority. This is a very cynical political strategy and I sure hope it doesn’t work."

House Speaker Nancy Pelosi also blasted the Senate Republicans. The Politico article that quotes her bears a bad, arguably biased headline—"Pelosi stokes House-Senate tension"—but as you will see this isn't the battle of the legislative chambers; it is a fundamental battle between lawmakers who want to respond to a jobs emergency and ideologues who show by their actions they could care less.

“Time and time again, Democrats in the House have sent legislation to the Senate to create jobs,” she said. “What did middle-class families ever do to Republicans in the Senate that they would snuff out every opportunity for job creation that has been sent to them?”

This afternoon a coalition of progressive activists groups held a gloomy emergency conference call to assess their strategy. Efforts continue to win over Republican Maine Sens. Olympia Snowe and Susan Collins as well as Ohio Sen. George Voinovich. But they have yet to commit to supporting the jobs bill even with all of the concessions that have been made in recent days to address their concerns.

The bill contains some tax fairness provisions that these senators still resist, even as they claim that the spending provisions in the bill must be "paid for." One change in the legislation would tax most income earned by hedge fund and private equity managers at the same rates as earned income. (In other words, these billionaires would finally be paying taxes at roughly the higher rates of the secretaries who work for them.) The other would end the so-called "John Edwards loophole" that allows people to use corporations to shield their earned income.

This is where we are: A group of senators are standing on principle to protect wealthy tax dodgers while blocking the benefits of people who do not have jobs in may cases because of the recklessness of some of those wealthy tax dodgers.

The Center for Budget and Policy Priorities released a new backgrounder today on some of what's at stake if the right continues to obstruct this jobs bill. The inability to send Medicaid money to the states "will force states – which are struggling with an unprecedented drop in revenues brought on by the recession – to make deep spending cuts and tax increases in order to balance their budgets. These actions will slow the economic recovery and raise the risk of a double-dip recession as the loss of spending power ripples through the economy."

The CBPP calculates that the lost aid to the states would force $15 billion in budget cuts at the state level nationwide, which would result in the loss of as many as 900,000 jobs.

But the failure of the bill to pass also means, among other things, that unemployment checks would run out for hundreds of thousands of workers, other unemployed workers would lose help with their COBRA insurance benefits, and a boost to the Food Stamp program (now called SNAP, the Supplemental Nutrition Assistance Program) that was part of the president's economic stimulus program would be phased out earlier than planned, meaning a loss of $56 worth of food assistance each month for a family of four.

Senate Minority Leader Mitch McConnell keeps trying to blame the Democrats, being quoted in a Congressional Quarterly article today that they “will not pass a bill unless it adds to the deficit.” McConnell is convinced that if he and his Republican colleagues say it enough, voters will believe that if only Democrats would stop trying to pass aid to the unemployed and trying to end unfair tax advantages for the wealthy, jobs would fall from the sky—and even the millions of gallons of oil BP spilled into the Gulf of Mexico would be sopped up and in our gas tanks in time for Labor Day vacations.

That's wrong and we all know it. We need to keep calling our friends in the Senate and tell them to keep at it and that there is an engaged progressive citizenry that has their political back. We need to make our case to the persuadables. And the foes need to hear us tell them that their evil plot to gain power on the backs of our economic suffering will surely backfire.

Sorry, but that is a stupid statement. Political parties have policies, they stand for things and they advocate courses of action, which determine how responsible the government is going to be.


Illegal immigration is not a buzzword, it is a real word describing real and illegal action, or breaking of the law.
We have already agreed, and that is why we already have laws against illegal immigration. The problem is finding politicians that will do what they swear to do, to uphold the law, okay.

nonsense and total hogwash.
Maybe part of the future energy mix, that remains to be seen. I am all for more research, pilot projects, and installations of proven technology. I think wind farms are beautiful, hows that?
And just what cliff are you even talking about, or do you have a clue?

Capitalism is not only a great idea, but it is the most practical and most free economic system on the face of the earth, plus it enabled the United States to become the most advanced and wealthiest nation on the face of the earth. What more could you want?

So what is your solution, start killing people or aborting more infants to reduce the population? Or is your solution more illegal immigration? If so, you don't seem very consistent in your thinking.

GWB dug that deep hole and Obama is trying to get the US out of that hole.

You get out of a hole by bringing in more diggers with bigger shovels that dig twice as fast? How logical is that?

It is an economic hole - the looting by Wall Street bank executives of the wealth of ordinary workers thru the stockshares in corporations which plummeted.