Where is the US economy headed?

In just the first year under ObamaRule - federal spending increased by over 22 percent.

Way to go Community Organizer!

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@H2O MAN,

Your math always kills me Squirt.

It's off by about 20%. Heck, you are worse than Obama at that rate.

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@parados,

Parasite hates the fact that my numbers are correct.

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@cicerone imposter,

ci, I agree for the most part, and I also think Wayne is right about us trying to live too high on the hog.

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@wayne,

wayne wrote:

I grew up in America. The folks in my neighborhood built their homes with their own hands. They drove used cars until they could afford a new one, which they drove for ten years or more, a/c was an expensive option.

I can identify completely. The first car I remember was our 1941 Buick, then a "new" car we bought was a used 49 chevrolet, which we bought after a good wheat crop for probably less than $500. We kept that car for about 10 years, at which time my parents bought a brand spankin new Chevrolet Biscayne 4 door, no air conditioning, no push button windows, no nothin extra. All they wanted was good dependable transportation and they wanted no frills at all.

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We cooked our meals at home and played monopoly on saturday nights. There were no such things as cd, dvd players, video games, atvs, laptops, i-phones, etc etc etc to blow money on. Processed foods were a luxury and few in number. Fast food? Starbucks?

Monopoly was one of our favorite games as well. We virtually never went to a "sit down" restaurant. Eating out was stopping at a drive in burger place, called "Lotta Burger," to have some 30 cent hamburgers, which were very large by the way. There was another place in town where you could buy the small old fashioned burgers, fried onions and all, seven burgers for a dollar.

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America's economic woes cannot and will not be solved by politicians or bankers. Our only hope lies in the hope that an increasingly spoiled populace that doesn't know the difference between luxury and need will wake up and smell the coffee.

Thats all I have to say about that.

Wayne, you have pretty much explained completely what I also believe. The fact is that at the foundation, this country still offers tremendous opportunity for success, and unfortunately many of the spoiled young generation either never learned or was never taught how to manage money in a sensible way. Many apparently grow up with an allowance, which is all too often too lavish, and they become accustomed to buying sodas and candy bars every day, running up huge charges on cell phones, and so on and so forth. Their parents buy them a car and furnish them with credit cards and gas money, and the rest is history. But people can still succeed, and many of the people that know how to succeed and understand the great opportunities that abound here, but just as it has always been, success requires personal responsibility, including self discipline.

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Good evening. It appears that President Obama and Congressional leaders from the Dems and Repubs have made a deal.
* The Bush era "temporary" tax cuts from a decade ago will be extended to all taxpayers regardless of income for another 2 years. A victory for the Repubs who argued that raising taxes on the wealthiest would stifle hiring.
* Long-term unemployment benefits will be extended. A win for the Dems.
* Maintaining current levels on estate taxes, capital gains and dividend income. That is something the Repubs wanted.
* A one-year "temporary" tax holiday on employee tax withholding of 2%. I am not sure what that is all about, but it is supposed to stimulate the economy by putting more money in consumers' pockets. "Temporary," of course, never means temporary in the sense that you or I define the word.
There are some Dems (and I am one of them) who would prefer that Mr Obama not back off on the extension of tax cuts on the highest brackets. There are some conservative Repubs who argue strongly that the cost of extending unemployment benefits needs to be offset by other government cuts.
But it looks like that is the deal that has been cut.

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@realjohnboy,

realjohnboy wrote:

* Long-term unemployment benefits will be extended. A win for the Dems.

Nancy Pelosi should be very happy about that, because she is on record as saying unemployment benefits are one of the fastest ways to create jobs!

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@okie,

okie wrote:

realjohnboy wrote:
* Long-term unemployment benefits will be extended. A win for the Dems.
Nancy Pelosi should be very happy about that, because she is on record as saying unemployment benefits are one of the fastest ways to create jobs!

This is true. And I'm pretty sure you know exactly why this is, too.

Cycloptichorn

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@H2O MAN,

Spending 2008 - 2,982,554
2009 - 3,517,681

http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf
Table 1.1

(3512681-29825554)/2982554 = 17.9% increase

Facts are funny things squirt. You don't get to claim them when you don't have them.

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@Cycloptichorn,

Cycloptichorn wrote:

okie wrote:

realjohnboy wrote:
* Long-term unemployment benefits will be extended. A win for the Dems.
Nancy Pelosi should be very happy about that, because she is on record as saying unemployment benefits are one of the fastest ways to create jobs!

This is true. And I'm pretty sure you know exactly why this is, too.

Cycloptichorn

??????? Unemployment benefits don't create jobs, though they do sustain some elements of consumer spending. Indeed they delay choices by many individuals to accept lower paying or less desirable jobs and thereby reduce the elasticity of labor costs. One may not wish this to happen, but it undeniability is an important component of economic recovery in that it enables a margial increase in new economic activity and production of goods and services and therefore jobs.

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@okie,

You get what you pay for. Pay people not to work and you get more people not working.

1 Reply

@georgeob1,

georgeob1 wrote:

Cycloptichorn wrote:

okie wrote:

realjohnboy wrote:
* Long-term unemployment benefits will be extended. A win for the Dems.
Nancy Pelosi should be very happy about that, because she is on record as saying unemployment benefits are one of the fastest ways to create jobs!

This is true. And I'm pretty sure you know exactly why this is, too.

Cycloptichorn

??????? Unemployment benefits don't create jobs, though they do sustain some elements of consumer spending.

Bingo. There are reams of evidence that show that UE benefits get recycled into our economy very, very quickly. Can't say the same for tax cuts for the rich. Like I said - you knew right away why it was true.

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Indeed they delay choices by many individuals to accept lower paying or less desirable jobs and thereby reduce the elasticity of labor costs.

However, there is MUCH less evidence that this is true. Oh, I know your theory behind it, but I also know LOTS of people who are out of work and will take any job they can get. Your theory doesn't match the reality I've experienced.

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One may not wish this to happen, but it undeniability is an important component of economic recovery in that it enables a margial increase in new economic activity and production of goods and services and therefore jobs.

Yup. So, why the question marks? You agree with my position that Pelosi is correct.

Cycloptichorn

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@roger,

roger wrote:

You get what you pay for. Pay people not to work and you get more people not working.

Ridiculously simplistic; like something a child would write.

Cycloptichorn

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

roger wrote:
You get what you pay for. Pay people not to work and you get more people not working.
Ridiculously simplistic; like something a child would write.
Cycloptichorn

It is really really sad when basic truths that a child can understand totally escapes you, cyclops. Roger is simply telling the obvious truth of it. It is a basic truth that what you reward, you will get more of. Another example of this principle was LBJ's Great Society. It was a colossal failure because it only perpetuated and enabled more of the behavior that helps produce poverty, namely more single women having more children and more broken homes, because people found out that the government would reward them or pay them more money if they had more children. Having an intact family was not necessarily economically necessary or desireable for them. So instead of conquering poverty, it only created more. The same principle applies to unemployment benefits. It is appropriate for a time, but if it is carried on indefinitely or too long, it only enlarges the problem it is intended to provide aid for.

This factor is not something commonly talked about in politics relative to the economy, but in my opinion it is the elephant in the room.
http://www.akdart.com/culture2.html

"It's the Culture, Stupid. In the 1950 census, "families" made up 89 percent of all American households. By 2000, that figure had dropped to 68 percent. But even this does not tell the whole story. "Family" figures include single-parent households, and this had proved the fastest-growing of family cohorts, from 10 percent of all households in 1970 to 16 percent in 2000. In that same period, the "traditional" family took the biggest hit. By century's end, married couples with their own children made up only 24 percent of all households, down from 40 percent just thirty years earlier.

The Fraud of Progressive Nobility: Forty years of Great Society-inspired welfarism have brought a 70 percent illegitimate birthrate among Blacks — a 218 percent explosion since the LBJ years. The non-Hispanic white illegitimacy rate hovers below 12 percent."

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The consuming public is responsible for almost 70% of the economic activity in the U.S. I can source that if challenged, but I suspect that folks here can attest to that.
Extending the unemployment benefits injects money into the economy faster, perhaps, than any other method (such as lowering taxes on the largest wage earners).
But there is a cost. Not only the cost of the program itself, but as Georgeob alluded to, it imposes a floor on labor costs. Why would I work for X$ at McDonald's or Y$ picking fruit in California when I can get Z$ on unemployment.
And, of course, lurking just below the surface, is the belief that "some people" are simply looters, losers, moochers and non-producers.
(See my tag line below).

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@realjohnboy,

One way to help insure that unemployment rates will never return to around 5%, is to make unemployment benefits permanent, to last for years and more. That will also produce other unintended consequences, such as forestall the transfer of skilled labor from industries that are being outmoded to other emerging or growing industries where more labor is needed, due to changing technologies and market demands. The reason this happens is that if people are laid off from a job in a stagnant sector or company, many will still wait and hope for a job in that industry or sector that they were accustomed to and liked, versus having to take a job doing something that is different and unfamiliar to them, which is more stressful and perhaps more difficult for them. However, in the long run, movement and change of the labor pool is necessary to keep the economy healthy. For example, the fact that harness manufacturers laid off their employees so that mechanized tractor and implement manufacturers could soak up part of that labor pool was a healthy thing for the economy in the long run. However, if unemployment compensation had been available as it is today, that labor pool may not have moved onto other things as they needed to do.

I realize the above is sort of a tough love type of principle, but at some point the unemployment benefits have to end. As a country, we simply cannot keep it up indefinitely. I think a few months should be enough, and hopefully most folks have enough relatives and friends that they could find at least some kind of a job through them, or at least some assistance if all else fails.

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@okie,

I have no real problem with what you argue for there, Okie.
Do you agree that, in the U.S. there should be a minimum wage?
I am amused to note that my post above, near the top of the page, got a thumbs down from someone. So it goes. Someone doesn't like me.

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@georgeob1,

You haven't a clue.

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@H2O MAN,

Obama is almost as right of center as you are.

Say, do you have trouble buying shirts? I've never seen shirts cut for men with both of their arms on the right side of the body.

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@okie,

Quote:

ci, I agree for the most part, and I also think Wayne is right about us trying to live too high on the hog.

Looks like you are speaking for yourself, as you should.

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Where is the US economy headed?

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