Where is the US economy headed?

@MontereyJack,

re MJackoff,
Obama inherited what the democrats put in motion under Bush years before O-boy took office.

The car makers paid the government back, but they stiffed the tax payer by billions.

Obama and his democrats have only exacerbated the situation by reckless spending and growing the size and reach of government.

Nothing that Obama and his democrats have done have made the situation better and this may be by design.

You are a member of the dumbmasses and you lack the intelligence required to know what is going on.

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@MontereyJack,

MJ, Good post. The conservative belief system in how to improve our economy is ass-backwards not only from historical perspectives, but from economic ones. Government austerity during these economic times do not make any sense, because it only kills jobs - which is the engine of any economy.

That's the reason why the pent up demand for consumer goods after the war made us into the economic giant of the world. Workers - especially the women of our country - worked in the defense industry building our tanks, airplanes, and bombs. They earned money all while government deficit grew to new highs as the wars expansion stretched into the fourth year.

Those deficits disappeared, because the government spent money "we didn't have" during the war years, but demand for consumer goods grew by leaps and bounds after the war. New housing projects grew based on demand, and those soldiers who went to college with the GI Bill helped our economy grow - not only in our country, but internationally.

Government austerity would have destroyed our country back then, and it will now. Most of those Euro countries who are being coerced into austerity programs will suffer more, and their loans will never be paid back.

Even Germany is talking about "forgiving" their loans to Greece.

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Obama's attempt to make the US economy more like a European economy will only make the economic situation worse in this country

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@roger,

roger wrote:

Speaking as a retail merchant, what's your feeling on this? Somehow or other, all costs are going to be recovered, meaning we all indirectly pay for the service. On the other hand, there are people who simply don't qualify for credit cards. They could end up with diffculties with hotels, car rentals, and internet sales.

independent restaurants pay almost 2% around here, so with the transaction fee the cost is 3.3% of the sale on a $15 check. The avarage profit is only 5%, so the new cost of .8% is a huge improvement. Why do the banks need to take 3% of our money when they are not lending in this transaction and when they have almost zero labor cost in this transaction? These fees have been outrageous.

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@hawkeye10,

Yes, but that wasn't quite the question. The costs are going to be reflected in the gross margin, paid by all customers. Is this going to cause fewer banks to issue debit cards? Will fewer merchants accept them? How will this affect the part of the population without access to credit cards?

Sorry for the string of questions, but I hope someone considered them before deciding to limit the fees.

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@hawkeye10,

I agree; but it's the government's fault for letting banks pay low interest to savers, and charge ridiculous fees for everything else. Consumers are at the mercy of banks in this environment, because the government is lax in their responsibility to protect consumers. Another Obama weakness.

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@cicerone imposter,

cicerone imposter wrote:

Another Obama weakness.

That observation earned you a rare thumbs up from me.

It's also the governments fault for forcing lenders to grant home loans to buyers that weren't qualified... Frank & Dodd come to mind here and nothing these two do seems to help the consumer.

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@cicerone imposter,

The government doesn't let banks pay low interest. Banks can pay as much or as little as they wish. If you prefer not to lend to your bank, you don't have to. Their rates do seem closely tied to treasury rates, so maybe that's what you should be looking at. If the treasury were offering better rates, the banks would fall in line toot sweet.

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Yes, Roger, I am in the retail racket but I tried to report on the "swipe" fee issue as objectively as this troll could.
75% of our sales are on plastic at my largest store. I have no problem with checks and store charges disappearing.
I shop for flower and vegetable plants at a local nursery - 8 miles from town. For years they only accepted cash and I suggested to one of the owners that they should take plastic because my eyes were often bigger than the cash in my pocket. They eventually relented and sales skyrocketed. I have no problem with plastic.

I am not real comfortable with the Federal Reserve (I think that is the agency monitoring "swipe" fees) getting involved in the private sector. But the truth is there is an oligarchy (Visa, Mastercard, Amex, and Discover) that every retailer must use with various other middlemen adding a nibble here and there.

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@roger,

The government can "regulate" banks. Your opinion about our choice not to lend to our banks is somewhat ridiculous. Who else will transact our money transactions? If consumers had a choice, don't you think they would use it?

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@roger,

roger wrote:

Yes, but that wasn't quite the question. The costs are going to be reflected in the gross margin, paid by all customers. Is this going to cause fewer banks to issue debit cards? Will fewer merchants accept them? How will this affect the part of the population without access to credit cards?

Sorry for the string of questions, but I hope someone considered them before deciding to limit the fees.

What costs do the banks have? THey need to set up the computer system, they need to staff the computer, they need to staff the fraud department, and they need to write off fraud which last year was $8.6 billion but they certainly could do better at dealing with fraud if they wanted to and the banks can charge the card holder for the use of the card and collect what they need to cover costs and make a profit that way......there is still money to be made and people want cashless transactions so debt cards will not go away.

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@cicerone imposter,

cicerone imposter wrote:

I agree; but it's the government's fault for letting banks pay low interest to savers, and charge ridiculous fees for everything else. Consumers are at the mercy of banks in this environment, because the government is lax in their responsibility to protect consumers. Another Obama weakness.

I am troubled by the lengths that Government is going to regulate the banking system, as it is another violation of the free market system. I am not understanding exactly how the banks came to be able to hold up merchants on debt card fees, but I have read accounts that assert that the merchants had no choice but to go along. In this case government regulation might have been the only way to right the wrong.

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@hawkeye10,

Sometimes it's necessary for government to step in when they know consumers are being ripped off. Especially since the government took taxpayer monies to rescue the banks from bankruptcy.

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@hawkeye10,

hawkeye10 wrote:

...and the banks can charge the card holder for the use of the card and collect what they need...

This debate today involved the banking/credit card industry vs the retailers. The notion expressed by Hawkeye above came up at the discussion at my store today.
I have no problem with plastic but a purchase of $2 or $1 drives me nuts. Personally, I pay cash for anything under, say, $20.
Charging the cardholder? That is probably a third rail that will not be touched by the banks.
A customer today, a young lady perhaps 30, joined in saying that a decade ago as a student, she got in trouble with her credit not by a spending splurge but from the $2 or $3 that she put on plastic a few times a day.

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@cicerone imposter,

cicerone imposter wrote:

Sometimes it's necessary for government to step in when they know consumers are being ripped off. Especially since the government took taxpayer monies to rescue the banks from bankruptcy.

Yes, and while I maintain a deep hostility towards the nanny state, I am willing to entertain the notion that in this one case government action was necessary.

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@realjohnboy,

Same here, except I will use plastic for gasoline and online purchases, regardless of amount of sale. I do not use debit cards.

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@realjohnboy,

I see it often where a consumer will use plastic to buy stuff under $10. Some retailers have a sign that states they will accept credit cards on sales of +$__, which I think is a very good idea.

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@cicerone imposter,

cicerone imposter wrote:

I see it often where a consumer will use plastic to buy stuff under $10. Some retailers have a sign that states they will accept credit cards on sales of +$__, which I think is a very good idea.

THat pisses customers off, and has happened because huge merchant fees on card swipes have pushed businesses into feeling the need to take the chance of pissing off customers.

As an aside not too long ago I was reading a bank justification for the high fees that stated the merchants should not bitch about the fees because there are costs to handing a lot of cash as well, the runs to the bank, the losses through theft, the time to count cash. The argument was that businesses have not come up behind in the switch to the debt system. This is so not relevant, as any technology driven improvement in transactional efficiency should rightfully benefit all parties in the transaction, but the banks have used their leverage to take it all for themselves.

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@roger,

roger wrote:

... I will use plastic for gasoline and online purchases, regardless of amount of sale. I do not use debit cards.

Same here, cash/check for everything else.

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@hawkeye10,

Good point. In fact, that was my main objection to some gas stations having a two tier pricing system regarding cash/plastic transactions. They very well do have benefits in accepting plastic, not the least of which is some late night convenience store being subject to armed robbery.

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Where is the US economy headed?

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