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Old 12-21-2010, 11:21 AM
 
2,515 posts, read 1,660,308 times
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Quote:
Originally Posted by InformedConsent View Post
You just said:
Yip what they are doing isn’t going to work. It is working backwards. We need less debt or more income for the economy to grow. We have gone down the road of ever increasing debt to the point that more makes the economy contract. Too much of our income is going to pay interest on debt.

Quote:
Originally Posted by InformedConsent View Post
While historically somewhat true, that won't happen now. Prices are almost at margin collapse as it is.
Again the problem generally is the very high debt load that we have, privet, public and corporate. Total debt as percent of GDP it is the ratio. Total debt coming down is a big mess, a really big mess. Wages coming up like I am talking about is a really big mess as well. Total debt coming down is what Japan has spent 20 years dealing with. What I am talking about is triggering a sharp “V” shaped collapse then recovery. (2 years?) It is really simple wages have to be able to support the debt load. Currently that is not the case.

As far as the deficit goes, we need to be saving at a rate high enough to be able to buy our own national debt. Taking the money out of the economy as taxes is not what we need to be doing, taking the money out as savings (credit union savings) does very different things to the economy. For one it tends to drive exports and reduce imports. That tends to grow the middle class. We need to be growing the economy.

There is an economic postulation that says that there is no difference where the money to run a business comes from. This postulation is not entirely true. If you use your own money for a venture then you need not get as high a return on your money as if you borrow money to start a venture. Also you can take more risks with your own money than you can with someone else’s money.
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Old 12-21-2010, 11:30 AM
 
62,775 posts, read 27,930,679 times
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Quote:
Originally Posted by newonecoming2 View Post
Yip what they are doing isnít going to work. It is working backwards. We need less debt or more income for the economy to grow. We have gone down the road of ever increasing debt to the point that more makes the economy contract. Too much of our income is going to pay interest on debt.

Again the problem generally is the very high debt load that we have, privet, public and corporate. Total debt as percent of GDP it is the ratio. Total debt coming down is a big mess, a really big mess. Wages coming up like I am talking about is a really big mess as well. Total debt coming down is what Japan has spent 20 years dealing with. What I am talking about is triggering a sharp ďVĒ shaped collapse then recovery. It is really simple wages have to be able to support the debt load. Currently that is not the case.

As far as the deficit goes, we need to be saving at a rate high enough to be able to buy our own national debt.
Saving means consuming stops. You've just killed our 70% consumption-based economy. What do you intend to replace it with?
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Old 12-21-2010, 11:50 AM
 
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Quote:
Originally Posted by InformedConsent View Post
Saving means consuming stops. You've just killed our 70% consumption-based economy. What do you intend to replace it with?
A rebuilt manufacturing base or some other value adding kind of thing. Henry Ford was about the first to figure out that you have to pay your workers enough to be able to buy your products. (The roaring twenties was a big debt bubble.) We need to be paying our consumers enough to consume. Loaning them the money to consume with doesn't work long term.
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Old 12-21-2010, 11:54 AM
 
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Quote:
Originally Posted by newonecoming2 View Post
A rebuilt manufacturing base or some other value adding kind of thing. Henry Ford was about the first to figure out that you have to pay your workers enough to be able to buy your products. (The roaring twenties was a big debt bubble.) We need to be paying our consumers enough to consume.
How do you avoid the consequent price increases caused by raising wages? Remember, profit margins are already at near collapse. You're describing nothing short of a dog chasing its own tail.
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Old 12-21-2010, 11:59 AM
 
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Originally Posted by InformedConsent View Post
How do you avoid the consequent price increases caused by raising wages? Remember, profit margins are already at near collapse. You're describing nothing short of a dog chasing its own tail.
The prices have to go up as well but the debt load doesn't multiply with the wages. Those are in the short term more or less fixed. So upping the wages should make things better for the economy as a whole in the long run. Upping the wages and the prices in lock step would improve profitability for high debt enterprises. Also upping wages means more un-leveraged income for consumers. Their debt load doesn't multiply with the increase in wages.
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Old 12-21-2010, 12:22 PM
 
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http://www.youtube.com/watch?v=Ij4H9...ayer_embedded#! Here is a video for you!!!
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Old 12-21-2010, 12:26 PM
 
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Quote:
Originally Posted by newonecoming2 View Post
The prices have to go up as well but the debt load doesn't multiply with the wages.
Why not? If prices increase along with wages, so will debt - only now it'll be at a higher level.
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Old 12-21-2010, 12:42 PM
 
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Quote:
Originally Posted by InformedConsent View Post
Why not? If prices increase along with wages, so will debt - only now it'll be at a higher level.
Raising the wages does not multiply the debt. Raising the prices does not multiply the debt. Taking on more debt multiplies the debt. Now if you double the wages and the prices you can take on 50% more debt and be ahead on the game. Lubricating this process with printed money providing excess consumer demand by giving the money to everyone. Soaking up the printed money with a national savings plan.

There has been a substitution of loaning out money for people to spend in place of paying them wages for doing work. The housing bubble. People were spending the equity in their houses.
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Old 12-21-2010, 01:01 PM
 
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Quote:
Originally Posted by newonecoming2 View Post
Raising the wages does not multiply the debt. Raising the prices does not multiply the debt. Taking on more debt multiplies the debt.
And when prices increase as a result of increasing wages, what makes you think taking on more debt won't be necessary?
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Old 12-21-2010, 01:18 PM
 
19,489 posts, read 13,225,807 times
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Quote:
Originally Posted by sanrene View Post
So says that economic genius, barack obama. The media never challenges him on this ridiculous claim.

RealClearPolitics - Video - Obama: Unemployment Benefits "Biggest Boost" To The Economy

If that were actually TRUE, then we should be rooting for MORE people to lose their jobs and start collecting UE benefits, right, right?

See, what obama and the Left fail to realize is that people collecting UE are living pay check to pay check, buying the essentials like food, paying their bills, just getting by. They don't have the money for those extras or luxury items.
The epitome of liberal social ideal, a citizenry wholly dependent upon government.

Quote:
Originally Posted by sanrene View Post
These are NOT the circumstances or the segment of the population that will boost the economy, get it rolling again. The people who will give a real jolt to the economy are the ones who are working, but due to uncertainty, anxiety and fear, are holding back on spending above and beyond the essentials. Like decorations for the house, new clothes for the kids they might not actually need, vacations over the Christmas break, spending more on entertainment, movies, dinners. The kind of people who have the money for those extras but have decided to NOT cut loose........kind of like me.

The man and his circle of advisers are truly clueless, but what can you expect when the vast majority of them haven't ever run a business or had private sector work experience.
Heralding mediocrity as the ideal, thanks liberals, for showing America what you truly are all about.
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