So how do we grow the economy? (generation, Reagan, Obama)
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There are limits to everything but we're not close to that limit as evidenced by the rest of the world buying our bonds yielding low rates -- which is why raising the debt limit is important.
Actually 100% of GDP is a red flag. 120% is a siren. 140% (maybe less) would have countries making a run on the U.S.
Quote:
Originally Posted by MTAtech
What isn't important is dealing with deficits and debt now, when unemployment should be the full focus. We will need to deal with deficits and debt when unemployment is closer to full employment.
No, it actually is very important. That was the point of saying there is a limit.
Unemployment will take forever to get back to a point that it used to be. The clear direction of wealth transfer is from west to east and it won't make one iota of a difference the policy you enact to try to change that short of war, plagues, floods, famine, locust and God himself coming to the planet and taking people from Central Asia.
Right now our leadership is looking at the future and wondering which direction to take. We have an ailing economy, a frustrated voter base, massive debts and no good signs pointing to the future. They're looking at most of the resources for the endurance on the shores of the people who are taking over our former place. They're seeing a debt ceiling too high as bad and cutting any deficit spending also as a bad thing. Either way they choose they go into recession and that's just not on the political agenda of today's politicians.
None of them will be honest and actually explain what is going wrong with our economy and because that'll never happen we will never try to fix it till it's too late. When you have a problem you have to honestly assess it, discuss it, determine a fix for it and implement that fix.
We're not even doing step 1.
Last edited by BigJon3475; 07-07-2011 at 06:35 PM..
Lol, even using ABC's number north of 70k per job is still pitiful.
From the ABC piece:
Quote:
Basic math would indicate that $2.2 billion spent to create 30,383 jobs would indicate a cost per job of $72,408.
That still overstates the $$$/job because it excludes the fact that dollars also paid for construction materials, buildings, etc. and not just personnel.
Not to mention US society would be in better shape with far fewer social ills.
How about shutting down military bases overseas, ending the war on drugs, and pulling out of the foreign wars?
Umm.. that scenario is even worse than staying the course.
Quote:
Global Scenario I: A World
Without the West
In this fictionalized account, the new powers
supplant the West as leaders on the world
stage. This is not inevitable nor the only
possible outcome of the rise of new states.
Historically the rise of new powers—such as
Japan and Germany in the late 19th and early
20th centuries—presented stiff challenges to
the existing international system, all of which
ended in worldwide conflict. More plausible
in our minds than a direct challenge to the
international system is the possibility that the
emerging powers will assume a greater role in
areas affecting their vital interests,
particularly in view of what may be growing
burden fatigue for Western countries.
Such a coalition of forces could be a
competitor to institutions like NATO, offering
others an alternative to the West. As detailed,
we do not see these alternative coalitions as
necessarily permanent fixtures of the new
landscape. Indeed, given their diverse
interests and competition over resources, the
newer powers could as easily distance
themselves from each other as come together.
Although the emerging powers are likely to
be preoccupied with domestic issues and
sustaining their economic development,
increasingly, as outlined in this chapter, they
will have the capacity to be global players.
Preconditions for this scenario include:
Lagging Western growth prompts the US
and Europe to begin taking protectionist
measures against the faster-growing
emerging powers.
Different models of state-society
relationships help underpin the powerful
(albeit fragile) Sino-Russia coalition.
Tensions between the principal actors in
the multipolar world are high as states
seek energy security and strengthened
spheres of influence. The Shanghai
Cooperation Organization (SCO),
especially, seeks reliable and dependable
clients in strategic regions—and Central
Asia is in both Russia’s and China’s
backyards.
Actually 100% of GDP is a red flag. 120% is a siren. 140% (maybe less) would have countries making a run on the U.S.
No, it actually is very important. That was the point of saying there is a limit.
Unemployment will take forever to get back to a point that it used to be. The clear direction of wealth transfer is from west to east and it won't make one iota of a difference the policy you enact to try to change that short of war, plagues, floods, famine, locust and God himself coming to the planet and taking people from Central Asia.
Right now our leadership is looking at the future and wondering which direction to take. We have an ailing economy, a frustrated voter base, massive debts and no good signs pointing to the future. They're looking at most of the resources for the endurance on the shores of the people who are taking over our former place. They're seeing a debt ceiling too high as bad and cutting any deficit spending also as a bad thing. Either way they choose they go into recession and that's just not on the political agenda of today's politicians.
None of them will be honest and actually explain what is going wrong with our economy and because that'll never happen we will never try to fix it till it's too late. When you have a problem you have to honestly assess it, discuss it, determine a fix for it and implement that fix.
We're not even doing step 1.
Well, the debt/GDP ration isn't anything close to that and it was over 100% after WWII and the nation was able to both tax and grow out of it.
What's wrong with the economy is no mystery, not enough demand. That's why there is unemployment -- companies don't need to hire because they're below capacity.
That doesn't even count for unfunded liabilities which that outlook will get even worse when they start cutting the budget. The whole reason they're not interested in spending anymore money is because they've already been told by the investors in us that they're nervous about the future of America.
What's wrong with the economy is no mystery, not enough demand. That's why there is unemployment -- companies don't need to hire because they're below capacity.
There's not going to be much of a demand for anything we build till we get it through our thick skulls that the standard of living we are used to is going away fast and never coming back.
This is economic evolution at this point and only the strong will survive. Those people will own lots of rental property and it'll be paid for out right.
They'll be able to cushion the massive drop in the standard of living in the U.S. because they'll own the property and whatever money is left in the nation will go to housing, and even that'll be hard to pay for.
The fact that the GDP per capita of the entire world is $11,200 (2010) should tell you where we're headed.
Well, the debt/GDP ration isn't anything close to that and it was over 100% after WWII and the nation was able to both tax and grow out of it.
What's wrong with the economy is no mystery, not enough demand. That's why there is unemployment -- companies don't need to hire because they're below capacity.
But Greece is nowhere near the size and scope of the U.S.
If we were at the point of Greece right now we'd be in a World War and trying to kill as many people as possible in the Central Asia and the Middle East.
But Greece is nowhere near the size and scope of the U.S.
If we were at the point of Greece right now we'd be in a World War and trying to kill as many people as possible in the Central Asia and the Middle East.
No.
Greeks have a higher quality of life/standard of living than US nationals.
Greeks protest because they want to keep their retirement at 53 years of age, and many other luxury benefits that they have/had.
They want to keep living as Swiss.
Greeks have a GDP per capita of $30,000 usd and their distribution of wealth is better than that of the U.S., plus they have Universal healthcare and cars are not a Must-have.
What is "Crisis" in Europe would be the "Heaven" to an average Joe.
Greeks have a higher quality of life/standard of living than US nationals.
Greeks protest because they want to keep their retirement at 53 years of age, and many other luxury benefits that they have/had.
They want to keep living as Swiss.
Greeks have a GDP per capita of $30,000 usd and their distribution of wealth is better than that of the U.S., plus they have Universal healthcare and cars are not a Must-have.
What is "Crisis" in Europe would be the "Heaven" to an average Joe.
No, what is considered maturity in Europe would quaify as childhood for an average American. Quality of life includes some modicum of civic responsibility -- a notion which the ancient Greeks created, but their modern counterparts have overlooked in their rush to embrace socialism.
Pie in the sky for free? With no comeuppence?
Tis the stuff of fairy tales. And, now, nightmares.
Greeks have a higher quality of life/standard of living than US nationals.
Greeks protest because they want to keep their retirement at 53 years of age, and many other luxury benefits that they have/had.
They want to keep living as Swiss.
Greeks have a GDP per capita of $30,000 usd and their distribution of wealth is better than that of the U.S., plus they have Universal healthcare and cars are not a Must-have.
What is "Crisis" in Europe would be the "Heaven" to an average Joe.
Uhh.. Where to start?
Greece is in trouble economically because it promised its people everything under the sun. Now the lenders they borrowed that money from want their money back. They don't have it and never did. That part is just the like the U.S.
Now, the economies of scale are far different than you're willing to give them credit for. For example, Greece's GDP is .4% of the rest of the worlds GDP. The U.S. GDP is about 25% of the rest of the world's GDP.
The people of France and Germany (part of the declining west) aren't interested at all in raising their taxes to pay for the incredibly ignorant choices the Greeks have made with voting themselves everything under the sun and not having a way to pay for it.
Everything in your post points to the exact reason people are rioting in the streets. Their pot of gold is running out and they're not willing to budge one micron to help anyone else out on the planet.
Well clearly that's not true $700 billion in stimulus later.
Where did the stimulus go? Some went directly to the banks to bail them out, if that money had gone to the banks through the people that owed them the money then it would have helped everyone out.
Quote:
Originally Posted by MTAtech
First, we covered this meme that Keynesian economics didn't work in the 1930s here: http://www.city-data.com/forum/19118368-post10.html We know that the revisionists are busy trying to discredit the policies that reversed the depression but the fact that FDR was elected four times in landslide elections should give an indication that the people living during that time thought FDR's policies were working.
Second, the $700 stimulus wasn't all stimulus. The GOP extracted 40% tax-cuts that did virtually nothing to bolster demand. Thus, a several hundred billion dollar stimulus for an economy that was down trillions in demand -- coupled with states cutting spending and further reducing demand, wasn't given much hope at the beginning with serious economists. In fact, the small size of the stimulus was predicted to provide ammunition to the GOP in their claims that it failed. Yet, it did have positive effects -- just not the optimistic amount that we wanted.
The stimulus was more about lining the pockets of the friends of those in office than it was about getting the economy going.
Quote:
Originally Posted by BigJon3475
There is a limit at which the rest of the world doesn't care to fund out debt. Unless Obama is a genius, which I doubt, watching us monetize our debt we owe to them isn't going to go over too well. They're already enjoying watching the toxic political climate as the ants scurry...
Printing enough money to get the economy going is far less destructive than monetizing our debt. Upping the minimum wage to where we have demand for new houses will tend to make the economy grow but above all we need to be saving enough money to be buying our own debt.
Quote:
Originally Posted by MTAtech
What isn't important is dealing with deficits and debt now, when unemployment should be the full focus. We will need to deal with deficits and debt when unemployment is closer to full employment.
You said it. We need to restructure the economy so that it will be healthy. Full employment is a starter but there are a lot of other things as well.
Quote:
Originally Posted by Venezuelan
The U.S. has a trade deficit due to its oil dependency. .
this is true only in part we are not saving enough money with a higher savings rate we should have a trade surpluss.
Quote:
Originally Posted by Venezuelan
The U.S built its cities for cars and not for people. A trade deficit will always exist because the U.S. Consumes 25 percent of the oil that is produced worldwide on a daily basis. .
we defiantly need to cut the oil consumption way down. One way to do this would be to put a $1 surcharge on gasoline and use that money as a consume subsidy for the purchas of electoric vehicles with photocells for recharging them.
Quote:
Originally Posted by Venezuelan
If the U.S. Had walkable/compact european style cities, the U.S. Would have a gigantic trade surplus and the average Joe would have a lot more disposable income.
If we had a higher savings rate we would have a trade surplus. The car culture is a problem but we could be using sunlight for fuel instead of gas and that would help a lot.
Quote:
Originally Posted by hilgi
Let it reset naturally, let debt evaporate, don't bailout banks, don't bailout home owners, let the deleveraging forces get over with fast.
The bitter pill. The banking system is in trouble not just the individual banks. If the system brakes down will the flow of oil stop? If it does we get a 90% population die off. Inflating away the debt is safer and faster to get full employment. Less painful all around.
Quote:
Originally Posted by MTAtech
Well, the debt/GDP ration isn't anything close to that and it was over 100% after WWII and the nation was able to both tax and grow out of it. .
What's wrong with the economy is no mystery, not enough demand. That's why there is unemployment -- companies don't need to hire because they're below capacity.
The solution to not enough demand is to give everyone money to spend, that is to replace the demand. Not all aggregate demand is created equal. We need to replace the missing extra money that was floating around the economy if we want the economy to grow.
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