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Are you asserting that our stimulus plan will have the same results? Last time I checked, i've not seen, heard, nor read about any "record lending" spurring "local investment" here in the United States. In fact, banks are hoarding the money. Sounds like an apples to oranges comparison to me.
Correct, there has been no increased lending the US. Banks are taking gov't money, saying thank you very much, and reducing credit. Also very little of the budgeted stimulus money has actually been spent - except bailouts to Wall St investment firms to cover losses not to stimulate investment. So far the money is going (to use a Canadian phrase) to corporate welfare bums.
Why yes, I can. GDP is just a combination of consumer expenditures, investment, net import/exports and gov't spending. I've looked but can't find the breakdown - but economists say that Chinese gov't lending and investments are way up with gov't lending now equaling 1/4 of GDP.
Both the Chinese gov't and western economists saying that the rise in Chinese GDP is a result of gov't spending and lending.
New lending was up a whopping 201% during the first half of more than $1 trillion, equal to nearly one quarter of GDP, part of the reason why the Shanghai stock market is up nearly 75% this year. Easy money means some marginal investment projects that commence when interest rates are low may run into difficulties down the road when monetary policy tightens.
I'm not supporting gov't spending - just saying that gov't spending by definition increases GDP - but it doesn't mean that the economy has any long term robustness.
But it appears that this recessions is ending according to the experts,please ignore the high unemployment,bankruptcies and closings of businesses and declining consumer spending...
We are coming out of the recession and, as the Obama recovery takes hold via the stimulus, we will see increases in the next few quarters. But it is going to take awhile to undo all the damage that Bush and Co did. You cannot undo 8 years of damage in 6 months but I do give Obama some credit in that he is trying.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,758,986 times
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Quote:
Originally Posted by oz in SC
Problem is the figures seem to be revised DOWNWARDS after the release....and of course consumer spending is down(makes up 70% of GDP) unemployment is increasing and the days of easy credit appear to be over.
A question for you,do you think the recovery when it happens will return us all to how it was just prior to the economic collapse of the last few years???
We need an economy that is not built on "consumer spending". We need an economy that is built on 3 legs- production, services and consumers. That is the trouble with this economy- it is a one legged stool that depended on consumers using their houses as ATM machines and buying trinkets at the malls.
When rebuilding a collapsed economy, like rebuilding a collpsed building, you have to start with the foundations. The administration is doing just that with the investment in long overdue infrastructure, mostly road repair, projects.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,758,986 times
Reputation: 3587
Quote:
Originally Posted by Gary Siete
Why yes, I can. GDP is just a combination of consumer expenditures, investment, net import/exports and gov't spending. I've looked but can't find the breakdown - but economists say that Chinese gov't lending and investments are way up with gov't lending now equaling 1/4 of GDP.
Both the Chinese gov't and western economists saying that the rise in Chinese GDP is a result of gov't spending and lending.
I'm not supporting gov't spending - just saying that gov't spending by definition increases GDP - but it doesn't mean that the economy has any long term robustness.
In China the banks are required to do whatever the policy of the central government is. If the bankers don't loan, they will be taken out and shot in the head. That is why China can do things we cannot.
A question for you,do you think the recovery when it happens will return us all to how it was just prior to the economic collapse of the last few years???
That depends on how well the media does influencing people to spend money again.
The media got us into this recession, the media can bring us right back out of it.
Why yes, I can. GDP is just a combination of consumer expenditures, investment, net import/exports and gov't spending. I've looked but can't find the breakdown - but economists say that Chinese gov't lending and investments are way up with gov't lending now equaling 1/4 of GDP.
Both the Chinese gov't and western economists saying that the rise in Chinese GDP is a result of gov't spending and lending.
You can make the claim, but using Chinese gov't officials to make that causal relationship is like a used car dealer raving about the quality of a car I'm interested in.
Quote:
I'm not supporting gov't spending - just saying that gov't spending by definition increases GDP - but it doesn't mean that the economy has any long term robustness.
Quite right. China will prosper despite the stimulus, not because of it. They will prosper because they save and produce, not borrow and spend.
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