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More and more our nation is heading towards a service economy. Our wonderful leaders in Washington brag about how this is a good thing for our nation and will create jobs. In my opinion, this sort of mentality will bring our nation to its knees. A service economy does not create new wealth, it only trades wealth. If I provide a service to you, I am taking money out of your pocket, only to transfer to another individual that is providing a service to me. Where is the wealth created in that scenario? Manufacturing, quarrying, mining, etc. all created wealth. Where are those jobs now? By creating a service based society, the middle class will be reduced to menial jobs, as many of us have already experienced, and only a select few will prosper from providing a service. If our nation is going to get back on track, our leaders need to search for ways to create wealth, rather than transfer it. Of course, all of this is my opinion so take it as you may.
I really enjoy all the statistics that come out from the government that still end up getting revised downward and are even worse about a month or two later.
If your using the government's definition for a recession...yes we are technically out of it. If your using common sense and know what about 80% of the u.s. populations knows...then no, we are still in a recession. The other 20% are in denial, probably because they want to believe Keynesian economics and Bernanke's funny money policy work.
Do you guys feel this attitude towards our economy will ever change? Will we get out of this funk, this mindset?
Nope. Many recent college graduates leave school with a huge debt load that will make most of them a slave for life to the government or banks (or both). Look at all these riots and protesting happening all over the world.
I think many business owners and corporations are reluctant to hire because of Obamacare, they just don't know what to expect from it.
Anyways, they did bring up a good point. Corporate balance sheets are extremely healthy (forgiving the financial sector). You would think that once confidence is restored, those earnings have to pour back into the economy, wouldn't you?
pour into the global economy, yes. not necessarily the american economy, not necessarily into american wages or american employment.
they've had strong balance sheets for some time, i don't think that is an indicator of anything important. when trying to define what the "economy" is and whether it is doing well i guess it depends on your personal priorities. Corporations are doing well, households are not.
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Originally Posted by NJBest
But sitting on cash has limited returns in comparison.... Wouldn't the investors want the bigger returns that come with risk at some point?
Well, the problem is that we're not in a recession. We are in a depression. A recession is basically a price adjustment, while a depression is a balance sheet adjustment. While there have been flickers of growth here and there, enough to pull us out of what would be conventionally defined as a recession, the continued erosion of home values back down to what would have been the actual price level adjusted for inflation continues. And when you add together the unemployed and underemployed, you get a number of around 17-18%. This is in no way a sign of a growing economy. To argue otherwise is to play games with the numbers.
If you look at past depressions, they have also been the result of credit bubbles. The problem is that the government and the press (A craven institution if there has ever been one. What happened to their mission to Afflict The Comfortable? Instead, all they do now is regurgitate press releases) have tiptoed around the word. But the continued unwinding of debt has continued unabated, witness BoA's near brush with insolvency last month and the EU's ongoing woes. In other words, the ride is nowhere close to being over.
A recession is not a subjective thing. A recession is not in place just because your neighbor is struggling. A recession is simply when GDP falls for two consecutive quarters.
As you can see, we pulled out of the recession in Q3 of 2010.
i disagree. maybe they teach you in business school that the NBER is an authoritative source for defining a "recession" and a "depression", but i don't buy that.
i disagree. maybe they teach you in business school that the NBER is an authoritative source for defining a "recession" and a "depression", but i don't buy that.
You disagree with the definition of a recession? How do you define gravity? Does it pull up? Are stop signs blue to you as well?
You can't reject the definition of a word simply because you don't like it.
A recession is not a subjective thing. A recession is not in place just because your neighbor is struggling. A recession is simply when GDP falls for two consecutive quarters.
As you can see, we pulled out of the recession in Q3 of 2010.
I see a presentation of total nonsense.
What we are looking at with the Infomerrical Graphix is . . . the "Stimulus" flow through (and out of) the US economy.
Since we STILL have the same leaky boat -- with the money being bled out of US to imported Oil, China and the Transnational Corporations, the money barely barely bounced off the table twice before it was vacuumed away.
(btw, the Stimulus itself was not a bad thing -- probably did save US from fully going under -- just we never fixed the leaks that help cause the mess).
Now we are still in the same leaky boat. Still sinking. And absolutely all attempts at stopping the leaks -- e.g. Tariffs, Taking US OFF Oil, and Taxes on the Upper End and Transnational Corporations -- will be fought until the boat is so low that the rats start jumping ship.
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