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Old 07-10-2012, 11:03 AM
 
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I am a bit more sanguine that many on here.

First thing to realize is that we're in a depression, not a recession. Technically, we've been out of a recession for quite some time, but does it really feel that way to anyone? However, when you realize that a depression is really a balance sheet adjustment, then the current malaise starts to make a great deal more sense. We got into an untenable debt position and are now going through the painful process of retiring those debts. For example, the amount of household debt has dropped 13% since 3Q2008. And the amount of households having significant credit card debt has dropped 15% in the same amount of time.

The critical problem however, is mortgage and home equity debt. With the likelihood that home prices are beginning to bottom out, the next phase is for home prices to begin ratcheting up again. Not at the bubble-like pace of last decade, but at a more moderate pace in line with inflation. So over the next few years, if home prices don't plummet further, we should see more homes sold at prices that make it possible to retire mortgages, thereby reducing household debt more dramatically.

The problem in all this, of course, is government which has taken on a massive amount of debt. What we're likely experiencing here is the discrediting of Keynesianism, although few want to admit it just yet. The total collapse of the welfare states of Europe, the complete ineffectiveness of the U.S. stimulus of 2009, the coming collapse of the Chinese economy and the overall failures of governments everywhere to stimulate economic activity despite going deeply into the hole to do so, should serve as an object lesson for those who think that government can spend us out of the economic crisis.


Probably the best single analysis I've ever read on what's going on right now: http://www.minyanville.com/businessm...d/28971?page=1

Last edited by cpg35223; 07-10-2012 at 12:09 PM..
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Old 07-10-2012, 03:16 PM
 
Location: Ontario, NY
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Quote:
Originally Posted by Boompa View Post
It appears to be a global downturn so it may take decades.
I think it's less of a global downturn and more to do with exporting our jobs overseas. America has been importing more goods then exporting for decades, and it's just not cheap products from China either. Oil is another big import we have only very recently reversed. A LOT of wealth has been drained from this country over the years, we are not as wealthy as we once were and it's beginning to show. A governemnt that spends WAY more than it takes in every year doesn't help either. Actually the current economic situation is way overdue. If it wasn't for reckless borrowing to prop up our false sense of wealth, this economic downturn would have occurred 10 years earlier. We financed our prosperity with debt the last ten years, and now we have to pay the bill.
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Old 07-10-2012, 03:33 PM
 
2,553 posts, read 2,145,956 times
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Originally Posted by Veyron View Post
I haven't really been following the recession too much. I know about it but not the specifics and the latest information.

So will the economy ever come back or is this way of life here to stay?
Are you referring to specific statistics (e.g., unemployment, new housing construction, manufacturing orders, etc.) or a specific year to which you want to compare? As it stands, your question is very vague and requires very broad responses.
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Old 07-10-2012, 03:41 PM
 
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i anticipate another boom within the next 10 years or so when there are major discoveries and profitable inventions in the alternative energy sector. its just a hunch and i could be off, but to answer your question i definitely don't think we are doomed in the long-term.
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Old 07-10-2012, 09:24 PM
 
81 posts, read 105,018 times
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Quote:
Originally Posted by TechGromit View Post
I think it's less of a global downturn and more to do with exporting our jobs overseas. America has been importing more goods then exporting for decades, and it's just not cheap products from China either. Oil is another big import we have only very recently reversed. A LOT of wealth has been drained from this country over the years, we are not as wealthy as we once were and it's beginning to show. A governemnt that spends WAY more than it takes in every year doesn't help either. Actually the current economic situation is way overdue. If it wasn't for reckless borrowing to prop up our false sense of wealth, this economic downturn would have occurred 10 years earlier. We financed our prosperity with debt the last ten years, and now we have to pay the bill.
That is exactly what we're going through. We were able to cover it up by lowering interest rates over the last thirty years and going further and further into debt. Debt kept it going until we finally reached the breaking point in 2008. More debt, this time taken on by the government allowed for a shallow, statistical recovery. It appears more and more that we're either going into a malaise where growth is 1 to 2% or possibly back into a new recession.
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Old 07-10-2012, 09:57 PM
 
Location: Ontario, NY
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Originally Posted by fitz99clem View Post
Debt kept it going until we finally reached the breaking point in 2008.
I really wish I could say the future looks brighter now. We are going to reduce spending and pay down our debt so we can have real prosperity again. And it could happen. If people paid off all the credit cards, and stopped flushing that 10 or 15 percent interest a year on there debt down the drain to fatten some banks bottom line. That money could be used to buy more goods and services without generating more debt to really invigorate the economy...


... Unfortunately no one wants to think or talk about the 50 ton elephant in the middle of the room. When the United States government credit rating is reduced to Junk status and they can no longer borrow money to pay for there bloated budget, then your see the real suffering in this country. Weather it comes in the form of hyperinflation, or just reducing/cutting social benefits to what we can actually afford to pay for, were going to look back on the good old days of only 8% unemployment. It's going to be like the great depression all over again. 20% plus unemployment for decades and no social nets to catch the fallen.
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Old 07-11-2012, 02:38 AM
 
Location: Fairfax County, VA
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Quote:
Originally Posted by TechGromit View Post
I think it's less of a global downturn and more to do with exporting our jobs overseas.
If we stopped outsourcing, would that also stop any inflow of immigrants (and illegals) into the country?
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Old 07-11-2012, 12:38 PM
 
Location: Apple Valley Calif
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The economy will begin to improve the minute obama is voted out of office in November. He is 100% responsible for the terrible economy, and he has done it intentionally....
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Old 07-11-2012, 12:49 PM
 
Location: Ontario, NY
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Originally Posted by Donn2390 View Post
The economy will begin to improve the minute obama is voted out of office in November. He is 100% responsible for the terrible economy, and he has done it intentionally....
This is a joke right? The republicans with there lets not regulate business so they can grow attitude has done far more damage to the economy than anything Obama has done. While he hasn't been a great president, I don't think he's doing all that bad of a job. Believe me we would be no better off if McCain won.
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Old 07-11-2012, 12:57 PM
 
Location: right here
4,142 posts, read 5,056,464 times
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Quote:
Originally Posted by TechGromit View Post
This is a joke right? The republicans with there lets not regulate business so they can grow attitude has done far more damage to the economy than anything Obama has done. While he hasn't been a great president, I don't think he's doing all that bad of a job. Believe me we would be no better off if McCain won.

We will never know now will we?

To answer the question....I hope a boom will start but I think this will be the new normal for awhile....
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