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Old 12-18-2012, 02:49 PM
 
Location: Ohio
22,587 posts, read 15,775,598 times
Reputation: 19111

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Quote:
Originally Posted by War Beagle View Post
I'd like for people to post what they believe the medium-to-long range sequence of events will be for the US economy. Republicans tend to argue that the US will become Greece. However, that is not a good comparison because Greece does not manage its currency.
It is a good comparison and the fact that the US prints its own money is irrelevant.

The problems in Greece are very, very simple: Greece has a spending problem, and a revenue problem, and it has borrowed more money from central banks and private banks than it could ever possibly repay -- in other words, Greece has done what many households in the US have done. The difference is that a US household can file bankruptcy and discharge its debts (Chapter 7) or make payments on fixed debt and then discharge the balance (Chapter 13), while Greece cannot.

Maybe you should look at currency devaluations in Italy and Romania.

The US borrows money from foreign central banks, but it borrows more money from US States, counties, and cities, union pension funds, State government employee pension, city/county government employee pension funds, corporate pension funds, insurance companies, mutual funds, philanthropic groups, US banks, and private investors.

Various US mutual funds have loaned the US government $797.9 Billion; State/local governments $444.3 Billion and State/local government employee pension funds $188.6 Billion.

As long as they continue to loan the US government money....you don't have a problem.

And various groups will continue to loan the US government money, so long as they perceive the US has a spending problem, and not a revenue problem, or a spending and revenue problem.

The minute everyone perceives that the US has a long term revenue problem, or a spending and revenue problem, they won't be loaning you money.

Perceptions are not fixed....they can and do change.

Quote:
Originally Posted by War Beagle View Post
On the other hand, there are some Democrats and liberals that essentially believe that US national deficits and debt don't matter for the very reason that we can always print money to pay off our debts.
Again, you might want to look at Italy and Romania. Also Zimbabwe. And the Wiemar Republic. No one has ever "successfully" printed their way out of debt.

Quote:
Originally Posted by War Beagle View Post
I believe that the US faces an economic reckoning (i.e. collapse) in the future due to unsustainable spending, though I am unsure how long it will take and how it will manifest. It is true that we can print our way out of debt for a while, but to say there will be no consequences is absurd. Eventually, we will face inflation and borrowers will expect a higher return on their investment if they think we will pay them in inflated dollars.
Then do the math. It's Economics, not Nuclear Physics.

Quote:
Originally Posted by War Beagle View Post
You just touched on one of the underlying assumptions in my topic. I agree that we are not in economic apocalypse territory yet and we could still turn things around with fiscal policies that involve compromise between the two parties.
You cannot turn things around. You owe more money than you could ever possibly repay, and worse than that, the money you owe is already part of your economy.

Quote:
Originally Posted by War Beagle View Post
I understand your opinion and the desire to keep economics and politics separate as much as possible. That said, it's not a realistic expectation.
It would be a realistic expectation, if you had a BS or BA in Economics (like I do).

Maybe you can go to university and learn how to be realistic.

Quote:
Originally Posted by War Beagle View Post
Given that economics is referred to as "the dismal science" I agree that we can only plan for multiple likely outcomes.
Economics is social science -- pseudo-science -- only where it concerns human behavior, which is unpredictable.

The majority of Economics is merely number crunching, plug the numbers into a formula and get a result.

If you're looking for an economic collapse, that's just not going to happen. What will happen over the course of the next several decades is that Capital will continue to be shifted to other parts of the world.

It's not like it hasn't happened before: political and economic centers are never static....they're always migrating around the globe.

As far as an "endgame," there is none. This is Economics, not Monday Night Football. Economics has been operating since the first humanoids starting hobbling around, and it will be in play until the last human dies.

Portending....

Mircea

Quote:
Originally Posted by Hamish Forbes View Post
Regarding the course of the economy -- nobody knows, and anybody who makes a prediction now and gets it right will simply have been lucky.
Lots of people know -- and it isn't a matter of luck.

Quote:
Originally Posted by Hamish Forbes View Post
Oh, my, but it certainly does as it is actually practiced. Talk to some North Carolina textile workers, for example. The theory that everyone benefits and nobody is worse off (i.e., a Pareto improvement) from free trade depends on using part of the generated surplus to compensate the losers.
North Carolina textile workers?

How were North Carolina textile workers created? They were created when the New England textile industry collapsed in the 1970s --due to oppressive taxes and unions -- and moved to the Southeast US -- North Carolina, South Carolina, Georgia.

I guess you forgot the part about US States being sovereign and the entire US is a free-trade zone.

Quote:
Originally Posted by Hamish Forbes View Post
It's really too bad that most of the people who can tell the future course of our economy are busy driving cabs, cutting hair, and posting on the internet.
Just because you are clueless doesn't mean other people are.

Quote:
Originally Posted by Hamish Forbes View Post
Here's another way to look at the situation: Paul Krugman disagrees with you about exiting the current Fed policy. He is a professor of economics at Princeton, and winner of the Nobel Prize in economics.
And that means "what," to me?

Krugman's Nobel Prize was in comparative trade.

"Dubya's Double Dip?", The New York Times, 2 August 2002:

"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

So, how's the housing bubble working out for everyone?

Krugman should stick to what he knows, which is economic matters regarding trade, not monetary policy.

Quote:
Originally Posted by Hamish Forbes View Post
Is Krugman right? I don't know.
Unless Krugman is discussing international trade, he's spouting nothing more than partisan rhetoric.

Quote:
Originally Posted by Hamish Forbes View Post
In an earlier life I worked professionally as a futurist for a large division of a "Fortune-10" corporation for about five years, and published in the professional literature. One lesson that I came away with is that humans cannot tell the future. The best we can do is identify what seem to be the several most likely outcomes, and try to plan accordingly for each. Deciding that one particular outcome is the future is called suicide. Regarding past successes, my suggestion is "don't confuse being lucky with being smart."
It's not very polite to impose your failures and personal limitations on others.

Would you like some hints on how to do it right?

Don't use any economic models based on Keynesian Theory; never use seasonally adjusted data -- someone else's view of how things ought to be isn't reality -- the raw data tells the story exactly as it is; for money matters, always play out the other side's view for comparison; and finally, make absolutely certain you fully understand the underlying problem or root cause.

In 2010, the CBO and others were saying your unemployment rate would be 5% by October 2012. I said they were wrong, that your economy was recessionary through the end of the decade and only then would unemployment decline.

I was right; they were wrong. I did not make a lucky guess, rather I could see the entire picture, not to mention I understood the problem, and they and all the others did not -- and they still don't understand it.

Your employment problems are not caused by "lack of demand." Sorry, wrong answer.

The housing "crisis" is not the root cause of your current problems. Sorry, wrong answer.

Accordingly, any attempt to "fix" your economy by throwing away money on "stimulus" or by trying to boost housing sales will fail.

You just have to look at the data. Your wages have been stagnant/declining for 15 years now. The reason your wages are stagnant/declining is due to the fact that you cannot compete globally, because of the huge, um, "income inequality" between the US and the majority of the world.

You lost most of your global jobs; those you didn't lose have declining wages; the high unemployment puts downward pressure on all wages; and here you are.

It was these job losses/declining wages that caused the "housing crisis."

Your economy is consumption-driven, and these huge credit cards (pronounced "houses") are a big factor in permitting consumption....when you take these huge credit cards away, well, what did you expect? If you don't want a repeat, then it would behoove the government to take appropriate actions in the arena of social-engineering -- you want government-backed/guaranteed mortgages? Okay, fine, but no 2nd or 3rd Mortgages and no HELOCs against government-backed mortgages.

Most of Economics is just "Relative Math." You presently owe $20.5 TRILLION to Social Security. You never had that money; you do not have that money today; you will not have that money tomorrow, or next week, or next month; and you will never have that money.

Next year, you'll see that you owe about $24-$25 TRILLION on Social Security. You ain't go that either and you will never have it.

If you raise taxes to cover it, then what are you doing in reality? You are shifting Capital by taking it from workers and giving it to retirees who will then dump most of that money into a sink-hole called Health Care.

How do you benefit from that over the long term? You don't --- unless you want to start taxing health care.

So, do you? Want to start taxing health care?

The bottom line is no matter what you do, come 2025 or $1 TRILLION will come out of your economy -- that is an economic contraction -- a recession if you want.

You can take $1 TRILLION from working Americans and give it to retirees, or you can stop giving retirees $1 TRILLION, either way your economy contracts. Your alternative is to borrow $1 TRILLION.

Did I mention that was $1 TRILLION per year?

Well it is.....but lucky for you it's only for a few years....unlucky for you it increases to $1.5 TRILLION per year after a few years.

Raising the FICA payroll tax to cough up $1 TRILLION is no big deal, right?

What's the average State/local sales tax rate? About 7% or so, no? Well, that's only $70 Billion in potential losses of sales tax revenues for States and cities. Move along. Nothing to see here, because we all know that every State can afford to just lose a potential $14 Billion per year in sales tax revenues.

I can see you failed at making futuristic predictions.

Not impressed...

Mircea

Quote:
Originally Posted by bale002 View Post
Please do not view economics through the prism of petty partisan politics in this forum, please save it for the one specifically dedicated to that particular brand of idiocy.
Thank you.

Quote:
Originally Posted by bale002 View Post
The debt, in itself, represents the money supply which, in itself, is not a problem. The question is whether the economy makes efficient use of the money supply (debt). To the extent that it doesn't, it's a problem.

The US economy is not facing a crisis of production: on the contrary, if anything, the US and global economy, to which it is linked, is suffering from overcapacity. The US is facing a crisis of stupid overconsumption.

If the US does face any "collapse" scenario, it could be triggered by a sudden - SUDDEN - and possibly contemporaneous, cut off of financial and trade links by countries such as China & Japan (manufactures), Saudi Arabia, Canada, Mexico, and Venezuela (fuel), Central America and Chile (food). What is the probability of such an event?

Other causes of collapse could be a black swan event, such as major defeat in an oil war, civil war, natural disaster, etc.

However, the most likely scenario is a decline, relative or absolute, in the standard of living of the average person in the countries of early industrialization - some of whom perceive it as a collapse - and an increase, relative or absolute, in the standard of living of the average person in the newly industrialized countries in such a way that they all meet somewhere in a mediocre middle, though at a lower average level than what was the case in the countries of early industrialization in, say, the 1950s-1990s period.
That would be close to nearly exact.

Quote:
Originally Posted by kanhawk View Post
Ever heard of the "Argentine Paradox"? It is a country that achieved advanced development and then slid backwards and never recovered.
Economic history of Argentina - Wikipedia, the free encyclopedia

Argentina was one of the wealthiest most developed countries in the world in the early 20th century. It slid into economic decline starting in the Great Depression and continuing with the election of socialist Juan Peron in the 1940s. It never really recovered and has lurched from one economic crisis to another for the last 70 to 80 years, falling further and further behind.
I don't know if the US is headed that way, but the signs are not encouraging. Let's hope we don't become a 21st century Argentina.
Thanks for bringing that up.

Impressed....

Mircea

Quote:
Originally Posted by munna21977 View Post
American Corporations are earning money. Everytime some Tom enters a McDonalds in Russia or some Dick in India buys a Coke or some Harry in China purchases an I-Phone, they are all American products and I would like to know that what percentage of that profit comes back to USA?
Wrong question.

Why would that profit come back to the USA?

Quote:
Originally Posted by munna21977 View Post
Thats a very dark future you are predicting for the economy.
And that poster wasn't even the first.

I told you way back in 2007 you'd had best get used to things like "house-husbands" because your economy is not going to permit every household in the US to have two wage-earners just because they wanna.

In the 1950s, only 6% of US households had two wage-earners. Those were mostly the poor, and then professionals.

By the 1970s, you had 13% of households with two wage-earners. That was largely due to women entering the work-force in ever increasing numbers.

The last real figures I saw were from 2008, at which time you had 67% of households with two wage-earners.

You don't have that now. And in the years to come, it will continuously decline. More to the point, the percentage of households with 2 full-time wage-earners will decline significantly. You'll have more and more households with either one wage-earner only, or one full-time wage-earner and one part-time wage-earner. As you would expect, household income will continue to decline, which is why unemployment will remain high.

Quote:
Originally Posted by munna21977 View Post
America has so many Nobel prize winners in Economics-so called best brains in the financial world.
So?

You don't need a Nobel Prize in Economics to understand that Capital is being shifted and re-directed all over the world -- it's Global Economy (just in case you forgot that "minor detail").

Quote:
Originally Posted by munna21977 View Post
Is there an attempt by the RULING CLASS to pull us out of this Financial Crisis or it is more about its NOT my job.
That's quite silly.

It isn't their job, and they cannot -- apparently you don't understand that you do not control Economics. You might want to study economics more.

Suggesting...

Mircea

Quote:
Originally Posted by John23 View Post
I would say a relative, gradual decline.
That's exactly what will happen.

Quote:
Originally Posted by John23 View Post
-The post WWII era for the US (from the late 40's, early 50's to the 80's) was a historic anomaly IMO. Germany, Japan, Europe was wrecked. The US was the only kid on the playground with the marbles.
Correct again.

Quote:
Originally Posted by John23 View Post
-The dollar game since the 70's is closer to an end than a beginning. Bretton Woods, the whole money management system is closer to an end than a beginning.
Bretton Woods is no longer a factor. It's the Petro-Dollar now.

Quote:
Originally Posted by John23 View Post
-I wonder where the tax base is going to come from in 20 or 30 years. How can you have highschools producing....20, 25% dropouts, mediocre test scores, kids who can't pass basic history....yet they are suppose to support the country in 20 years?
What tax base?

Impressive...

Mircea

Quote:
Originally Posted by BadJuju View Post
What nation out there is going to make us use their currency?
Israel.

Obviously you don't read the Federal Register or other government notices. Payments of US aid to Israel are in Euros at the request of Israel.

Russia.

The US imports oil from Russia. Not a lot to be sure, but Russia only accepts Rubles and Euros.

Quote:
Originally Posted by BadJuju View Post
What other countries out there are not engaged in currency debasement right now? The US is the world's largest military power many times over. Who the heck is going to force the USA to do anything?
The fact that the US is the largest military power is irrelevant. Your soldiers are not superior, but their technology is ---- so long as you can use it. When you are unable to use your technology, or its advantages have been negated, you don't really do so well.

Realistically...

Mircea
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Old 12-18-2012, 03:30 PM
 
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Quote:
Originally Posted by munna21977 View Post
If they are not "our" corporations and no loyalty towards US, then why do we keep on focusing on giving them more and more tax breaks as they are neither bringing any profits in US nor creating any jobs. Tax cuts for the super rich-that is the Conservatives plan for economy. One example-Conservatives want to give tax break to Disney Corporation. Disney uses that money of tax break, invests in India where they hire hundreds of people who are working on American projects. who got benefit-India becoz they got investment in Real Estate and jobs and Disney because they got cheap labor there. Who lost-American Tax payers as Disney got Tax break.


A mature understanding of economics requires more than a cursory reading of theory. I've long been aware of the fact that there is no "we" in U.S. economic considerations. The oft heard reference to an imagined American financial collective of "we" is a reflection of a poor education, especially history. American's though, are beginning to awake from their slumber and become knowledgeable about the things that have been kept from them. This little bit of enlightenment has been the start of an undoing for some of the best laid plans of America's upper class. This media created notion that "we are all in this together", that American corporations can't do without "us" the masses of American consumers is beginning to crumble. We see that even when a sizable portion our labor force is in distress, even when our banks are owing their souls, and, our government almost a sector of Wall Street, the circus goes on, the stock market rises, the wealthy are still going to the posh resorts, and high rolling still defines the situation for those on top.

Although, it's those on the bottom and middle that really define the direness of America's economy. Yes "our" corporations really aren't "ours" after all, surprised? This has been the way of economic class distinction since the earliest days of U.S. history, our public school education tells us differently but most know that the top rules and the bottom makes do. Are you looking to the government by and for corporations to do something for YOU? Once you realize the game is really quite old you'll be able to stand back and let the game expose itself to you, as Dick Gregory, the comedian, used to say, "if you think you're not getting screwed just look in your wallet".................
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Old 12-18-2012, 03:55 PM
 
621 posts, read 593,001 times
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Financial, Real Estate, Stock Markets Trends and Current Affairs


Quote:
Originally Posted by Hamish Forbes View Post
It's really too bad that most of the people who can tell the future course of our economy are busy driving cabs, cutting hair, and posting on the internet.



I agree with you completely. You should read this blog really good stuff. He got 420% return on a 50% cash position in 10 quarters. His run stopped because of actions taken by the Fed to support technically insolvent companies.




Quote:
Originally Posted by Hamish Forbes View Post
Here's another way to look at the situation: Paul Krugman disagrees with you about exiting the current Fed policy. He is a professor of economics at Princeton, and winner of the Nobel Prize in economics.
There was a person that won a Nobel prize in economics for proving that debt was as good for Providing capital for a business as savings was. I don't have the disproof worked out in its entirety but he is wrong. I don't set much store in who won a Nobel prize or what is taught in economics at all for that matter. Take a look at what the actions of the Rockefeller foundation and the Carnagy foundation have been for the past ¾ of a century or more and then look at this schools of thought in economics started with political agendas and then made the math fit. I am self taught in economics. My political agenda. I want a job at McDee's and I don't want to entirely destroy my mom's savings.
Quote:
Originally Posted by Hamish Forbes View Post
Is Krugman right? I don't know. Other accomplished, authoritative people have yet other ideas. Time will tell -- finance is very complicated now, as we all should understand from the recent past.

But history does not teach any lessons regarding the future. There is too much uncertainty in the state machine. Rather, we can use various historical anecdotes to understand what has happened, after it has happened, tracing backward into the state machine.
Black swan events. Unforeseeable looking forwards highly foreseeable in hind sight. One of those is coming.
Quote:
Originally Posted by Hamish Forbes View Post

In an earlier life I worked professionally as a futurist for a large division of a "Fortune-10" corporation for about five years, and published in the professional literature. One lesson that I came away with is that humans cannot tell the future. The best we can do is identify what seem to be the several most likely outcomes, and try to plan accordingly for each. Deciding that one particular outcome is the future is called suicide. Regarding past successes, my suggestion is "don't confuse being lucky with being smart."
”If you want to know tomorrows weather with accuracy then get the days after news paper and read what happened.” If you understand what the players are and what they want and if they can get it then you have a chance not of predicting what will happen but as you say planning for the possible outcomes.




Quote:
Originally Posted by BadJuju View Post
What nation out there is going to make us use their currency?
China. They have 3X the population that we do and their economy is growing as ours is contracting. The lower wage structure there is meaning that they will be getting the investment in manufacturing for the foreseeable future. The end game of this is when people say I don't want USD any more because it is worthless.
Quote:
Originally Posted by BadJuju View Post
What other countries out there are not engaged in currency debasement right now? The US is the world's largest military power many times over. Who the heck is going to force the USA to do anything?
the great wall of China was never breached militarily. When China was invaded they just bribed the border guards. A big military is like strong teeth. What use are they if the bones they sit in are rotten? We can't buy the bullets to shoot the Chinese with from China. Sequestration. We need the tax base to pay for that military. We are shipping that tax base to China and India.




Quote:
Originally Posted by Hamish Forbes View Post

In an earlier life I worked professionally as a futurist for a large division of a "Fortune-10" corporation for about five years, and published in the professional literature.
Good for you. I work part time as a psychic. Readings work like this. Translate something from English to Russian to French without the use of the original paper as reference. And having different people do the translation. The limit on accuracy is about like that. Then if you know something about the future your advance knowledge will invalidate the knowledge to the point that you can influence the future. (I have driven out of my way to the point where I got a ticked trying to avoid the ticket.) Predicting the future isn't the thing to do, hold a view of the future that you like and then let the world conform around it.
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Old 12-19-2012, 11:05 AM
 
621 posts, read 593,001 times
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http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg


Looking at this I think that the total debt is going to come down.


Top Marginal Income Tax Rate


This one has a striking inverse relationship with the last one.


http://static.seekingalpha.com/uploa...load_gdp_1.jpg


We are due to spend some time under the curve.


http://blogs.reuters.com/rolfe-winkl...ow-vs-gold.jpg


Viewed in gold the recovery after 1999 disappears.


http://1.bp.blogspot.com/-SG98yggMkP...PE%2BRatio.jpg


P/E ratios need to come down in order for the stocks to not be overpriced. They need to spend some time trading in the 7:1 range.


Secrets Of The Plunge Protection Team


The current overprice of stocks probably reflects actions taken by the Fed in response to this presidential directive. At least in part.


How this picture resolves itself is open to debate.




So what do I think is going to happen?


Gold up. Long term $7k is a reasonable target. So is $12k or $24k. Or not depending on how the Fed manipulates things.


Oil is under pressure to go higher due to species dilution. Printing money.


The very high total debt level is going to put employment under pressure to go lower. The reported number is fiction. The last numbers I have are for nov of 2010 in that month they were paying out for an unemployment rate of 17+% and calling it 9.8%.


My economic forecast is for hyper stagflation. Probability of being correct? I'd say I have about a 1 in 4 chance of being correct.


An event unforeseen by all most everyone about 50/50.


A continuation of the status quo for the next ten years or so. About 25% chance.
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Old 12-19-2012, 02:19 PM
 
Location: Seattle, WA
209 posts, read 554,936 times
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Quote:
Originally Posted by War Beagle View Post
I'd like for people to post what they believe the medium-to-long range sequence of events will be for the US economy. Republicans tend to argue that the US will become Greece. However, that is not a good comparison because Greece does not manage its currency. On the other hand, there are some Democrats and liberals that essentially believe that US national deficits and debt don't matter for the very reason that we can always print money to pay off our debts.

I believe that the US faces an economic reckoning (i.e. collapse) in the future due to unsustainable spending, though I am unsure how long it will take and how it will manifest. It is true that we can print our way out of debt for a while, but to say there will be no consequences is absurd. Eventually, we will face inflation and borrowers will expect a higher return on their investment if they think we will pay them in inflated dollars.

Endgame is simple. Default, currency collapse and reissue a new currency.
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Old 12-20-2012, 03:15 AM
 
155 posts, read 500,081 times
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Government control
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Old 12-20-2012, 04:48 PM
 
2,988 posts, read 3,768,075 times
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Quote:
Originally Posted by Mircea View Post

I was right; they were wrong. I did not make a lucky guess, rather I could see the entire picture, not to mention I understood the problem, and they and all the others did not -- and they still don't understand it.


Thank you.
You're welcome.

But it is the reader, here, who is deeply in your debt. We are so fortunate indeed to have your wisdom available completely free of charge (and perhaps worth even more than that), in abundance, overabundance, super abundance, and hyper abundance by way of the internet. Keep up the good work and the lengthy posts!
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Old 12-25-2012, 12:08 PM
 
Location: 3rd Rock fts
748 posts, read 1,001,975 times
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Default ‘We’=young/medium/old folk zombies’

Quote:
Originally Posted by jertheber
I've long been aware of the fact that there is no "we" in U.S. economic considerations.
I respectably disagree—back then & especially now! As long as voter subsidies are standardized, we are still part of the game. The financial apparatus is trying to make the citizenry obsolete; but it’s hard to do when the TBTF banks/Big Business constantly rely on USGov’t/Taxpayer welfare.

By not allowing deep recessions/recessions to clear the air, everyone is a zombie—Gov’ts/Banks/Real Estate/Big Business/citizenry. IMO, using perpetual fiscal/monetary policy to ZOMBIE the workings of the economy is eventually going to backfire.

I totally agree that the orchestrated plan is for the subliminal decline of the USA economy. However, it’s becoming painfully clear that we are ALL in this nightmare together now. The endgame is simple: collect all the deferred non-recessions & lump them all together Depression style.
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Old 12-27-2012, 02:24 PM
 
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Quote:
Originally Posted by Mircea View Post
It is a good comparison and the fact that the US prints its own money is irrelevant.

The problems in Greece are very, very simple: Greece has a spending problem, and a revenue problem, and it has borrowed more money from central banks and private banks than it could ever possibly repay -- in other words, Greece has done what many households in the US have done. The difference is that a US household can file bankruptcy and discharge its debts (Chapter 7) or make payments on fixed debt and then discharge the balance (Chapter 13), while Greece cannot.

Maybe you should look at currency devaluations in Italy and Romania.

The US borrows money from foreign central banks, but it borrows more money from US States, counties, and cities, union pension funds, State government employee pension, city/county government employee pension funds, corporate pension funds, insurance companies, mutual funds, philanthropic groups, US banks, and private investors.

Various US mutual funds have loaned the US government $797.9 Billion; State/local governments $444.3 Billion and State/local government employee pension funds $188.6 Billion.

As long as they continue to loan the US government money....you don't have a problem.

And various groups will continue to loan the US government money, so long as they perceive the US has a spending problem, and not a revenue problem, or a spending and revenue problem.

The minute everyone perceives that the US has a long term revenue problem, or a spending and revenue problem, they won't be loaning you money.

Perceptions are not fixed....they can and do change.

This is the hart of the reason why I want to radically increase the minimum wage. With that you can get the revenue to balance the budget. Keep government spending more or less the same and increase the revenue base with higher wages across the board. Get full employment with effective stimulus. Lump sum cash to everyone.
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Old 12-28-2012, 12:00 PM
 
2,553 posts, read 2,135,741 times
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Quote:
Originally Posted by pie_row View Post
This is the hart of the reason why I want to radically increase the minimum wage. With that you can get the revenue to balance the budget. Keep government spending more or less the same and increase the revenue base with higher wages across the board. Get full employment with effective stimulus. Lump sum cash to everyone.
EITC makes far more sense than increases to the minimum wage. Minimum wage should represent a inflation-adjusted floor to keep workers from scraping the bottom. It is not an effective means of doing more than that.

Most people for whom the minimum wage is designed to help--adults with children--earn above it and are, therefore, not helped by it. Most of the minimum wage earners are youths living with parents, working at part-time jobs.

Direct payments to working parents is far more effective at keeping families above some multiple of the poverty line.
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