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Thread summary:

Bad Economy: economic depression, expectations, fiscal policy, home mortgage interest rates.

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Old 06-18-2008, 11:42 PM
 
Location: Arizona
19 posts, read 67,415 times
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Hello,
I am a relatively young individual, like everybody else I am paying quite a bit of attention to the economic situation we're in right now. While I was in college during the 2001 (?) recession, I didn't give it much thought at all. Likewise, I was obviously too young to know anything about other previous recessions, including those in the early 90s and late 70s.
My question to those who experienced those economic downturns is this: how does this feel to you compared to other downturns? ... not only in your own personal life but in the overall feeling of the general population - you know, how people view the situation.
Since I'm young, I can't compare this to anything, but I am seeing lots of people that I know that are very worried and even preparing for the absolute worst, including, well, a total economic meltdown. I'm interested, but again I have nothing to compare this to.
Can someone shed some light on this for me so I can have some more insight?

Thanks!

Last edited by lifeisbigger; 06-18-2008 at 11:55 PM.. Reason: Added question mark
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Old 06-19-2008, 12:20 AM
 
655 posts, read 758,004 times
Reputation: 240
Quote:
Originally Posted by lifeisbigger View Post
Hello,
I am a relatively young individual, like everybody else I am paying quite a bit of attention to the economic situation we're in right now. While I was in college during the 2001 (?) recession, I didn't give it much thought at all. Likewise, I was obviously too young to know anything about other previous recessions, including those in the early 90s and late 70s.
My question to those who experienced those economic downturns is this: how does this feel to you compared to other downturns? ... not only in your own personal life but in the overall feeling of the general population - you know, how people view the situation.
Since I'm young, I can't compare this to anything, but I am seeing lots of people that I know that are very worried and even preparing for the absolute worst, including, well, a total economic meltdown. I'm interested, but again I have nothing to compare this to.
Can someone shed some light on this for me so I can have some more insight?

Thanks!
Things are much different this time around in my opinion. The past few recessions we had a few things weighing on the economy, this time we have everything. My gut, (and I'm no downer) tells me we might be heading into something real grim here. Something beyond just a cycling slowdown, something that starts with the big D. We have soooooooo many negative factors right now. I won't bore you by naming them all, if your slightly educated and watch the news, you know them.

Next quarter I fear the wave of major layoffs coming will be second to nothing this country has seen before. We are right on the brink of falling off that cliff. My prediction before things turn? How does the Dow 7000 sound? I'll stand by it, 18 months or under. Watch, listen, prepare and learn.
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Old 06-19-2008, 12:26 AM
 
Location: rain city
2,958 posts, read 11,568,647 times
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I went through the civil rights upheaval of the 60's, the gas crisis of the 70's, the 80's 15% mortgage interest rates, the late 80's oil bust in Texas, the 2001 meltdown. And as an official baby boomer, gone through life in the US as the rat in the snake--always too many of us for available jobs and housing.

But I think this is the worst so far and I think there will be long term ramifications. After riding the long wave of late 20th century post-war glory, America is in the 21st century and falling behind in every catagory. We have invested all of our talent and most of our money in the best interests of the military industrial complex (as feared by Eisenhower). Those chickens are settling in to roost.

As investment in our country, our cities, and our people have diminished over the last 50 years at the expense of worldwide meddling, overseas outsourcing, and a catastrophic sinking of resources in *defense* spending, our country is running farther and farther behind. I think this trend will continue for the forseeable future with further deteriorating quality of life for many Americans and a shrinking middles class.

Pumping/drilling/stealing/squeezing gas and oil from every crack and crevice will NOT fix our problems. America has failed to invest in its infrastructure, failed to invest in its own cities, failed to invest in public transportation, failed to support education, failed to invest in public health, failed to support families. Failed to take care of the bottom line.

We will pay for these failures for a long time to come. While many other places make the right investments, we will continue to ignore our shortcomings and seek glory in faraway conquests that make good headlines.
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Old 06-19-2008, 12:34 AM
 
655 posts, read 758,004 times
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Quote:
Originally Posted by azoria View Post
I went through the civil rights upheaval of the 60's, the gas crisis of the 70's, the 80's 15% mortgage interest rates, the late 80's oil bust in Texas, the 2001 meltdown. And as an official baby boomer, gone through life in the US as the rat in the snake--always too many of us for available jobs and housing.

But I think this is the worst so far and I think there will be long term ramifications. After riding the long wave of late 20th century post-war glory, America is in the 21st century and falling behind in every catagory. We have invested all of our talent and most of our money in the best interests of the military industrial complex (as feared by Eisenhower). Those chickens are settling in to roost.

As investment in our country, our cities, and our people have diminished over the last 50 years at the expense of worldwide meddling, overseas outsourcing, and a catastrophic sinking of resources in *defense* spending, our country is running farther and farther behind. I think this trend will continue for the forseeable future with further deteriorating quality of life for many Americans and a shrinking middles class.

Pumping/drilling/stealing/squeezing gas and oil from every crack and crevice will NOT fix our problems. America has failed to invest in its infrastructure, failed to invest in its own cities, failed to invest in public transportation, failed to support education, failed to invest in public health, failed to support families. Failed to take care of the bottom line.

We will pay for these failures for a long time to come. While many other places make the right investments, we will continue to ignore our shortcomings and seek glory in faraway conquests that make good headlines.
I think there is another thread on here for military haters. You should find it. The military, contrary to your rant is an economic stimulus. Always has been a stimulus aand, probably always will be. Some of the other points you mention, make sense, but not your anti-military stance. If not for the military, you and I would not be here. That is a fact, like it or not.
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Old 06-19-2008, 02:38 AM
 
Location: western East Roman Empire
7,445 posts, read 11,234,793 times
Reputation: 7008
Quote:
Originally Posted by azoria View Post
I went through the civil rights upheaval of the 60's, the gas crisis of the 70's, the 80's 15% mortgage interest rates, the late 80's oil bust in Texas, the 2001 meltdown ...

But I think this is the worst so far and I think there will be long term ramifications. After riding the long wave of late 20th century post-war glory, America is in the 21st century and falling behind in every catagory. We have invested all of our talent and most of our money in ....

As investment in our country, our cities, and our people have diminished over the last 50 years at the expense of worldwide meddling, overseas outsourcing ... our country is running farther and farther behind. I think this trend will continue for the forseeable future with further deteriorating quality of life for many Americans and a shrinking middles class.

Pumping/drilling/stealing/squeezing gas and oil from every crack and crevice will NOT fix our problems. America has failed to invest in its infrastructure, failed to invest in its own cities, failed to invest in public transportation, failed to support education, failed to invest in public health, failed to support families. Failed to take care of the bottom line.

We will pay for these failures for a long time to come. While many other places make the right investments, we will continue to ignore our shortcomings and seek glory in faraway conquests that make good headlines.
Some of these criticisms are spot on, but the emphasis on the military is over stated.

Take this equation into account:

production - domestic consumption = domestic saving + investment.

The basic problem with the US economy this time around has been too loose monetary/credit policy for too long in the 2000s, a major factor in the grotesque imbalance in the above equation right now. The domestic economy invested too much in housing and transport that is not in harmony with the new energy environment.

Nonetheless, the US still has the legal environment, the tax code, technology, and managerial skills to come out of this, provided that the proper set of monetary and fiscal policies are implemented.

One major factor will be whether the ruling class decides that it wants to continue with a dynamic and flexible society or a stagnant one.

If structural changes in the economy are slow, we face the two evils of inflation and/or high taxation.

Choices in favor of a continued dynamic and flexible society imply a choice of inflation over high taxation. In this case, the result is that those with the right set of skills to compete in the global economy can stay afloat or excel, while those without will fall further behind.

Choices in favor of a stagnant society imply high taxation over inflation. In this case, most people stagnate and/or fall further behind, as according to the laws of economic cost, while only a select few who know how to navigate international waters, so to speak, can compete and excel.

An even better choice is to focus on what is productive and pragmatic, in the framework of a sensible moral discipline: we can make relatively quick structural changes to the economy, avoiding the worst of inflation and high taxation.

Such a solution probably includes significantly changing our organization of space as energy supply and technology allow and our concepts of retirement and health care.

On this venue, any response to your questions can only be crude, but I hope this helps.

As for feeling, I remember in the 1970s a feeling of malaise, truly sickening to the stomach, like waking up from a hangover or a drug-induced stupor, while the 1980s, from around 1983 and afterwards, a feeling of optimism, like winding down from a brisk jog in cold, crisp air.

The optimism and successes of the 1980s-1990s unfortunately in the 2000s turned into hubris, greed, and a lack of discipline. These are common cycles in human history, what changes is the scale and to what extent they spiral out of control ... sometimes entire civilizations are turned over and die out.

Anyway, it is better to keep it short and succinct lest we ramble unduly.

In short, this country needs to come down from its greedy hubris and its high on the money supply, from its undisciplined credit-induced consumption stupor, and return to a focus on sensible productivity in the framework of what is possible, while striving to harness new energies.

It can be done, but failure to do so may indeed have grave consequences this time around.

Good luck!

Last edited by bale002; 06-19-2008 at 03:17 AM..
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Old 06-19-2008, 05:38 AM
 
Location: Los Angeles Area
3,306 posts, read 3,557,114 times
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Quote:
Since I'm young, I can't compare this to anything, but I am seeing lots of people that I know that are very worried and even preparing for the absolute worst, including, well, a total economic meltdown.
During every down turn there are people that are preparing for a "total economic meltdown". You can find many books on it. For example:

Amazon.com: Surviving the Great Depression of 1990: Dr. Ravi Batra: Books

You'll find their reasoning is just as short sighted as people's reasoning is today.
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Old 06-19-2008, 05:58 AM
 
3,283 posts, read 4,757,208 times
Reputation: 753
everyone's going to lose their jobs, all businesses are going to close down, realestate will become worthless! we're all going to have to learn how to grow our own food, build our own accommodation and protect ourselves. cities will be deserted, massive unrest, civil war...........

i don't know about you but it sounds a whole lot more appealing than coming into the office!

lol
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Old 06-19-2008, 07:23 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,807,967 times
Reputation: 1708
Quote:
Originally Posted by Humanoid View Post
During every down turn there are people that are preparing for a "total economic meltdown". You can find many books on it. For example:

Amazon.com: Surviving the Great Depression of 1990: Dr. Ravi Batra: Books

You'll find their reasoning is just as short sighted as people's reasoning is today.
As the old adage goes:

Prepare for the worst and hope for the best.
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Old 06-19-2008, 08:25 AM
 
2,775 posts, read 3,033,919 times
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I don't buy into the whole economy is going to collapse theory. Compared to previous economic downturns I've lived through this is not as different feeling as a lot of others would have you believe. My crystal ball tells me that the next generations of Americans are going to be more global and more entrepreneurial than the baby-boomer generation, and that is going to make a huge difference in the upcoming years. Our current President and his advisors have either intentionally or unintentionally sabotaged the US economy over the past 7 years, but it will stop shortly. Automakers are going to produce alternative fueled vehicles, the federal government will put laws in place to curb offshore outsourcing, US education will see some much needed reform, and US healthcare will be revamped so as to be more affordable and less driven by profit. Will all these things happen next year? Probably not. But I do think we'll see some positive change starting very shortly.
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Old 06-19-2008, 08:35 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,807,967 times
Reputation: 1708
Quote:
Originally Posted by lifeisbigger View Post
Hello,
I am a relatively young individual, like everybody else I am paying quite a bit of attention to the economic situation we're in right now. While I was in college during the 2001 (?) recession, I didn't give it much thought at all. Likewise, I was obviously too young to know anything about other previous recessions, including those in the early 90s and late 70s.
My question to those who experienced those economic downturns is this: how does this feel to you compared to other downturns? ... not only in your own personal life but in the overall feeling of the general population - you know, how people view the situation.
Since I'm young, I can't compare this to anything, but I am seeing lots of people that I know that are very worried and even preparing for the absolute worst, including, well, a total economic meltdown. I'm interested, but again I have nothing to compare this to.
Can someone shed some light on this for me so I can have some more insight?

Thanks!
Well I in the mid 30's range in age. So slightly remember the downturn in the 1990's but I was just getting out of high school and was to busy getting ready for college to be too concerned with it. But at the time I and most of my friends and family had/found jobs without a problem. Really it was no big deal to us. With the 2001 downturn. Well this is going to sound horrible but I was getting a real chuckle at the whole thing. This was because at the time I view the people that have lost money on this asset/stock bubble as over zealous and greedy gamblers that got burned. They lost because they didn't diversify there asset and a lot of them put all there chips into on company or one asset class (tech). And again for the most part the people around me weren't really affected by that downturn. In fact I was the only one semi-effected by the whole thing because I had a job in the financial sector and was let go from one job. But I was out of a job for 2 weeks and pretty easily found another job and was back in the mix in no time. Now with this downturn. Well actually I had the same attitude as I had with the 2001 bubble at least at first. But as I've watched thing progress I'm becoming more concerned. I realized that this is not like the 2001 downturn. The big difference in my mind is that this time the asset bubble of choice was the housing sector. You see with the stock loses when you lose for the most part you just lose the money you put into the game. Ex. those who lost on Enron mostly were people who bought the stock on a retirement plans or were folks that put there own money (not borrowed) in the those stocks. So when they lost they lost the money on hand. Which was in some cases significant. But that was it. Granted I,m sure there were plenty of people with CC debt back then. Now with this time around a lot of people borrowed cash to buy into this bubble and/or took out their phony (hyperinflated house appreciation) equity out of there biggest asset. So basically everybody owes somebody long term money this time around. Heck most people knowingly (despite what they say) borrowed more than they could afford because they actually thought that housing prices were going to go up forever. Now with this rather deep housing downturn a lot of people are behind the 8 ball with the cost of financing a mega-mortgage and the current bout of price rises in energy and food. Basically people are just going under with the debt and cost of living. Of course now a lot of them who had and credit left are now putting a bit of there debt/bills foolishly on there Credit cards. Getting themselves even into more debt. So this in the end for the short term (I'm thinking 5 years) will (I think) cause a major slowdown pretty much all sectors of the U.S. Economy excluding exports because people will just not have the money to spend on consumer items. I personally think in the next year we will be in a official recession. We shall see. As on a personal level I and my family are still doing OK. I getting out of the financial world and training to go into the health sector. But on the other hand some of my friends are hurt'in a bit. Some of them have been laid off and are now having a tough time getting jobs. One of my buddies has run out of unemployment and is just not finding work. And unfortunately he was one of the foolish that bought when the housing market was high and now owe a lot of money to a bank. I hope he can pull it out but right now it's not looking so hot. One last thing. I know I sound down on the economy right now but to be honest in the long term I think America will be just find. We just have to take a kick in the ba!!s for now. As always we will pick ourselves up and figure out a way to thrive once again. Granted I expect after this downturn we are going to have to share the title "economic leaders" with china.
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