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The way to prove understanding is not be citing education, but applying it. You comments about the likelihood of collapse are much more in line with mainstream thought then the outliers that seem to believe in freakish scenarios...
Mainstream thinking is EXACTLY what led us into this mess. In 2005-06, how many people were predicting the housing bubble burst? Peter Schiff was laughed at and ridiculed on countless news shows. Here's one example:
Mainstream thinking since John Maynard Keynes has held that you can deficit spend your way out of trouble. Yes, that may be true to a certain extent, but that's only true in countries that have productive capacity to back up the borrowing and spending (the U.S. in the 1930s, Germany today). I don't see any indication that any of the stimulus money is going to stimulate anything remotely productive in this country. Instead, we get, among other things, an $8K tax credit to do our part in re-inflating the housing bubble. Even the arch-Keynesian Paul Krugman has commented on how stupid that is.
To chet and the others - since the "mainstream" has proven so incapable in the past, why do you continue to place so much stock in it?
HAHAHA! (to the comment in bold). You and I and every other non-delusional person knows that is not going to happen. You can't pay debt with a debt spending spree and trillion dollar "reforms". With your degrees I would assume you have a handle on that.
I will agree with your comment regarding the hypocritical nations of this world who have/are going through the same situation as us. On top of that, it was FOREIGN loans/investment which led to this mess.
It's like me giving money to a drunk and being pissed off when he spends it on booze.
A few of us have logically pointed out our reasons for believing an inevitable collapse; can anyone give a different perspective on why not? (Other than simply dismissing our posts)
I was not trying to dismiss anything really, just so many things seem to start by one poster assuming the education and experience of the other instead of dealing with points...such as past posts in this thread. I don't think the points are bad, I just have a differing opinion. You assume a negative attack when people just don't agree.
The entire collapse is unlikely, many companies not dependent on consumer spending are still strong outside of the general mortgage mess (pharma, consumer staples). The markets are increasing, consumer based businesses are starting to report positive margins for last quarter, more jobs are being posted and snapped up fast. I think the country is simply too large and diversified to really collapse without a major natural disaster, and past recessions and depressions much worse have failed to do so. The country's economy as we knew it is gone though, low cost production goods and better living through debt is unlikely to return quickly.
I see it in my own city as well, even though it's 3rd worst in the nation. From January to May there were almost no jobs posted where I work, the last month it has been 10 a day for more people to replace the layoffs. Going out the restaurants are packed (gratefully many bad ones closed), malls still have decent traffic, highways are busier now then I have seen it in the last year, and every time I go to Costco half the people have a big LCD TV's on their cart. It doesn't seem like things are getting worse and worse from my eyes.
As for the debt, they will have to do something as it's reaching the cap as a percentage of GDP. It was nearly paid off when Reagan took office, so it's possible, but asking a politican to quit spending is impossible, especially with looming social security and medicare shortfalls.
The way to prove understanding is not be citing education, but applying it. You comments about the likelihood of collapse are much more in line with mainstream thought then the outliers that seem to believe in freakish scenarios...
i will tell you what a freakish scenario is. it is telling the american taxpayer that there will be a world collapse in finance unless they step up to the plate and bail out the banking system. if anyone is willing to trust that same brainpower that let us into this mess, i question their judgement. i am not looking at an economic collapse per se, but i do think that some americans are going to see a significant decrease in the standard of living down the road while trying to absorb this debt load pushed upon us.
It looks like an interesting article, although it seems to address capacity utilization without addressing capacity (total or utilized) relative to the amount of debt we had as a nation back then. That's key. Regardless of whether we were utilizing capacity or not, the mere fact that we had it relative to the debt we were incurring is important. Plus, our debt back then was held mostly by other Americans (as it was largely up until the 1980s). It's the foreign holdings, on top of the size relative to capacity/utilization that's so disastrous for us now.
If Martians want to lend me money at a low interest rate why should I care?
So you're now conceding that the U.S. will/should default on its foreign debt?
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