Bush's tax rebate and our bad economy.

[E equals MC2]

The news reported today that "we're on a verge of recession".

I don't know much about economy esp on macro scale. Please tell me what I think is correct or not:

1. Our ecnomony is currently bad due to all these poor idiots who THOUGHT they could afford a house bought one using the stupid gimmick ?interest-only payments?. When the housing cost declined and interest rates skyrocketed, this resulted in millions of these poor idiots foreclosing all of their homes.

2. And recession is cyclic. A bad recession happened about 15 yrs ago, it's merely repeating the same cycle.

Are these correct, partially or am I totally off? If I'm wrong, is it because of the war? foreign goods? homoseckuslas? (jk)

I'd like to learn a bit more on thiis.

 

[intogamer]

There are additional variables that factor in the economy. The subprime mess just triggered the sharp decline.

History doesn't repeat itself, it rhymes.

 

[Pabster]

The gloom and doom media is always reporting that we're "on the verge" ... they've been saying it incessantly for the last 2 years or so.

And you're right. Economies are highly cyclic.

 

[nageov3t]

the problem with pessimists is that they're usually right 😛

I do think the idea of a tax rebate is more chicken in every pot smoke and mirrors, though.

 

[Lemon law]

Yes Virginia there is almost certainly a recession coming. Its only partly due to poor lending practices. And IMHO, mainly due to GWB vodoo economics chickens finally coming home to roost.

And by traditional economic thought, the answer is getting more money into consumer hands
and its looking to be a tax cut by increasing the amount we will all get back from the IRS by increasing standard deductions. And as such, will not be a tax cut favoring mainly the rich.

But that also points out the flaws of the science of economics. If most people then increase spending the economy may recover, but if they lose confidence, quit spending, then mild recessions can deepen into something far worse. Its more psychology than exact science.

And the other danger is that if we pile on more debt, rip roaring inflation can result. Making the cost of servicing the debt prohibitive. As it is, many other countries are very disturbed by the falling value of the dollar, and will become increasingly unwilling to lend us more.

 

[theeedude]

11 scariest words in the English language are
"I am George W Bush and I am here to help."
Just ask Katrina survivors 😀

 

[Lemon law]

In somewhat fairness to GWB, we have had a negative balance of trade for nearly three decades. But GWB is sure accelerating the day of reckoning.

 

[ProfJohn]

Originally posted by: senseamp
11 scariest words in the English language are
"I am George W Bush and I am here to help."
Just ask Katrina survivors 😀

Quit stealing Reagan quotes 😛

 

[sactoking]

Originally posted by: Lemon law
In somewhat fairness to GWB, we have had a negative balance of trade for nearly three decades. But GWB is sure accelerating the day of reckoning.

In somewhat fairness to ANY president, realize that Congressional policies and the Federal Reserve have 'infinitely' more to do with any economy than the president does.

As far as economics goes, the president (any president) is nothing more than a scapegoat in bad times and a figurehead in good.

 

[hellod9]

There is a serious threat to our economy based on the demographics of the baby-boomer generation. They are starting to retire, and contribute less into the economy. Their bubble was more than just a population bubble, it was an economic bubble. All those baby boomers were buying houses, having kids, starting businesses, and creating new industries(e.g. the internet.) But the baby boomer bubble is peaking, and they are leaving a gap in our economy. We are short on people having kids, buying houses, and starting businesses.

Personally thats why I think we need to liberalize our immigration policy -- so that we can quickly fill the gap left by the baby boomers. People are the fuel of our economy. We're starting to need more fuel.

 

[ElFenix]

if you think the recession 15 years ago was bad... yikes


edit: we basically have spent the last 60 years above the historical trend line link :shocked:

 

[randym431]

So whats old GW's stim package? SUV's over $50,000 at half off?
Is that the one he's pushing?

Or is it the one where congress gives itself another $4000 raise, so THEY will do better governing?

What a deal America!

 

[WHAMPOM]

Factor out the money spent on the war on terror and we have been in recession for the last five yaers.

 

[compuwiz1]

Originally posted by: loki8481
the problem with pessimists is that they're usually right 😛

I do think the idea of a tax rebate is more chicken in every pot smoke and mirrors, though.

This is gonna get a lot worse before it gets better. Ok, that's what I heard my pessimist father say during the last recession. 😛

 

[LegendKiller]

Originally posted by: WHAMPOM
Factor out the money spent on the war on terror and we have been in recession for the last five yaers.

The WoF is a drop in the bucket compared to the amount of debt taken out in the last 7 years to pay for plasmas, cars, and houses.

 

[Thump553]

You are partially correct. The prosperity of the last seven years was primarily phony, driven largly by the previous tax "rebate" (ie political giveaway), restructuring of the tax code to drive the federal budget out of balance negatively (ie the Bush tax cuts aka giveaway to the wealthy) and unfunded federal government spending to fund Bush's wars and the "war on terror." Lax governmental regulation and the surge of low/no documentation mortgage loans, especially those that were variable with low teaser rates, certainly had a lot to do with creating false prosperity on the consumer side.

What probably should have been relatively flat economic years appeared to be prosperous (at least for those in the upper finanical tiers). Things are finally starting to come home to roost and I'm concerned that the recession will be even deeper than it otherwise should have been.

 

[chucky2]

I know this may sound crazy (and it probably is), but, maybe that's really what America as a whole needs, a Recession.

I mean, lets gets real here: There are 10's of millions of people in this country that live way too well for the wage they bring in, and that's all they're accustomed to.

Maybe what we need are a few hard hears to force people to limit themselves and live within their means. No more 50k SUV's so mom can be safe driving to the grocery store, no more living paycheck to paycheck because it's possible while at the same time spending on credit, etc.

I'm not saying I'm looking forward to it, but maybe America as a whole right now needs to learn lessons that our grandparents and great grandparents (and heck, to a certain extent parents themselves) all had to learn...

Chuck

 

[XMan]

Originally posted by: chucky2
I know this may sound crazy (and it probably is), but, maybe that's really what America as a whole needs, a Recession.

I mean, lets gets real here: There are 10's of millions of people in this country that live way too well for the wage they bring in, and that's all they're accustomed to.

Maybe what we need are a few hard hears to force people to limit themselves and live within their means. No more 50k SUV's so mom can be safe driving to the grocery store, no more living paycheck to paycheck because it's possible while at the same time spending on credit, etc.

I'm not saying I'm looking forward to it, but maybe America as a whole right now needs to learn lessons that our grandparents and great grandparents (and heck, to a certain extent parents themselves) all had to learn...

Chuck

Very progressive of you. How can we sum that up in a pithy statement . . . hmm. I know! "Work will make you free." What do you think?

 

[chucky2]

Originally posted by: XMan

Very progressive of you. How can we sum that up in a pithy statement . . . hmm. I know! "Work will make you free." What do you think?

I just pulled three in a row - and will unfortunately have to continue doing so for the foreseeable future - pretty high hour weeks, so it's not that I want to see people working their @sses off to just make it by, I know how bad that sux...

What I'm talking about is more things getting tougher and it forcing people to limit their irresponsible/out of control fiscal policies since they don't seem to be able to self-limit.

Look, I make a good wage, especially for my age. I could go nuts and buy everything under the sun, live it up...but I don't, I've got more of a long term outlook on life.

Just seems in lieu of people making responsible choices on their own, things getting bad for a relatively short period of time might be long term better for everyone. Witness high gas prices and increased calls for higher mpg vehicles and alternative energy sources. Had the good times (low gas prices) kept up, we would have kept on consuming and consuming without care...now that we've start to have been limited, we start being more responsible.

It's all to a degree, some it good, too much is too much...

Chuck

 

[Siddhartha]

The idea is to keep the US consumer from cutting back too far by giving them back some money to spend.

 

[Jaskalas]

Originally posted by: Lemon law
And the other danger is that if we pile on more debt, rip roaring inflation can result. Making the cost of servicing the debt prohibitive. As it is, many other countries are very disturbed by the falling value of the dollar, and will become increasingly unwilling to lend us more.

The prime argument for not lowering the interest rate. Lower it, and watch the dollar drop and oil prices (compared to the dollar) sky rocket resulting in no positive effect on the economy.

So then I suppose the topic at hand is, should we give the economy a stimulus package such as the one Washington (Dems,Reps, and Bush combined) are proposing and all but guaranteeing?

 

[Colt45]

Originally posted by: XMan

Originally posted by: chucky2
I know this may sound crazy (and it probably is), but, maybe that's really what America as a whole needs, a Recession.

I mean, lets gets real here: There are 10's of millions of people in this country that live way too well for the wage they bring in, and that's all they're accustomed to.

Maybe what we need are a few hard hears to force people to limit themselves and live within their means. No more 50k SUV's so mom can be safe driving to the grocery store, no more living paycheck to paycheck because it's possible while at the same time spending on credit, etc.

I'm not saying I'm looking forward to it, but maybe America as a whole right now needs to learn lessons that our grandparents and great grandparents (and heck, to a certain extent parents themselves) all had to learn...

Chuck

Very progressive of you. How can we sum that up in a pithy statement . . . hmm. I know! "Work will make you free." What do you think?

Wow. Living within your means = nazi? 😕

Spend money you don't have, get fucked in the end. The american way.

 

[Exterous]

Originally posted by: Colt45

Originally posted by: XMan

Originally posted by: chucky2
I know this may sound crazy (and it probably is), but, maybe that's really what America as a whole needs, a Recession.

I mean, lets gets real here: There are 10's of millions of people in this country that live way too well for the wage they bring in, and that's all they're accustomed to.

Maybe what we need are a few hard hears to force people to limit themselves and live within their means. No more 50k SUV's so mom can be safe driving to the grocery store, no more living paycheck to paycheck because it's possible while at the same time spending on credit, etc.

I'm not saying I'm looking forward to it, but maybe America as a whole right now needs to learn lessons that our grandparents and great grandparents (and heck, to a certain extent parents themselves) all had to learn...

Chuck

Very progressive of you. How can we sum that up in a pithy statement . . . hmm. I know! "Work will make you free." What do you think?

Wow. Living within your means = nazi? 😕

Spend money you don't have, get fucked in the end. The american way.

Did seem an excessive reaction. And I didn't see anywhere where he mentioned that people should work more, only curb their spending. Given the financial data out there on american credit card and mortgage debt, I would say chucky2 is right

 

[XMan]

Originally posted by: Exterous

Originally posted by: Colt45

Originally posted by: XMan

Originally posted by: chucky2
I know this may sound crazy (and it probably is), but, maybe that's really what America as a whole needs, a Recession.

I mean, lets gets real here: There are 10's of millions of people in this country that live way too well for the wage they bring in, and that's all they're accustomed to.

Maybe what we need are a few hard hears to force people to limit themselves and live within their means. No more 50k SUV's so mom can be safe driving to the grocery store, no more living paycheck to paycheck because it's possible while at the same time spending on credit, etc.

I'm not saying I'm looking forward to it, but maybe America as a whole right now needs to learn lessons that our grandparents and great grandparents (and heck, to a certain extent parents themselves) all had to learn...

Chuck

Very progressive of you. How can we sum that up in a pithy statement . . . hmm. I know! "Work will make you free." What do you think?

Wow. Living within your means = nazi? 😕

Spend money you don't have, get fucked in the end. The american way.

Did seem an excessive reaction. And I didn't see anywhere where he mentioned that people should work more, only curb their spending. Given the financial data out there on american credit card and mortgage debt, I would say chucky2 is right

The way he proposed seemed to be almost wishing people would be forced to change their behavior. In any free society there are going to be idiots who blow all their money. Doesn't mean that it's the government's job to "teach" them how to be more wise with their money.

 

[blackangst1]

Originally posted by: XMan

Originally posted by: Exterous

Originally posted by: Colt45

Originally posted by: XMan

Originally posted by: chucky2
I know this may sound crazy (and it probably is), but, maybe that's really what America as a whole needs, a Recession.

I mean, lets gets real here: There are 10's of millions of people in this country that live way too well for the wage they bring in, and that's all they're accustomed to.

Maybe what we need are a few hard hears to force people to limit themselves and live within their means. No more 50k SUV's so mom can be safe driving to the grocery store, no more living paycheck to paycheck because it's possible while at the same time spending on credit, etc.

I'm not saying I'm looking forward to it, but maybe America as a whole right now needs to learn lessons that our grandparents and great grandparents (and heck, to a certain extent parents themselves) all had to learn...

Chuck

Very progressive of you. How can we sum that up in a pithy statement . . . hmm. I know! "Work will make you free." What do you think?

Wow. Living within your means = nazi? 😕

Spend money you don't have, get fucked in the end. The american way.

Did seem an excessive reaction. And I didn't see anywhere where he mentioned that people should work more, only curb their spending. Given the financial data out there on american credit card and mortgage debt, I would say chucky2 is right

The way he proposed seemed to be almost wishing people would be forced to change their behavior. In any free society there are going to be idiots who blow all their money. Doesn't mean that it's the government's job to "teach" them how to be more wise with their money.

I know youre speaking in generalities, but to think "the government" creates recessions is rediculous. Take the hot topic of mortgages. Is it the government's fault so many people bought too much house they couldnt afford? No. Should the government have stepped in to warn people their ARMs may be a bad idea? Hell no. It's free market. And ther fact of the matter is, the majority of Americans do NOT know how to live within their means. They overspend. They overeat. Everything is within excess.

I remember before I moved into networking back in the late 80's I was in banking/finance. The majority of 45-55 year olds I sat down with had less than $100k in retirement, everything included. You know what? They lived in NICE houses. They drove beautiful cars. They took greeat vacations. And they were up to their eyeballs in debt and didnt save anything. Guess what-when they reach retirement with only $200-300k (IF that), that will last probably 4 years. Then what? Oh yeah. The government will take care of them.

People need to wake the fuck up and learn to live responsibly. chucky is right: a deep recession would be a good thing for our country.