We have reached Defconomy 2. Defconomy 1 = Greater Depression...

[Siddhartha]

Solutions for getting out of the hole"

1. Reduce the size of the US's sphere of influence. Close bases in Europe and Asia. Those geo-political centers can and should defend themselves. Get out of Iraq and Afghanistan within a year. This will significantly reduce government spending.

2. Promote the use of coal. This will be a significant step towards energy independence. Yes coal is dirtier but are there technologies that can make it less damaging to the environment?

3. Start agressive programs to improve the country's physical and human infrastructure. This will increase the efficiency of the economy and creat jobs here.

I always shake my head when I read economic doom and gloom posts and threads. The solutions I have listed above will not sit well with people who think the US should run the world, who think that investing in other people is evil, or who have vested interests in not using domestic energy sources.

 

[StageLeft]

Greater depression, who knows. Nobody including the best economists can proove and demonstrate with certainty what is going to happen. i know just enough to be dangerous to myself (same said for most of us, I think). This is a massive and complex thing to understand. I do think that there are enough bad indicators for the economy right now that not only will the US be lucky to get away with only a small recession, but it won't surprise me in the least if it is truly a substantial one. All of the economic indicators are bad and many are breaking records. The national debt & deficit are absurd, inflation is starting to explode, home values are crumpling (both of which are hitting either records or levels not seen in decades, at the least), the dollar has gone to sh*t. Remember when it was a given that the Canadian dollar was play money? It's been at parity or stronger than the US dollar for months now. The ONLY silver lining I see in any of this is a potential for greater exports due to a weak dollar, but that is like saying that since you just lost your two legs, you can save money on food because you won't need as many calories. Now we have Bernanke who's clearly out of control, trying to pull down interest rates to help things out and yet the banks aren't biting; mortgage rates, for example, continue to be comparitively high because they are worried about inflation, so what can the man do? Don't be surprised if the stress hits him and he eats a bullet.

But like I said, I know only enough to be dangerous. I really am no better than many of the other ignorant sheep with no sense of the future. I am poised better than most, with no credit card debt and menial car/student loans. *shrug*

 

[vhx]

Originally posted by: Siddhartha
Solutions for getting out of the hole"

1. Reduce the size of the US's sphere of influence. Close bases in Europe and Asia. Those geo-political centers can defend and should themselves. Get out of Iraq and Afghanistan within a year. This will significantly reduce government spending.

2. Promote the use of coal. This will be a significant step towards energy independence. Yes coal is dirtier but are there technologies that can make it less damaging to the environment?

3. Start agressive programs to improve the country's physical and human infrastructure. This will increase the efficiency of the economy and creat jobs here.

I always shake my head when I read economic doom and gloom posts and threads. The solutions I have listed above will not sit well with people who think the US should run the world, who think that investing in other people is evil, or who have vested interests in not using domestic energy sources.

Meh the solution should be to focus on our own problems before others. The talks about a possible attack on Iran makes me laugh if this depression thing were to be sure.

They drive the economy deeper and deeper into the crapper. LOL I wonder what the real solution they would come up with to save the economy. The fabled Amero? I would laugh hysterically if that were to be true.

Oh well, I'll say it again: I sense troubled times ahead.

 

[GTaudiophile]

Originally posted by: blackangst1

Originally posted by: GTaudiophile

Originally posted by: Pabster
:music: THE SKY IS FALLING! ... NO EARLY WARNING ... IT'S THE END OF THE WORLD...:music:

:laugh:

What's hilarious is how much money the talking pinheads are paid to spew the same 'Gloom And Doom' nonsense they've been repeating ad nauseum for the last ... 8 years?

I would feel a little better if we had (or at least could hope/expect) to have a leader/President who at least WANTED to act fiscally responsible for once. (Slim down debt, government, find a new form of taxation, etc.)

But no, we get $4.00 per gallon? I hadn't heard of that!

WTFTEXASBBQ!!!

WTFTEXASBBQ does $4/gal have to do with the president you dolt

Has nothing to do about Iraq. Has everything to do with the intelligence of our Prez.

 

[jpeyton]

Originally posted by: GTaudiophile

Originally posted by: blackangst1
WTFTEXASBBQ does $4/gal have to do with the president you dolt

Has nothing to do about Iraq.

Gas has a lot to do with Iraq, actually.

Text

In fact, the price of oil has climbed from $25 a barrel to $100 in the past five years - great for oil companies, and oil-producing countries, who, along with the contractors, are the only beneficiaries of this war, but not for anyone else. After calculations based on futures markets, Stiglitz and Bilmes conclude that a significant proportion of this rise is directly due to the disruptions and instabilities caused by Iraq. This price rise alone has cost the US, which imports about 5bn barrels a year, an extra $25bn per year; projecting to 2015 brings that number to an extra $1.6 trillion on oil alone.

 

[Delita]

LOL @ this thread

 

[jpeyton]

Originally posted by: Delita
LOL @ this thread

So profound.

 

[stlcardinals]

Can someone dig up some statistics on what percentages of the money for the War is spent domestically and foreign?

I would like to see how much of the War money is actually leaving the country.

IIRC, wasn't it WWII that brought us out of the Great Depression?

 

[StageLeft]

I would like to see how much of the War money is actually leaving the country.

This is relevant, but not the entire picture. If the US government spends $5 M paying a domestic contractor for a missile, that contractor has the money, but the missile just exploded and is useless. If alternatively it's paid to a domestic contractor who repairs a new bridge, that is a tangible boost to infrastructure.

This is remarkable. I postd this link in another thread to wikipedia for great depression: Link, but see what they have about debt:

Debt is seen as one of the causes of the Great Depression. (What follows relates to the USA).

Macroeconomists including Ben Bernanke the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view of the Great Depression originated by Arthur Cecil Pigou and Irving Fisher: in the 1920s, American consumers and businesses relied on cheap credit, the former to purchase consumer goods such as automobiles and furniture and the later for capital investment to increase production. This fueled strong short-term growth but created consumer and commercial debt. People and businesses who were deeply in debt when price deflation occurred or demand for their product decreased often risked default. Many drastically cut current spending to keep up time payments, thus lowering demand for new products. Businesses began to fail as construction work and factory orders plunged.

Massive layoffs occurred, resulting in unemployment rates of over 25%. (US) Banks which had financed this debt began to fail as debtors defaulted on debt and depositors became worried about their deposits and began massive withdrawals. Government guarantees and Federal Reserve banking regulations to prevent these types of panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets.

The debt became heavier, because prices and incomes fell 20?50% but the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). By 1933, depositors had lost $140 billion in deposits. [4]

Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending. [5] Banks built up their capital reserves, which intensified deflationary pressures. The vicious cycle developed and the downward spiral accelerated. This kind of self-aggravating process may have turned a 1930 recession into a 1933 great depression.

I find this incredible. In the last few weeks a lot of these things have been noted. The FDIC is now very worried about a number of banks, we're seeing credit tightening (even with lowered rates), house prices going down, new builds on houses slowing (there is a 10 month supply of houses up from a 3.6 month at the peak of housing).

 

[XMan]

Originally posted by: jpeyton
Rainsford, the real collapse won't happen immediately. But common sense tells you that any country as far in the hole as we are, with no possible way to cover our current spending levels, let alone our future liabilities, will hit a major correction soon enough.

To cover the next 50 years of social service liabilities, we would need to have at least $9 trillion in the bank right now...we have zero. In fact, we're digging ourselves further in debt at a rate of roughly $3 trillion every 6 years.

Bush got away with cutting taxes and printing more money to finance all his fiscal escapades, but we will eventually have to pay. Not just in the obvious way, but in the general export of control over America's wealth (a good example are major financial institutions like Citibank and Merrill Lynch selling large amounts of their ownership to foreign nations).

And do you really think Obama, with his nearly trillion-dollar proposed spending increase, is going to make the situation any better? Raising taxes on the rich ain't the answer. They've got enough money to leave. Just look at what's happening in New Jersey.

 

[GTaudiophile]

Originally posted by: XMan

Originally posted by: jpeyton
Rainsford, the real collapse won't happen immediately. But common sense tells you that any country as far in the hole as we are, with no possible way to cover our current spending levels, let alone our future liabilities, will hit a major correction soon enough.

To cover the next 50 years of social service liabilities, we would need to have at least $9 trillion in the bank right now...we have zero. In fact, we're digging ourselves further in debt at a rate of roughly $3 trillion every 6 years.

Bush got away with cutting taxes and printing more money to finance all his fiscal escapades, but we will eventually have to pay. Not just in the obvious way, but in the general export of control over America's wealth (a good example are major financial institutions like Citibank and Merrill Lynch selling large amounts of their ownership to foreign nations).

And do you really think Obama, with his nearly trillion-dollar proposed spending increase, is going to make the situation any better? Raising taxes on the rich ain't the answer. They've got enough money to leave. Just look at what's happening in New Jersey.

What is happening in NJ?

 

[XMan]

Originally posted by: GTaudiophile

Originally posted by: XMan

Originally posted by: jpeyton
Rainsford, the real collapse won't happen immediately. But common sense tells you that any country as far in the hole as we are, with no possible way to cover our current spending levels, let alone our future liabilities, will hit a major correction soon enough.

To cover the next 50 years of social service liabilities, we would need to have at least $9 trillion in the bank right now...we have zero. In fact, we're digging ourselves further in debt at a rate of roughly $3 trillion every 6 years.

Bush got away with cutting taxes and printing more money to finance all his fiscal escapades, but we will eventually have to pay. Not just in the obvious way, but in the general export of control over America's wealth (a good example are major financial institutions like Citibank and Merrill Lynch selling large amounts of their ownership to foreign nations).

And do you really think Obama, with his nearly trillion-dollar proposed spending increase, is going to make the situation any better? Raising taxes on the rich ain't the answer. They've got enough money to leave. Just look at what's happening in New Jersey.

What is happening in NJ?

NY Times

Taxes matter when it's time to move

"So we're not talking about state-by-state population growth here, but significant trends in the most economically desirable demographic groups ? people who can afford movers, or whose companies pay to move them. These are mostly families that will probably buy homes or at least rent for a long time.

The top five destination states in the 2007 survey are North Carolina, Nevada, Alabama, Oregon and South Carolina. The top five departure states are Michigan, North Dakota, New Jersey, New York and Illinois. For instance, 62 percent of United's jobs in North Carolina were deliveries, while 68 percent in Michigan were pick-ups."

. . .

The Journal editorial concluded that the moving trends are a warning to governors and legislators who think residents will pay more for good government services. Migration figures seem to indicate that's true only of poor people, who are willing for someone else to be taxed to provide better government services.

"The people who tend to be the most mobile in American society are the educated and motivated ? in other words, the tax-paying class," it said. "Tax them too much, and you'll soon find they aren't there to tax at all."

 

[GrGr]

Originally posted by: GTaudiophile

Originally posted by: blackangst1

Originally posted by: GTaudiophile

Originally posted by: Pabster
:music: THE SKY IS FALLING! ... NO EARLY WARNING ... IT'S THE END OF THE WORLD...:music:

:laugh:

What's hilarious is how much money the talking pinheads are paid to spew the same 'Gloom And Doom' nonsense they've been repeating ad nauseum for the last ... 8 years?

I would feel a little better if we had (or at least could hope/expect) to have a leader/President who at least WANTED to act fiscally responsible for once. (Slim down debt, government, find a new form of taxation, etc.)

But no, we get $4.00 per gallon? I hadn't heard of that!

WTFTEXASBBQ!!!

WTFTEXASBBQ does $4/gal have to do with the president you dolt

Has nothing to do about Iraq. Has everything to do with the intelligence of our Prez.

Wars are incredibly inflationary.

If a Prez "catapults the propagand" and repeats close to 1000 lies ad nauseam and lies the nation into war in an OIL nation, yes the President definitely has something to do with $ 4/gallon oil. Every time it looks like the US is going to war with another oil nation (or sabre rattles against someone like Iran) the price of oil goes up.

For the war trillions SS could have been saved for decades. Instead the Prez has the knife ready to gut all kinds of social services. The Military is a beast that always craves more! How many here are ready to take the knife to Pentagon's obscene budget?

It is a lie that "nobody" saw this crap coming. Those who didn't buy into the Bush propaganda have seen this coming from the start of Bush's Presidency. It is the direct and logical result of his policies. And yes others in Washington have played their part too obviously. :roll:

 

[kranky]

Originally posted by: Rainsford
Jesus Christ on a speedboat, what is with the economic doom and gloom? Every time the economy slows down a little, you have all sorts of people ready to predict the end of civilization itself. Probably because economic speculation is the world's silliest business, so every little bump in the road starts the herd stampeding all over the place. But for most of us, as long as WE don't do anything economically stupid, we're probably going to be fine. The "end of the world" indicators just aren't there.

I mean, am I the only person who thinks the fact that there is less than a year between "things have never been better" and "OMG, we're all going to be living in cardboard boxes"? The fundamental foundations of economic health don't change that quickly, so chances are pretty good that people simply don't know what we're talking about. Case in point, the comparisons to the great depression. Scary stuff, but the problems that lead up to the great depression simply don't exist today. Upswings in the market don't last forever, if the world ended every time a period of growth did, our economy would have collapsed long ago.

I agree that economies don't change in the blink of an eye. But it's common for people to not see or understand the implications of the changes which have already happened. Things go in cycles, that's true. But like stretching a rubber band, the farther you go in one direction, the more severe it snaps back when you let go. With housing, some areas have really partied it up and now they have to suffer the hangover.

I suspect there are major efforts being taken to sugarcoat the picture as much as possible. Not a evil conspiracy, but a push to downplay bad news and keep things as muddled as possible. A lot of average people know that things are going south even though "officially" things seem to be OK.

 

[Codewiz]

Oil has NOT gotten much more expensive. The value of the dollar has decreased. If you compare the price to gold, it has been a flat line pretty much.

 

[GrGr]

Originally posted by: Codewiz
Oil has NOT gotten much more expensive. The value of the dollar has decreased. If you compare the price to gold, it has been a flat line pretty much.

Correct. The same goes for oil against the ?. It is the dollar that is diving at more or less free fall speed, and the dive is only gaining more and more momentum.

 

[Codewiz]

Originally posted by: GrGr

Originally posted by: Codewiz
Oil has NOT gotten much more expensive. The value of the dollar has decreased. If you compare the price to gold, it has been a flat line pretty much.

Correct. The same goes for oil against the ?. It is the dollar that is diving at more or less free fall speed, and the dive is only gaining more and more momentum.

If people want to get an idea of how our currency getting devalued, they should look at what the cost of goods were in Europe during the 90's compared to us.

When gas cost $0.80/gallon in the late 90's here, it still cost $3.00 a litre in europe. Their prices have not increased over the past 10 years for gas in Europe. Only our cost has tripled.

Our currency is the world currency and when it stops being that, we will see a HUGE increase in cost in everything we buy.

 

[ahurtt]

Awesome! That means the greatest is yet to come!

 

[LegendKiller]

DOOM DOOM DOOOOOOOMMMM

This guy is a blowhard pundit that runs around and makes stupid prognostications and proclaimations. He's no better than Nancy Grace and is hardly the bellweather of journalism.

 

[GTaudiophile]

Originally posted by: Codewiz

Originally posted by: GrGr

Originally posted by: Codewiz
Oil has NOT gotten much more expensive. The value of the dollar has decreased. If you compare the price to gold, it has been a flat line pretty much.

Correct. The same goes for oil against the ?. It is the dollar that is diving at more or less free fall speed, and the dive is only gaining more and more momentum.

If people want to get an idea of how our currency getting devalued, they should look at what the cost of goods were in Europe during the 90's compared to us.

When gas cost $0.80/gallon in the late 90's here, it still cost $3.00 a litre in europe. Their prices have not increased over the past 10 years for gas in Europe. Only our cost has tripled.

Our currency is the world currency and when it stops being that, we will see a HUGE increase in cost in everything we buy.

And the ? will likely become the world's reserve currency within a decade. Once that happens the value of the $ will plummet.

I have begun my Euro bank research. Once I dig a little and find out some of the complexities and costs involved and moving a savings account or two, I will let you know.

 

[Atreus21]

It's sad to see that people are so gullible these days.

People should stop trying to scare themselves. Anyone who's taken economics knows that, first of all, we're not yet technically in a recession, and second, that recessions happen cyclicly, with just this sort of sky-is-falling reaction, and followed by growth. It's ridiculous that we don't learn from our previous foolishness.

 

[GTaudiophile]

Originally posted by: Atreus21
It's sad to see that people are so gullible these days.

People should stop trying to scare themselves. Anyone who's taken economics knows that, first of all, we're not yet technically in a recession, and second, that recessions happen cyclicly, with just this sort of sky-is-falling reaction, and followed by growth. It's ridiculous that we don't learn from our previous foolishness.

Yeah, but the level of globalization we have now has never been there before.

Let me repeat, the world WILL switch to the EURO/EUR/? currency as the world reserve currency, replacing the U.S. DOLLAR/USD/$. This WILL devalue our currency like never before. So while American company X might be making a profit in USD, they might be worth $.10 on a world stage.

No matter the case, I see no problem having a Euro-backed bank account.

 

[lupi]

Don't worry, when the candidate of change gets elected he will fix this.

I mean, it's not like a WSJ editor called his economic plan Nanny State on Steroids. Oh wait.....

 

[SoundTheSurrender]

Don't worry about the dollar going to shit. Once the NAU and NAFTA highway are in place we'll be using the Amero.

 

[ElFenix]

Originally posted by: GrGr

Originally posted by: Codewiz
Oil has NOT gotten much more expensive. The value of the dollar has decreased. If you compare the price to gold, it has been a flat line pretty much.

Correct. The same goes for oil against the ?. It is the dollar that is diving at more or less free fall speed, and the dive is only gaining more and more momentum.

and yet i'm still paying less for electronics than anyone else on the planet.

Originally posted by: LegendKiller
DOOM DOOM DOOOOOOOMMMM

This guy is a blowhard pundit that runs around and makes stupid prognostications and proclaimations. He's no better than Nancy Grace and is hardly the bellweather of journalism.

the problem i have with unthinking blowhards is that people tend to listen to them and modify their behavior accordingly, thus bringing on what the blowhard was predicting.