Yet another record for this amazing Economy

[ntdz]

Originally posted by: LegendKiller

Originally posted by: ntdz

Originally posted by: B00ne

Originally posted by: Genx87

Originally posted by: Zorba
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Deficit was $69.9B in August up from $68B in July. Trade deficit with china and mexico is up. How long can we keep up these record deficits?

We have been running trade deficits for years if not decades. I would say we can keep it up indefinately provided we keep growing our economy the way we have the past few years.

Believe we have added nearly 2 trillion in GDP since 2002 and believe we are projected to push over 13 trillion this year.


Yup

2002 GDP == 10.4 Trillion
2006 estimated at 13.2 Trillion

What is your bank? I want to be a customer too. Say you earn $2000 yet you spend 2200 every single month. And your bank is fine with that forever, indefinately?

The United States has never missed a payment in its over 200 year history, it's bonds are the most valuable and most sure thing you can put your money in. In our case, the "bank" is our own population and some from outside countries. Besides, our one year GDP number is still larger than our total debt. There are many other countries in the world that can't say that, including Japan, who owes trillions itself.

As I have stated several times before, you can't take the total production of a country and then compare that to the sovereign debt of that country and say "they match!". The government is only a part of the economy and is only a moderate obligor compared to the country as a whole.

What you are doing is essentially taking the combined income of a large family with a bunch of teenagers and then only comparing that to the mortgage on the house, excluding student debt, credit cards, and other forms of leverage.

Lets take for example GDP. We know that at least 1/3 of GDP is built off of the latest housing bubble. Furthermore, we also know that the remainder was built off of equity cash out. Those two factors are driven by *CONSUMER* debt, not sovereign debt. Thus, to consider (government debt/EVERYTHING consumers produce) is a BS measurement.

The correct measurement would be to take everything consumers OWE and then divide that by everything produced.

Since America has a negative savings rate *AND* consumer debt is at an all-time high, your numbers become a lot less rosey. Further consider that -1% GDP reduction and the equity cash-out, you start to see that GDP is nothing more than a fictional number built upon leverage, irrational exuberance, and stupidity.

Of course, the all of this will reverse, since a period of incredible growth primarily driven by leverage is only borrowing growth from the future, not actually creating *new* wealth and growth. Thus, we have only locked ourselves into stagnant, or even negative, GDP growth for the future.

Total debt is usually measured between countries by their debt/GDP ratio. The United States' debt is comparatively lower than many other countries, including many first world countries.

 

[charrison]

Originally posted by: BaliBabyDoc
1) Most Europeans don't drive itty bitty cars. They drive cars commensurate with their transportation needs. Accordingly, that $5/gal gasoline means you don't see a bunch of SUVs and dualies with one person in them.

They do drive much smaller cars on average. Those smart cars are easily found over there. Their needs are also radically changed by the price of gas.

2) I believe the current mix is close to 50% diesel. Then again, it makes sense to use diesels since they dramatically improve fuel economy compared to gasoline . . . even direct injection. Imagine, what the US could do when diesels get out of the single digits?!

Unfortuanly our EPA has kept them off the market here. Looks like we will start seeing them in the next year or two. And they are going to be very clean diesels as well.

3) The Europeans chose NOT to regulate but tax b/c they were smart. They wanted to change EVERYONE'S behavior. As opposed to the US where CAFE left enough wiggle room for manufacturers to produce a) crappy cars, b) relatively unsafe cars, c) grossly overestimate mileage, d) have a category of vehicles that are exempt b/c they are so heavy. In Europe, they taxed the fuel which means consumers choose to drive more fuel efficient vehicles AND reduce unnecessary driving, while manufacturers are free to produce econoboxes, behemoths, and everything in between.

I agree CAFE is a bad idea and that fuel tax and toll roads would have been far better way to improve transportation economy. CAFE gave birth to the SUV as it was a class of vehicle that did not fit in the original legislation. Gas cheap and consumers demanded more power and size. I will say this, if there was an increased gas tax I would only wanting it going to upkeep of the roads. Adding a gas tax and having it go in the general fund would just be a bad idea.

4) Subsidized gasoline has allowed us to WASTE more without facing the consequences of such waste. Then again, arguably that 'thirst' for oil is a reason why we are so wound up with the Middle East, drooling to drill our coasts, and seem absolutely twittertaited by Hugo Chavez.

I dont have a problem will off shore drilling or domestic drilling. It can be done safely, so there is little reason not to. Hiowever, I would have little problems with tariffs on oil coming those pesky countries that cause us problem. Granted that would do little as they would just sell the oil to someone else at market prices.

5) Only a moron buys a larger car than they need. Many of those morons were cursing those vehicles when gasoline prices surged. From the rise in SUV sales, it's apparent the idiots are rushing back now that prices have fallen. All the more reason to raise gasoline taxes and reap the benefits of our European counterparts. Some day . . . sooner rather than later . . . the US will desperately need to use FAR less oil for transportation. It would be nice if that transition is smooth rather than cathartic.

People like big vehicles because they do have utility to them. But we are not going to run out oil anytime in the near future, so there should be smooth transition to whatever is next.

6) It is difficult to overestimate the wealth extraction that has occurred b/c America has to send hundreds of billions of dollars each year to oil exporting countries. It's an indefensible position given the great benefits our country would reap from improved fuel economy. Unfortunately, we are going the opposite direction. US oil consumption will grow by 2% next year. That's another 400k barrels per day from Hugo, Ahmadinejad, House of Fraud, etc. Does that make sense to you?

[/quote]
There is wealthe extraction, but you would rather that wealth extraction by the goverment. TO the consumer, that wealth is still gone. However one thing about those petro dollars is they are flowing back into the US as investment into our economy. Which is not such a bad deal. But i do agree, there are countries I would rather not do business with.