You think the US Economy is Recovering ?!

[cwjerome]

Or Euros.

Plus, if you have your money in Euros, in a Euro bank, at least you have somewhere to go when the USA turns in to Thunderdome.

Negative. If the dollar falls apart the world will suffer and the Euro will tank. What people should have are scarce resources that people will want badly or more importantly need. Whatshisnut up there made it sound like I thought gold was a cure-all, but gold can be PART of the equation. Sorry about not being clear on that.

 

[StageLeft]

If the dollar truly tanks, the Euro won't be far behind. There has been some unwinding since things started falling apart, but the economies of all major nations are very entangled.

I agree and I still maintain that the US dollar is unfairly weak right now. Skoorbian economic theory, based on thousands of years of meticulous study, says that things have a natural value to which they tend toward over time and when they break away from this it's only a matter of time before they fall back in line. This is why oil was obviously overblown, gold is obviously overblown, US dollar's weakness if overblown, and nobody really thought Kirstie Alley could keep off the weight.

It wouldn't take much of an interruption in oil flow to bring all of our local assets to a screeching halt. Hell, you'd need martial law just to keep the shelves stocked at the grocery store.

The response of the American citizen would be based upon who the common enemy is. If things crumbled in a way that it seemed everybody had to fight domestically to get ahead, things would suck. However, if an external enemy could be identified, people internal would remain civil and work together.

Anyway, I'm not worried about the US in reference to the rest of the world. Its debt is still better than many other Western nations, it still has vast domestic resources, still has infrastructure, and still has military. It's likely the best place to weather any big storm. It can't pick its nose without a tissue purchased from China, but oh well.

 

[cubeless]

snip

It can't pick its nose without a tissue purchased from China, but oh well.

psst... that's why we pick our noses, don't need no damn china tissue...

and i'm all in on corn whiskey and ammo, the only truly safe commodities...

 

[Zebo]

Yes we have assets, but even a brief interruption in global trade due to the destruction of the USD would create chaos. How long would it take to set up a new currency? It wouldn't take much of an interruption in oil flow to bring all of our local assets to a screeching halt. Hell, you'd need martial law just to keep the shelves stocked at the grocery store.

Of course. If it's out after dark kill it and all that. For awhile.

 

[StageLeft]

Amrbose's bleak picture. I always like Ambrose because he has a staccato way of writing, kind of hysterically going from point to point:

http://www.telegraph.co.uk/finance/...er-into-depression-as-Wall-Street-revels.html

 

[werepossum]

in the long run, all countries engaged in free trade always end up better off than without.

I imagine that long run would be geological time. By any other metric, the USA has badly failed with free trade.

 

[Jhhnn]

Good question, remind me again, which trickle down are we talking about?

Tax breaks for the wealthy which is supposed to then trickle down to the lower income brackets, but really just stays in the hands of the wealthy capitalists?

or

Tax increases on the wealthy which is supposed to then trickle down the lower income brackets, but really just stays in the hands of the wealthy politicians?

Exceptionally obtuse today, huh?

Whenever the govt spends more than they take in, a Republican hallmark of sorts, the govt then borrows to make up the difference, usually from the people at the top, the same guys whose taxes were cut by their republican pals. They win twice- once with tax cuts, and again buying the world's safest securities.

Not to mention that they now have sufficient capital, particularly with deregulated banking, to build a new factory, in China, offshoring american jobs, increasing profits. Wash, rinse and repeat for 30 years until the top 1% share of income goes from <9% in 1979 to more than 23% in 2007...

Can't figure it out? You're not supposed to, because you've been trained to think in circles and to believe in lies...

 

[IGBT]

lots of smoke/mirrors and soaring empty teleprompter drivin rehetoric for the mindless millions.

 

[wwswimming]

Amrbose's bleak picture. I always like Ambrose because he has a staccato way of writing, kind of hysterically going from point to point:

http://www.telegraph.co.uk/finance/...er-into-depression-as-Wall-Street-revels.html

that was a good article. glad to see the honesty.

 

[soccerballtux]

I imagine that long run would be geological time. By any other metric, the USA has badly failed with free trade.

Meaningless assertion.
If people would act fiscally responsible then as their wages decline so would their purchases and companies would have to lower the price of the products they're selling if they want to maintain sales.

Instead we have the results of our irresponsible actions.

You naysayers are just angry that someone makes more money than you. You aren't owed anything just because you exist.

 

[BigDH01]

Meaningless assertion.
If people would act fiscally responsible then as their wages decline so would their purchases and companies would have to lower the price of the products they're selling if they want to maintain sales.

Instead we have the results of our irresponsible actions.

You naysayers are just angry that someone makes more money than you. You aren't owed anything just because you exist.

Actually, in H-O model, capital in the US does quite well as we are capital rich. It's just unfortunate that most people have no real capital. Those who do will see high returns and increase their wealth and purchasing power. It sucks for labor who has to see its real wage decreases competing with this increased purchase power.

Of course, on the international market, the US's decreased wage now has to compete with the increasing wages in the labor rich countries, which will maintain some price level, albeit at some intermediary standard of living. So when American labor can learn to live like Chinese labor, and vice versa to some extent, wages will stabilize. Although it does suck that for things like land, Chinese labor gets to compete mostly with other Chinese labor while American labor is going to have to compete with those Americans who had capital and are making extraordinary returns.

By the way, the model you are using makes a few key assumptions (Ricardian model). If you had read these assumptions (perhaps #1 being factor mobility) you'd have realized why this model does not work very well in trade situations where there is imperfect mobility. This is an assumption besides those which never exist in the real world (like perfect competition). I know they do not address these issues very much in typical American economics classes.

Also, I do feel like I am owed something because of my existence. I feel as a human I am entitled to have the opportunity to feed, shelter, and clothe myself with my own labor working on our ultimate shared resource, the Earth. Unfortunately, we have an economic system in place that holds unlimited private ownership as its ultimate tenet, even if that means that someone with little other capacity may be unable to till the Earth from which they came as it already belongs to someone that came before. I suppose this is for another discussion though.

 

[PokerGuy]

now is the time to take corrective action. It should be no surprise the only way to do this is to elect more progressives.

Yeah, electing more idiot socialists ...errr... as you call them "progressives" is the answer. Raising taxes, more welfare and entitlement programs and increasing government waste will surely improve the economy. Riiiiiiiiight. :thumbsdown:

 

[Jaskalas]

Yeah, electing more idiot socialists ...errr... as you call them "progressives" is the answer. Raising taxes, more welfare and entitlement programs and increasing government waste will surely improve the economy. Riiiiiiiiight. :thumbsdown:

They believe wealth redistribution solves the problem.

 

[Craig234]

Yeah, electing more idiot socialists ...errr... as you call them "progressives" is the answer. Raising taxes, more welfare and entitlement programs and increasing government waste will surely improve the economy. Riiiiiiiiight. :thumbsdown:

Taxes, welfare, and entitlements have nothing to do with progressives on the topic of this thread. They're the equivalent of you posting with crayons. Progressives side with the pubic interest against Wall Street.

Progressives are the ones who have given us the progress we've had on these matters, like the SEC and Glass Steagall in the past.

Progressives are the ones who support productive banking activity and oppose the destructive but profitable practices that enrich Wall Street by threatening the country.

 

[Craig234]

They believe wealth redistribution solves the problem.

You're an idiot. You throw around a term like "wealth redistribution" like McCarthy used "communist".

Yor are irrational and spout buzzwords as your argument.

YOU are the one supporting policies that have led to massive wealth distribution to the top, but you are not honest enough and too much the idiot to get that.

Progressives support a healthy distribution of wealth, not too much mot too little.

You don't get that policies affect this, you run around like a child screaming 'poopyhead'.

 

[Special K]

Debt to GDP ratio
Short Version - we're going deeper into debt, to recover from economic problems that had their root in ... too much debt.

I'm trying to better understand that chart and the national debt debate (i.e. is it too much) in general and was hoping someone could point me to some good resources for learning about the issue. Yes I could just google "national debt", but that's no guarantee the results would be quality or even accurate.

I know that borrowing money isn't bad as long as the asset you are borrowing for grows at a rate that exceeds the rate of interest on the debt, but here are some specific questions I have:

1. Is there any historical "point of no return" regarding debt to GDP ratio? That is, is there any debt to GDP ratio that, when exceeded in the past, basically spelt doom for the country in the form of national debt default or hyperinflation?

2. The treasury has a website that tracks the national debt to the penny:

http://www.treasurydirect.gov/NP/BPDLogin?application=np

I notice that ~37.5% of our total debt is "intragovernmental holdings". Does this number even matter with regard to our total national debt? From what I understand, it is just money owed by one governmental agency to another, which would imply it doesn't matter.

 

[Zebo]

We will not recover until debt is cleared from the system. Americans and their business are tapped credit wise and their wherewithal to get untapped or produce income is shrinking day by day. As Such sales, tax receipts, pensions, states, etc are all at risk because of concentric contraction.

However, when our banks were insolvent, the government gave the banks trillions of free money to them so banks could lend it right back to the government at much higher rates. They also play in the stock market currently with that free money <beware>. One thing they are NOT doing is lending it to strapped consumer and business to make productive outputs or put cash flow back on main street.

Why would our government give the banks free taxpayer money simply so the banks could lend it back to the government at a much higher rate? Why wouldn't the government just give the money to consumers so we could pay our debts to our banking overlords? Because our whole political system is bought and paid for by the investment bankers.


This Bill Moyers interview sums it all up nicely.
http://video.pbs.org/video/1380851536

 

[Zebo]

You're an idiot. You throw around a term like "wealth redistribution" like McCarthy used "communist".
\'.

What the righties do not understand is wealth redistribution is going one way. Everyone to the super rich. Gov't gives free tax payers money to bankers who control everything. You go try and get a 0&#37; loan from the fed and let me know if they stop laughing before their body guards throw you out.

 

[JS80]

We will not recover until debt is cleared from the system. Americans and their business are tapped credit wise and their wherewithal to get untapped or produce income is shrinking day by day. As Such sales, tax receipts, pensions, states, etc are all at risk because of concentric contraction.

However, when our banks were insolvent, the government gave the banks trillions of free money to them so banks could lend it right back to the government at much higher rates. They also play in the stock market currently with that free money <beware>. One thing they are NOT doing is lending it to strapped consumer and business to make productive outputs or put cash flow back on main street.

Why would our government give the banks free taxpayer money simply so the banks could lend it back to the government at a much higher rate? Why wouldn't the government just give the money to consumers so we could pay our debts to our banking overlords? Because our whole political system is bought and paid for by the investment bankers.


This Bill Moyers interview sums it all up nicely.
http://video.pbs.org/video/1380851536

You need to repost clarifying what you are referring to in terms of TARP and federal reserve policy.

 

[Zebo]

You need to repost clarifying what you are referring to in terms of TARP and federal reserve policy.

Why it amounts to the same thing. TARPS were bailouts for an equity stake but when you're giving free fed money away and pay interest on money you loaned out it's trivial to pay back tarp.

I could pay off my house in a week if FED gives me 0&#37; money and lets me buy treasuries for 3%.

Anyway it's all in the video.

 

[JS80]

Why it amounts to the same thing. TARPS were bailouts for an equity stake but when you're giving free fed money away and pay interest on money you loaned out it's trivial to pay back tarp.

I could pay off my house in a week if FED gives me 0% money and lets me buy treasuries for 3%.

Anyway it's all in the video.

Well TARP is from the government, and fed funds are from the federal reserve. One is public, the other is private.

And I don't think banks are buying 10 year treasuries when they draw from the fed.

 

[Zebo]

Dude Fed money is not private and it's money is created out of thin air it's simply a data entry which goes back into treasury if they get paid back.

 

[JS80]

Dude Fed money is not private and it's money is created out of thin air it's simply a data entry which goes back into treasury if they get paid back.

Don't oh geez me I am perfectly aware how the federal reserve system works. It is clear you do not.

The profits are paid to the Treasury after dividends are paid. The federal reserve is not government. It's a separate entity. Right now it's getting muddled because recent fed governors are getting political due to the president appointing them.

 

[Special K]

Well TARP is from the government, and fed funds are from the federal reserve. One is public, the other is private.

And I don't think banks are buying 10 year treasuries when they draw from the fed.

Where exactly did the money from TARP come from? Was it all financed by foreign investors such as China who already held dollars? Was any of the money created by the government selling treasuries to the Federal Reserve?

 

[JS80]

Where exactly did the money from TARP come from? Was it all financed by foreign investors such as China who already held dollars? Was any of the money created by the government selling treasuries to the Federal Reserve?

US Investors + Foreign investors + the rest monetized by Fed