41 replies to this topic

[CCL]

OGM - I'm mad as hell too. Nothing we can do about it - no one that wins a political office can hope to get re-elected without playing by the system rules - but I'm mad as hell too. The basic "recovery plan" is pretty clear - No. 1 fed budget problem is health care; we argue over what we pay and who we pay - Deficit is now a structural problem, with the Bush tax cuts being equally guilty with the un-paid spending (Medicare Part D & 2 wars) - Our education system is still based on a 1940's model - with the expected results. We need to admit, as a nation, that we will not succeed with a burgeoning unskilled labor and "would you like fries with that" service class. That cannot be changed without structural reform of the system producing those workers. - The largest drag on the unemployment the last two years has been the reduction of public sector workers at state and local levels. Those workers were paid, at least partially, through the 2009 stimulus program; with no more stimulus, the state budgets can no longer afford those workers without replacing the income that was first lost through the reduction in tax receipts, then made more permanent with the loss of fed funds. Some think this is an excellent move; I'm more in the camp that our society needs more, not less, in the way of teachers, police, fire, and public heath workers. I agree - we need more spending from the federal level - especially in the area of infrastructure projects - the quickest way to put a mason back to work is to build a brick wall - and in the R & D world. We need a revision to the entire tax code - lower the rates, cut the exemption and loopholes - but the loopholes for those that buy Congress never get closed, do they? The late 40's through the Vietnam era was, in hindsight, our Renaissance. While I don't want to see the rest of the world destroyed again to ensure another century of American dominance, I sure don't see our leaders - or wannabe's - doing anything other than talk to return American Exceptionalism to the front of the pile.

[SemiBizz]

You want to talk about "gets things done" ? Steven Roach was on Bloomberg this morning and just said that China took their population from like 20% urban to 51 % urban dwellers and are still accelerating... greatest urbanization in the history of mankind Can you imagine that with the sheer SIZE of that population?

[NAV]

You want to talk about "gets things done" ?

Steven Roach was on Bloomberg this morning and just said that China took their population from like 20% urban to 51 % urban dwellers and are still accelerating... greatest urbanization in the history of mankind

Can you imagine that with the sheer SIZE of that population?

That's a disaster of monumental proportions. Same thing is happening in India too. What's happening in reality is creation of massive urban slums, most of which is slave labor. There is no dignity in that kind of urbanization. Believe me. The appalling conditions in which most of these labour class live is something no western nation would desire for.

P.S - I was watching a documentary on China's labor class recently. It was heartbreaking.

Edited by NAV, 18 September 2012 - 11:50 AM.

[CRUISENAL]

To me it's ALL about the DEBT! The private debt must be reduced as it is a major drag on spending dollars. You can't give the public cash just to pay off the debt. If the Gov. decided to give money to all to wipe out the debt, that is good for the individual but then the Gov. holds all the debt. Not a good idea either. Somewhere somebody has to pay the debt. Basically, I would like to know how much debt is owed by the public on a chart that shows the history of public debt. I have saw this before somewhere. Maybe Shadowstats. There would likely be a mean level where Debt should come down to, to make it affordable to borrow again. I am pretty sure we are no where near that level. To me, this is where the real problem lies. And if I am correct, this debt reduction will take years and will likely go below a mean level just like it went above the mean level. The old scenario is "Once bit, twice shy" and many who borrowed to the hilt were Bit and now twice shy. The change in mindset take years to change. Once you pay off your debt, are you really excited about doing it all over again? Do not think so. In fact you prepare for the worse case scenario. So IMO the people who got really hurt in this mess are very likely to spend less and save. My guess is savings will be a high priority for many years. Spen when you can afford it, not borrow and spend. Eventually I don't think this will bode well for auto sales at the prices of cars today. I can afford to go buy a car and may do so, but it will not be on borrowed money. For some reason I think eventually people will save for the car at current prices, especially Baby Boomers. Just my opinion! Alan

[salsabob]

Regulation is part of the problem, but its not whats killing sales. Broke consumers are killing sales. Consumers that have been borrowing for 30 years on credit cards, car loans, mortgages, home equity loans, etc all over suddenly lost their jobs to China and India and their ability to repay the loans. So instead of borrowing extra 1k a month to spend they now not only can't do that but need to subtract money from their shrinking income to repay the loans, while facing higher energy, food and healthcare costs at the same time.

Until consumers regain the ability to spend the economy will sag. Broad tax reform would be one of the ways to help people rebuild their spending power, combined with massive government investments into education and new technologies to regain competitive advantage in the world.

So I'm talking both sides of the isles here.. MORE targeted government investment and LESS taxes....

And instead we have congress who is on the opposite side of every solution and is stuck in the mud. They can't pass anything, nevermind whats really needed. Want to blame it on someone ? Blame it on congress. On all those clowns from both parties who do nothing but run for re-election every 2 years and b*tch at each all day long after they get elected.

Wow. You should run for Congress; I'd vote for you!

[salsabob]

To me it's ALL about the DEBT! The private debt must be reduced as it is a major drag on spending dollars. You can't give the public cash just to pay off the debt. If the Gov. decided to give money to all to wipe out the debt, that is good for the individual but then the Gov. holds all the debt. Not a good idea either. Somewhere somebody has to pay the debt. Basically, I would like to know how much debt is owed by the public on a chart that shows the history of public debt. I have saw this before somewhere. Maybe Shadowstats. There would likely be a mean level where Debt should come down to, to make it affordable to borrow again. I am pretty sure we are no where near that level. To me, this is where the real problem lies. And if I am correct, this debt reduction will take years and will likely go below a mean level just like it went above the mean level. The old scenario is "Once bit, twice shy" and many who borrowed to the hilt were Bit and now twice shy. The change in mindset take years to change. Once you pay off your debt, are you really excited about doing it all over again? Do not think so. In fact you prepare for the worse case scenario. So IMO the people who got really hurt in this mess are very likely to spend less and save. My guess is savings will be a high priority for many years. Spen when you can afford it, not borrow and spend. Eventually I don't think this will bode well for auto sales at the prices of cars today. I can afford to go buy a car and may do so, but it will not be on borrowed money. For some reason I think eventually people will save for the car at current prices, especially Baby Boomers. Just my opinion! Alan

I agree with you on private debt - although not a good idea to pay off ALL private debt - the economy would come to a standstill. Just ask the guy who has to meet payroll every two weeks.

On public debt that would be really something new. We've only done that once since the nation started around 250 years ago. It was Andrew Jackson's idea. He soon reverse course when it caused a depression that economic historians believe was, on a proportional or per capita basis, worse than what happen in the 1930s.

Monetarily sovereign nations actually pay off their entire debts pretty frequently. As a monetary sovereign, the US pays off its entire debt about every 3-4 months - you can see it in the monthly FED statements. They pay the old bonds off and issue new bonds; they roll over the debt - mostly always have (there's that Andy exception) and most likely always will.

I realize this is difficult for most people to grasp these days. Most people, if they think about it at all, have very strange ideas of how our monetary system actually works. It has been very beneficial to certain folks to promote those strange ideas. For the last couple years, most people's ignorance has actually been very financial rewarding to me, but I refuse to promote it. On the other hand, I don't work too hard any more at correcting the ignorance.

You'll know you've arrived when you look at those crazy federal debt clocks and see not debt, but somebody's equity.

Edited by salsabob, 18 September 2012 - 12:19 PM.

[pdx5]

Debt is what kills nations and individuals. Beginning with the Roman Empire to modern day Greece, debt has been the biggest culprit. I am talking about debt incurred for consumption, not the debt to build a business. I know of no individual who ran up credit card debt beyond a certain level of their income and came out of it unscathed. It is all done because people and politicians want the goodies now, before they have the cash to pay for it. Then they not only have to pay for the merchandise but pay interest on top of it.

[Rogerdodger]

Of COURSE poor sales are the biggest issue facing small business.
If the sales are big enough, they can work around the regulation. But the regulation is killing sales becaues it's killing growth.
And the agents of regulation just keep taking more, wasting more, meddling more, and actively destroying parts of society.
M

From the ever optimistic Clark Howard yesterday:
Clarkonomics: Small business confidence trends with work truck sales

"Small business confidence trends neatly with the sale of work trucks, according to a new oddball kind of index from Bloomberg.
Small businesses often use work trucks and vans, so the direct correlation is not surprising. But the troubling thing is that, starting in May, small business confidence trended down right along with the sale of work trucks.

We're entering an era of uncertainty that makes capitalists afraid to invest. You have big companies sitting on roughly 2,000 billion dollars by most conservative estimates. They're worried about the fiscal cliff, debt downgrades of the U.S., and the upcoming election.

In another sign of the times, FedEx independently corroborates the uncertainty. They've just issued what's called negative guidance. Their revenue is great, but looking forward, they see that shipments are declining and more people are degrading shipment quality by selecting the cheapest possible shipping options.
The result is this collective uncertainty impacts us in so many ways by slowing down the underlying rate of economic growth. If we didn't have all this uncertainty in the small business sector, I saw numbers suggesting that unemployment would be 6% instead of 8%.
When the political class starts putting the U.S. first instead of the R and D by their names, the fundamentals are now in place for a meaningful, robust recovery in these United States.

I told you recently how the housing recovery is underway with home values rising in all but five states. So I am certain when we get our act together as a country -- not if -- we will have a boomlet if not an outright boom." (A point I have been making for some time)

But first, maybe it's time for another Union bailout:
AMERICAN AIRLINES expects 4,400 job cuts, warns 11,000...

Edited by Rogerdodger, 19 September 2012 - 09:09 AM.

[Rogerdodger]

The Fraser Institute released its “Economic Freedom of the World: 2012 Annual Report.”
After ranking 2^nd in 2000, the U.S. falls to 18^th in this year’s report. As the authors explain:

“[T]he United States has fallen precipitously from second in 2000 to eighth in 2005 and 19th in 2010 (unadjusted ranking of 18th). By 2009, the United States had fallen behind Switzerland, Canada, Australia, Chile, and Mauritius, countries that chose not to follow the path of massive growth in government financed by borrowing that is now the most prominent characteristic of US fiscal policy. By 2010, the United States had also fallen behind Finland and Denmark, two European welfare states. Moreover, it now trails Bahrain, the United Arab Emirates, Estonia, Taiwan, and Qatar, countries that are not usually perceived of as bastions of economic freedom.”

http://www.freetheworld.com/2012/EFW2012-complete.pdf

[salsabob]

The Fraser Institute released its “Economic Freedom of the World: 2012 Annual Report.”
After ranking 2^nd in 2000, the U.S. falls to 18^th in this year’s report. As the authors explain:

“[T]he United States has fallen precipitously from second in 2000 to eighth in 2005 and 19th in 2010 (unadjusted ranking of 18th). By 2009, the United States had fallen behind Switzerland, Canada, Australia, Chile, and Mauritius, countries that chose not to follow the path of massive growth in government financed by borrowing that is now the most prominent characteristic of US fiscal policy. By 2010, the United States had also fallen behind Finland and Denmark, two European welfare states. Moreover, it now trails Bahrain, the United Arab Emirates, Estonia, Taiwan, and Qatar, countries that are not usually perceived of as bastions of economic freedom.”

http://www.freetheworld.com/2012/EFW2012-complete.pdf

Yes, let's go back to the year 2000 and unleash the raw power of Countrywide, Ameriquest, Citigroup, Lehman Brothers, Bear Stearns, Merrill Lynch, AIG and oh so many engines of economic vitality!!! Let's unleash them to once again completely F us all!!! Yee-haw!

Just because a group of idiots, like the Fraiser Institute, come togther and call themselves an "institute" doesn't mean they stop being idiots.

But if you like white sturgeon, the Fraiser River got some great fishing.