Moderators: richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

Economy: Is The Worst Over?

Fri Apr 03, 2009 10:56 pm

So my former roommate from New York, a producer for CNBC, is visiting me. We were talking about the fact that I've noticed lately that economic indices don't seem to be getting any worse.

In fact, she says that, in spite of the jobs report, most indices seem to be leveling off or even trending back up. The Dow is back above 8,000 today and optimism is rising. Oh, we're still in a recession, but it appears that it's not going to get quiet as bad or last quite as long as it initially appeared.

I'm not going to credit Obama's administration, but for those who are blaming it all on him, both the first and second-order derivatives of just about every economic index are turning positive. So whatever he's doing, it's not making it worse.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
User avatar
fr8mech
Posts: 8215
Joined: Mon Sep 26, 2005 9:00 am

RE: Economy: Is The Worst Over?

Fri Apr 03, 2009 11:06 pm

I reserve judgment until we see what inflation does. An increase in inflation will send us right back into the hole.

We're printing money way too fast. That is not the same as creating wealth.

I still don't see people buying stuff. On the plus side, I've seen some anecdotal evidence that suggests we are saving more. It's a good thing.

Fuel prices are going up again, and we still haven't addressed our energy needs.

Stock prices are up, but stocks aren't a true indicator of the economy, though they do reflect the mood of the people.

I certainly don't like what Obama is doing in the private sector. And, I don't like the way some in the private sector come to the governmet with hat in hand. In my opinion they desrve what they get. Government needs to do the work of government, let the private sector create the wealth.

I still think we're in for 6 - 9 more months of crappy news and dropping indices.
When seconds count, the police are minutes away, or may not come at all.
It’s hard to win an argument with a smart person, but it’s damn near impossible to win an argument with a stupid person. ~B. Murray
Ego Bibere Capulus, Ut Aliis Sit Vivere
 
swissy
Posts: 1481
Joined: Fri Jan 07, 2005 11:12 pm

RE: Economy: Is The Worst Over?

Fri Apr 03, 2009 11:22 pm

No, not by a great margin..... 9-12 month... just my guess

Quoting Fr8Mech (Reply 1):
We're printing money way too fast. That is not the same as creating wealth.

Yep, could not agree more...... and as we can see some countries getting very nervous about that....

Quoting Fr8Mech (Reply 1):
Stock prices are up, but stocks aren't a true indicator of the economy, though they do reflect the mood of the people.

Also a sign of the fact credit is available.... good or bad.....

Cheerios,
 
User avatar
fr8mech
Posts: 8215
Joined: Mon Sep 26, 2005 9:00 am

RE: Economy: Is The Worst Over?

Fri Apr 03, 2009 11:32 pm



Quoting Swissy (Reply 2):
Also a sign of the fact credit is available.... good or bad.....

Responsible credit is a good thing. I just refinanced my house (4.75 for 15 years). This is my fourth home loan in 15 years. It took longer than any other loan and required more documentation. I hope the banks have learned a lesson.

We need credit in the market so that business can start running again. Credit is a small business's life blood.

But we need to encourage those that can afford it to start buying some big ticket items. We need to stop growing the government. Every dollar that goes into the public sector comes out of the private sector. Again, the private sector creates wealth.
When seconds count, the police are minutes away, or may not come at all.
It’s hard to win an argument with a smart person, but it’s damn near impossible to win an argument with a stupid person. ~B. Murray
Ego Bibere Capulus, Ut Aliis Sit Vivere
 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

RE: Economy: Is The Worst Over?

Fri Apr 03, 2009 11:34 pm



Quoting Fr8Mech (Reply 1):

We're printing money way too fast. That is not the same as creating wealth.

Then again, loaning money that doesn't exist is also similar to printing money.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
Klaus
Posts: 21642
Joined: Wed Jul 11, 2001 7:41 am

RE: Economy: Is The Worst Over?

Fri Apr 03, 2009 11:36 pm



Quoting Fr8Mech (Reply 3):
Again, the private sector creates wealth.

And sometimes it burns it up in a firestorm. Oversimplifications are always dangerous. And as much as excessive regulation or intervention by the government are certainly harmful, insufficient regulation or intervention are harmful as well; It's just not always as simple to discern the respective boundaries as some people (on both ends of the spectrum!) try to make us believe.
 
swissy
Posts: 1481
Joined: Fri Jan 07, 2005 11:12 pm

RE: Economy: Is The Worst Over?

Fri Apr 03, 2009 11:45 pm



Quoting Fr8Mech (Reply 3):
Responsible credit is a good thing. I just refinanced my house (4.75 for 15 years). This is my fourth home loan in 15 years. It took longer than any other loan and required more documentation. I hope the banks have learned a lesson.

Agree a step into the right direction.... also hope the home buyers have learn it too not to go for homes they can not afford from the beginning.......

Quoting Fr8Mech (Reply 3):
We need credit in the market so that business can start running again. Credit is a small business's life blood.

You are right but the problem starts when there is too much crappy business..... someone eventually has to pay for it.....

Quoting DocLightning (Reply 4):
Then again, loaning money that doesn't exist is also similar to printing money.

 checkmark   checkmark   checkmark 

Cheerios,
 
User avatar
fr8mech
Posts: 8215
Joined: Mon Sep 26, 2005 9:00 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 12:01 am



Quoting DocLightning (Reply 4):
Then again, loaning money that doesn't exist is also similar to printing money.

Yes, but printing money will weaken the dollar, increase inflation and prolong this recession.

Quoting Klaus (Reply 5):

Yes, Klaus, it is an over simplification, but the less regulation, in my opinion, the better. When the government intervenes, it tends to smother. Take for instance The Consumer Product Safety Improvement Act of 2008.

http://www.cpsc.gov/cpsia.pdf

Basically, a law designed to prevent lead in product for children. A good cause.

The Attorney General and the Consumer Protection Agency are interpeting this act to mean all products marketed to children. Children in the US usually denotes under 18.

Products include clothing, toys, furniture, bicycles, ATV, moor scooters, dirt bikes, fashion accessories, etc. Everything that can be marketed to kids. Everything on the secondary and private markets. Everything. This act will destroy countless small business.

I last heard that implemntation was delayed, but I haven't confirmed that.

This is what I mean by smothering.
When seconds count, the police are minutes away, or may not come at all.
It’s hard to win an argument with a smart person, but it’s damn near impossible to win an argument with a stupid person. ~B. Murray
Ego Bibere Capulus, Ut Aliis Sit Vivere
 
lowrider
Posts: 2542
Joined: Wed Jun 30, 2004 3:09 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 12:46 am

I don't think we have even seen the "dead cat bouce" yet. As others have remarked, we are printing money at a reckless rate. Federal, state, and local deficits are up, and taxes are sure to follow. No sign of a reducing of spending is anywhere to be found. People are saving more, but most most still do not have adequate levels of savings. Our manufacturing sector is still withering. The only thing we have done to help employers lately is bail out some of the failing ones, and even some of those have just been throwing money away. I think we might see a slight rebound in 12 to 18 months or so, but it won't last and we still have years to go before we hit bottom. We haven't even begun to scratch the surface of inflation, unemployment, and a devalued currency. Some of this depends somewhat on the actions of our government, but I don't see them changing course significantly. Most of our economic problems had their foundations laid years ago when people, banks, and credit card companies abandoned reason and good judgement.
Proud OOTSK member
 
Klaus
Posts: 21642
Joined: Wed Jul 11, 2001 7:41 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 1:15 am



Quoting Fr8Mech (Reply 7):
Yes, Klaus, it is an over simplification, but the less regulation, in my opinion, the better. When the government intervenes, it tends to smother. Take for instance The Consumer Product Safety Improvement Act of 2008.

Not a good example. I myself am quite certainly an adult by now, but "even" I don't want any more lead in products I buy than absolutely necessary (and there aren't really that many places where it is). So heinously putting the poor lead-producing industry under pressure does not exactly break my heart.

On the other hand, a blatant lack of regulation has just recently led to the biggest crash of the financial industry in its history, dragging everything else down with it as a consequence and leading to massive consequences on a worldwide scale. That single example easily trumps your single example of the poor lead-producing industry being "suffocated" by protective legislation. Actually, both examples show the necessity of regulation!  mischievous 
 
StarAC17
Posts: 4072
Joined: Thu Aug 07, 2003 11:54 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 1:26 am



Quoting Swissy (Reply 6):
Agree a step into the right direction.... also hope the home buyers have learn it too not to go for homes they can not afford from the beginning.......

That should be the bank's job to determine through their assets and credit history whether or not the person interested in a property should be allowed to borrow money. Some people just don't know and the bank should say how much they are willing to lend.

Quoting Lowrider (Reply 8):
I think we might see a slight rebound in 12 to 18 months or so, but it won't last and we still have years to go before we hit bottom. We haven't even begun to scratch the surface of inflation, unemployment, and a devalued currency.

One thing a devalued currency does if controlled which is a positive is that it makes manufacturing in the US incredibly appealing to the world markets. This could potentially put many people back to work in that sector and if they are manufacturing products of the future then it might be good in the long run. This was happening last year with the US dollar falling in the wake of the oil price increases and the overall value of overseas manufacturing was become more than doing it at home but with the financial crisis oil dropped again.

What a lot of economists have said and what I have learned from basic macro economics is that inflation is an easier beast to control over a level of stagnant spending which is what happened to Japan in the 1990's. If you have inflation with spending increases the theory is to bring interest rates back up to control it which was done in the 1980's as it works to decrease the money supply.
Engineers Rule The World!!!!!
 
lowrider
Posts: 2542
Joined: Wed Jun 30, 2004 3:09 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 1:48 am



Quoting StarAC17 (Reply 10):
If you have inflation with spending increases the theory is to bring interest rates back up to control it which was done in the 1980's as it works to decrease the money supply.

How does that work if you continue to print currency with no real value behind it? How is inflation controllable if the rates start to outstrip the growth in revenue, wages, and asset value? In my worst case scenerio, I picture an economic situation similar to that of the Wiemar Republic. We keep taking on more debt and keep printing more money to finance it.
Proud OOTSK member
 
FreequentFlier
Posts: 1111
Joined: Sun Feb 25, 2007 4:30 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 2:09 am



Quoting Klaus (Reply 9):
Not a good example. I myself am quite certainly an adult by now, but "even" I don't want any more lead in products I buy than absolutely necessary (and there aren't really that many places where it is). So heinously putting the poor lead-producing industry under pressure does not exactly break my heart.

On the other hand, a blatant lack of regulation has just recently led to the biggest crash of the financial industry in its history, dragging everything else down with it as a consequence and leading to massive consequences on a worldwide scale. That single example easily trumps your single example of the poor lead-producing industry being "suffocated" by protective legislation. Actually, both examples show the necessity of regulation! mischievous

Klaus, you're really oversimplying the situation. The financial market breakdown was caused by too little regulation in some areas (such as regulation of credit default swaps through some sort of central clearing-house) and too much regulation in other areas (the federal government forcing lenders to provided a certain amount of subprime loans and the backing of mortgage loans by Fannie Mae and Freddie Mac). Unfortunately, it really doesn't fit into a neat little box either way.

As for the CPSC, I'm sure you'll be happy to know a German company can no longer sell toys in the US because it can't afford to comply with this silly regulation.

http://heartkeepercommonroom.blogspo...rman-toy-company-pulls-out-of.html

Many other small businesses are going to be forced to close up shop because of this as well.
 
comorin
Posts: 3858
Joined: Sun May 29, 2005 5:52 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 3:38 am

The good news is that the economy is no longer in free fall. There are still too many sources of instability left that makes it impossible to place a directional bet.

Second point is, Inflation is the only way out. If we can inflate asset prices, then everybody is rich again vis a vis their leveraged positions. We may have to give up about 30% of the value of our currency in the short term, but at least people and companies are whole again.

In a new world, public policy won't allow companies get Too Big to Fail. We won't let pension funds invest in Hedge Funds without limits and active investment committee representation. Hedge funds also present huge risks once they grow too big.

Long ago, we broke up Standard Oil for monopolistic reasons. Those laws have to be modified to contain menacing new risks from size.
 
StarAC17
Posts: 4072
Joined: Thu Aug 07, 2003 11:54 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 3:53 am



Quoting Comorin (Reply 13):
In a new world, public policy won't allow companies get Too Big to Fail. We won't let pension funds invest in Hedge Funds without limits and active investment committee representation. Hedge funds also present huge risks once they grow too big.

In Canada this makes our last government look really good because the federal government blocked the merging of any of our big 5 commercial banks because they wanted to compete at a far greater length in the world markets. They denied this because it would have made them to big to fail because they would have way too much of a market share.

However the Glass-Stegall legislation that was introduced in during the depression to prevent "Too Big to Fail" was repealed in 1999 and we could always repeat this again. If human history has taught us anything we have short memories and take history for granted far too much.
Engineers Rule The World!!!!!
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 3:55 am



Quoting DocLightning (Thread starter):
I'm not going to credit Obama's administration, but for those who are blaming it all on him, both the first and second-order derivatives of just about every economic index are turning positive. So whatever he's doing, it's not making it worse.

Nice to see rates of change being thought important!  bigthumbsup 

Quoting Comorin (Reply 13):
In a new world, public policy won't allow companies get Too Big to Fail. We won't let pension funds invest in Hedge Funds without limits and active investment committee representation. Hedge funds also present huge risks once they grow too big.

A. Let us hope.
B. This is the big sleeper. Urge folk to go out and get the best returns on their investment and then shrug with disinterest when their high yield investments turn their toes up, does not seem a sustainable strategy. There have to be limits relating to investment of retirement funds, otherwise there will simply be bursts of very angry pensioners and pensioners to be, or huge gov bail outs on a recurring basis. It is planned madness.
 
Ken777
Posts: 10160
Joined: Thu Mar 11, 2004 5:39 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 4:17 am



Quoting Fr8Mech (Reply 7):
Basically, a law designed to prevent lead in product for children.

My wife is a physical therapist who spent 25 years caring for "special needs" children. Looking at the potential harm it's a no brainer in terms of what kids should be exposed to. Actually right now she refuses to buy anything from China that might have a problem, be it toys for the grandkids to a new casual dinner set for us.

Quoting FreequentFlier (Reply 12):
As for the CPSC, I'm sure you'll be happy to know a German company can no longer sell toys in the US because it can't afford to comply with this silly regulation.

It would seem logical that a reputable German company who is known by the government to produce toys that are lead free would find rapid financial support from the government to have the tests carried out. It's in the government's interests as much as the company's.

Quoting Lowrider (Reply 11):
How does that work if you continue to print currency with no real value behind it?

Right now I believe the core value is confidence. Confidence in the country to work ourselves out of it. Confidence in consumers to start buying when funding is available. Loss of our major banks would have probably pushed confidence into a very deep hole.

The work Obama's auto team is doing will, in the end, get consumers in a position to buy a new car under a cash for clunkers program. The key, if this program gets finalized, is for the automakers to push hard on additional discounts. I'm an old retailer and I know the only way to get excess inventory (and slow movers) out the door is markdowns. I also know that the faster to you take a markdown the small the markdown percentage is. How many brand new 2008 cars are waiting to be sold while the 2010's are heading to dealers? Neither automakers nor dealers can play games.

As long as the US consumers can continue to increase their confidence in the country and other countries can continue to increase their confidence the additional money is worth it.
 
ANCFlyer
Posts: 21391
Joined: Mon Nov 15, 2004 3:51 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 4:21 am

This economy is better off than the one Carter left Reagan. It isn't anywhere near as bad as the 1930s.

It will get worse, however, the longer we allow Obama to penstroke TRILLIONS of $$$ at a whim.

Your children, and grand children will buy this ride . . . .
FOR THOSE THAT FOUGHT FOR IT, FREEDOM HAS A FLAVOR THE PROTECTED WILL NEVER KNOW OR UNDERSTAND
 
Alessandro
Posts: 4961
Joined: Wed Sep 12, 2001 3:13 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 4:27 am

Hardly, every day the debt for US goes up +3,8 Billion US$, can someone tell me when the debt shrunked for one day? 5% of the world population have overconsumed too much and now it´s all about finding new loans at a good interest rate.
The rest of the world 95% of the population is also suffering from overconsumation, we´ll see
how it ends. But in the eye of the storm sits the 5%.
From New Yorqatar to Califarbia...
 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 8:41 am



Quoting Fr8Mech (Reply 7):

Yes, but printing money will weaken the dollar, increase inflation and prolong this recession.

The beauty is that printing money can be controlled. You can choose to stop printing it whenever you want. Careless loans cannot be controlled and they create money at an unprecedented rate. That's part of the reason why the dollar was so weak last year. Out-of-control inflation.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
swissy
Posts: 1481
Joined: Fri Jan 07, 2005 11:12 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 11:10 am



Quoting DocLightning (Reply 19):
The beauty is that printing money can be controlled. You can choose to stop printing it whenever you want. Careless loans cannot be controlled and they create money at an unprecedented rate. That's part of the reason why the dollar was so weak last year. Out-of-control inflation.

 checkmark 

That is why I am worried, do we have a clear picture of the true value of the US  dollarsign ..... it appears more foreign countries are keeping pumping lots of their currency into the US one, I am wondering what will happen once that stops because there is nothing more left....

Quoting ANCFlyer (Reply 17):
This economy is better off than the one Carter left Reagan. It isn't anywhere near as bad as the 1930s.

It will get worse, however, the longer we allow Obama to penstroke TRILLIONS of $$$ at a whim.

Your children, and grand children will buy this ride . . . .

 checkmark 

Maybe go as far as great grand children.....  Angry

Cheerios,
 
na
Posts: 9844
Joined: Sun Dec 12, 1999 3:52 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 11:14 am

I expect a stagnation for some time, but no further decline in general although unemployment will still rise considerably until the end of this year. The main problem is that the foremost thing that has been lost is trust. And trust is not easy to restore. A deep distrust in the capitalistic system as it is will always remain in our brains. It needs further renovation and restructuring. And limitations in respect of blatandly egoistic "the more you have, the more you get" principle, because that caused the greed responsible for the crisis

Quoting ANCFlyer (Reply 17):
Your children, and grand children will buy this ride . . . .

And you and me, too. Its old news, that the next generation has to pay for the mistakes of the former. It has always been that way. Sometimes more financially, sometimes more morally.

In the long term I think that the ecological burden our fathers and grandfathers left us is much worse than the financial worries. Take 1/3rd off the wealth of the top 2 or 3% of the world and all is paid for, and these 5% will still remain rich! Curing nature is much more difficult. We´re simply far too many people on this planet, and most with the egoistic interest of living like we do now. To say "be fruitful and multiply" is imho a sin to preach nowadays.
 
FlyDeltaJets87
Posts: 4479
Joined: Fri Aug 11, 2006 3:51 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 11:24 am



Quoting Klaus (Reply 9):
On the other hand, a blatant lack of regulation has just recently led to the biggest crash of the financial industry in its history, dragging everything else down with it as a consequence and leading to massive consequences on a worldwide scale. That single example easily trumps your single example of the poor lead-producing industry being "suffocated" by protective legislation. Actually, both examples show the necessity of regulation!

I thought a big chunk of this banking collapse was BECAUSE of regulation because under a certain former President of the US, banks were required to lower their standards for loans and gives mortgages to people who were more than risky (so that "everyone could own a house")and these people had no way of being able to pay them back.

Quoting Na (Reply 21):
Quoting ANCFlyer (Reply 17):
Take 1/3rd off the wealth of the top 2 or 3% of the world and all is paid for, and these 5% will still remain rich! Curing nature is much more difficult. We´re simply far too many people on this planet, and most with the egoistic interest of living like we do now. To say "be fruitful and multiply" is imho a sin to preach nowadays.

 sarcastic 
You obviously don't understand that if you tax the hell out of the rich, the rich will either A) have no incentive to become rich or B) take their money elsewhere and either one leaves YOU in the hole because you just lost your tax base.
"Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
 
IgneousRocks
Posts: 73
Joined: Mon Dec 15, 2008 3:06 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 11:31 am



Quoting Klaus (Reply 9):
On the other hand, a blatant lack of regulation has just recently led to the biggest crash of the financial industry in its history, dragging everything else down with it as a consequence and leading to massive consequences on a worldwide scale.

Maybe 10% of the problem we have today was lack of regulation. The other 90% was the government's heavy hand. Frequentflier's response summed it up nicely.

Quoting Ken777 (Reply 16):
The work Obama's auto team is doing will, in the end, get consumers in a position to buy a new car under a cash for clunkers program.

Obama's team would have done better to give tax-paying consumers a $5,000 credit to spend on an auto purchase - from ANY manufacturer - than to pour the money down the black hole that are GM and Chrysler and the UAW. What they did will achieve zero results and burden future generations. Those bloated dinosaurs will eventually be shuttered.
I can take your igneous rocks or leave 'em. I relate primarily to micas, quartz, feldspar.
 
Alessandro
Posts: 4961
Joined: Wed Sep 12, 2001 3:13 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 12:41 pm



Quoting IgneousRocks (Reply 23):


Obama's team would have done better to give tax-paying consumers a $5,000 credit to spend on an auto purchase - from ANY manufacturer - than to pour the money down the black hole that are GM and Chrysler and the UAW. What they did will achieve zero results and burden future generations. Those bloated dinosaurs will eventually be shuttered.

Done in certain european countries, if you scrap your old gazgussler.
From New Yorqatar to Califarbia...
 
User avatar
fr8mech
Posts: 8215
Joined: Mon Sep 26, 2005 9:00 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 1:28 pm



Quoting Ken777 (Reply 16):
It would seem logical that a reputable German company who is known by the government to produce toys that are lead free would find rapid financial support from the government to have the tests carried out. It's in the government's interests as much as the company's.

So the answer to too much government regulation is more government intervention?

Quoting Klaus (Reply 9):
Not a good example. I myself am quite certainly an adult by now, but "even" I don't want any more lead in products I buy than absolutely necessary (and there aren't really that many places where it is). So heinously putting the poor lead-producing industry under pressure does not exactly break my heart.

Actually, it's a good example. This regulation requires that everyone marketing to children test their products (or certify their raw materials are lead-free), all their child targeted products, for lead. Everyone. Big corporations, small corporations, Mom and Pop shops, flea market and craft sellers. Everyone. This will crush small business.

I don't want to get into the political aspect of the banking/mortgage/housing crisis, but it wasn't just the banks lending out-of-control. They were pressured by government and non-government entities. With any luck that has been fixed.

Quoting IgneousRocks (Reply 23):
Obama's team would have done better to give tax-paying consumers a $5,000 credit to spend on an auto purchase - from ANY manufacturer - than to pour the money down the black hole that are GM and Chrysler and the UAW.

Agreed, the only way to salvage the auto industry is get get folks to buy cars. That will not happen by just pouring cash into Detroit. That just wastes cash. The sales tax credit or deduction (I don't recall which) is a start, but I would have like to seen an interest deduction on a car loan. Or maybe a straight out credit.

Quoting DocLightning (Reply 19):
The beauty is that printing money can be controlled.

It can only be controlled if the person running the machines has control. A trillion here, a trillion there, toss in another trillion for good measure. I see no control here. Just populist spending that will keep us in a recession

Quoting Ken777 (Reply 16):
buy a new car under a cash for clunkers program.

First I've heard of this, a good idea. But (and it's a big but), will I be allowed to buy any vehicle I want or will the ever-knowing, ever-beneficent government limit me to the model car it wants me to buy?

I'm sorry, to mis-quote or para-phrase Reagan...Government is a big 'effing problem here.
When seconds count, the police are minutes away, or may not come at all.
It’s hard to win an argument with a smart person, but it’s damn near impossible to win an argument with a stupid person. ~B. Murray
Ego Bibere Capulus, Ut Aliis Sit Vivere
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 2:16 pm

I'd listen to George Soros were closely, here's someone with a very credible track record, someone that can both counter-think, and think truly globally. The days of laissez-faire unregulated capitalism are definitely over according to him.

http://news.bbc.co.uk/2/hi/programmes/newsnight/7981506.stm (see especially at 1:10; 1:54)

They installed armoured cockpit doors, but nobody would have thought that the most dangerous enemy of the system was riding comfortably first class enjoying the very best service!

This is the end of an era, no less. This WILL hurt the American Conservatives, there are two options: 1) your taxes will go up or 2) your country will be in ruins. Take your pick.
 
ltbewr
Posts: 15716
Joined: Thu Jan 29, 2004 1:24 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 2:49 pm



Quoting Na (Reply 21):
expect a stagnation for some time, but no further decline in general although unemployment will still rise considerably until the end of this year. The main problem is that the foremost thing that has been lost is trust. And trust is not easy to restore. A deep distrust in the capitalistic system as it is will always remain in our brains. It needs further renovation and restructuring. And limitations in respect of blatandly egoistic "the more you have, the more you get" principle, because that caused the greed responsible for the crisis

I agree with this assessment. I do see a stnagnet economy and a higher unemployment/underemployment rate in the USA and throughout the world for the next 2 to 8 years much we saw for different reasons in the 1970's. As to the fear of inflation, the Fed can crank up the interest rates from their near-zero rates. We still have a long way to go to rid ot toxic assets, chase out the corrupt business and governmental leaders, put in new and reasonable regulations, change consumer credit to more sustainable levels, reduce energy demands and change overconsumption attitudes we have had for generations.
 
PPVRA
Posts: 8603
Joined: Fri Nov 12, 2004 7:48 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 4:06 pm



Quoting DocLightning (Reply 19):
The beauty is that printing money can be controlled. You can choose to stop printing it whenever you want. Careless loans cannot be controlled and they create money at an unprecedented rate.

Printing presses are an analogy in this day in age. The Fed inflates by creating money out of thin air too.

The "printing presses" are far too attractive to spending-happy governments (deficit financing), and have proven too tempting to be controlled many times in history, despite its damaging effects. And we are well on that way once again.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
comorin
Posts: 3858
Joined: Sun May 29, 2005 5:52 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 4:57 pm



Quoting ANCFlyer (Reply 17):

Wow! You are BACK!! Hooray  praise   praise 

Quoting Baroque (Reply 15):
Quoting DocLightning (Thread starter):
I'm not going to credit Obama's administration, but for those who are blaming it all on him, both the first and second-order derivatives of just about every economic index are turning positive. So whatever he's doing, it's not making it worse.

Nice to see rates of change being thought important!

We have to be careful with that. 1st and 2nd order rates of change are fine with physical processes, but limited in application to economic data. If you think of the economy as a physical engine, it works, but more often than not, it's an organism that responds to specific events that we cannot predict very well - the very act of prediction changes the game. In an earlier avatar as an econometric forecaster, we'd use first differences, as they would also have serial correlation built into them.

Econometrics went through a phase in the 70's borrowing heavily from deterministic engineering concepts - signal analysis, control systems theory (poles and zeroes) and so on. On the statistical side, we'd use Box Jenkins ARIMA and other regression based methods for forecasting. I think the underlying logic - treating economic activity as probabilistic (like gas molecules) instead of behavioristic ( each molecule has free will) only changed in the last decade with the focus on Behavioral Finance.

The thinking on this last recession is that it had nothing to do with classic inflation-deflation cycles but was triggered by a 'Hundred Year Event' - translate as "It's not my Fault' - that is outside of conventional thinking. We will recover from it in unusual ways too. My gut goes for a quick recovery.
 
Ken777
Posts: 10160
Joined: Thu Mar 11, 2004 5:39 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 5:38 pm



Quoting Swissy (Reply 20):
I am wondering what will happen once that stops because there is nothing more left....

The one factor with the US Dollar is that it is tied to a very large customer base. Countries like China have a certain level of need to ensure the Dollar is viable as US consumers are major keys to china's economic development.n

Quoting Swissy (Reply 20):
Maybe go as far as great grand children.....



Quoting Na (Reply 21):
And you and me, too. Its old news, that the next generation has to pay for the mistakes of the former. It has always been that way. Sometimes more financially, sometimes more morally.

I remember my father telling me how his employer (a major oil company) stopped their stock sharing program for employees when Social Security came in. If there was no Social Security then he probably would have had a very nice pile of valuable shares, which would have passed onto his 3 kids - me included. As I'm 65 that wealth that would have come to me, at whatever level it would be, would have already put our now grown kids through university and the grand kids would now have their university paid for. We wouldn't be living in McMansions, but comfortable homes that were paid for.

That is how government decisions filter down through generations. Dad's great grand children are paying the price of bringing in a program of Social Security. Failure to have Social Security, however, would have cause a level of misery and poverty that would still be negatively impacting this country.

It's a price we pay for an improved standard of living for the country, and especially the elderly.

Quoting FlyDeltaJets87 (Reply 22):
were required to lower their standards for loans and gives mortgages to people who were more than risky

There is a major difference between easing restrictions for people that are reasonably close to qualifying for a home and having the financial industry going hog wild to suck out as much profit out of the program.

There is absolutely nothing wrong with a modest home. I've lived in a modest home ffor the majority of my life and now live in our largest home ever - 2,300 sq ft.

Imagine the difference between helping people who have had stable jobs and work hard for their family - even if they don't make a lot of money. Getting them into a modest home and making it affordable is a good thing in my opinion. I'm especially supportive in having them go through pre-ownership courses covering basics, like saving a bit for when something (like a water heater) goes out. Fixing basic problems. Working in the yard & garden, etc.

Now compare that to a financial system that discovered they could take a janitor or hair stylist on a low income, falsify that income on the docs and get them into a $500,000 house on the hope that inflation will allow them to trade up in 2 years. Paying only interest on an variable mortgage, this worked for a while and a lot of folks in the related industries made a lot of money. Then someone noticed that the emperors in the financial sector had no clothes and it all hit the fan.

There was a major difference between the original intent and what resulted when the greed in the financial sector took over, taking their sucker customers along with them.

Quoting FlyDeltaJets87 (Reply 22):
You obviously don't understand that if you tax the hell out of the rich, the rich will either A) have no incentive to become rich or B) take their money elsewhere and either one leaves YOU in the hole because you just lost your tax base.

Someone in the 25% tax bracket has an effective tax of 40+% on all additional income when FICA is included. I don't think that taxing people who make more than $250 a year would be hurt if they had to pay the same rate.

But, hey, if they want to move out of the country and drop their US Citizenship in order to save a bit of money that's fine with me. They'll find paradise somewhere. Within a short time their position in our country will be filled and we won't miss them at all.

As for just "hiding" their money overseas, that is coming to an end also. Even more inroads were mode on this situation during the G20 session. Looks like they will need to go where ever they send their money.

Quoting IgneousRocks (Reply 23):
What they did will achieve zero results and burden future generations. Those bloated dinosaurs will eventually be shuttered.

Actually the incentive is for cars made in America. That includes companies like Toyota, Honda, VW, Mazda, etc. There will still be competition for customers for a lot of models.

There were two primary objectives - get the economy improving through building some confidence in car purchases and work on saving, maintaining and (eventually) improving the employment situation in the auto sector.

There will be more than zero results on the cash for clunkers program and I'm ready to start looking sometime this year.

Quoting Fr8Mech (Reply 25):
So the answer to too much government regulation is more government intervention?

Intervention or support for companies to maintain export levels. Governments in a lot of countries test and certify (or approve) products. Like the 787 and 380 needing certification before they can go into service.

Quoting AverageUser (Reply 26):
The days of laissez-faire unregulated capitalism are definitely over according to him.

Agree with that fully. It's clearly a failure and has resulted in a greater economic division in this country even before it all hit the fan. In the years of W & Grumpy it was grab as much as you can as fast as you can. Long term impacts were forgotten and we're now paying the price. Trillions in toxic assets and not a lot of those responsible having to pay the price.
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 5:51 pm



Quoting Comorin (Reply 29):
My gut goes for a quick recovery.

But that will still show first in a slowing of the rate of worsening ........... {fill in the parameter of choice}

Trouble is no sign of slowing in increase in unemployment and even after layoffs slow (not yet it seems) the other factors will likely cause the headline % to increase. And increases are likely to spook Wall St - although not this week it seems.
 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 6:20 pm



Quoting Baroque (Reply 15):

Nice to see rates of change being thought important! bigthumbsup

Nice to see someone who knows what a derivative is!  thumbsup 

Quoting PPVRA (Reply 28):

Printing presses are an analogy in this day in age. The Fed inflates by creating money out of thin air too.

It doesn't matter whether it's a printing press, an inkjet, or a number in a computer. It can be controlled when its one agency doing it. When it's the banks doing it by making loans that don't exist, then it 1) causes inflation and 2) crashes down in a wave of deflation. And that's what happened.

Quoting FlyDeltaJets87 (Reply 22):

You obviously don't understand that if you tax the hell out of the rich, the rich will either A) have no incentive to become rich or B) take their money elsewhere and either one leaves YOU in the hole because you just lost your tax base.

There's a balance. Taxing the hell out of the poor doesn't work well, either.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
FlyDeltaJets87
Posts: 4479
Joined: Fri Aug 11, 2006 3:51 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 7:14 pm

Quoting Ken777 (Reply 30):
Quoting FlyDeltaJets87 (Reply 22):
You obviously don't understand that if you tax the hell out of the rich, the rich will either A) have no incentive to become rich or B) take their money elsewhere and either one leaves YOU in the hole because you just lost your tax base.

Someone in the 25% tax bracket has an effective tax of 40+% on all additional income when FICA is included. I don't think that taxing people who make more than $250 a year would be hurt if they had to pay the same rate.

Let me break this down for you a couple of ways.
A) After earning a nice pension for 28 years in the military and the job he has in the private sector, plus the pension my mom receives from her time in the military and now her job in the private sector, we are in that top bracket. Now would we be "hurt" if the tax rates were increased? No - we could afford it and we would still be able to cover our basic needs without any problem. But what is the effect down the road? It means we have less money to donate to charity. It means we don't eat out as often. It means we wouldn't be able to take that nice vacation to Hawaii we recently took when we're having to shell out several thousand more in taxes each year. I'm sure otherr people in the same bracket would find themselves in the same position. They wouldn't be buying the nice tvs or going on vacations either. Thing is, you don't consider that on the other end of that vacation is someone else making (depending) on that money for their income that allows them to cover their basic expenses and for them to buy the things they want. When we eat out less, the servers who depend on tip money for their income make less money.

B) Let's try explaining the tax system this way:
An economics professor at Texas Tech said he had never failed a single student, but had once failed an entire class.
The class (students) insisted that socialism worked since no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on socialism.
“All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.”
After the first test the grades were averaged and everyone got a B. The students who had studied hard and actually earned an A were upset when the grades were averaged, while the students who had studied very little were happy.
But, as the second test rolled around, the students who had studied little studied even less and the ones who had studied hard decided that since they couldn’t make an A, they also studied less. The second test average was a D.
No one was happy. When the 3rd test rolled around the average grade was an F.
The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for anyone else.
To their great surprise, all failed. The professor told them that socialism would ultimately fail because the harder people try to succeed, the greater their reward (capitalism), but when a government takes all the reward away (socialism) no one will try or succeed.


Whether the above story is true or not, it is what happens when you heavily tax those who work to pay off for those who slack off or just can't hack it. Case in point: You don't deserve my parent's A, and I can assure you that my parents have already decided that they're not going to carry your weight.

Quoting Ken777 (Reply 30):
But, hey, if they want to move out of the country and drop their US Citizenship in order to save a bit of money that's fine with me. They'll find paradise somewhere. Within a short time their position in our country will be filled and we won't miss them at all.

And then the whole cycle will start over again, because the people still on the bottom will be mad at the new people on top. Its funny. I've never once met a liberal who said "I'm not tax enoughed - raise *my* taxes" - No. It's always "raise their taxes".

[Edited 2009-04-04 12:28:01]
"Let's Roll"- Todd Beamer, United Airlines Flight 93, Sept. 11, 2001
 
PPVRA
Posts: 8603
Joined: Fri Nov 12, 2004 7:48 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 7:17 pm

Quoting DocLightning (Reply 32):
It doesn't matter whether it's a printing press, an inkjet, or a number in a computer. It can be controlled when its one agency doing it. When it's the banks doing it by making loans that don't exist, then it 1) causes inflation and 2) crashes down in a wave of deflation. And that's what happened.

You're more likely to see some control by a bank that could go bankrupt than by a government agency with little to lose. With that said, our current system gives little reason for banks to be responsible. Eliminate the FDIC and cut off access to subsidized loans to the private sector by the Federal Reserve and banks will have much to rethink. As will depositors, which will require much more from their banks than just an FDIC sticker.

[Edited 2009-04-04 12:18:44]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
DfwRevolution
Posts: 9310
Joined: Sat Jan 09, 2010 7:31 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 9:11 pm



Quoting AverageUser (Reply 26):
I'd listen to George Soros were closely, here's someone with a very credible track record, someone that can both counter-think, and think truly globally. The days of laissez-faire unregulated capitalism are definitely over according to him.

 redflag   redflag   redflag   redflag   redflag   redflag   redflag 

If those are the exact words used by Mr. Soros then he is a bumbling fool! No western economy has come close to being an unregulated laissez-faire capitalist economy, especially not the United States or the UK.

 redflag   redflag   redflag   redflag   redflag   redflag   redflag 

How many decades of increasing regulation, oversight, and government-mandated wealth redistribution do we need before we realize that we are as prone to economic catastrophe as ever? The Bush administration, notorious in the mainstream media for pushing deregulation and now accused of letting free-market forces drive us off a cliff, presided over an 8 year period which saw thousands of additional financial regulations.

And guess what? Some of those very regulations and oversights contributed to the crisis we are in today. And because of our government's ties to massive corporate interests, the people least responsible for this crisis will now subsidize the losses of failed businessmen and irresponsible debtors. That is the proud product of a mixed-capitalist economy with abundant regulation, folks!

I'm sure if we just tilt the mix a little more toward public-sector works and add a little more regulation we will be safe forever!  rotfl   rotfl 
I have a three post per topic limit. You're welcome to have the last word.
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 9:17 pm



Quoting FlyDeltaJets87 (Reply 33):
I've never once met a liberal who said "I'm not tax enoughed - raise *my* taxes" - No. It's always "raise their taxes".

You need to come over here. A recent survey (n=1166) by TNS Gallup indicated that 42% of the Finns would like to pay more taxes to cover the increasing public debt. Even the with the Conservative Kokoomus Party supporters the rate was 32%. Cuts in healthcare, social programmes spending, or education were supported by 10%.
link
 
DfwRevolution
Posts: 9310
Joined: Sat Jan 09, 2010 7:31 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 9:25 pm



Quoting Ken777 (Reply 30):
But, hey, if they want to move out of the country and drop their US Citizenship in order to save a bit of money that's fine with me. They'll find paradise somewhere. Within a short time their position in our country will be filled and we won't miss them at all.

I wonder how many of the nobility in Old Europe said those very words as the productive-class made the difficult choice of leaving their homes and emigrating to the United States when their economic and social liberty finally became intolerable?

Have you seriously failed to notice the migration within the United States of businesses and families away from the high-tax, high-regulation, anti-business, anti-family, predominately liberal states like New York and California to low-tax, low-regulation, pro-business and family-friendly center/right states like Texas, Arizona, and Florida? People will move thousands of miles for economic opportunity. They will ditch their U.S. citizenship when push comes to shove, just as our ancestors ditched their citizenship for opportunity here.
I have a three post per topic limit. You're welcome to have the last word.
 
FreequentFlier
Posts: 1111
Joined: Sun Feb 25, 2007 4:30 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 9:28 pm



Quoting FlyDeltaJets87 (Reply 33):
And then the whole cycle will start over again, because the people still on the bottom will be mad at the new people on top. Its funny. I've never once met a liberal who said "I'm not tax enoughed - raise *my* taxes" - No. It's always "raise their taxes".

"It only stands to reason that where there's sacrifice, there's someone collecting the sacrificial offerings. Where there's service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master."
- Ayn Rand
 
Ken777
Posts: 10160
Joined: Thu Mar 11, 2004 5:39 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 9:32 pm



Quoting FlyDeltaJets87 (Reply 33):
Now would we be "hurt" if the tax rates were increased? No - we could afford it and we would still be able to cover our basic needs without any problem.

First, I delighted that your parents reached a point where they are being taxed on over $250K a year. They are also very fortunate that they have their military retirement safety net as a lot of people in ALL tax brackets are signing up for unemployment these days.

If someone in the 25% tax bracket gets with 40+% on, say, an income increase of $1,000 then I personally believe that people with a far greater income should be able to pay the same rate. Maybe it's better to go to, say, 36% between $250K to $1,000K and then go to, say 45%. Or move everyone over $250K to 27% and have them pay both sides of the FICA like I had to when I was running a one man company. That would save Social Security

Quoting FlyDeltaJets87 (Reply 33):
But what is the effect down the road?

The effect is the same down the road if one or both of your parents had to take a cut in pay to keep their current job. People in the top bracket have had a far better ride during the W & Grumpy years than any other tax bracket group. Some have made major gains in their wealth and others have ripped home owners and investors with total disregard of the problems they were building for the country and average American.

I was fairly far from the top bracket when I was working, but was able to take the who family back to Australia a few years before retirement. Like me I'm sure that your parents will be able to adapt - especially when they understand the impact it will have on their kids through grandkids.

Quoting FlyDeltaJets87 (Reply 33):
Its funny. I've never once met a liberal who said "I'm not tax enoughed - raise *my* taxes" - No.

I don't consider Warren Buffet a liberal but he did indicate that he was embarrassed to be paying a lower total tax rate than his secretaries. If Buffet believes something needs to be done at the upper end he's either spot on - or someone conservatives would a radical left wing liberal idiot.
 
Ken777
Posts: 10160
Joined: Thu Mar 11, 2004 5:39 am

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 9:46 pm



Quoting DfwRevolution (Reply 37):
to low-tax, low-regulation, pro-business and family-friendly center/right states like Texas, Arizona, and Florida?

Check out their property taxes before considering the lack of a state level income tax a blessing. Texas isn't that small a state and they do have a lot of miles of very good roads. Got some pretty good schools also, but part of the quality at the university level is, I believe, based on some major funding from wealthy supporters. Just like one LSU grad left LSU $125 million when he died in the mid to late 80's.

Basically there is no free lunch in those states and the state budget's need no come from somewhere.,

Quoting AverageUser (Reply 36):
People will move thousands of miles for economic opportunity. They will ditch their U.S. citizenship when push comes to shove, just as our ancestors ditched their citizenship for opportunity here.

Let them go - especially if they will be happier somewhere else. I've been overseas enough (starting with my time in the Navy) to understand that there are good people everywhere and a lot of countries provide a good standard of living. Australia and New Zealand are two good countries with great standards of living, but there is a need to warn that they are closer to "socialized medicine" than you expect to see here and a close look at their top tier rates is also important to understand.

Basically I say let 'em pick their country and be happy.
 
DfwRevolution
Posts: 9310
Joined: Sat Jan 09, 2010 7:31 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 10:05 pm

Quoting Ken777 (Reply 40):
Check out their property taxes before considering the lack of a state level income tax a blessing.

Does not change the fact that the cumulative tax burden in Texas is significantly lower than the liberal states I mentioned.

Quoting Ken777 (Reply 40):
Basically there is no free lunch in those states and the state budget's need no come from somewhere.,

No, there is no free lunch but there are also no coincidences. The Texas government provides fewer services than CA, NY, MA. The result is a leaner state/local government that leaves a greater share of the economy to a more efficient private sector.

Quoting Ken777 (Reply 40):
Let them go - especially if they will be happier somewhere else.

You are crazy. The people who are going to leave are the productive individuals who lead successful businesses and create jobs. That means a future of mediocrity for those who are left behind. Like I said, you sound like those old Europeans who turned their nose during the brain-drain of professionals, scientist, and thinkers to the United States. Now the reverse is starting to happen and you really can't see the consequences?

And by the way, the reverse brain-drain of professionals has already started to happen. A string of energy companies are leaving Houston, TX (one of the best markets left in the U.S.) for Switzerland because of America's uncompetitive tax code.

Quoting Ken777 (Reply 40):
Basically I say let 'em pick their country and be happy.

No, you are making excuses as to why the U.S. should stop vying as a competitive economy.

[Edited 2009-04-04 15:15:21]
I have a three post per topic limit. You're welcome to have the last word.
 
AverageUser
Posts: 1824
Joined: Tue Oct 23, 2007 6:21 pm

RE: Economy: Is The Worst Over?

Sat Apr 04, 2009 11:04 pm



Quoting DfwRevolution (Reply 35):
If those are the exact words used by Mr. Soros then he is a bumbling fool

Feel free to check out his exact words by the link. It'll only take a couple of minutes.

You really should respect Soros more, he's an embodiment of the American enterprising and individual spirit. Also made lots of money by betting againsts the governments and central banks in the 1990s. Too bad he financed Obama, and was strongly anti-G.W.Bush
 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 12:00 am



Quoting FlyDeltaJets87 (Reply 33):
Let me break this down for you a couple of ways.
A) After earning a nice pension for 28 years in the military and the job he has in the private sector, plus the pension my mom receives from her time in the military and now her job in the private sector, we are in that top bracket. Now would we be "hurt" if the tax rates were increased? No - we could afford it and we would still be able to cover our basic needs without any problem. But what is the effect down the road? It means we have less money to donate to charity. It means we don't eat out as often. It means we wouldn't be able to take that nice vacation to Hawaii we recently took when we're having to shell out several thousand more in taxes each year. I'm sure otherr people in the same bracket would find themselves in the same position. They wouldn't be buying the nice tvs or going on vacations either. Thing is, you don't consider that on the other end of that vacation is someone else making (depending) on that money for their income that allows them to cover their basic expenses and for them to buy the things they want. When we eat out less, the servers who depend on tip money for their income make less money.

Ah, yes. The very basis for Reagan's "Trickle-Down" theory of economics. It didn't work very well.

The problem with that model is that every time money changes hands, it gets taxed. So by the time it gets to the little guy, most of it's either been taxed or taken away by middlemen.

Quoting DfwRevolution (Reply 35):

How many decades of increasing regulation, oversight, and government-mandated wealth redistribution do we need before we realize that we are as prone to economic catastrophe as ever? T

Is the cure to strep throat "antibiotics?" No, it's a specific antibiotic: penicillin. If I give you trimethoprim/sulfamethoxazole, that won't fix your strep throat.

Similarly, lumping all "regulation" under the same umbrella isn't valid. France has done regulation for quite a while and, because they have employed the right regulations, they have been relatively unscathed of late.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
DfwRevolution
Posts: 9310
Joined: Sat Jan 09, 2010 7:31 pm

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 12:17 am



Quoting AverageUser (Reply 42):

Feel free to check out his exact words by the link. It'll only take a couple of minutes.

You really should respect Soros more, he's an embodiment of the American enterprising and individual spirit.

He has a sterling reputation, but anyone who says the our economic system leading into the economic crisis was laissez-faire capitalism is instantly and completely discredited, IMO. I made use of the conditional "if" in my original post since I was aware those were not in fact Mr. Soros words. They were yours.  Wink

Furthermore, I would like to know why Mr. Soros says that the "market fundamentalist" who wanted to let the market sort itself out were proven "decidedly false." When were they even given an opportunity to prove themselves? The national governments stepped-in early in the crisis and started picking winners and losers long before the markets were given the opportunity.
I have a three post per topic limit. You're welcome to have the last word.
 
sv7887
Posts: 1259
Joined: Tue May 20, 2008 7:31 pm

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 12:33 am



Quoting DocLightning (Reply 43):
Ah, yes. The very basis for Reagan's "Trickle-Down" theory of economics. It didn't work very well.

The problem with that model is that every time money changes hands, it gets taxed. So by the time it gets to the little guy, most of it's either been taxed or taken away by middlemen.

He grew the economy by a third and added $4,000 in effective spending power to the average citizen and reduced unemployment to 5.5%, and rebuilt a humiliated US military. far better than what prevailed in the Carter years.

People seem to ignore what actually happened to create this crisis: Irresponsible consumption, and government policy that forced banks to lower standards (Community Reinvestment Act, Fannie Mae Expansion). If you don't believe me, have a look at this article:

http://boston.bizjournals.com/boston...3.html?b=1237176000^1793570&page=1

The Feds are punishing this bank for being too "cautious" and not making any subprime loans. And the kicker is that they had ZERO defaults in this crisis.

How about that? a government that punishes a bank for doing the smart thing? That's a government that is failing the people....

Our lack of competitiveness as a nation is another problem. We consume too much of the world's resources, and have an education system that delights in spending money and just asking for more as if that will solve the problem. We also have a society that seems to forget how we became a superpower in the first place: Ingenuity, Innovation, and Hard Work.

President Kennedy said it best, "Ask not what your country can do for you, Ask what YOU can do for your country..."

Never a wiser word spoken...
 
PPVRA
Posts: 8603
Joined: Fri Nov 12, 2004 7:48 am

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 1:15 am



Quoting Sv7887 (Reply 45):

He grew the economy by a third and added $4,000 in effective spending power to the average citizen and reduced unemployment to 5.5%, and rebuilt a humiliated US military. far better than what prevailed in the Carter years.

Carter gets a bad rep. He's the one who really got rid of a lot of the regulations and appointed Paul Volcker (which Reagan kept) to the Fed. Reagan reduced taxes, though, and that was nice--but not the spending increase. All things in accordance to what Reagan believed but not actually done by him.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 2:00 am



Quoting Sv7887 (Reply 45):


Our lack of competitiveness as a nation is another problem. We consume too much of the world's resources, and have an education system that delights in spending money and just asking for more as if that will solve the problem. We also have a society that seems to forget how we became a superpower in the first place: Ingenuity, Innovation, and Hard Work.

We spend far more money on a bloated and unnecessary military than we do on education. FAR more. We build very little infrastructure other than roads. We are soaking in natural resources and yet can't apportion them (there's no reason that California should have a water shortage).

We have this outmoded 60's mentality and it needs to catch up with the times.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
sv7887
Posts: 1259
Joined: Tue May 20, 2008 7:31 pm

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 2:12 am



Quoting DocLightning (Reply 47):
We spend far more money on a bloated and unnecessary military than we do on education. FAR more. We build very little infrastructure other than roads. We are soaking in natural resources and yet can't apportion them (there's no reason that California should have a water shortage).

The military is hardly unnecessary. Is it inefficient, definitely. But ask the Taliban what happens when you piss off the American army. We're bombing Pakistan, on a monthly basis and have troops all over the world. I'd prefer to keep those troops in Korea to keep Kim Jong in check.

Why would China and the Russians keep spending more and more money to modernize their forces? It's all about power projection.

Regarding Education:

Spending money aimlessly on education has gotten us where exactly? We spend nearly $9,000 dollars per student in this country. Look at the state of DC's schools and they spend nearly $14K per student.

http://empirezone.blogs.nytimes.com/...hest-per-pupil-spending-in-the-us/

The system is broken. And those states that have experimented with charter schools have done MUCH better than public schools.

http://www.gse.harvard.edu/blog/news...e-positive-effects-on-student.html

"Researchers from the Harvard Graduate School of Education and MIT have released the results of a groundbreaking study that suggests charter school students in Boston outperform their peers at other public schools in Boston. Results for pilot schools were less clear; some analyses showed positive results at the elementary and high school level, while results for middle school students were less encouraging. The study uses an innovative research design based on school lotteries that allowed for a direct comparison of charter and pilot school students with their peers."

Throwing more money at the problem won't solve anything. We need to reward good teachers, and make the system more flexible. Japan, Taiwan, and other countries eat our students for breakfast on global exams:

http://www.mackinac.org/article.aspx?ID=6998

But as President Obama says (and I agree wholeheartedly with him) it's up to the students and most importantly Parents to make it work.

If people don't push their kids to study and if kids can't see the importance of it, what's the point? We have a society more interested in the latest reality show than actually studying...
 
User avatar
DocLightning
Topic Author
Posts: 22208
Joined: Wed Nov 16, 2005 8:51 am

RE: Economy: Is The Worst Over?

Sun Apr 05, 2009 3:02 am



Quoting Sv7887 (Reply 48):

The military is hardly unnecessary. Is it inefficient, definitely. But ask the Taliban what happens when you piss off the American army.

Maybe if we didn't have that same army blundering all over the place pissing off the Taliban, we wouldn't have had to go there.

Again, how come we seem to attract all the trouble? Don't give me this "greatest country in the world" crap.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan

Who is online

Users browsing this forum: Virtual737 and 24 guests

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos