We are nearing the End

[YuccaFlatsRanch]

Greece is about to default, the French elected a Socialist who wants more spending, the Germans in one province of Germany followed France's lead. SPEND SPEND SPEND - Spend your way out of debt. Obama is pressing Congress for another 25 billion in Stimulus.

Down, Down, Down we all go, drowning in Debt. Is there no end except THE END???

[DAVID In Wisconsin]

What a shame. The leaders of the world can't do what we do everyday...live on what we earn.

[big rockpile]

The End no not unless a Major Natural Disaster Hits but I do believe there will be World wide Civil unrest,War,thinning out,Take Overs and adjustments made.

big rockpile

[gideonprime]

Originally Posted by big rockpile

The End no not unless a Major Natural Disaster Hits but I do believe there will be World wide Civil unrest,War,thinning out,Take Overs and adjustments made.

big rockpile

I can see the above to a greater or lesser degree depending on location.

Agreed. Not the end. The sky, she is not falling.

[plowjockey]

I'm seeing new businesses large and small opening everywhere.

Apparently, they are not interest sitting and waiting, for "the end"

[Yvonne's hubby]

Prosperity is just around the corner.

[pancho]

Originally Posted by DAVID In Wisconsin

What a shame. The leaders of the world can't do what we do everyday...live on what we earn.

Lots of people are doing just like the leaders of this country.
Notice all of the foreclosures going on?
Notice the level of debt in the country?

We have elected people that do just like the majority of us do.

[poppy]

Originally Posted by plowjockey

I'm seeing new businesses large and small opening everywhere.

Apparently, they are not interest sitting and waiting, for "the end"

We've heard this before. What you may see in your immediate area is not what is happening across the country. The economy is flat at best. Most of the Euro countries are in recession, India is flat, and China has problems. There is no decent recovery anywhere in sight, except for maybe around your house. The world, as a whole, is broke and shuffling worthless paper around trying to keep the ponzi scheme going a little longer. People here and in other countries want their government freebies to continue but all that spending has bankrupted all the countries. The day of reckoning for us and everyone else is close. Greece has already reached it and it looks like Spain will be the next domino to fall. You and others pretend our 16 trillion dollar debt doesn't matter but you are about to face reality.

[gideonprime]

Originally Posted by poppy

We've heard this before. What you may see in your immediate area is not what is happening across the country. The economy is flat at best. Most of the Euro countries are in recession, India is flat, and China has problems. There is no decent recovery anywhere in sight, except for maybe around your house. The world, as a whole, is broke and shuffling worthless paper around trying to keep the ponzi scheme going a little longer. People here and in other countries want their government freebies to continue but all that spending has bankrupted all the countries. The day of reckoning for us and everyone else is close. Greece has already reached it and it looks like Spain will be the next domino to fall. You and others pretend our 16 trillion dollar debt doesn't matter but you are about to face reality.

A very large portion of which was created when we entered into an off the books pay for it with borrowed money set of wars.

[sevenmmm]

Homesteaders who have a certain measure of self-reliance will not suffer one bit.

Those who rely on this debt-based system, and those in debt, will be first to suffer, as they already are. Then as the printing presses crank up, then those who have dollars saved will suffer a devaluation of their savings.

The devaluation will officially end the age of consumerism...

At risk of complicating my prediction (:-), there will be a window forthcoming that borrowing money to buy a homestead will be a smart deal. I suspect large corporate farms will crash and burn because subsidies will end and input costs will be higher than income. This event will reflect in lowering land prices. Then, since food prices will be on the increase, an erstwhile homesteader can truck farm the fruits of his/her labor into these increasing prices while the debt payment becomes increasing smaller because of the devaluation.

At some point in the not to distant future I think one old twenty dollar Gold peice will buy a few acres of the best farmland in the county. Now I know that one is out there, but it has happened before, back when people knew the bankers were a bunch of lying theives.

[Hollowdweller]

We are in sort of uncharted economic territory really.

In the past when we cut wages and cut gov't spending then interest rates went down.

When rates went down then people could afford to buy houses and other stuff, and start new businessses.

When workers salaries were kept low then businesses could make a profit even if they sold less stuff and they could also keep prices lower.

Now interest rates are at record lows but because salaries have dropped to such a low point people really can't afford to consume more.

Corporate taxes are at all time lows but they have used the money to gamble on the stock market (eg JP Morgan) rather than to use the stock market in the traditional manner which was to raise money for business.

Basically no one economic theory works forever.

What we have seen since 2008 is the collapse of the effectiveness of supply side economics.

As long as the deregulation and tax cuts were causing the economy to grow the volume of taxes coming in to the gov'ts made up for the cuts in rate.
However with the Bush tax cuts we saw the phenomenon of tax cuts that did not pay for themselves by increasing the volume of revenue.

So a lot of state and county gov'ts did what they had to do with falling taxes and decreased federal aid to the states after the stimulus ran out. They laid off public servants.

So unlike other recessions where public jobs were kept by gov't aid to the states the US has lost over 600,000 public jobs since the recession began.

This cut in gov't spending has been a huge drag on the economic recovery.

But the politics of it suck.

The public doesn't realize the vital role that gov't jobs play in the economy. In many rural areas the gov't jobs are the ones driving the local economy.

The politicians don't want to vote in a new stimulus to help gov't workers keep or regain their jobs.


With the debt due to the recession it makes spending the money to do so look foolish.

However the real foolishness was to CUT taxes back when the economy was doing good. Cut them to the point we had a deficit.

If we had been wise and state and local gov'ts and the feds had saved for bad times then we'd have enough to stimulate the economy.

The problem is now we need to SPEND money to get the economy going but we wound up not having any to spend because we went out on a tax cutting spree when times were good.

[poppy]

Originally Posted by gideonprime

A very large portion of which was created when we entered into an off the books pay for it with borrowed money set of wars.

Leftist spin. But I guess it is easier than facing the reality that entitlement programs have been building the problem for decades and are dooming our country. Look at the Euro countries for pete's sake. You can't blame their condition on wars. It is totally due to entitlements. Look up the cost of the 2 wars and it becomes clear that if that was the only problem, we would be in good financial shape.

[Darren]

How do you get around the fact that consumer spending is what drives the economy?

[Hollowdweller]

Finally, financial crises have mushroomed. After World War II, countries restricted the flow of money across borders. This changed in the 1970s and 1980s, when these controls were gradually dismantled. Unexpectedly, rapid inflows and outflows of foreign money caused booms and busts: first in Latin America in the 1980s; then in Asia and Russia in the late 1990s. And the American and European financial crises, though largely homegrown, have had global repercussions.

Globalization, it turns out, is a double-edged sword. It raises living standards by promoting trade and spreading modern technology around the world. But it also causes disruptions and deepens downturns. The future of the world economy hinges heavily on whether this instability is modest and tolerable or massive and intolerable. As Bergsten asks: “Are we on a path not only of crises but also of crises of increasing frequency and rising severity?”

World economy’s uncharted territory - The Washington Post

[dollmaker]

Originally Posted by YuccaFlatsRanch

Greece is about to default, the French elected a Socialist who wants more spending, the Germans in one province of Germany followed France's lead. SPEND SPEND SPEND - Spend your way out of debt. Obama is pressing Congress for another 25 billion in Stimulus.

Down, Down, Down we all go, drowning in Debt. Is there no end except THE END???

Which part of Germany followed France's lead? Are you talking about one of the states? If so, which one?

[gideonprime]

Originally Posted by poppy

Leftist spin. But I guess it is easier than facing the reality that entitlement programs have been building the problem for decades and are dooming our country. Look at the Euro countries for pete's sake. You can't blame their condition on wars. It is totally due to entitlements. Look up the cost of the 2 wars and it becomes clear that if that was the only problem, we would be in good financial shape.

Dude,

you don't get into two wars and cut taxes. That isn't how it works. Aren't you rightists the one's saying you cannot spend without paying for it? isn;t that what happened by cuting taxes and starting two wars? The USA borrowed money from china to fight in teh ME. Not that is just plain DUMB!

You can try to blame entitlements all you want (and in some cases there are reforms to those entitlements that need to be made I will grant) but to say the wars had nothing to do with it is to ignore reality.

[poppy]

Originally Posted by Hollowdweller

We are in sort of uncharted economic territory really.

In the past when we cut wages and cut gov't spending then interest rates went down.

When rates went down then people could afford to buy houses and other stuff, and start new businessses.

When workers salaries were kept low then businesses could make a profit even if they sold less stuff and they could also keep prices lower.

Now interest rates are at record lows but because salaries have dropped to such a low point people really can't afford to consume more.

Corporate taxes are at all time lows but they have used the money to gamble on the stock market (eg JP Morgan) rather than to use the stock market in the traditional manner which was to raise money for business.

Basically no one economic theory works forever.

What we have seen since 2008 is the collapse of the effectiveness of supply side economics.

As long as the deregulation and tax cuts were causing the economy to grow the volume of taxes coming in to the gov'ts made up for the cuts in rate.
However with the Bush tax cuts we saw the phenomenon of tax cuts that did not pay for themselves by increasing the volume of revenue.

So a lot of state and county gov'ts did what they had to do with falling taxes and decreased federal aid to the states after the stimulus ran out. They laid off public servants.

So unlike other recessions where public jobs were kept by gov't aid to the states the US has lost over 600,000 public jobs since the recession began.

This cut in gov't spending has been a huge drag on the economic recovery.

But the politics of it suck.

The public doesn't realize the vital role that gov't jobs play in the economy. In many rural areas the gov't jobs are the ones driving the local economy.

The politicians don't want to vote in a new stimulus to help gov't workers keep or regain their jobs.


With the debt due to the recession it makes spending the money to do so look foolish.

However the real foolishness was to CUT taxes back when the economy was doing good. Cut them to the point we had a deficit.

If we had been wise and state and local gov'ts and the feds had saved for bad times then we'd have enough to stimulate the economy.

The problem is now we need to SPEND money to get the economy going but we wound up not having any to spend because we went out on a tax cutting spree when times were good.

Good grief. If government jobs are so good, let's put everyone to work for the government. Government jobs are a net drain on the economy. While they do provide some people with employment, they also remove money from the economy by tax collection to pay their salaries. That money would be spent by consumers to create jobs in the private sector. Then there is the matter of government jobs saddling taxpayers with pensions far into the future, part of the financial crisis we are facing. Your theory only works for those who think government can manage our economy better than the private sector. You are wrong.

[gideonprime]

Originally Posted by poppy

Good grief. If government jobs are so good, let's put everyone to work for the government. Government jobs are a net drain on the economy. While they do provide some people with employment, they also remove money from the economy by tax collection to pay their salaries. That money would be spent by consumers to create jobs in the private sector. Then there is the matter of government jobs saddling taxpayers with pensions far into the future, part of the financial crisis we are facing. Your theory only works for those who think government can manage our economy better than the private sector. You are wrong.

Yeah cause the private sector did such a bang up job we needed to bail them out.

[poppy]

Originally Posted by gideonprime

Dude,

you don't get into two wars and cut taxes. That isn't how it works. Aren't you rightists the one's saying you cannot spend without paying for it? isn;t that what happened by cuting taxes and starting two wars? The USA borrowed money from china to fight in teh ME. Not that is just plain DUMB!

You can try to blame entitlements all you want (and in some cases there are reforms to those entitlements that need to be made I will grant) but to say the wars had nothing to do with it is to ignore reality.

Simple question: Did the wars cost 16 trillion dollars? You sound like Gov. Brown in California. They had a 9 billion dollar deficit when he was elected and it is now 16 billion. As far as I know, Cali has started no wars. Now he is moaning that things are worse than he thought. Does he consider cutting spending? Only in vague terms which means he has no intention of meaningful cuts. Instead, he is proposing raising taxes.

[Hollowdweller]

Originally Posted by poppy

Leftist spin. But I guess it is easier than facing the reality that entitlement programs have been building the problem for decades and are dooming our country. Look at the Euro countries for pete's sake. You can't blame their condition on wars. It is totally due to entitlements. Look up the cost of the 2 wars and it becomes clear that if that was the only problem, we would be in good financial shape.

Correct. In Europe. Not in the US.

In the US our big problem is our for profit health care system. Because it causes the cost of health care to be so high the gov't has to spend a lot in medicare where in other countries with universal health care it is less.

Social Security right now is not contributing to the defcit because the extra surplus has been invested in gov't bonds and used to fund the gov't.

When the boomers retire these bonds will come due and either we will have to raise taxes or cut spending to pay for them.

Since US citizens pay into Social Security to cut the benefits they pay for is wrong.

The one area of our budget where we pay more than other countries is not social spending. It is defense. We spend more than the next 10 countries combined on defense.

Our entitlement spending is actually a little less than other countries.

So for the US we will have to cut defense. It's a huge waste but the problem is it's sort of a red state welfare program as workers in many red states are employed in it.