America's Recession ~ Depression
cowmeet
Registered User regular
Registered User regular
Soo the US of A is pretty fucked.
We are digging a hole we havn't been able to get out of for the past decade or so.
I mean, we are thinking about changes that might fix this, but without implementing them, we are going to take a hard fall from our pedestal.
We need to change, citizens of the US, we need to change soon.
Discuss this recession, will we get out of it, or will it get to a worse case scenerio and cause the government to make a drastic change that could leave you thinking, "Oh fuck"?
Simplified Recession Overview - Bad and Good
We are digging a hole we havn't been able to get out of for the past decade or so.
I mean, we are thinking about changes that might fix this, but without implementing them, we are going to take a hard fall from our pedestal.
We need to change, citizens of the US, we need to change soon.
Discuss this recession, will we get out of it, or will it get to a worse case scenerio and cause the government to make a drastic change that could leave you thinking, "Oh fuck"?
Simplified Recession Overview - Bad and Good
Issues that come to mind:
..1. The US printed ~1/2 Trillion more dollars last year, this devalues the currency.
..2. If the US wanted to have a balanced budget for FY 09/10 it would have to spend 51% of all tax income paying the deficit. Deficit is the interest on the debt, without actually paying down any capital. This 51% is larger than the amount spent on Education, Health Care and Defense COMBINED.
..3. Since the Vietnam war, presidents have been "borrowing" from the Social Security fund in order to pay for emergencies. Clinton drained the remaining money in the fund, essentiall rendering it bankrupt. This is especially a concern with the number of baby boomers expected to retire in the next 5-10 years. The average American has saved $40,000 each when they retire. You are expected to have %50-%60 of your working wage, per year, between the time you retire and the time you die. Since the average retirement age is 62 and life expenctancy is 76 (for men) you need at a minimum %50 * working wage * 14 years.
..4. If the US wanted to pay off its debt, it would be approx $70k / US inhabitant
..5. The trade deficit has been increasing since the 80's, which contributes to devaulation and debt.
..6. Many countries around the world (Middle East, Japan) are very close to changing from the US Dollar to the Euro as the trading base currency. I doubt this will occur overnight, however more emphasis will be placed on the difference between the Euro and US Dollar. This will increase the price of gas since Canadian Dollar is at parity (yes the US gets more of its gas from Canada than any other country) and the Euro is worth more, and the larger the disparity between the two, the higher the price per barrel of crude from the Middle East. This may force US companies to invent new techniques for extracting the tar from the Shale in the Midwest.
Upsides:
..1. The US may finally do something about China tying the Yen to the US Dollar. It is undervalued by a significant percentage (Wide variance depending on who you ask)
..2. Manufacturing will return to the US, reducing the trade deficit
..3. An extended recession/depression (extended being 2+ years) will cause a lot of unemployment and restructuring.
.....a. People will learn and not carry a high debt load
.....b. Businesses will be forced to restructure, reducing the power unions have over corporations. (There is no reason that the UAW should be worth more than GM. That money was collected in union dues, and rightfully belongs to the workers)
.....c. The government, hopefully, will return to the system they used from 1930-mid 60's basing future expenditures on a balanced budget.
The issues did not occur overnight, and will not go away overnight. However the US has a large, educated population base and is capable of returning from this position if it wants to. Personally I believe the US two party system is too corrupt, and only looking for their next election rather than the welfare of the country. This is partly to blame on the voters, since they are rewarding them for their behaviour. The voters even tolerate an electronic voting system that has been shown to be problematic and costly, without any real opposition.
If you are complaining about the cost of goods now, it is going to get worse. The market will not be able to continue to sell at a loss simply to hold its market share (see VW/Audi base models as an example)
..1. The US printed ~1/2 Trillion more dollars last year, this devalues the currency.
..2. If the US wanted to have a balanced budget for FY 09/10 it would have to spend 51% of all tax income paying the deficit. Deficit is the interest on the debt, without actually paying down any capital. This 51% is larger than the amount spent on Education, Health Care and Defense COMBINED.
..3. Since the Vietnam war, presidents have been "borrowing" from the Social Security fund in order to pay for emergencies. Clinton drained the remaining money in the fund, essentiall rendering it bankrupt. This is especially a concern with the number of baby boomers expected to retire in the next 5-10 years. The average American has saved $40,000 each when they retire. You are expected to have %50-%60 of your working wage, per year, between the time you retire and the time you die. Since the average retirement age is 62 and life expenctancy is 76 (for men) you need at a minimum %50 * working wage * 14 years.
..4. If the US wanted to pay off its debt, it would be approx $70k / US inhabitant
..5. The trade deficit has been increasing since the 80's, which contributes to devaulation and debt.
..6. Many countries around the world (Middle East, Japan) are very close to changing from the US Dollar to the Euro as the trading base currency. I doubt this will occur overnight, however more emphasis will be placed on the difference between the Euro and US Dollar. This will increase the price of gas since Canadian Dollar is at parity (yes the US gets more of its gas from Canada than any other country) and the Euro is worth more, and the larger the disparity between the two, the higher the price per barrel of crude from the Middle East. This may force US companies to invent new techniques for extracting the tar from the Shale in the Midwest.
Upsides:
..1. The US may finally do something about China tying the Yen to the US Dollar. It is undervalued by a significant percentage (Wide variance depending on who you ask)
..2. Manufacturing will return to the US, reducing the trade deficit
..3. An extended recession/depression (extended being 2+ years) will cause a lot of unemployment and restructuring.
.....a. People will learn and not carry a high debt load
.....b. Businesses will be forced to restructure, reducing the power unions have over corporations. (There is no reason that the UAW should be worth more than GM. That money was collected in union dues, and rightfully belongs to the workers)
.....c. The government, hopefully, will return to the system they used from 1930-mid 60's basing future expenditures on a balanced budget.
The issues did not occur overnight, and will not go away overnight. However the US has a large, educated population base and is capable of returning from this position if it wants to. Personally I believe the US two party system is too corrupt, and only looking for their next election rather than the welfare of the country. This is partly to blame on the voters, since they are rewarding them for their behaviour. The voters even tolerate an electronic voting system that has been shown to be problematic and costly, without any real opposition.
If you are complaining about the cost of goods now, it is going to get worse. The market will not be able to continue to sell at a loss simply to hold its market share (see VW/Audi base models as an example)
cowmeet on
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That's the only way I can see us paying for all the shit we owe. It's gonna suck for the next few years.
But seriously, there are fucking TENT CITIES outside Los Angeles, I didn't even know that was possible outside natural disasters.
http://www.youtube.com/watch?v=CnnOOo6tRs8
Well yeah but it also had aliens disguised as humans taking over by becoming the rich and powerful.
In regards to raising taxes...It's not so much the amount of the taxes as what that amount is spent on. Most sources are close but for the 2007 budget, Wikipedia had the prettiest graph.
$549 billion on defense
$89.9 billion on education/training
$76.9 billion on transportation
There's a note at the bottom about how the 2007 federal budget of $2.8 trillion doesn't include expenses for the Iraq war...which are funded by "appropriations"....so like the OP said about SS and emergency funds, with the war in Iraq and no bailout to come, what's next?
I've seen it.
Most of the people who were leasing the electric cars came off as creepily in love with the cars, as if they were doing a little more than just driving them.
But yeah, the economy is in the shitter. And the only real way out is to impose a matter of inconvenience upon ourselves and others: increase taxes.
Bushervilles!
I still can't figure out why everybody's insisting on a recession when there is no deflation.
I know lawyers, top consultants etc. that work for the gov't that make a shit ton more than 200k a year so senators aren't even taking all of it. No, I think we pay these people good enough money to expect a solution. But lets just turn a blind eye to it all and say "raise taxes!"...and then when all is good and paid for do you honestly think the govermnent is going to lower those taxes back to their previous rates? I'll always consider raising taxes my last option because it's just giving greedy fuckers who have more money than me even more money to fuck with our lives.
Looks pretty familiar now.
It's just the natural result. They gave out more money than could possibly be paid back even with the best financially stable people amongst the population. It was getting rediculous there for a couple of years - over 10 new paycheck advance stores opened up within 3 blocks of each other here in South Omaha, whilst only one new bank built a new location in the same area.
And suprise, most of them are starting to close down.
So you cant really pay it off untill people come get their bonds.
but they're listening to every word I say
I know lawyers, top consultants that make a shit more than they would working for the government (counting benefits), so what's your point? The Senators are required to own two houses.
Also, the nation did pretty damn well with the nearly balanced Clinton budget, and horribly under Bush (both) and Reagan, so I think the country can handle it. Besides this, the current deficit is only about 600 billion.
That's how fucked we are.
GM and Ford shot themselves in a foot a long time ago. They put all their faith in domestic loyalty and kept making shitty inefficient cars thinking no one was going to buy a Japanese econobox. Then they pushed trucks and SUVs dowen everyone's throats.
Developing nations are improving their quality of life, which means their slave labor prices are only going to last so much longer.
American Education just keeps getting shittier and shittier, meaning that our competitiveness is fucked.
Globalization is negating the ability to keep secrets. Anything we can do someone else can do cheaper (at least for now). Innovation has to move fast enough to deal with countries who don't believe in patent rights.
The environmental movement-inspired regulations are going to pick up a huge amount of speed ~2010. Several items at once. In California, and any other state that uses California's methods, this is going to kill a lot of medium-sized businesses (goodbye competitive prices!), and eat up an incredible amount of raw materials. The best part is that many of these regulations are not actually going to help matters, but are the result of people ensuring their investments in "green" companies pay off; see: ethanol.
The middle class is losing ground in general due to various factors. Part of the reason housing is so expensive is because people who already have a home for each season buy homes, forcing the price up, so that families with weaker paychecks have to take out loans with companies (often ones where the same house resellers own stock :P ), reducing their actual economic power a great deal, and shoving credit debt up their asses, shoving huge piles of money into bank accounts that are not prone to being put back into the economy.
Public employees currently make about 50% more on average than private employees, despite being infamously unproductive.
Right now, I'm pretty happy that I'm working for a company that builds prisons.
Gov't pension is one reason to work for them. You also don't have to be famously competent once you've settled in. Some people, like the ones I know just happen to like law in relation to urban development. I'm sure they enjoy making 400k a year as well. And the suggestion we should fund these people two homes of their own is ridiculous. Four homes, owned by the state where a senator can live free or recieve a tax benefit if they use their own is more than adequate with that salary to either pay off those they own or have enough for a downpayment on a nice house when they get out...assuming the senator only serves one term.
According to the OP the projected deficit is upwards of 1.5 billion. I don't know where he got the numbers from though. Currently we're allocating about $300 bil towards the deficit. If we raised taxes to cover 1.2 billion that's about what...$8000 a person? Since it's just deficit then we're expecting these numbers to stay the same year by year unless it's paid down.
As for military spending:
According to Truthandpolitics.org our military spending per the GDP has actually shrank quite a bit. The extra $100 mil/year only beefs current numbers by about .75%.
However, notice where all the money has been going.... These guys show their sources...monthly federal treasury statements, the treasury deparment itself. All these social services..medicare/welfare etc. increased $150 bil over the past four years. This totals up to nearly the same cost as the Iraq war in this period.
How about we do things like ending the practice of "cost-plus" contracts and prohibiting companies that are delinquent on their taxes from bidding on contracts? Those are things that will actually save large amounts of money - not playing nickel and dime games with salaries.
Thank you. I love how negative unions are represented. I work for a union, The United Association of Journeymen and Apprentices of Plumbers and Pipe Fitters Industry of the United States and Canada. (Yes it's a long freaking name, I know.) Which is UA for short. We have classes 2 nights out of the week, and what averages out a 6 hour Saturday class a month. I understand not every union is like the one to which I am a member, and yes, that some of the negative stereotypes that are associated with unions do ring true. But I'll be damn if every economic ill will be blamed on us.
I could write pages on how unions have benefited the working man and woman in America (i.e. The eight hour work-day, helping establish minimum wage etc.) But I won't. I personally do HVACR and of all the apprentices in my class, 80% had went to a technical school, but joined the union afterward due to the difference in demand for union vs non-union employees in this area.
In essence, what I'm trying to say is that instead of pointing the finger at unions who, while not perfect, are a counter to the power of employers, and take a good hard look at big business.
My apologies for the wall of text.
Americans spend more money on the military than the next 9 countries below them combined. They spend more than the revenue of every American owned company combined.
I'm going to blame the huge amount of money spent on social security to the death of the extended family/ rise of the nuclear family, but that just becomes an opinion/social values thing.
The thing is that people are stupid and look at all unions as being the same entity. Some of them are wonderful, some of them are horrible.
Steel Workers Union is mostly hilarious.
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Octo: You do realize we're semi-mercenaries? :P
You missed the part where I mentioned that we pay them adequately to get the job done. The problem is that it's not. If you listened to any congress sessions - the hearing today for example- there was a lot of time wasted with political "buffering" and assurances they weren't trying to "offend" the opposing side. It's 90% brokering power (and getting their friend a contract) and 10% getting shit fixed.
I don't expect 20 million dollars is going to fix anything either...and that's assuming we stopped paying them altogether. I will repeat however, that increasing taxes is not the right solution to all our problems.
The ones on yachts mostly.
"In 1998 we had 25,000 more manufacturing employees than government employees, now in 2007 that has reversed, 53,000 more government employees than manufacturing and manufacturing jobs have declined by 56,000 while government jobs have increased by 22,000!"
Who says anything about nickel and diming? I want jobs cut!
While I don't mind competitive salaries for skills...is california the top state in education? Oh no wait it's like 47. So why are our superintendants paid more than the governator himself? (Some of them reach upwards of 250k/yr).
And when these jobs are cut where will these people go? just go die or what? As long as they are doing somthing worthwhile then it is okay to have them.
Superintendants are paid more than the governer because they need to find the best people(in theory). The governer get found by campagining. It already takes huge amounts of money to get elected. They dont need to be paid, they are rich already.
The problem with that is the "hand of the market" is slow and usually only works when things are at disaster levels anyway.
but they're listening to every word I say
The Hand of the Market is what kept regulations lax enough for this recent bullshit to happen.
GM is producing the Chevy Volt, has a few Hybrid SUVs, and has quite a few vehicles that can run on ethanol. So they are trying (finally).
The era of Japanese dominance in the auto industry actually seems to be slowly coming to an end.
As far as the economy is concerned, that tent city story is sad, but exaggerated. Most of the people there probably bought homes they couldn't afford. Sure, some blame falls on the banks for giving out the loans, but good old common sense tells you not to buy something you can't afford. I could go tomorrow and lease a nice BMW, but I'm not going to do it, because it wouldn't make any damn sense right now for me to do so. I wouldn't yell at the bank if times got tough and say "But you should have told me it was a bad idea!"
XBL: QuazarX
I pay $840 for a single bedroom and yet there are still people who live here who leave shopping carts in the parking lot. :x
And I'm not a fan of unions (I have to deal with the CWA, and I don't like them, to tell the truth), but I don't think they're the anti-christ or anything.
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