The future of our economy

Discussion in 'Politics' started by Salty, Jun 7, 2011.

  1. Salty

    Salty
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    I was talking to a fella tonight - he said that w/i 18 months we will have a financial crisis that will rival the Great Depression of 1929

    Do you agree with him?
     
  2. preachinjesus

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    Economics is a side hobby of mine. Love the topic and probably would have gotten a PhD in it if I had another shot at this life thing.

    That said (which means I have no qualifications for anything I'm about the type) I disagree. We are facing some difficult times. QE1 and QE2 have been failures. They failed to address the underlying causes which got us into this mess and they didn't benefit the actual engines of the American economy, the small business and employment. The thing that has to happen right now is a full fledged scaling back of the corruption on Wall Street and some serious work by Congress to fix the problems that got us into this.

    The difficulty here is that Congress is completely unable to lead on this like they should. Both houses are devoid of actual leaders, people who will stand on principle to change the wa things are in the US.

    That's bleak but I think we do have more going for us than some think. If we can revitalize the industrial engine of the US that would be a huge start. We're seeing this happen. Also, the other economies are in a lot worse shape. America still controls the world economy, though not as tightly as before. I really believe American innovation and sticktoitiveness will win the day. Things will look different. Not everybody will go to college, but then not everyone needs to go to college.

    The two things I'm worried about:

    1. Student loan defaults
    2. A growing Wall Street bubble on social media, new media ventures that bursts

    I believe we'll see a "double dip" but the US economy will emerge from all of this. It woud be better if our elected leaders would show the way but at this point nobody in Washington has the guts to lead.
     
  3. billwald

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    Your source is very optimistic. The job outlook is already worse and more people have lost their houses than in the GD.
     
  4. InTheLight

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    Agree with you.

    It's important to note that most corporations are profitable. So long as this holds, the economy will not tank.

    Hard to match that. Back then there was only one bread winner per household. Nowadays it's normal for both parents to work. Therefore, even if unemployment were to approach Depression era levels there would likely still be someone bringing in money into the household. Or at least someone would have part time work.
     
  5. JohnDeereFan

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    One of the things people don't realize is that in the US, the Depression was greatly exaggerated and dragged out by FDRs policies. While Europe had not fully recovered, they were on the road to recovery much, much faster than we were because they didn't have these policies.

    Now, not only are we recreating FDRs policies, we're doing it to a far higher degree than he did.

    If we don't break ties with the Fed, stop spending money we don't have, stop endorsing money we can't back up, and stop instituting punative restrictions on business, we're going to see a depression like you've never imagined.
     
  6. revmwc

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    3 things extneded the Great Depression in the US

    1. The rich stopped spending, they totally quit putting any extra out, they had it but they held it.

    2. The tariff act of 1930 it increased taxation just the Great depression started.

    3. The Federal reserve failed to react in changing policies. (I am doing this from memory I can get to the exact thing later)

    Sound familiar.
     
  7. targus

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    We are toast already.

    When interest rates start going up due to all of the funny money being printed it's really going to get bad.

    I wouldn't be surprised by twice the real unemployment that we are seeing now and double digit inflation at the same time.

    Keep your children inside because the streets won't be safe.
     
  8. Arbo

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    All I can say is that it is a good time to be debt-free.
     
  9. TomVols

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    No, I don't think we're headed for a Great Depression. However, this is a bad recession that is nowhere near over yet. It's by no means the worst I've seen in my lifetime, but it's very bad. No one - not the President, Congress, or the Fed seems willing to do anything about it. Bernanke is probably the best adept at handling the economy between him and Obama, but that isn't saying much. The Dodd/Frank legislation could be the X factor as the implementation could case a banking crisis that will only hurt people more. Then that's when the gravity gets turned off and people start losing their shirts.
     
  10. billwald

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    Back in '29 half the people lived on a farm and one could shoot rabbits or jacklight a deer. Now days most families have two workers because it takes one salary to pay the mortgage and taxes.

    >Economics is a side hobby of mine. Love the topic and probably would have gotten a PhD in it if I had another shot at this life thing.

    AMEN! A tenured chair in econ in a college town. Heaven couldn't be much better.
     
  11. revmwc

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    In 29 there was some work if one was willingto travel to find it, but most had large families and hard to move everyone. My Grandfathers both did that, my Mom's Dad left the family to find work while my Dad's Dad was a saw filer and followed the Saw mills with his family. Both families were dirt poor but still able to eat. Dad always talked about have their rations and how he had to put cardboard in his shoes to keep a pair of shoes on. Then in 1941 his Dad died and my Grandmother was on her own with 6 kids, They made it fortunate for me I can hunt and fish and there are still animals around even in the cities. Just be careful not to get caught in the burbs killing animals. If that is what it took I bet we would find a way to feed the family.
     
  12. AresMan

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    The best thing for our economy is if the fearless leaders get their grubby mitts out of it and let malinvestment readjustments occur. The Fed's artificial manipulation of credit and interest rates, and government policies trying to force "improvements" to the economy and "stimulus" measures are responsible for the bubbles that inevitably lead to busts.

    If our bureaucrats--elected and unelected--simply allow the market to correct the imbalances that they so graciously imposed on it, we would enter a very steep recession for a short period of time, but then we would come out of it stronger with sound fundamentals.
     
  13. AresMan

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    I disagree. Their persistent "doing anything about it"--all detrimental central planning measures--is what caused, and is prolonging the imbalances. The economy does not--and never does--need central planners.

    Bernanke is at the helm of the problem. He, like Alan Greenspan, knows virtually nothing but inflationary policy to inflate bubbles that burst, and then they blame the market for doing what they signaled to do.
     
  14. jdmcm

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    The economy isn't going to be a quick fix, but thats an extremely pessimistic view. Things may get worse before they get better, but eventually things will be back to normal. As Harvey Dent said, "The night is darkest just before the dawn" ;)
     
  15. billwald

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    WW2 produced freak economic and social conditions which resulted in a 50 year middle class bubble. I think the bubble has popped and we are regressing to the 8000 year norm of 80% serfs and de facto slaves. Why do you think that WW2 changed the norm?
     
  16. Borneol

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    Thought Michael Barone had a nice article this week, explaining why we have high unemployment. Have to imagine as long as uncertainty remains, the out of work numbers will remain high.

    "Obama Tunes Out, and Business Goes on Hiring Strike"

    http://www.realclearpolitics.com/ar...nd_business_goes_on_hiring_strike_110094.html

    Excerpt:
     
  17. billwald

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    90% Bull.

    Go to any large store and read the labels on the products. What do we call a nation which buys all its consumer goods from foreign nations? Either "Switzerland" or "Third World." "Switzerland," we are not.
     
  18. InTheLight

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    The reason that companies aren't hiring more people is because there is not increased demand for their products or services. It's that simple. Consumers aren't buying their stuff, so they have no need to hire on more workers. It's not complicated.
     
  19. Bro. James

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    Greed, deficit spending and a burgeoning welfare state have served to make havoc in our economy. Greed at every level has made a full circle. All the utopian bubbles have burst.

    It all belongs to God. He will make us give an account.

    We still have some high-tech money printing machines and plenty of red ink. It may take a wheel barrow full of money to buy a loaf of bread. What happens if our USDs are not accepted by China for all the manufactured goods which Walmart buys for us to buy with our welfare checks. We are running out of grace period on our national debt.

    Let us get some more credit cards.

    The Book of Revelation has reference to the world economic system failing before the end.

    Are we ready?

    Even so, come Lord Jesus.

    Peace,

    Bro. James
     
  20. mandym

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    We will never see a recovery unless we see a stop to all new spending and a repeal of some past spending.
     

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