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Yes and Big brother hasn't aged in all the years I've been watching him fight Goldstein during the 2 minutes of hate. I certaintly wont ask about it though.
How has the GOP fixed the economy?
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Yes and Big brother hasn't aged in all the years I've been watching him fight Goldstein during the 2 minutes of hate. I certaintly wont ask about it though.
bickelz
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Well, yes but there are a few other things such as Alt-A and sub-prime loans that really helped. People started to make a lot of money off of flipping houses by buying them with little to no money down. In other words, with really high leverage. So that when they sell the house in a couple of years when the house has appreciated, they make a high rate of return. This works great, as long as houses appreciate. If home prices stagnate or decline, you're in deep shit my friend on a loan with high leverage. You lose everything. And many of these loans with low interest/no money down had a super high interest rate that kicked in after 2 years. So now you're stuck with a depreciating asset, you owe more than it's worth and your interest rate is impossibly high (let's say 20%).
Not only are you in it deep but the bank sold off your loan and opened it up to the market to investors in these complicated investments (not sure what they're called). Essentially, your loan, as well as many others are cut up and sold off when they're sold off to investors. Basically, the investors lose big on this too.
Back to Alt-A and sub-primes. Alt-A loans didn't require income documentation so you could get a massive loan without having any source of income. My Econ prof said there was a case of a strawberry picker who made ~$14,000/year and got a loan for $800,000. The kicker is that it's loan fraud to lie on your app for a loan so not only were people in huge debt, they could face legal trouble too.
Sub-primes were just loans given to people with bad credit and many of those just defaulted.
So there were a bunch of toxic assets and the TARP Bailout was suppose to buy up all the toxic assets.
So...
I really don't see a solid GOP plan. There's Ryan's plan but I mentioned that before. And many GOP members seem scared to back it. Not to mention it's not going to cut anymore than Obama's plan is scheduled to cut. And the GOP wants to cut unemployment benefits, which are the most direct form of stimulus because it is all spent right away since those people don't have any money. Giving tax cuts to rich people doesn't ensure that money will be put into the economy. It gets saved. Trickle down economics vs direct injection. This may be a generalization but even if you give tax cuts to everyone, it's not all going into the economy.
My dad doesn't speak for all stupid people or all conservatives but he gave me the key to life yesterday "Make a bunch of money and don't spend any of it". That's the key to life btw, not finance. Like life, not finance. You need to spend for the economy to run, otherwise you don't make any money.
manatee
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Well, the thing is that what you're doing is essentially to say that the problem with a flu patient isn't just the influenza virus, but also fever, cough, headaches etc.
When there's a credit expansion, lending standards fall, since a creditor would first lend to the most reliable borrowers, so when additional money is available for lending, the reliability of debtors generally falls.
When there's a credit expansion, the structure of production is distorted and investment is misled into higher-order goods, a bubble must pop up somewhere. This time, it was in housing, due to policies whose aim was to stimulate activity in housing, but if it hadn't been that, it would have been another market.
Of course, things like Fannie&Freddie and other moral hazards, the CRA etc. intensified/affected the situation, but a credit expansion (artificial lowering of interest rates) alone necessitates a correction (recession).
Money that is saved is generally loaned out. Money that is loaned out is generally invested. This generally leads to capital accumulation and economic growth. The "spending" will still be there, it's just deferred: consumers save their money and delay their consumption (although, not necessarily so with fractional reserve banks and associated credit expansion), so resources can be moved from the later stages of production to earlier ones, making increased economic output possible.
How about this example: imagine a considerable amount of people in a community decide that they want to go... live in cabins in the woods (the specifics aren't important, lol), and consequently need to cut back their spending to afford it. They save money by not going to restaurants as often. Of course, this is a setback for the restaurants affected, who need to lay off workers etc. However, at the same time, interest rates are lowered due to more savings, which encourages investment in long-term projects, for example, a savvy businessman would start building cabins. Thus, the loss in jobs in the restaurant sector is regained by more jobs in the cabin building sector. In essence, this is no different from a scenario in which the consumers decided to eat more Italian food: non-Italian restaurants lose, but this is counter-acted by the gain made by Italian restaurants. It's important to realize that savings aren't a decrease in spending per se, rather, it's a shift in demand, but an inter-temporal one.
You feel me?
(Damn, I yapped again. Okay, no more for realsies now)
just me
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Too much government, and giving people too many things to sit on their butts and do nothing, has something to do with it. Press one for English...
People are NOT better off not working for minimum wage. Many have found the lazy, easy way of doing nothing to be their choice of survival. It is in direct comparison to my first quote.
A lot needs changing, both sides of the coin, to help fix this. Politics stinks. I am not going to sit here and blame one party for the mess we are in. Anyone that does is myopic.
bickelz
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Yeah, there were many variables in this recession. There were actually fairly strict regulations regarding leveraging loans that the banks lent but there were other avenues you could get unregulated loans.
I see how bubbles pop up now but I think there are some that are far more dangerous than others. Messing around with home loans seems pretty dangerous. People were making some pretty big bucks for a while there, but I feel like only a few people won and now there's a huge gap in wealth right now that the free market just can't fix.
Oh, I feel you. [MENTION=3444]manatee[/MENTION] But the problem is that using this route to recover from the economic downturn is long, slow and painful. True, that money may be invested but it's not really helpful until people start spending their retirement accounts or start us a business project, which usually requires other loans.
I want to major in economics because it's a fascinating system though.
I think it was Keynes that said a free market economy will always fix itself in time but we don't know how long it will take. So invented bailouts and stimuli from the government into the economy during recessions to get things going again.
So now I'm having some thoughts...
Would these investments coming from savings eventually lead to a more stable system in the long run with less emphasis on consumer "crap" that we really don't need and more emphasis on technology and energy? Or would jump-starting the economy bring us to a place where it would be easier for us to make policy that stabilizes the system.
I guess I'm trying to bring in and entertain topics such as green energy policy in particular.
bickelz
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Well, I actually am not sure if I believe in the minimum wage. I think that it hurts business to be honest and it doesn't effectively target poor workers. Norway, Sweden, Switzerland and I think Finland have no minimum wage laws. I'm on favor of programs like the EITC that target poor people the best.
But I think we differ in that I think you see a bunch of lazy people who are living off of your tax dollars. But I see that many of these people can't catch a break, are single mothers or just need help for a plurality of different reasons. Sure, there will always be people that are leeches in the system but why shut the whole thing down when people really need it? Shouldn't we be there to help catch our fellow Americans when they fall? Give them the resources to pick themselves back up? Realize that we have the power to make a system that does not teach you the world is a cold, hard place full of people that just want to take you. We don't have to be on the defense, always looking out for ourselves. It goes against our biology and everything the human race has evolved to do throughout time.
We travel and work together as a pack. Not because we want to, but because we need to. We look out for each other because we rely on each other for survival and because they would do the same for us.
But now people want to have their wealth and be exclusive with it and instead of using it to help people, they use it as an excuse to attack one another and use the excuse that it's a "dog eat dog world". But it's not.
I was raised to believe that liberalism was selfish, that it's about "me". It's not. Liberalism is about "we". It's inclusive, not exclusive.
magister343
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The famous Keynes quote is "The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."
Apparently though he may have been purposefully using the phrase "the long wrong" in its vernacular meaning to obfuscate an argument where he knew his opposition was meaning it in a technical sense.
http://www.csmonitor.com/Business/T...n-we-are-all-dead-What-did-Keynes-really-mean
Stimulatory measures can have decidedly non-stimulatory effects. It seems that they might actually stifle the recovery, not cause it to happen sooner. They make it so that the trough is not quite as deep but lasts much longer.The Depression of 1920-1921 was significantly more severe than the Great Depression, but the Harding-Coolidge administrations refused to intervene. Within two years we were at full employment with possibly the most robust economy the word has ever seen. Hoover and Roosevelt's interventions in the Great Depression may well be responsible for its extended duration.
Barnabas
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If I'm not wrong the right isn't in a power, there in a lock with the Democrats and let's not forget that when Obama was elected the democrats had not only the presidency but a super-majority in the house and senate and they fixed all of a nothing.
just me
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Bickelz, I am far from being selfish. I have been giving all my adult life to the benefit of others. I do not mind paying taxes, either. Our system is not working. They say a man can't borrow himself out of debt. What makes you think a government can? First thing to do when you find yourself dug deep into a hole is to quit digging.
There is a better way. It may be above our vision or understanding right now, but there is a better way. Why? Simply because there has to be.
I do not denounce our government; I disagree with it. I do not denounce our political parties and their infighting; I am disgusted over it. I do not turn my back on poverty; I cannot agree with throwing more money at it as the best solution. Breakfast: gotta go.
There is a better way. It may be above our vision or understanding right now, but there is a better way. Why? Simply because there has to be.
I do not denounce our government; I disagree with it. I do not denounce our political parties and their infighting; I am disgusted over it. I do not turn my back on poverty; I cannot agree with throwing more money at it as the best solution. Breakfast: gotta go.
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Actually the administration did a lot of work towards improving the economy. People were idealistic though that the economy would severely improve with Obama. In a way it is his fault, as he went a head and went with the cheesy campaign that was "change". Yet again he might not have even been elected if he did not say dreamy promises.
http://whatthefuckhasobamadonesofar.com/
I state the right wing has power right now because not only do they control the senate, but a majority of state governorship's and they have the power to block legislation. The GOP gained a great amount of power in 2010 yet they have also done nothing to fix the economy. I'm not saying going democrat is the best way to go. But all I've heard pretty much from the GOP is "cut this, and this, and cut that". Primarily in the education field, were many of my teachers are loosing their jobs. I just find it irrational how we are cutting on everything except war. And instead of giving taxes to the rich who are clearly still a lot better off than your person in this country, they plan on lowering their taxes. I understand hard work should pay off( yet again many got there without real hard work but corruption) but where's one's heart? When you have a middle class that's loosing their homes and a lower class loosing their jobs. Everyday you see more homeless and this time this people were simply not "homeless". They were average people, in average conditions who have simply lost everything.
~jet
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They haven't... the GOP (not to be confused with folk who consider themselves conservative) is the party of rich people; it always has been. Sure, democrats in office are typically richer than their constituents, but typically not so rich as their GOP counterparts, either, whose constituents are oil barons, hedge fund managers, and for-profit healthcare and prison CEOs.
The point is that this points to motivation and math. Rich people get richer whenever the limit worker rights, worker pay, and worker security because workers who have more rights tend to exercise them; workers who are paid more cut into their profit margins; workers who are secure are willing to defend themselves and leave a job for a better one if they start to be abused or underpaid in their current position. While the 40s-70s proved that rich people could still exist and be very comfy in a pro-worker environment, they also remembered the 10s-20s (and multiple previous eras) during which people working for less and in terrible conditions made them an order of magnitude richer than they otherwise would have been. The GOP has been hired by these people, and represent the interests of these people, and as a result, their priorities are the following:
Slice away your savings and increase your debt so that you will work out of fear
Reduce your benefits and cripple social security so that you will work out of fear
Exploit said fear to get to you take lowered pay and reduced benefits and worsening working conditions because you are too afraid to leave your job.
Make a hell of a lot more money, stash it and gamble with in in ways that hamper or corrupt the economy.
Increased vulnerability adds to increased worker insecurity which further makes them exploitable.
Make a hell of a lot more money.
They even have a long history of (here as well as around the world, under many titles, names, etc) throwing war and terrorism in your face to make you even more fearful, because these will be the same people who then take up the military mantle, promising and pretending to defend you against enemies that either never existed or never needed to exist (sans provocation.) Even pearl harbor was provoked through extensive meddling and economic sabotage of Japan.
In the end, I suspect that the GOP and their
The point is that this points to motivation and math. Rich people get richer whenever the limit worker rights, worker pay, and worker security because workers who have more rights tend to exercise them; workers who are paid more cut into their profit margins; workers who are secure are willing to defend themselves and leave a job for a better one if they start to be abused or underpaid in their current position. While the 40s-70s proved that rich people could still exist and be very comfy in a pro-worker environment, they also remembered the 10s-20s (and multiple previous eras) during which people working for less and in terrible conditions made them an order of magnitude richer than they otherwise would have been. The GOP has been hired by these people, and represent the interests of these people, and as a result, their priorities are the following:
Slice away your savings and increase your debt so that you will work out of fear
Reduce your benefits and cripple social security so that you will work out of fear
Exploit said fear to get to you take lowered pay and reduced benefits and worsening working conditions because you are too afraid to leave your job.
Make a hell of a lot more money, stash it and gamble with in in ways that hamper or corrupt the economy.
Increased vulnerability adds to increased worker insecurity which further makes them exploitable.
Make a hell of a lot more money.
They even have a long history of (here as well as around the world, under many titles, names, etc) throwing war and terrorism in your face to make you even more fearful, because these will be the same people who then take up the military mantle, promising and pretending to defend you against enemies that either never existed or never needed to exist (sans provocation.) Even pearl harbor was provoked through extensive meddling and economic sabotage of Japan.
In the end, I suspect that the GOP and their
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This is an absurd, party line based explanation thats is laughable...
if thats the constituency of the GOP they must only have a few thousand voters behind them, since that 1% mean the 1% of the POPULATION and yet they usually average somewhere between 45-55% of any electorates voting %... your math is BS at best.
And George Soros isnt just a little wealthier then the average liberal democrat, neither is Michael Moore or Bill Clinton or any of the limousine liberals who pretend to be a party of the people.
The economy isn't fixable.
It's the fault of the American people and the philosophy of going into debt for everything.
Not enough people are saving money.
Too many people are in too much debt.
It comes from 40 years of faulty thinking about Economics.
Nixie
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The problem it that people actually believe that each party is really opposite from one another. Party lines for the most part are basically bullshit. Democrats cater to the rich because they fund their parties. Republicans fund socialist programs and government interference because their is a need for such programs and a life without government interference isn't desirable. Moderations is the only true way to look at any structure.
Key problems include the deregulation of the banking industry by the Great Satan (Regan) which began our downward slide because of inflated real estate prices commonly called the Savings and Loans Debacle.
Increased globalization which means that our economies are more closely tied with other countries which means that things become even harder to predict. The US is no longer insulated from economic hardships that are found abroad.
A partial collapse of the one facet of our economy--investment arm. G + I + C = our economy. G is government spending. I is investiment. C is consumer spending. Basic economic model. Investment went to hell in a handbasket probably induced by faulty loans given to consumers. Our economy for the past decade was basically consumer driven with the consumer base freely spending money and freely borrowing money to spend. Well, hell, now everybody is over extended. Reducing government spending is not a really bright solution at this point considering the other two arms of your economy are anorexic.
I would recommend urban renewal programs such as building energy efficient housing in urban and rural areas which would stimulate local economies which would stimulate spending which would stimulate production and so on and so on. Why do you think the Worker programs after the Great Depression were created? You gotta spend money to make money.
I would limit the number of high school students in the job market to tighten the market up so that real grown ups could have a chance to get a job. It might make the environment more worker friendly. See, lots of people who should be retiring can't so the job market is tough. I would also penalize large businesses who keep over a certain percentage of underage workers or part time workers--extra taxes to help offset the costs of higher unemployment and health care.
Oh yea and I would stop sinking so much money into an overseas war. I would funnel some of those funds into finding alternative fuel sources. I would spend money on wind and solar energy.
Key problems include the deregulation of the banking industry by the Great Satan (Regan) which began our downward slide because of inflated real estate prices commonly called the Savings and Loans Debacle.
Increased globalization which means that our economies are more closely tied with other countries which means that things become even harder to predict. The US is no longer insulated from economic hardships that are found abroad.
A partial collapse of the one facet of our economy--investment arm. G + I + C = our economy. G is government spending. I is investiment. C is consumer spending. Basic economic model. Investment went to hell in a handbasket probably induced by faulty loans given to consumers. Our economy for the past decade was basically consumer driven with the consumer base freely spending money and freely borrowing money to spend. Well, hell, now everybody is over extended. Reducing government spending is not a really bright solution at this point considering the other two arms of your economy are anorexic.
I would recommend urban renewal programs such as building energy efficient housing in urban and rural areas which would stimulate local economies which would stimulate spending which would stimulate production and so on and so on. Why do you think the Worker programs after the Great Depression were created? You gotta spend money to make money.
I would limit the number of high school students in the job market to tighten the market up so that real grown ups could have a chance to get a job. It might make the environment more worker friendly. See, lots of people who should be retiring can't so the job market is tough. I would also penalize large businesses who keep over a certain percentage of underage workers or part time workers--extra taxes to help offset the costs of higher unemployment and health care.
Oh yea and I would stop sinking so much money into an overseas war. I would funnel some of those funds into finding alternative fuel sources. I would spend money on wind and solar energy.
manatee
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jet: While I in essence agree with the symptoms you identified, I suppose, but I disagree as regards the causes.
Workers' rights legislation does nothing to improve their conditions: they all amount to being, in effect, minimum wage requirements, and minimum wage laws do not at all increase wages, they either cause ostracision from the workforce or increase prices.
What does improve worker's conditions, however, is capital accumulation. Wages tend towards productivity, and productivity is increased mainly by investment and increased capital stocks. For this process to occur, savings (deferred consumption) is necessary. Instead of consuming resources immediately and producing only for this present consumption, a portion of resources are saved, to be used in constructing better capital equipment so that total output can increase later.
Unfortunately, there has been a war on savings for decades. Through relentless credit expansion, manipulated interest rates have encouraged investment without real savings to invest, while at the same time discouraging saving, further diminishing the real pool of savings. In fact, real interest rates might've been highly overstated for an extend period, due to how the CPI has been fine-tuned to conceal real inflation.
Of course, such an astonishing lack of real savings doesn't simply mean stagnant growth: the already existing capital stock needs to be replenished to even keep the current level of productivity going, and when real loanable funds prove lacking, capital is actually consumed. The process of decivilization is initiated.
The rich do benefit, though. Bankers see sweet profits from being enabled to shuffle around phony "credit", and the state and associated special interests benefit from the non-neutrality of money.
This is just one part of it, but it's pretty universal, although it seems to be most intense in the US.
Workers' rights legislation does nothing to improve their conditions: they all amount to being, in effect, minimum wage requirements, and minimum wage laws do not at all increase wages, they either cause ostracision from the workforce or increase prices.
What does improve worker's conditions, however, is capital accumulation. Wages tend towards productivity, and productivity is increased mainly by investment and increased capital stocks. For this process to occur, savings (deferred consumption) is necessary. Instead of consuming resources immediately and producing only for this present consumption, a portion of resources are saved, to be used in constructing better capital equipment so that total output can increase later.
Unfortunately, there has been a war on savings for decades. Through relentless credit expansion, manipulated interest rates have encouraged investment without real savings to invest, while at the same time discouraging saving, further diminishing the real pool of savings. In fact, real interest rates might've been highly overstated for an extend period, due to how the CPI has been fine-tuned to conceal real inflation.
Of course, such an astonishing lack of real savings doesn't simply mean stagnant growth: the already existing capital stock needs to be replenished to even keep the current level of productivity going, and when real loanable funds prove lacking, capital is actually consumed. The process of decivilization is initiated.
The rich do benefit, though. Bankers see sweet profits from being enabled to shuffle around phony "credit", and the state and associated special interests benefit from the non-neutrality of money.
This is just one part of it, but it's pretty universal, although it seems to be most intense in the US.
Detective Conan
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I'd agree with this, assuming that 100% of the people living on welfare, food stamps, et cetera are all doing so with other options available to support themselves. However, that's a lot to assume of the people receiving government aid (wait, do college students count as bumming off the system, too?), so I can't agree 100%.
Honestly, though, the benefits the government offers people who are not employed outweigh the benefits of people seeking employment and holding down a job. For those receiving aid from the government, there's really no reason to seek employment, especially when odds are they'll earn less money working than living off the system. If the government wasn't so involved, then maybe those who genuinely bum off the system would get off their bum and get a job. However, speaking from my high school years, seeking employment sucks when large companies lay off thousands of employees with years of experience and at least one bachelor's degree under their belt and those employees take whatever jobs they can get, cannibalizing the low-end jobs that high schoolers need to start earning experience in the work place... so for some, I'm sure they are plenty happy not to have the additional competition in the job market.
just me
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Key word....many. Key problem.....too much debt. Key solution....less government. When a President threatens the citizens with not sending out their Social Security checks(etcetera), he should clean out his closet first if he truly cares for the people. jmo
100% would be giving people too much credit(not monetarily). heh
100% would be giving people too much credit(not monetarily). heh
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just me
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Generating income is not the same as creating jobs. It should be done together. We have shipped entirely too many of our jobs generating income overseas. We have been destroyed from within. Who is man enough to fix it instead of pointing fingers of blame and continuing on this course of destruction? Stop all the government benefit and program checks and you may very well see a revolution in the streets of a nuclear-armed government. Accuse the leaders of other countries in their handling of internal affairs, but you should remove the mote from your own eye first. Nobody can promise another year and a half in this.