American recession '05?

Discussion in 'Business & Economics' started by Undecided, Nov 2, 2004.

  1. Undecided Banned Banned

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    I predict along with many other economists that the US economy will have to go into a HUGE correction within the term of the next president:

    The US economy like I have always maintained does not exist, an economy based on debt is no economy at all. Total US debt is $17.1 trillion that is about $6 trillion more then the US makes per annum. That is about 54% more then the US makes, compare that to a country like China who’s debt is well below that amount, and whose economy should rival and usurp the US economy in due time. The question I ask myself is why is this happening. To all you Americans who are going to vote tomorrow listen and listen closely. The US economy in 2000 although slowing down the US economy was nevertheless in the green the government was able to pay down the debt, and save for social security; she was in relatively good shape. Then it happened, the unnecessary and totally underperforming tax cuts. Now a lot of Bush fans will scream America is fighting a “war on terror” (whatever that may mean of course), and that the deficit is a result of 9/11…Bullshit. The current deficit is caused 2/3 by the tax cuts, and Alan Greenspan supported the tax cuts a Bush support will tell me. Yes that is true, but he supported them in relation to a cut in spending this president has been increasing the US budget into the stratosphere. Much of the increase in spending is actually in education, healthcare, the military, etc. With less and less coming in (in relation to revenue). Under Bush the true liberal spender in Washington these are the stats:

    Government consumption (% of GDP)
    2000: 17.54
    2001: 17.97
    2002: 18.44
    2003: 18.72

    Public debt (% of GDP)
    2000: 57.98
    2001: 57.47
    2002: 59.75
    2003: 62.43

    Budget balance (% of GDP)
    2000: 2.44
    2001: 1.27
    2002: -1.52
    2003: -3.46


    To all you so called republicans…how can you vote in a man who is the antithesis to Republican stands on fiscal conservativism? To be clear this is not the Republican party of yesteryear, this is not a party that can be trusted with your money. From Iraq to Halliburton this administration has systemically raped and pillaged the US people for every cent she has. Now that the US is inevitably going into the sink of history, since she has squandered her once great opportunity to change her economy again she will now have to deal with slowing growth, and slowing demand. I know what some will tell me…oh but look at Reagan under his reign the US economy boomed through tax cuts, true but at what cost? The huge increase in debt, budget deficits, and the Reaganist economic model not ending with Clinton but with GHB recession in the early 90’s. What will the US have to do? Simple these following things, raise taxes and cut spending, raise interest rates, and devalue her currency. All of which require there to be a very long and painful recession if not depression. America should learn from the example that is Argentina b.c I suspect she won’t be far behind.
     
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  3. kmguru Staff Member

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    Yes, we will go through a serious recession by the Summer of 2005, irrespective of who comes to power. There is a solution that my friends are working on with the Department of Commerce to get out of the crisis or atleast reduce the impact.

    Stay tuned...
     
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  5. Undecided Banned Banned

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    The problem with that assertion is that the US only has $80 billion or so in FOREX to spend. With the budget already being in deficit, how can the US afford to alleviate the pain of a recession? Remember that during the great depression, the US ran a surplus before the depression, now it runs a huge deficit. I don’t know how or what the US gov’t can do apart from raising taxes which would only further depress the economy further. Which goes to show how much taxes the president has cut, too much. The gov’t has little to no leeway when it comes to discretionary spending anymore. Here is some good news for Bush on the election:

     
    Last edited: Nov 2, 2004
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  7. kmguru Staff Member

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    There are ways to increase job growth very rapidly. It is a complex multi-lateral initiative meaning many projects need to be interconnected for job growth including a lot of technology that we are not using but are waiting to be exploited. That is how commerce works. You have something I need and vice versa. The world is still a big place. The catch is if not coordinated properly - the process would not work.
     
  8. Vortexx Skull & Bones Spokesman Registered Senior Member

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  9. guthrie paradox generator Registered Senior Member

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    kmguru, how do you propose to increase job growth very rapidly? Does it invovle lots of investment? I know that commerce works by means of big interconnectedness, but cannot see how it will work, seeing as growth needs capital, innnovation, physical resources and human resources.

    And do you agree that the amrket is teh best coordinator of things, or not?
     
  10. kmguru Staff Member

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    11,757
    Here are the problems and issues:

    Our Commerce department have no clue what to do now because it was designed and polished in 50s where America was exporting a lot of goods. Now that America is mostly a service oriented economy, they have no idea how to sell them. The Department sucks Billions of Dollars in tax payer money with no clue.

    As you know, Ohio put the President Bushy back in business. So, natuarally they expect the Govetment to help Ohio in economy and jobs. But in US governments do not produce jobs, the private industry does. To do other wise, means, taking hard earned tax dollars and creating fake jobs.

    I just came back from a political brain storming session in Ohio. The winner does not have a clue as to what to do. So, do not expect any help from this government in economy.

    Then, you say Market is the best coordinator. Not necessarily so. It is the innovator that moves us in the right direction and not the market. The market has a propensity to control (look at DVDs costing $15 while VHS costing $5). The Market only works if there is choice. Who is going to provide that choice if the giver of the choice is controlled? There is a big disconnect between theory and practice just like Communism.

    How to increase job growth very rapidly? Jobs are created when suddenly there is a real demand and people are willing to work for that demand. You get paid after you do the work. At least most of us work that way. So, the work credit creates the real work output and so on. By cordinating the work process, in a organized manner...they connect.

    Growth does need Capital, innovation, physical resource and human resource. That is true. To my way of thinking, growth needs the following items:

    People
    Process
    Technology
    Information

    It has been this way since the dawn of civilization. But most people (if you google the first 3 words) think it only requires the first 3. Have you seen a 3 legged animal? It does not work.

    But as you say, the innovation is the key. It is a word that is used like water. If someone says, he or she is an innovator, find out if that person does a specific act the same way everyday or changes the process. If you do a time and motion study of a non-innovator, he or she would get up the bed the same way, eat breakfast the same way, open the door out the same way everyday....it is the change that is the hall mark of an innovator. There are very few of them out there...

    As to the Capital - there is plenty of Capital and Resources that is idle even today - 80% is not used productively. The entire Department of Commerce and CIA is only 20% productive. Now you get the idea.
     
  11. guthrie paradox generator Registered Senior Member

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    "The Market only works if there is choice. Who is going to provide that choice if the giver of the choice is controlled? There is a big disconnect between theory and practice just like Communism."

    Indeed, that is why I despair over the free market fanatics that often seem to infest newspapers and gvt think tanks. I had one argue with me in a newspaper that rationing in the UK in WW2 was bad, and no rationing and a free market would have resulted in everyone being fed. (I'm not so bothered by the communists, since despite the republicans and Christian right wings paranoid fantasies, they have little power.)

    ACtually, I'm sure theres something more to argue with in your post, but I'm too busy right now. Broadly I would agree with you.
     
  12. kmguru Staff Member

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    11,757
    I understand. My friends are involved with State of Ohio at the highest political level to improve the state's economic conditions. My comments are due to the direct observation of what is going on between State Republican Party, US Department of Commerce, Small Business Adminstration, The Governor's Office and the US State Department.

    There is always the possibility that I misunderstood some items. But over all, it does not look good. No one has a clue what to do, but they all speak with buzz words that they rarely know what it means - like "Innovation".
     

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