What is the fiscal cliff of US?

Discussion in 'Business & Economics' started by Saint, Nov 7, 2012.

  1. RealityCheck Banned Banned

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    The real reality check came with the GFC: and that check showed that it is sociopathic gamers of the system (political/financial) who destroy as means to paper profit for themselves.

    So, better to be young and optimistic while tackling the real problem, than to be a self con-centered naive sociopath who will soon be given a shocking reality check of their MO.

    Be part of the solution, not the problem; else you will be seen as a sociopath not a human being in touch with the common reality rather than your own 'pathological reality' as espoused by the Gordon Geckos and Mitt Romneys of this world.

    Wake up. Stop gloating over others' misery brought about by such as these.
     
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  3. RealityCheck Banned Banned

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    In that era there were an abundance of UNskilled jobs for reconstruction/manufacturing.

    Today most of those kinds of jobs have been allocated to computers/machinery/automata such that the exploitation of the lowest paid will not be easy to recover from because there are less and less alternative employment opportunities for unskilled labour to the extent then available.

    The fact that you revel in paper profits which do nothing for your fellow worker at REAL jobs demonstrates the illness which has been afflicting mentalities born of the old dog-eat-dog evolutionary past.

    Get human, get real, get a social conscience and do something because it's right IN FACT rather than because it's paper profitable in your sociopathic fantasies.

    Good luck, mate.

    And good luck and good thinking, everyone....back in a few weeks (but I'll be reading through once in a while)!
     
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  5. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Your comment is premature by 23+ months at best. I predict a run on the dollar on or before Halloween 2014, and that was reduced from from the original date being "some time in 2017" as the global financial problems are growing worse faster than I expected. US´s divided ("polarized" perhaps a better term) Congress may deliver that run on the dollar before the end of 2013 but I am conservative and not again changing the date to closer to the present.
     
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  7. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    As I recall that is not correct, but it depends somewhat on how you correct for more than six decades of inflation. Be that as it may be, point I want to note is that conditions for the US are very different now than in 1945. US debt to GDP ratio is what really is important. It is currently 1.02 and growing at 12.5% per year.

    Only twice in human history has a country not been destroyed by that ratio exceeding 0.9 and both cases had very uniquely special conditions aiding the country recover.

    (1) At the start of the industrial revolution, England had borrowed greatly to build mainly textile factories with steam powered looms. They also had huge captive market empire to sell to and could make large profits even if selling for half the price of local hand production.

    (2) The US after WWII is the only other case. All the developed world´s productive capacity lay in ruins, except for the US where WWII had greatly increased the productive capacity and significantly increased the labor force, as "Rosy the Riveter" decided she liked getting paid for her work. Like England before, all the world needed and wanted to buy US made products, so the debt was quickly and easily paid down. Now, unfortunately many nations have more modern factories and much cheaper labor than the US does, so US is non-competitive, is closing its factories, and out sourcing many of the components used in what it still does produce and going into debt much fastest than its GDP is growing.

    History tells clearly what to expect from this new condition, which is very different from those the US enjoyed at the end of WWII.
     
  8. RealityCheck Banned Banned

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    Hi Billy T. Just about to log out and probably not return for a while except to read. No time to spare even now, so briefly...

    About your last two posts especially, you must also realize that the US FEDERATION of states and Canada) is practically a self-contained "ECONOMIC ZONE' of its own. So before things ever got so dire as you 'predict', the US would merely go into a 'war footing' (not military, only self-regulatory in its internal manufacturing/resource allocation/pricing etc).

    THe consumer/resources and tax base in the US and canada itself would be plenty to allow TEMPORARY WITHDRAWAL from international economy for a certain amount of time such that no IMPORTS from China/elsewhere would be required and any real shortfalls made up with internal manufacturing/labour capacity currently unused for local consumption (and capacity previously used for EXPORT industries would be available too).

    All the US 'internal debt' could be soon wiped out by stopping imports like that for a few years. Meanwhile, that temporary measure would have increased the US capacity for self-reliance and internal economic zone efficiencies and infrastructure/resource developments, so they would come out of that temporary state of emergency stronger than ever, with any spare/saved currency reserves not needed for imports would also quickly pay down international debts.

    The US is the best placed nation in the world for such an emergency readjustment of its debt/economy and internal robustness to handle any sort of emergency of this scale, and hence would be the best placed nation to defy your 'predictions', since the options ARE there to prevent the conditions on which you base your predictions from getting to the point which would make them 'collapse' as you think.

    My advice: Never underestimate the robust democracy and economic prowess of the greatest nation this planet has ever seen. They have the capacity, resources, intelligence pool (despite all the crazy politicians and religionists and crooks) and willpower to act when 'the writing is on the wall' and no-one can ignore it any longer.

    But my own 'prediction' is that the globe is transitioning ever-faster towards more stable democratic states/economies, and the inevitable settling down of all those things which have wasted so much blood, time and treasure are nearing the final 'expiration date'.

    The global societies evolving since the internet and global transportation/communication/distribution etc will produce a less-loss future where no nation will be left behind to fend for itself....and all problems can be overcome if we pull together.

    It is inevitable; else catastrophe will overtake us all, no matter where you are or what 'predictions' you make.

    Good luck and good thinking, everyone, until we speak again!
     
  9. Aqueous Id flat Earth skeptic Valued Senior Member

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    6,152
    Sounds like a plan for guaranteed naivete and ease of programming.

    Easy to say, but if you needed emergency heart surgery, who you gonna call? Old fogeys. I don't think you want to be the intern's guinea pig, do you? That's where the reality checking comes in, when your ass is seriously on the line. Ideals are great and can even have a noble purpose, but the empirical data is what ultimately will drive you when conditions allow. Evidently, idealism is what fills the void of fact-checking.
     
  10. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    to RealityCheck:I have only minor quibbles with your post 85, as it is true that in WWII gasoline was rationed with consumption less than half what it is to day as the "suburban sprawl" Levitt towns that destroyed the nearby farms were post WWII developments. Women were baking their own bread, etc. and sticking the money saved in cookie jars to buy "war bonds" with. Kids wore hand-me-down cloths and shoe, not $200 tennis shoes and $70 T shirts, etc. I collected cans, and scrap steel to help build the tanks and landing craft, etc. All that saving (and recycling) helped hold the debt for fighting the war down but perhaps more importantly formed a frugal self-reliant attitude in the population that took a decade to die out and produce the current "I want it now as is my right, and sent the bill to future generations" attitude.

    Yes, what you say is conceptually possible, except we are stuck with the inefficient suburban sprawl for several decades. What we lack is wide spread understanding of how serious the problem is. I´m certainly doing my part to reverse that. Without appreciation that this post WWII life style of Americans have adopted as the birth right is UNSUSTAINABLE, we lack the will to do what is needed: Raise taxes, cut entitlements, consume like we did in WWII until the debt to GDP ratio is below 50%. I.e. send Coach (maker of $400 hand bags) and the makers of $1000 golf bags into bankruptcy for lack of sales, kids make do with toys they made and bigger sibling´s hand-me down shoes and cloths, or Mom gets her mother´s sewing machine out of storage in the attic and bakes some of the family´s bread; Dad cuts wood on the weekend for winter heating instead of takes out his aggression on little white balls on a golf course, etc. etc.

    Yes, what you say is conceptually possible, just not very probable to occur until forced by necessity and then its too late to avoid the collapse I foresaw coming and posted about here 7 years ago. Actually I was concerned for the US´s future years before that when I wrote my book, Dark Visitor, which is a cosmic horror story, written as if the true observations of an astronomer, that predicts the approach of a small black hole (from careful observations of perturbations of Pluto as it is invisible in telescopes since reflects zero light and still big enough to radiate only far IR photons.)

    I was hoping to scare some of US´s brightest students into choosing to study the hard sciences instead of business and law by causing them check to see if Dark Visitor could be true. - Dark Visitor is a physics book in disguise, made for those who would never knowing open a book teaching physics. The slight change in Earth´s orbit (Northern hemisphere about 11% closer to the sun in winter and having mild weather with the huge snow falls typical in spring almost every day as S. Hemisphere´s oceans evaporate much more to provide global clouds of water. Six months later and farther from the sun, in cool to cold summer, this mass of winter snow is not entirely melted, and the increasing albedo accelerates the return of the new permanent ice age in the N. hemisphere. Where I live, we can still grow rice but all of Brazil´s coastal cities are washed into the sea as the torrential southern rains are essentially continuous). This all is possible, just not true (as far as we know). In less than a decade so much ocean water is stored on land that all ports are useless, etc. and less than 10% of world´s population is still alive. I.e. a possible cosmic disaster is predicted by Dark Visitor in hope those bright students will at least want to see if their plans to grow rich on Wall Street or as lawyers are valid or not.

    PS - Reason why N. hemisphere astronomers have not reported the approach of the Dark Visitor is that Pluto is difficult or impossible to observe from there due to its current location in its inclined orbit plane. Also very careful measurements are required over many months, which only this S. Hemisphere astronomer has specialized in doing as continuation of his graduate student studies. He is rich with his own modest observatory as did not have any interest in the large cattle ranch he inherited. Everwhere, especially in the S. Hemesphere, telescope time is much too valuable to spend it looking at and precisely recording the position of boring Pluto.

    BTW, "energy independence" for the US may not be as feasible as most believe: The NG and oil locked in these tight rocks comes out with fracking but only rapidly during the first year - then production from any one well falls down about 30% annually as the fuels diffuse from farther away. US will need to complete several (more than a dozen, I think) new wells EVERY DAY to produce it own fossil fuels - not economically feasible even with a great increase in the number of drilling rigs. Yes 100 or so years of oil & NG are there, but like current US economy, not for sustainable energy independence, so we will still need to be importing from cheaper conventional sources like those coming on line in East Africa and in Ocean near it and NW Australian Ocean, but being closer to richer China, they may not be sold to the US.
     
    Last edited by a moderator: Nov 26, 2012
  11. RealityCheck Banned Banned

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    Hi Billy T. Just popped in to check a PM, can't stay and chat, so very briefly...

    Much of US fossil fuel sourced energy/feedstock is for export industries; and also much for discretionary internal travel/trips, goods, services, 'events' etc. This would be drastically reduced, so reliance on fossil imports would fall equally drastically. Also, solar power and other alternative energy/feedstock sources would be exploited/developed with more purpose, reducing import energy reliance even further and improving health, economy and sustainability

    Maybe you're right! Just like your fictional "Dark Visitor" scenario was intended to make the younger generation take note and do something useful for science and humanity instead of just 'having a ball' at the expense of future generations, maybe this real crisis point is exactly "what the doctor ordered" that will finally make policy makers get serious and stop self-interested bickering/politicking when it comes to energy/feedstock self-reliance projects?) and economic/finance system reforms to remove the crooks from the equation! Never underestimate human ingenuity/application when chips are down, especially when that human ingenuity is of the calibre possessed by the peoples of the US and Canada, together the most stable and effective democracies the world has ever seen....and the greatest nation for potential problem solving of anything that humanity needs to solve for the greater good and for itself when necessity is the mother of invention and action/adaptation.

    Good luck to the North American people and all who depend on them and their democracy for continuing success of global transition towards real democracies everywhere, eventually....for there is no other way that will be sustainable for globe in the coming centuries. And good luck to us all, wherever the accidents of history has placed us on this globe. Cheers and back in a few weeks. Enjoy your discussions, everyone!
     
  12. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Thanks, looks like we will need that:
     
  13. joepistole Deacon Blues Valued Senior Member

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    You have moved your original date, because of Obama's presidency.
     
    Last edited: Dec 1, 2012
  14. joepistole Deacon Blues Valued Senior Member

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    Something interesting happened this week. Treasury Secretary Geithner went to Capitol Hill this week and presented President Obama’s fiscal cliff agenda to the Republican leadership, Mitch McConnell in the Senate and Speaker Boehner in the House. It wasn’t particularly surprising to see McConnell and Boehner react with indignation and outrage. What was surprising is how the equity markets reacted to McConnell and Boehner’s statements of outrage and indignation, barely at all. Last year similar statements sent the equity markets plunging into the financial abyss, not so last week. That says the markets don’t believe McConnell and Boehner. The markets think there will be some resolution by year end despite the usual Republican melodrama. My inclination is to believe that Republicans will find some resolution by year end. I am assuming Republicans will be rational actors. But I may be giving Republicans more credit than they are due. Rational is not a behavior commonly associated with Republicans. And Boehner has yet to demonstrate his ability to lead his caucus. Boehner’s caucus has not changed much as the new congress has not yet been sworn into office. And when it is, Boehner will have 8 fewer seats in the new Congress.

    Rationally Republicans should realize that the power dynamics in Washington have changed significantly this election cycle. President Obama has a 4 year term in office while Republicans are facing another election in 2 years. So if they screw this up, they are going to face the voter piper far sooner than President Obama. Prior to November 6 it was a Republican political strategy actively thwart economic growth so they could blame President Obama. It didn’t work, voters were not that dumb. But it doesn’t appear Republicans have figured that out yet. President Obama will not be up for election next election cycle, but they will be. Republicans need to stop playing Russian roulette with the nation’s economy. It wasn’t a winning strategy this election cycle, and it won’t be next election cycle either.

    http://www.huffingtonpost.com/2012/11/30/mitch-mcconnell-fiscal-cliff_n_2218063.html
     
  15. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Yes it was originally just some time in 2017. & No I moved it closer to the present as things, not anticiapated originally, were also sending the western world into depression (mainly the mess in Euro zone). I think Obama, with the help of Berannke, is quite an accomplished "can kicker" so if not for US losing the Euro market, I would want to have stayed with a later than Halloween 2014 date.
    That is certainly plausible, but so is the idea that the dollar will lose value if the can is just kicked down the road as I predicted some months ago it will be. With a lower value dollar it then takes more of them to by the real value represented by shares of companies. That too could explain why there was no big drop in S& P etc.
     
  16. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Down grade coming again?
    * Why not? Dollars are only paper and US has lots of trees.

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    S&W has a new double barrel shot gun, designed for killing governments. One barrel is for fiscal cliffs & other is for debt limits. S&W will put this new weapon on each Congressperson´s desk as a Christmas present.
     
  17. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Don´t rule out Democrat´s "Plan B" -I.e. hang tough on need for top 2% to pay more taxes (on income above $250K but less like everyone up to that point) and go over the cliff.

    Then in early Jan13 introduce new bill reducing tax rates on all income less than $250K back to the "Clinton rates" - See how many Republicans will vote against reducing taxes on 98% of the voters!
     
  18. kmguru Staff Member

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    11,757
    That is a high possibility...that is what I hear from grape vine...
     

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