The Most Important Economic News of the Year

[W*GS]

http://www.tcsdaily.com/article.aspx?id=122805C

Provided as a tonic to the unending stream of doom-and-gloom economic stories we get. Some folks here take too much pleasure in predicting the imminent demise of the US.

[elsid13]

Productively rates are indicator that provided some indication of the economy standing but you can not use them exclusively, since productive is factor of capital (K) and labor (L). Automation and management techniques (Kapital) have increased productive flows but doesn't mean that the economy is healthy or growing, just that we able to produce more. A better indicator of the health of the economy is the inventory of given goods on hand, the less inventory sitting idle the better consumption that occurring. No one indicator can tell anyone about the state of economy. Want to know the state of the economy find out how much inventory is sitting idle, it the quickest way to predict future trends.

[Dizlexus]

Moreover, no one can tell me we are in good economic condition, no matter the spin, when we spend more than our income, and the Fed. Gov. borrows tens of billions per week from the likes of Russia and China. We are headed toward disaster on the express train.

[W*GS]

Moreover, no one can tell me we are in good economic condition, no matter the spin, when we spend more than our income, and the Fed. Gov. borrows tens of billions per week from the likes of Russia and China. We are headed toward disaster on the express train.

Deficit spending is a problem, no doubt. However, raising taxes to increase federal revenue is not the answer - cutting spending on the big three drivers (Social Security, Medicare, and Medicaid) is the only viable solution. Bush certainly disappointed with his prescription drug plan.

In comparison with Russia and China, the US is in far better shape for the longer haul. Russia is pretty much an economic and political basket case, and China is facing some huge problems caused by its sclerotic political system and wrenching demographic changes brought on by its one child policy.

"Disaster" far overstates the case - if the US is truly doomed, then most other similarly-advanced nations are in still worse shape.

[Dizlexus]

I disagree big time. First, if Russia and China were in such poor shape they would borrow money from us -- but we borrow 10s of billions from THEM every week! How long can this go on? When do they say "no more"!? Comes a time when we lose our bonding in the eyes of international lenders and that time is neigh. Moreover, no need to raise taxes, just repeal Bush's plutocratic tax cuts, illegalize outsourcing where workers are exploited, and repeal plutocratic corporate tax cuts. Also, what percentage of our budget is really taken up by Social Security, Medicare, and Medicaid? It aint much. More importantly, you do not balance a budget (an abused and misapproiated one) on the backs of the poor and infirm if you have any moral fiber, whatsoever. It is time for some sacrifice by someone other than the poor when it comes to meeting the needs of this country.

[elsid13]

I disagree big time. First, if Russia and China were in such poor shape they would borrow money from us -- but we borrow 10s of billions from THEM every week! How long can this go on? When do they say "no more"!? Comes a time when we lose our bonding in the eyes of international lenders and that time is neigh. Moreover, no need to raise taxes, just repeal Bush's plutocratic tax cuts, illegalize outsourcing where workers are exploited, and repeal plutocratic corporate tax cuts. Also, what percentage of our budget is really taken up by Social Security, Medicare, and Medicaid? It aint much. More importantly, you do not balance a budget (an abused and misapproiated one) on the backs of the poor and infirm if you have any moral fiber, whatsoever. It is time for some sacrifice by someone other than the poor when it comes to meeting the needs of this country.

The reason that other countries, China/Russia the European Union, purchase US Bonds because we (USA) offer preferred and safe investment. From the geo-political stand point having China hold our bonds is good thing because countries that actively engaged in economic activity don't get into shooting wars. Do we have problems yes, there definite need to restructure some current fiscal policy but it we are not doomed. In particular the personnel saving rates are extremely low for Western nation and we need to address that problem.

[W*GS]

First, if Russia and China were in such poor shape they would borrow money from us -- but we borrow 10s of billions from THEM every week! How long can this go on? When do they say "no more"!? Comes a time when we lose our bonding in the eyes of international lenders and that time is neigh.

The dollar's status as the world's reserve currency will probably change, but that's a good thing. If there's one thing that the US and its citizens need, it's some fiscal discipline - and not just the State, but good ol' Jane and John American too. We can either do it easy, by getting our own financial houses in order (and stop with the China-bashing) or we can do it the hard way, by continuing our borrow-and-spend ways and let others dictate terms to us. Sadly (but as usual) the political leadership just isn't there, on either side of the aisle, but they're just going where the electorate tells them - impose any sacrifice on someone else, but leave me and my government subsidies (direct and indirect) alone. Sorry, but that's what has gotten us into this bind - and no, putting the screws to "the Rich" won't work either.

Moreover, no need to raise taxes, just repeal Bush's plutocratic tax cuts, illegalize outsourcing where workers are exploited, and repeal plutocratic corporate tax cuts.

Your first clause contradicts the second and fourth ones.

As for making outsourcing illegal, that's not a real solution, even with the caveat of "where workers are exploited", because that's not easy to define or enforce. Besides, that's setting the stage for an authority that regulates the global economy, and we don't even want to go there.

Also, what percentage of our budget is really taken up by Social Security, Medicare, and Medicaid? It aint much.

Show me. You might be surprised - those three are already tremendous, and their expected cost growth rates are truly horrifying.

More importantly, you do not balance a budget (an abused and misapproiated one) on the backs of the poor and infirm if you have any moral fiber, whatsoever. It is time for some sacrifice by someone other than the poor when it comes to meeting the needs of this country.

Indeed. The poor won't be the ones paying the overdue bills (because they have no money), it won't be the rich either (why would they suddenly cave to populism when they've been so successful at fending it off for decades), it will be you and me and the rest of the middle class. But, since we're the ones primarily overextending ourselves with too-big houses, too-new SUVs, and maxed-out credit cards, demanding that the State show discipline when it comes to money when we don't is rather hypocritical.

One smallish step in the right direction would be to force the State to use GAAP for its revenue and expenditures - no more of this "off budget" nonsense.

[Dizlexus]

W*GS
I do not consider repealing Bush's bone head tax cuts a tax hike. So I do not feel I have contradicted myself. I would consider the move getting back to a "rational" tax base. But, you are right, this subject stinks. I'm with you, let's ditch it -- we agree, at least, that the current situation must change.

And thanks elsid for your contribution to the discussion, but I still fear we are selling out to foreign interests! And I'm a liberal (mostly).