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As omens go, this is one very, very bad news indeed.
The year 1995 only saw a US government shutdown, this time round a debt payment default is a distinct possibility. And on top of the debt ceiling stand-off on the Hill, it seems that the US surprime crisis may be far from over and that more major banks may collapse before the year goes out.
Any wild thoughts on how we can grow our way out of this global credit mess? Cause only growth is going to save us.
AII
Most businesses like stability. I think that's uncontested. So the best possible solution would be for the administration and the congress to reach as long-term of a deal as possible, showing some sort of roadmap for the next ten years or so. Anything less is going to hamper growth. (I.E., I'm not going to invest in a new bottling machine until I know how it will affect my write-offs. Or I'm not going to open a new extension to my factory. Or I'm not going to make that new round of hires. Etcetera.)
As for the subprime mess, what's to say? The bankers really went nuts using bundled mortgages as financial tools, and the risk was spread so broadly that it seems as though every financial institution is in danger. Still. Having spent eight years working with investment bankers, I can say with confidence that they make the average mafia soldier look like a model of ethical long-term thinking. And yes, the government's involvement with low-end lending didn't help, but that had a fractional impact compared with the bundling and selling of mass mortgages. Who thought that was a good idea? Oh, right, investment bankers. 'Nuff said.
I'm moderately worried. The USA has a long-term debt problem and a short-term growth problem. The most recent jobs report, for example, was negative almost entirely due to shrinking county and state payrolls. Things like that indicate that while cutting government down to a more reasonable size is a good goal, timing is everything. I fear we're looking at 1937 all over again.
Well, if the US dives so will China, not to mention Japan and everywhere in between. In developing countries that will lead to massive unrest, as they've only been forstalling political turmoil by raising living standards. A collapse in the US will hurt Britain, as we are a trading nation that is currently mostly moving other people's money around; if our banks fall access to credit internationally becomes even harder and at that point Germany starts to suffer becasue she has an export economy.Quote:
Originally Posted by Adrian II
My conclusion is that our living standards will fall nationally, the gap between rich and poor will widen and I blumen' well better finish my PhD and get a Fellowship somewhere before it gets too bad. In a glbal depression the countries who come through best will be those with the most stable political institutions, but recent evidence shows that even the US and Europe have problems in that area that we have only just woken up to and begun to fix.
It's going to be an "interesting" time to be alive, and I suggest all adult males on the forum (re)learn how to iron their trousers and polish their boots.
Growth isn't the only way out, but it is the best.
My wild thought on growth is, and will always be, the heavens. No, I don't mean horrible clothing and missionary-style sex; I mean Mars. Since we've lost ideological motivations, people are now focused on themselves. The desires to explore and expand are part of human nature. If people can be convinced that there is a reward for it (e.g. cheap energy) we might be more motivated to build and grow.
As silly as it sounds, exploration and colonization of Mars would lead to advances in solar energy, recycling, composites, and etc.
Growth is the answer but why grow? It's poplar to say that growth and consumerism are bad so why do it?
Here's a pretty good summary of what will probably happen if congress refuses to re-up the debt ceiling. "Bad" doesn't begin to cover it.
[O]ne thing that can’t be ignored will be the economic shock that will result from the immediate need to cut federal spending by 44%:
- The US government is the largest purchaser of goods and services on planet earth.
- The government buys everything from equipment for cancer research to metal for warships to toothpicks for federal cafeterias. Suppose the governmetn had to cut 44% from its budget on 2 weeks notice? How sharp a shock would that be to the world economy?
- Here’s a comparative. In the worst quarter of 2009, American consumers cut their spending by … not 44%, not even 4.4%, but 1.2%. That 1.2% drop in consumer spending helped tumble the US economy into the worst collapse since the 1930s.
- The US consumer sector is even larger than the federal government sector. But it’s not unimaginably larger. US consumers spend about about $10 trillion a year. The federal government spends about $3.4 trillion.
- If a cut of 1.2% from $10 trillion was an economic shock, a cut of 44% from $3.4 trillion will be a much, much, much bigger shock.
So at the very least we are talking about Recession Part Deux, if not a slide into Depression. Doubtless the aftershocks will be felt around the world. I find it very hard to believe our Congress could be that irresponsible.
As long as they don't cancel Jersey Shore and we can still laugh at homeless people, America will be okay
The problem is that they have been for a very long time, and it was the President who stormed out of the most recent negotiations.Quote:
Originally Posted by Lemur
I haven't read your article yet but I assume it's alarmist. Truth is that we have plenty of money to cover our discretionary expenses (social security, debt interest, medicare) so the resulting cuts would be discretionary (this always means military).
Read it.
Thought so; a lawyer from NOVA offering more opinion than news. Yes, there will be pain, which is why I hope all parties involved come to an acceptable solution.
I not too sure what the problem is really here Obama says 3-1 cut to taxes and thats usually the way most people like it despite what they tell the news.
Do the Rep people really want to push this when there is a solution on the table, crashing the government is hardly likely to endear them to voters.
Yeah, the blogger is a lawyer, not sure how that disqualifies him from looking at numbers. Didn't see any reference to NOVA; are you talking about the PBS show or something else?Quote:
Originally Posted by Vladimir
Furthermore, the bulk of bullet points were cross-referenced from here. Frum is what conservatives used to be, and I rarely find him to be alarmist or hyperbolic.
And we don't have to wait till we get there, we can start right now.Quote:
Originally Posted by Vladimir
Sadly, habit is a real bitch. I remember doing an article about a difficult transport project in the Neds some years back. One of the engineers suggested that instead of building bridges and fly-overs and stuff over some soft grounds, they should build a giant tunnel right underneath. You're out of your mind, they all said, it's too costly, we've never even done that. He said: Sure, it's gonna cost ten times the budget we have now, but over the next 25 years anybody in the whole wide world who wants a tunnel underneath a swamp, be they Scottish, Russian or Japanese, is gonna call us. Because nobody has ever done it. And we're gonna make a lot of money.
So they went and build the bridges and crap. And they still went over their budget.
I think lemur's remarks about investment bankers go some way toward explaining why growth is in disrepute. The article I referred shows a similar reason why. But in the main it's environmentalism and sustainability what did it. They gave us guilt and disinvestment and pandaworship. Oh, and luke-warm soda's.Quote:
Growth is the answer but why grow?
AII
I believe he's referring to Northern Virginia, which is known as NoVa in the DC area. It is the most prosperous of the three DC areas (the other two being DC proper and southern Maryland). If that is what he is referring to, he is using it as a disparaging term to indicate that the writer is the equivalent of a 'Washington elite' who is (1) a Democrat, (2) overpaid, and (3) so highly educated he's become stupid.Quote:
Originally Posted by Lemur
I thought the overpaid Democrat Washington elites lived in Montgomery County, MD. :inquisitive: Virginia (even NoVa) is too red-state for them.Quote:
Originally Posted by TinCow
Too Red State? Virginia went for Obama in 2008, and both of its sitting Senators are Democrats. VA has been a swing-state for the last 10 years, largely due to NoVa and the peninsula.Quote:
Originally Posted by drone
Here's why the housing market probably won't be getting better any time soon....Quote:
Originally Posted by Adrian II
https://img231.imageshack.us/img231/...aseshiller.jpg
It looks like there's still quite a bit of "correction" that needs to happen in real estate prices.
I'd say the government needs to stop "helping" so much and take their boot off the neck of our businesses. More regulations under the guise of consumer protections, Dodd-Frank, a healthcare law that reads like mad-libs, threats of energy cost increasing green-house gas regulations.... I mean, even if you think these are well-intentioned, good changes, it should be obvious that increased regulation and it's accompanying uncertainty will slow growth. Maybe under better economic times you could make the case for some of it, but why now? We're strangling an already tepid recovery.Quote:
Any wild thoughts on how we can grow our way out of this global credit mess? Cause only growth is going to save us.
Also, vis-a-vis the debt ceiling negotiations- I really don't think it'd be wise to raise taxes while we're teetering on the edge of a double-dip recession. Again, you might be able to make a case for higher taxes- but not now for crying out loud.
Everything is relative. VA is more of an old-school Southern conservative-type state, the reason we have Democrats as Senators is because the GOP put forth idiots (Allen/ Gilmore) against them. And our Dems could never be mistaken for those pinkos from Maryland! ~DQuote:
Originally Posted by TinCow
"Read my lips. No new taxes." Similar promises have been made and the cuts never happened. That is the danger here. It looks like one side is willing to deal but it's quicker to raise taxes so the other side doesn't have to follow through with cuts.Quote:
Originally Posted by gaelic cowboy
Sorry Lemur; making a reference to Northern Virginia. It's that he's echoing the party line and is trying to set a certain mood.Quote:
Originally Posted by Lemur
Lemur gave an excellent example of how and illustrates what is holding our economy back. I hate thinking this but one of the good things about the polarized past is that it motivated people to build things, regardless of how destructive those things were.Quote:
Originally Posted by Adrian II
:laugh4:Quote:
Originally Posted by TinCow
Easy there. It's easy to read too deeply into text. ~;)
Hey I live in Southern Maryland and we are one of the few red voting areas of Maryland. We are wealthy simply because of the military. It is a flying navy town and because it is a majority of flyers you know that there are alot of officers who are decntly paid and also because so many test projects are conducted on that base you have tons of engineers. You also have well paid contractors and plenty of lawyers. This creates the nucleus that allows other wealthy social supports like doctors and luxury businesses. As someone else stated when the government makes quick cuts the first thing it does (rather stupidly especially when in a war) is cut the military. People don't realize that war makes this country quite a bit of money and provides a hell of a lot of jobs both unskilled and skilled. If the base shut down where I lived (while unlikely its the most important testing base on the east coast) the entire county would just die and dry up. And that is thousands of high paing jobs as well as low paying millions upon millions of dollars.Quote:
Originally Posted by TinCow
also we arent part of the DC area :tongue:
Good books always come out during these sorts of times
So there's that
If the US goes tits up it;s nucular.
...Why? How does depression = nuclear war
I think he means global economic meltdown...
No, the US will nuke everybody else becuz there the best and if that is about to change they will have to make everybody else worse real quick.
The problem with this is that it is all reliant on the government. It has no application to normal business and commerce, because it is neither.Quote:
Originally Posted by Centurion1
Think it through. Suddenly the world's reserve currency is worthless. Why trust the Euro, pound or yen? Best keep liquid assets... erm. What exactly? And who is going to sell it?Quote:
Originally Posted by InsaneApache
If one relatively small institution can cause market paralysis, the biggst one in the world going belly up with uterly destroy the world as we know it.
~:smoking:
That's an excellent point because as of now, no one, not even China, is in a position to take the dollar's place. I'm sure they'll smarten up though.Quote:
Originally Posted by rory_20_uk
If the dollar went, let's not forget the Rinimbi looses about 1 TRILLION dollars of foreign reserves just like that. It also looses the market for most of its manufactured goods. Perversely, the Rinimbi is strong because the dollar is. Until China's economy grows to be much larger internally it is as vunerable as everyone else.
~:smoking:
If you can't stay afloat, go under. Simple Business 101.
Another one is "don't lend to insolvent people".
The whole point of a "free market" is a system where there is multiple redundancy so if one thing goes there are many others to pick up the slack and systems are corrected early. neither of these have happened.
So, a more appropriate adage is: owe the bank £1000, you're in trouble. Owe the bank £10,000,000 the bank is in trouble.
The system has no redundancy and debt has been given to those who have no realistic way of repaying it for too long. But for "natural selection" to take its course would bring down the system all together.
~:smoking:
Maybe investing in gold wasn't such a bad idea after all...
Burn this whole thing to the ground. Let's start from scratch.Quote:
Originally Posted by Adrian II
Most likely they will come up with a solution, but right on the brink. I don't expect to see any agreement on the debt cap before the last days of July.
That is not a solution. It is merely putting off having to make a solution.
Judicious cuts and tax rises to, y'know, get more money than spent would be a solution and then pay off part of the National debt occasionally.
~:smoking:
Yes, well, going through this every few months makes it look increasingly like the US is run by children, and stupid ones at that.Quote:
Originally Posted by rory_20_uk
Looks? I'm sure a group of chimps could do a better job, and if not at least we could laugh at their shennanigans-- politicians are never cute, and their shannigans usually involve cocaine and dead hookers...Quote:
Originally Posted by Philipvs Vallindervs Calicvla
It's almost like there debating who should get to cut the first slice of cake while the visigoths are bashing the gates in.Quote:
Originally Posted by Lemur
Let's scrap all debt and currency and bring in the one-world government with its one-world currency with a completely new economic system where the global state cannot go into debt. Along with other economic reforms, all the issues will be solved almost instantly.
Erm, I hate to burst your bubble, but unless you are stating that there would then be no lending, it would change nothing.
China's municipalities are in massive debt due to their lending. It changes the name, not the outcome.
~:smoking:
This is pretty good:
https://www.youtube.com/watch?v=e6nNJiJsm70
As an adult conservative American Cristian I find Regan worship deeply uncomfortable. Me and the Gipper go way back but he did give congress a blank check to spend as much as they wanted on social/domestic issues if they gave him a blank check on defense.Quote:
Originally Posted by Lemur
He's right, of course, but also bears some of the responsibility.
I really want to believe you're joking as if I attack your position you'll retreat to the barricades.Quote:
Originally Posted by Beskar
Quote:
Originally Posted by rory_20_uk
My comment was in partial jest, as in, I think ultimately a united government with a single currency, along with world-wide economic reforms including a total economic reboot would solve so many issues present in the current global market.Quote:
Originally Posted by Vladimir
As for "There would be no lending", that would be a folly, as I think you said yourself earlier Rory, owing $1000 to the bank, you are in trouble, the owing $10,000,000 to the bank and the bank is in trouble. Economic reform would include provisions for banks to lend what it can afford to lend. If this came alongside social shift in how we spend/treat money a credit crunch or similar would never occur.
If a global government with a balanced budget sheet came into play as well, with funds for "Rainy Day", then it changes the outcome of the global climate. If a bank ends up bankrupting, the other banks would simply fill the void of where it fell and there would be no threats to the stability of the government/nation, as we have seen in Greece, USA and other places.
The reason for global government is because the Eurozone is a joke if all the different countries are singing from different song sheets, and thus so would be the world if there was just a unified currency.
As for a unified currency, the benefits of that is pretty common sense and would go into a different argument.
As for my comment in jest, there is no way that such a revolution would occur unless some random cataclysm event occurs. People are too self-interested in their own stocks to create a new world which would solve a great many of the old worlds wrongs.
Quote:
Originally Posted by Beskar
Command economy and one, unoposed, government?
No thanks, at least the current mess allows for despotic regimes to be removed by other regimes. Reform almost never comes from within the system, so a unified system will never be reformed. This is, I believe, another problem with the EU, lack of political opposition. The Torys were basically called anti-semnites for pulling out of the pro-EU centre-right coalition in the EU parliament.
@PVC
I never mentioned anything about a command economy? I don't even believe in a command economy? I cannot really address this point since I am unable to grasp where it has came from.
As for One Government, the main despotic regimes visible around the world are the main problem. Having a united democratic government would be far superior to ridding tyranny due to being able to act decisively and swiftly. Since my proposal of a world government would be federal and in a sense, similar scope to Belgium where the world could continue and government doesn't have much of a part to play, if at all, in the scheme of things. There wouldn't be many issues.
Think of things that plague this world. Country X having human rights abuses, Country Y being very hostile and arming themselves with nukes, Country Z who cannot even do basic maths and decimating their own economy. All that would be done away with in a simple way, since there would be a universal charter of human rights which everyone would be made to stick to and they cannot weasel themselves out of it. United World which could swiftly deal with despots who rear their ugly heads without spending tons of time at a conference table, trying to organise "who will contribute what".
I almost hate to say it given the recent attack but maybe Norway should run the world. It seems like they're able to do this effectively and responsibly.Quote:
Originally Posted by Beskar
Norway is a very responsible country from what information I know. So obviously taking from the best aspects of various countries such as Norway would be a good idea.Quote:
I almost hate to say it given the recent attack but maybe Norway should run the world. It seems like they're able to do this effectively and responsibly.
I'm really impressed with Boehner, he is negotiating really well. He knows that Obama cannot let this default happen, but he is still returning to the table to show him that a deal is possible. I have a feeling that this deal is going to be really good - increased 1+trillion in revenues while lowering tax rates and "simplifying" tax codes plus an additional 3+trillion cut to the debt over 10 years. 4+ plus in debt reduction over 10 years without "raising" taxes. This will most likely happen this week.
Or we could get a forced 44% cut instantly. Either way, this government is going to be slashed mercilessly and funding will be forced to go to necessary functions rather than the fluff. The government should be privatizing services at this point.
When will they understand that nobody owns their own property? We are merely renting from the government under the guise of "taxes". Any privatization would be under a similar agreement. The government still owns everything and controls critical functions through regulation, why not charge people rent instead of running it yourself? Generate revenue, create growth potential... Win,Win
Profit does not equal better. There are many systems and services which cannot be properly utilized with a system of competition due to practical reasons. Without competition, no growth can be formed, even if there is lots of profit to be had.Quote:
Originally Posted by TuffStuffMcGruff
Of course, why am I even bothering to say any of this. You are so off the deep end in thinking that the man who is holding the country hostage to satisfy some ideology is "impressive" and that somehow there is no private property in America anymore. Reality check bro.
What happens when you stop paying property taxes? We're all renters, my friend. How am I off the deep end on this issue? What do you think is going to happen to our country? We are already bankrupt, but other nations have been afraid to call us on it. I'm open to increased taxes generally, especially for salaries over 250k, but I know that the government will just squander it in the form of pay raises for employees and programs which are already paid too much, rather than use it for anything bold or necessary. I recognize that our ability to increase our credit limit is just a way to further compound how screwed we are. It's only a matter of time before we are forced to liquidate. We should not increase our debt limit unless we can get spending under control. It is responsible govenrment to push this to the brink now, while we still have options rather than later, when we inevitably wont. People are just afraid of "brinksmanship", but "politics" has only put us in the poor box.
I'm an extremist in my moderation. Politically I am within the margin of error. I like balance, but balance does not exist here.
Well; you see my friend; you are taking your army to the forest for an ambush. The problem is not "paying property taxes", but the taxes (or more moderately, the effects themselves). It is a silly concept. To have to pay money for something that is your possession for the only reason that it's in the government lands.
Boehner is just an *******. Why not simply disregard whatever petty republican wishes for this single and only instance. Throw 'em to the craphole for this single and only decision, and solve any problems you have. If he doesn't want high taxes for the rich, then **** him.
Or simply, make a quick referendum on what to do. You will see that it's going to be pretty one-sided.
America doesn't need a filibuster right now.
~Jirisys ()
Why don't you tell us what America needs?
Because few people, if any; know that.Quote:
Originally Posted by TuffStuffMcGruff
One can know what it doesn't need at a given time.
~Jirisys ()
That reply made no sense gramatically, but I think I got the point.
I was using the property tax thing as an example of why, when the government sells a function, it still owns the land and the function (and the right to charge rent through "taxes"), even though others are working it and paying the government money. This creates growth potential in private sector. For example, the post office is almost completely irrelevant. If anyone is still dumb enough to send things through the mail, they should pay more to do it and convert their bulk correspondence to digital. This would increase the volume of fedex and UPS while saving the federal government 10 billion per year. Additionally, post offices have prime real estate which would net the government untold billions, for sale over time as the economy picks up. There is no reason to have these stupid fossils sitting in the best areas of towns. They are taking away from tax revenue potential and they no longer even serve the interests of the poor - they are a tumor on the taxpayer with no added value. Add more computers to library's if lower income people need to send correspondence.
A better plan would be to reform the Post Office and get it working so that it can undercut FedEx etc. and become a useful service again. The Postal Service is like the road and rail network, it's existence is a anecessary part of the country's infastructure. So is the Health Service - which is, incidentally, someone Americans pay for twice, in taxes and insurrence.Quote:
Originally Posted by TuffStuffMcGruff
Get rid of the US mail and the US government would have to subsidise another carryier to bring down prices and ensure it didn't go under.
That's not true. Price mail correctly for the desire and cost of service. 45 cents a stamp doesn't reflect a sensible cost. If people began to see that their mail was too costly to send when postage hit a dollar, 2 dollars, maybe they would use some sense and invest in electronic methods. Otherwise, if the mail really needed to go out, maybe the dollar would be worth it. Ups and fedex would appreciate the growth in function and volume
The reason mail is a 45 cent has nothing to do with sensible costs, it is a fundamental part of the governance of any country being able to communicate with official correspondence to any region under it's control.Quote:
Originally Posted by TuffStuffMcGruff
UPS and Fed Ex would still end up being given federal money to keep the ability to send an letter from Alaska to DC.
Ok, how much would it cost to open up Fedex availability in certain parts of Alaska and Puerto Rico? I think we are at the point where that is a weak argument. In the mid 1900's that held plenty of water, now we spend this much money in order to make sure that the Federal government can ship confidential and secret correspondence to the middle of nowhere? The post office serves as a job provider - an unnecessary welfare donor. It pays people money for a service that is no longer necessary.
Why does Ireland still have a post office? You can travel to anywhere in Ireland in around 4 hours. I'm saying that sacred cows need to be slaughtered. There is waste in government because we fail to re-evaluate needs. We see "post office" and everybody knows that we need one, except that they don't know why we need one.
double post
Well part of the reason is we use the post office for different things over here, we have things like Post Office banking and Social Welfare payments renewal of Passports etc etc there is a myraid of things.Quote:
Originally Posted by TuffStuffMcGruff
However those things are not the reason we have a Post Office it really does still come down to official communication between citizens, we would still have to suplement the private sources of mail and we would still require them to open offices all over the place in order to do business.
I am open to having a private mail service but it would have to still engage with the existing universal service obligations and it would have to have offices at pretty much all the same locations give or take a few more(considering the latest population increase here they prob need extra ones)
UPS an Fed Ex likely don't want to have to offer any of these services to be honest, there quite happy with the lucrative chunks they have already, then we have the problem that if any of them went bust it creates messy problems with the service while new vendors are sourced.
On an historical note the British system of government here was subverted through interception by IRA agents in the sorting offices in London and Dublin, they knew what the British were doing before the Governor General had even read it.
In the United States, we have separate SS offices that rent out space in private buildings. I can't think of anything other than passports that private companies couldn't do better and more profitably. Before anyone says "not everything is about profit", save it for an argument about social security. What the hell IS about profit or efficiency or sustainable growth?Quote:
Originally Posted by gaelic cowboy
In the UK there was a massive outcry when large postoffices that contained little more than open space to line up waiting for the tills. Most of these have been replaced with small counters in shops. They do the same job in a lot less space.
Some have claimed the network must remain in place as some elderly can not use computers - rather than solutions to the problem, keep everything the way it is...
There are few things that have to be sent through the post. Most of the rest is either historically sent through the post or people think it would be nice to have sent in the post. The former category can be sent via email. The latter can be sent at what the item costs to send.
I can send a 30kg parcel anywhere in the UK. It will be picked up from my doorstep at a set point. I purchase it online and print the label myself. This service costs £5. Not bad, I think. I've sent 400g through Royal Mail having to go to a post office and the rest of the hassle for roughly the same cost.
~:smoking:
usps handles passports as well and also other paperwork. like selective service
Vince Cable made a few comments on this:
http://www.bbc.co.uk/news/business-14267091
That doesn't cover government post, does it?Quote:
Originally Posted by rory_20_uk
Looks like a compromise is not happening, and it's down to brinksmanship. Sad, really. A little perspective:
https://img.photobucket.com/albums/v...d63fa970d-.gif
From the interview I saw on the news today... the Speaker of the House sounds like he wants his airtime.
Is he running for president?
I want the US to get their heads around this. To pay up. To keep their AAA credit rating, to not rock the boat of the world economy (although on news of this the Aussie dollar seems to have gone up not down).
I for one would like to see my government back in surplus in the next two years, despite paying $25 a ton on carbon and raising the tax free threshold to $18k. USA playing silly buggers is not , is not going to win any friends. If anything it's going to go down worse then invading Iraq. Sure push up petrol prices and kill a dictator. The implosion of the GFC was bad, but primarily the blame lies with corporations (lack of oversight by the gov isn't good, but isn't the to blame). A self created GFC II over party politics one will go down like a turd in a pool. Problem being this pool is the world economy and the long term damage will be:
AAA rating will dip making interest rates on loans to the US go up. The consequence is that it will be even harder to service debt.
Today the FX is primarily about swapping US currency. Shake that confidence and another (EU or Chinese) will take steadily over, it won't be immediate, but over time oil, gold and other contracts will be moved across.
What does a currency that is less in demand do? Well like any commodity to sell the same amount it dips in value or the contraction will have to remove more cash from the system. Essentially it amounts to the same thing. It becomes harder for the US to service overseas debts as the value of the currency goes down.
Part of the power of power is confidence. Markets run on confidence. To much brinkmanship even if it doesn't go over the brink is going to put a dent in the US economy as investors start to rethink their portfolios. Once this trend starts, it will become a long term strategy. China may not sell up its bonds, but it may slow down how many it buys. This again will have a knock on effect on the US governments budget.
I wonder how much it would cost to make an iPhone in the US?
Aside from shotguns/ammo/canned foods, where should I put my money if the default happens? Gold is already expensive enough as is. I'm assuming we are in for rampant inflation, right?
No idea. I only do long-term investing, never play the market. That's for people with far more disposable attention and energy than I have.
A good point about why a default (and the resulting recession) may be good politics for the GOP:
If in fact the debt limit is not raised well beyond the August 2 target date, and the economy suffers the severe blow that experts, Democratic politicians, and most Republican politicians believe is likely to happen -- the dissenting Republican politicians such as Michele Bachmann, Steve King, and Louie Gohmert (and other insiders) will not, in fact, admit that they were wrong about it. Instead, they will blame Barack Obama for implementing the debt limit badly. And they will do so no matter how he implemented it [...]
So really there's no downside for the GOP, and no reason they should accept any compromise. Driving America's economy into the ditch will only help them re-take the White House and the Senate.
What's more, and this is only slightly less obvious and slightly less certain, they will almost certainly not be penalized within the GOP for being wrong. Indeed, what's far more likely is that if, as virtually all economists and budget experts currently insist, failure to raise the debt limit causes economic disaster, the likely effect within the GOP will be to enhance the prospects of those who claim that the experts don't know what they're talking about -- and any post-limit disaster will be considered yet another sign that the experts don't know what they're talking about.
That reminds me of that website ages ago which said "Can you fix the economy?" and there was lots of different options and laws, and realistic things.Quote:
Originally Posted by Lemur
I remember me, Louis, HoreTore and a few others fixing the economy by 2014 because we repealed the Bush tax cuts and removed perks of the Mega-rich, while at the same time expanding pensions, healthcare, R&D (also increase in Nasa funding) and infrastructure investment (like american autobahns). So safeguarding and creating an awesome america for everyone.
Then other forum users (republican minded) wanted to decrease taxes (!) and increase military spending, etc and killed the nation by 2012.
It's almost Orwellian, no I take that back it is Orwellian.Quote:
Originally Posted by Lemur
Do these fellas have cotton wool in there ears or summit.
Well, sending things to the government electronically is nice, and I'd like to do it, but concerning ELENA(electronic transmission of your tax sheets etc.) has been dumped here over concerns of data security and our customs had their system hacked etc. it may be a nice thing for the future, but if it isn't done well and secure you might find your whole financial data on some hacker's site someday. It would also require you to have it all in electronical form on your compter and I'm not sure how safe exactly home firewalls are, our customs used one(wanted to save money...) when they got hacked...
Yeah that game is dead easy. Slap a VAT on the American economy problem 33% solved. Slash and burn the tax cut laws, job done. But that is apparentlysocialistsound financial policy. So it's like cheating, really.
You know... I was getting worked up about this; then I decided that no matter how angry I was going to get, the only thing I could really do is piss and moan, and get on with my day. So, whatever, if it's economic armageddon if this thing doesn't go through, guess I'll just smoke a cigar... drink a few tumblers of bourbon, and get on with life in one fashion or another-- I even did the responsible thing and told my Congressman to get off his :daisy: and start working with his opposition, but I digress. Either way, even if I lose my job, or get a pay cut, or a tax increase... I'll still probably be better off than most other people in the world.
Good observation, Lemur. I also fail to see the downside for the GOP. We are prepared to shoot this hostage, im surprised. On the one hand, the failure of the united states will be in the hands of a democrat, on the other, spending will be cut by 44 percent. America will be radically redefined and there was no other way to do it. Give us what we want or prepare for an end to life as we know it. Or not, and they were lying to us, in which case we are stronger for it. It is a triple win and I don't even have kids yet! quadruple win!
You are detached from reality, many Americans will be driven into poverty if spending is cut by 44%, and it will be the fault of the Republicans. Failure to agree to closing tax loopholes is madness at this juncture. America will not be "radically redefined" unless you your defintion of that is "bankrupt" which I suppose would be "radical".Quote:
Originally Posted by TuffStuffMcGruff
Further, deliberately failing to service a debt is immoral, I'm surprised the "Christian" Republicans would do so for purely political reasons.
Right, we're all going into poverty. I don't buy the doomsday scenario. I want spending cuts of 20 to 30 percent of government. We could just steam roll out of iraq and afghanistan, slash federal employee wages, sell off land which the government owns. My personal credit is perfect, literally. I have no respect for the debt obligations incurreds hundreds of miles away by individuals who do not represent my interests. Don't bring religion into this. Floating a deficit of 44% to pay for crap we don't need on the backs of our children isn't the most ethical choice.
Additionally, credit markets will make it more expensive to borrow money. Maybe the money that we borrow will be geared toward spurring growth in excess of interest, transportation, creating public use internet networks, creating an educational system that works; rather than spending it on gaining the votes of poor people and the elderly who rely on the governments for handouts
Good quote for the day: "America is the only country in the world that that has the luxury of creating an economic crisis when there isn’t one."
So, if I have read this aright:
The Republicans table a bill in Congress designed to embarrass the Democrats when rejected in the Senate, but the Congressional Budget Office sends it back because the sums are massively wrong. Next day, the Republicans (having taken their shoes and socks off this time, belatedly recognising that sums are hard) push the same bill forward only for their own party to scupper it and hang their leader out to dry.
Meanwhile the Democrats laugh themselves stupid (er) in the same way that someone going over a thousand metre waterfall laughs at the misfortune of the other fellow, because the other fellow is in the bow and somehow that's better.
I wonder how the head of the Chinese Sovereign Investment Funds explains that to the Party bosses.
I guess that sums it up, unless another member knows more than we do.Quote:
Originally Posted by Banquo's Ghost
I can see one - and only one - advantage to this episode: from now on American members on this board will have a hard time criticising the EU over its bumbling and indecisiveness.
But that's lame. Let me put it more productively: what unites politicians across the Atlantic seems to be a tendency to put one's own interest above that of the whole, which is a sure sign of a breakdown of societal trust.
I blame it on unfettered capitalism. Unfettered capitalists will probably blame it on the likes of me.
QED
AII