Excellent point. Maybe criticism will have been shifted to Obama after three years?:unsure:
Well today it looks as though America have lost of "economic wars" that have ever been, but I think they'll rise from this. China is a little too fast in it's interpretation of who they're dealing with.
Exactly! Now China is treating the United States like they're over and done with, but we all know that the United States will rise from this and challenge the Chinese.
I'm not so sure about that. The current US debt on the books doesn't represent the financial committments made - social security, medicare, medicaid. Those are real committments that have to be dealt with and there is no easy solution. A lot of people at or near retirement have made unalterable plans based on receiving those benefits, its too late for them to change their financial situation. If the govt cuts back on benefits in a significant way (enough to have a real impact on decreasing the debt), these people are going to be hurt financially, some will have to go back to work, some will have to significantly reduce their lifestyle, some will need govt assistance (welfare). And thats isn't just retirement issues due to cuts in social security, there are medical expense issues due to cuts in medicare.
On the other hand, if the govt continues to cover these immediate need people at an appropriate level, the debt remains unaffordable. Its almost a no win situation.
And to top it off, we have an administration that is openly committed to deficit spending. Obama's 10 year budget plans show huge deficits, Obama's own report states this will almost double the debt by 2019, non-partisan economists put it at increasing the debt 150-250% by 2019.
So we have a system already obligated to large financial problems, and a govt that wants to accelerate the deficit spending. This isn't going to end well.
China and other countries see the writing on the wall. China, India, Russia, Brazil have already begun moving away from the US dollar as the international monetary standard. Those countries and others are trying to decrease their dependence on the US, quietly decrease the amount of US debt they own, and are hoping to cushion themselves from a future US economic collapse. They can't make themselves independent, if the US collapses, they are going to feel some pain.
And, don't forget theat the US has thrown its economic weight around as a way to manipulate countries. Other countries will do the same.
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Wonder whether it would help if they took over China? Wasn't that what they used to do in the days of the British Empire. When they were short of cash, they colonized? :giggle:
There's a lot of pessimism in this post, and I think the great enemy to get the world through this is pessimism and self confidence. If we only look at the negative, exactly what I think you're doing through your post, it will be completely impossible to get ourselves out of this crisis. But if we try to stabilize ourselves without getting hung up in negative figures, I honestly believe we can make it.
I totally agree with you, it's not that I am saying a financial crisis is positive. You've pointed that very well out in your post. My point was that we should all try and move forward and try to look at the positive sides of our lives, instead of getting these red figures in our head. Too much negativity, will also always lead to even more negativity.
I agree, every life has positive and negative and people need to keep a good perspective. But this is a thread to discuss the US economic situation, which is in a particularly bad position with potentially dire consequences. I have had a growing concern over this for the past several years, maybe I'm too pessimistic, which is why I asked the original question. If there is a way out of this economic problem, I might have missed it, and I'd like to hear about it if there is one.
The way out of a recession is most definitely not having negative views. If we all just moved forward and looked at everything in a positive way, I think that's the greatest medicine to get out of a financial crisis.
There is some truth to that if the problem is a recession. That's the Keynesian approach, get people feeling positive and they will start spending again, businesses will start selling stuff and need to replace stock, etc.
This isn't the normal recession, its 2 problems coming at the same time. Theres he recession, and there's the national debt. The govt has spent itself deeply into debt and has plans to continue deficit spending even after the recovery. Thats not a problem that a simple positive attitude will solve.
This isn't the normal recession, its 2 problems coming at the same time. Theres he recession, and there's the national debt. The govt has spent itself deeply into debt and has plans to continue deficit spending even after the recovery. Thats not a problem that a simple positive attitude will solve.
I don't totally agree on this and think Dave's point of view is a realistic rather than a negative point of view. I don't believe the world has dealt with the financial crisis from its roots up last year. All it did was to put band-out strips over the problems to bail out selected corporations so that the party could continue. The economy has been in trouble for much longer than when it caved in at the end of 2008, and it has never been allowed to sort itself out. There has always been artificial meddling with it, in the interest of Governments, more than the people. The rot started to set in during the eighties when Corporations were allowed by Government to bail themselves out by taking over companies. For example the Banks were allowed to take over Investment and Insurance companies, and extend their businesses. What happened last year is a result of that, and a real problem as there are no more businesses the Banks can take over, or are there? Maybe the Government? Government and the Banks have become one. What is needed for someone in Government to have the guts to break up the big banks and bring the money back to where it should be for the economy to be sorted out and revived again, which is with the people in the form of building societies and co-ops. And to once again separate the businesses of banking, insurance and investing.
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Compared to Mao, his successors are pretty democratic. China basically became a free economy afterwards. The one-party, not-so-free news is going to be there for a while (not to mention those olympic cheaters), but hey.
The US economy won't be able to recover fully. If you looked before the Obama Administration (Bush or even Clinton), many different businesses who are failing now were thriving then using techniques which will maximize short-term profit for long-term reputation. Banks, Insurance Compnies, even Activision are like that. Watch Activision in a few years' time.
The US economy won't be able to recover fully. If you looked before the Obama Administration (Bush or even Clinton), many different businesses who are failing now were thriving then using techniques which will maximize short-term profit for long-term reputation. Banks, Insurance Compnies, even Activision are like that. Watch Activision in a few years' time.
[FONT=verdana, arial, helvetica, sans-serif] In market economics, rates of inflation are pegged to wage growth. Wages are a lagging economic indicator. If wages weren't growing, then interest rates wouldn't rise significantly. The fact that interest rates are rising indicate that more cashflow exists in the market. Interest rates are used as a predictor of wage growth, and recent trends indicate wages are growing, and doing so faster than inflation.
I don't think it is headed, I think it is already suffering from it! Especially when USA was going through the credit crisis. It seems to be recovering now, but the policies that USA plans to implement will do it no good, it will only drag it into deep sea!
