Posted on 02/04/2010 9:50:11 AM PST by blam
20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover
Michael The Patriot Blogger
Feb. 4, 2010, 10:26 AM
Even though the U.S. financial system nearly experienced a total meltdown in late 2008, the truth is that most Americans simply have no idea what is happening to the U.S. economy. Most people seem to think that the nasty little recession that we have just been through is almost over and that we will be experiencing another time of economic growth and prosperity very shortly.
But this time around that is not the case. The reality is that we are being sucked into an economic black hole from which the U.S. economy will never fully recover.
The problem is debt. Collectively, the U.S. government, the state governments, corporate America and American consumers have accumulated the biggest mountain of debt in the history of the world. Our massive debt binge has financed our tremendous growth and prosperity over the last couple of decades, but now the day of reckoning is here.
And it is going to be painful.
[snip]
(Excerpt) Read more at businessinsider.com ...
I've had doom monger on FR bet me that the SP 500 would have crashed by year end - won easily - and that the CPI would be up by a third in 3 years - no chance I lose that one either. If you want a bet on the future path of US GDP, I'll take it. And you too can join the parade of doom mongering losers who owe me money.
Good thing GWB and Pelosi raised the minimum wage in 2008 which took effect in the middle of 2009 to jump start the ‘Obama recovery’ . Justice wouldnt you say?
Money is just one more good among others.
There is nothing magical about things you can hit with a stick, but the idiotic materialism of the populist set knows no bounds. If real assets were always more valuable than paper claims, then houses would be worth more than the mortgages written against them.
News flash, that idea being a complete crock was the bubble.
In the past decade, we made gobs and gobs of real assets called new houses. 12.5 million new units in 7 years. That was just about 5 million more than were justified by their actual money cost, at the prices they could actually continually sell for. You know, it imaginary useless unreal money...
Jason - You are always optimistic on these threads and I appreciate the sentiment. However, we have an unbelievable entitlement problem and few people are talking about it. It’s the real reason we have so much government debt and all of this other stuff we debate does not come close to our future guaranteed spending of money we don’t have.
I hope you are right but I truly believe we are in uncharted waters in terms of debt and it has to impact our currency eventually. Those who blame Obama miss the big picture. Obama is just the latest installment of a progressive politician who fails to address entitlements. The fact that he is borrowing much more than his predecessor simply accelerates the day of reckoning.
I find it hard to be optimistic about our future unless we abolish entitlements. It’s the right thing to do for our children and future generations. It appears to be the only thing to secure our future and prevent runaway inflation.
Where am I wrong (and I hope I am)?
Inflation IS rearing her ugly head. We’ll be LUCKY if we only get screwed as much as we did during Carter. Strap in!
http://www.miseryindex.us/customindexoneYear.asp?StartYear=2009&submit1=Create+Report
It may well not recover, but that isn’t the way it needs to be. But it will be painful.
Those with half a brain understand that an economy grows with savings and investment, unlike some of our brainLESS congresspeople who think that increased spending is how you grow an economy.
1- Sunset ALL spending legislation. Make the Congress revisit every piece and only re-legislate the spending we IMMEDIATELY need.
2- Repeal all legislation that gave bailouts to ANY company or bank.
3- No more federal protection for unions.
4- Give back all federal land to the states and remove all regulations that limit development of natural resources.
5- Decrease the size and funding of ALL federal agencies by a third, with plans to close most of them in the near future. Immediately close down the Dept. of Education, HHS and the EPA.
6 Force all able-bodied people under the age of 40, who are NOT physically and demonstrably disabled, off SSI. Give ALL welfare issues back to the states.
7- Force a Constitutional amendment that forbids the COngress from increasing the credit limit.
8- Initiate tax credits for savings and investment, and bring back tax credits for families.
9- Demand that the federal government spend to maintain the military and roll back to its COnstitutional limits- no more growth of the fed.
10- ELECT STATE GOVERNORS WHO UNDERSTAND THE MEANING AND IMPORTANCE OF STATE SOVEREIGNTY!
Here is my modest proposal to fix the public fiscal mess and the unreality it has bred. It requires new legislation and will be anathema to the left, and I don't seriously expect it in the short run. But it is a program that would work and that populists might agree on and push for.
The idea is to use the portion of measured GDP the budget is in deficit or surplus, as an automatic adjusting factor in many federal payments. Basically, automatic marginal cuts when the budget is in deficit, and rises capped by the portion of GDP in surplus at other times.
To start with, no federal worker can receive a pay adjustment in any given year for the same job or grade, greater than the above percentage, plus 2% to reflect average targeted inflation. If the deficit is 10% of GDP, that means an automatic 8% pay cut. If the budget is balanced, that means a maximum 2% raise. For federal workers to get real annual raises, the budget would have to be continually in surplus by several percent of GDP.
Second, for COLAs for federal pensions and also for social security, the rule is more forgiving but still tight. No increases at all if the budget is in deficit. Second, when COLAs are given for either, the indexing series shall be the CPI, not wages.
Third, gradually raise the normal retirement age to 70, by 3 months each year. Adjust the early and later retirement options for social security away from actuarial equality, to instead deliberately encourage working longer, in real terms, by at least 2% per year away from the new retirement age standard. (So someone retiring at 65 should expect only 90% of the total benefit of someone retiring at 70, and spread over more expected years of life, with less interest, in addition).
Next for so-called "discretionary" spending, it is important to encourage smaller government, not just fiscal balance (by e.g. higher taxes). So a different automatic budgeting rule there. The maximum rate of change in federal discretionary spending is 20% minus federal spending as a share of GDP. Meaning, if spending is taking 25% of GDP, discretionary spending must fall 5% per year. If you want discretionary spending to grow 5% per year, then spending must already be under 15% of GDP.
Now, naturally congress cannot fully bind its successors. These rules should be in place as an automatic budgeting matter, but congress retains the right to vote new spending for wars or national emergencies etc. But the above system would effectively require continual new majority (or in the senate, sometimes supermajority) votes to deviate from this fiscal discipline.
I’d say the top reasons are:
1) Obama
2)Pelosi
3)Reid
4) Barney Frank
5) rest of democratic party.
Excellent summary of what’s going on and where we’re headed!
It doesn’t matter to the unemployed. Obama’s Central government will come to the rescue of state unemployment accounts and will extend right through the 2010 election, at the very least.
BTTT
BTTT
BTTT
Inflation is like the scene, “I dreenk your MEELKSHAKE” scene from There Will Be Blood.
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