Posted on 01/25/2006 8:43:47 AM PST by Capitalism2003
We need more people to spread this debt around - darned planned parenthood!
Interesting. I've always thought it was our ability to attract investment capital along with technological innovation, to increase productivity, that drove our economic growth and increased our standard of living. I think that's what separates our economy from all the others. That, and entrepreneurial ability.
The boomer generation has kept us in a wave of people who are experienced, seasoned and educated beginning in about 82!
If this is true, how does the next generation in this country always manage to enjoy a higher standard of living? Are you saying that technological advances are going to stop and that those behind the boomer's won't increase their productivity and, therefore, their standard of living?
Our population continues to grow as does our productivity and real income. It's not going to stop just because the boomer's go into retirement. Americans, throughout history, have moved up the income ladder from the lower quintiles to the upper and I don't see anything that's going to stop that progression of upward mobility. But then again, I am an optimist.
So, when do we pay the piper??? When the consumption stops.
So, the boomer generation is the generation of consumption but once they hit retirement all that consumption is going to stop or slow dramatically? I just don't see it. Even if it does, our population continues to expand. There is nothing out there that indicates innovation and productivity are going to slow down in the future. This being so, the US will continue to attract the investment capital it needs to grow the economy and support a rising standard of living.
Most would agree that when a countries debt exceeds its GDP, the country is in trouble.
Not sure who you mean by "most". If we continue to grow our household net worth five times faster than the national debt. where will the problem be?
In the meantime enjoy the last few years of the most prosperous period that the US has ever known!
You sure have a gloomy outlook on the future. It's hard for me to share your doom when I look at the trend in per capita disposable income and the decline in federal debt as a percent of household wealth. I can also look at public debt as a percent of GDP and employment as a percent of the population and be fairly certain that my positive outlook is based on facts.
Believe what you like but there is little doubt in my mind that my children will enjoy a better quality of life than I have and that the world will be a safer place thanks to the growth of capitalism worldwide and the courage of our military, and the resolve of a majority of our leaders, in conducting the WOT.
Mase we will agree to disagree.
But I appreciate your civil tone all the same. Too many posters want to get "in your face" and start throwing insults. Its nice to spar with someone who can carry on a civil discussion.
I don't have a doom and gloom view of the future, just one that is based on my observation of the indicators that I have found to be reliable predictors over and over.
1. Profits are up, but the wages and the incomes of average Americans are down. quote:
-------------------------------------------------------------------------------- * Inflation-adjusted hourly and weekly wages are still below where they were at the start of the recovery in November 2001. Yet, productivitythe growth of the economic pieis up by 13.5%. * Wage growth has been shortchanged because 35% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 22% in previous periods. * Consequently, median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389. --------------------------------------------------------------------------------
2. More and more people are deeper and deeper in debt. quote:
-------------------------------------------------------------------------------- * The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years. * The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago. * The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%. * The personal savings rate is negative for the first time since WWII. --------------------------------------------------------------------------------
3. Job creation has not kept up with population growth, and the employment rate has fallen sharply. quote:
-------------------------------------------------------------------------------- * The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina) than in March 2001 (the start of the recession). Private sector jobs are up only 0.8%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%. * The unemployment rate is relatively low at 5%, but still higher than the 4% in 2000. Plus, the percent of the population that has a job has never recovered since the recession and is still 1.3% lower than in March 2001. If the employment rate had returned to pre-recession levels, 3 million more people would be employed. * More than 3 million manufacturing jobs have been lost since January 2000. --------------------------------------------------------------------------------
4. Poverty is on the rise. quote:
-------------------------------------------------------------------------------- * The poverty rate rose from 11.3% in 2000 to 12.7% in 2004. * The number of people living in poverty has increased by 5.4 million since 2000. * More children are living in poverty: the child poverty rate increased from 16.2% in 2000 to 17.8% in 2004. --------------------------------------------------------------------------------
5. Rising health care costs are eroding families' already declining income. quote:
-------------------------------------------------------------------------------- * Households are spending more on health care. Family health costs rose 43-45% for married couples with children, single mothers, and young singles from 2000 to 2003. * Employers are cutting back on health insurance. Last year, the percent of people with employer-provided health insurance fell for the fourth year in a row. Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000. Taking population growth into account, 11 million more people would have had employer-provided health insurance in 2004 if the coverage rate had remained at the 2000 level. -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
Even Newsmax is aware of the dangers facing us ahead in that they summarize from an Economist article:
Danger time for America http://www.economist.com/finance/displayStory.cfm?story_id=5381959 quote: -------------------------------------------------------------------------------- The economy that Alan Greenspan is about to hand over is in a much less healthy state than is popularly assumed
DESPITE his rather appealing personal humility, the tributes lavished upon Alan Greenspan, the chairman of the Federal Reserve, become more exuberant by the day. Ahead of his retirement on January 31st, he has been widely and extravagantly acclaimed by economic commentators, politicians and investors. After all, during much of his 18½ years in office America enjoyed rapid growth with low inflation, and he successfully steered the economy around a series of financial hazards. In his final days of glory, it may therefore seem churlish to question his record. However, Mr Greenspan's departure could well mark a high point for America's economy, with a period of sluggish growth ahead. This is not so much because he is leaving, but because of what he is leaving behind: the biggest economic imbalances in American history.
One should not exaggerate Mr Greenspan's influenceboth good and badover the economy. Like all central bankers he is constrained by huge uncertainties about how the economy works, and by the limits of what monetary policy can do (it can affect inflation, but it cannot increase the long-term rate of growth). He controls only short-term interest rates, not bond yields, taxes or regulation. Yet for all these constraints, Mr Greenspan has long been the world's most important economic policy makerand during an exceptional period when globalisation and information technology have been transforming the world economy. His reign has coincided with the opening up to trade and global capital flows of China, India, the former Soviet Union and many other previously closed economies. And Mr Greenspan's policies have helped to support globalisation: the robust American demand and huge appetite for imports that he facilitated made it easier for these economies to emerge and embrace open markets. The benefits to poorer nations have been huge.
So far as the American economy is concerned, however, the Fed's policies of the past decade look like having painful long-term costs. It is true that the economy has shown amazing resilience in the face of the bursting in 2000-01 of the biggest stockmarket bubble in history, of terrorist attacks and of a tripling of oil prices. Mr Greenspan's admirers attribute this to the Fed's enhanced credibility under his charge. Others point to flexible wages and prices, rapid immigration, a sounder banking system and globalisation as factors that have made the economy more resilient to shocks.
The economy's greater flexibility may indeed provide a shock-absorber. A spurt in productivity has also boosted growth. But the main reason why America's growth has remained strong in recent years has been a massive monetary stimulus. The Fed held real interest rates negative for several years, and even today real rates remain low. Thanks to globalisation, new technology and that vaunted flexibility, which have all helped to reduce the prices of many goods, cheap money has not spilled into traditional inflation, but into rising asset prices insteadfirst equities and now housing. The Economist has long criticised Mr Greenspan for not trying to restrain the stockmarket bubble in the late 1990s, and then, after it burst, for inflating a housing bubble by holding interest rates low for so long (see article). The problem is not the rising asset prices themselves but rather their effect on the economy. By borrowing against capital gains on their homes, households have been able to consume more than they earn. Robust consumer spending has boosted GDP growth, but at the cost of a negative personal saving rate, a growing burden of household debt and a huge current-account deficit.
Take away the massive deficit spending (odd, eh? Esp. in a time of "recovery"?), add in the negative savings rate (consumers overloaded with debt), add in fragile paper worth of Americans' home equity, add in average wages lagging inflation for two years now, and add in the fear cost of the price of energy due to a potential war with Iran, and that's one scary-ass equation!
THINK mase...Don't just tout the party line cuz you like Bush.
Chairman of the Board
Gerald W. McEntee
President, American Federation of State, County and Municipal Employees
Secretary-Treasurer
Morton Bahr
President, Communication Workers of America
Lawrence Mishel
President, Economic Policy Institute
Jeff Faux
Distinguished Fellow, Economic Policy Institute
Barry Bluestone
Professor of Political Economy, Director for Urban & Regional Policy, Northeastern University
R. Thomas Buffenbarger
President, International Association of Machinists
Ernesto J. Cortes, Jr.
Director, Industrial Areas Foundation
Leo W. Gerard
President, United Steelworkers of America
Ron Gettelfinger
President, International United Auto Workers
Robert Kuttner
Editor, The American Prospect; author, columnist, Business Week, New Republic
Julianne Malveaux
Economist, writer, syndicated columnist; owner, Last Word Productions
Ray Marshall
LBJ School of Public Affairs, University of Texas; former Secretary of Labor
Edward J. McElroy
President, American Federation of Teachers
Jules O. Pagano
Vice President, American Income Life Insurance Company
Bernard Rapoport
Chairman of the Board, American Income Life Insurance Company
Bruce Raynor
President, UNITE (Union of Needletrades, Industrial and Textile Employees)
Robert B. Reich
Heller Graduate School, Brandeis University; former Secretary of Labor
Andrew L. Stern
President, Service Employees International Union
Richard L. Trumka
Secretary-Treasurer, AFL-CIO
Roger Wilkins
Professor of History and American Culture, George Mason University
Are you so unable to support your absurd assertions that you have been reduced to quoting from a group run by unions and socialist activists? C'mon, Robert Reich, Julianne Malveaux - she's the one demanding reparations for slavery -The United Steel Workers, The AFL-CIO, The National Federation of Teachers?!! Are these the kinds of people you need to help you make your case?
What, couldn't you find any stats to back up your propaganda from the CPUSA or Public Citizen? How Conservative of you! ROFL
You have no explanation for why our household net worth (that's assets less liabilities which includes all that mortgage and consumer debt your left wing website is so concerned about) continues to increase five times faster than our national debt nor do you understand how the national savings rate is calculated. You ignore (or can't understand) the math that easily proves incomes have risen for Americans over time which is why they can increase per capita consumption year after year, while their net worth (that's assets less liabilities, which includes all mortgage and consumer debt) continues to grow. You can't even show us where the money supply has been over stimulated because inflation is nonexistent - other than in you hyperactive imagination. Finally, you whine constantly about debt accumulation without any regard for assets. How can you understand any of what you post if you can't even understand the most basic accounting like how net worth is calculated?
Because of your lack of knowledge, you are forced to post some socialist rant from a left wing think tank run by unions. Who exactly are you shilling for?
Is this really about the national debt and the money supply or is this more about personal circumstances that have caused you to take a bleak view of what are, in reality, really great times?
Alright!! Tell us what we won, Bob!!
Pathetic. Waiting for people coming to tell us it is still better than the alternative in 5,4,3,2,1...
It has been very refreshing to read your exchanges, they remind me of FR in my lurking days. Both have very interesting points, backed with knowledge and opinions. No one was called a troll, given ZOT pictures or insulted, even though both opinions and conclusions differ and remain to differ... thank you both very much.
Although, I am in the camp that when the baby boomers all start getting SSI checks and prescription drugs, there will be heck to pay that we cannot imagine. The seniors have voted themselves some very nice packages that will have to be paid for by us and our children.
This is called an ad-hominem attack. When in desperation, throw logic out the window and begin attacking individuals, rather than addressing their arguments and FACTS presented.
Debate over. You lose.
My goodness. You don't even know what that is either.
When in desperation, throw logic out the window and begin attacking individuals, rather than addressing their arguments
I guess you'd have to make an argument in the first place. All we've gotten from you this entire thread is fact-free emotion. In your only attempt to back up your feelings, you posted some propaganda from a socialist union supported website then tried to sell it as "FACT". Then, after doing this, you expect to be treated with kid gloves. Jeez, grow some skin.
You've got nothing to refute the net worth numbers or all the charts I linked in post #43 and post #44.
Not once have you shown anything to back up your continuous claim that inflation is out of control and that a depression is inevitable.
You purposely ignore the information provided by others showing that, without counting assets, worry about liabilities is meaningless. You don't want anyone to get in the way of your doom and gloom and when they do, you think that they're attacking you. Your continuous disregard for the facts that refute your claims leads me to believe, logically, that this is more about your personal situation rather than the nation as a whole. Is this an irrational assumption?
Debate over. You lose.
You'd rather run away than defend the information from a socialist think tank? I don't blame you. I'd be pretty embarrassed too if I used them as a source on a conservative forum.
wow, $150 billion more in less than a month. At this rate we will be at $10 trillion before new years.
GO CONSERVATISM!
What would be quite illuminating is how many different THINGS are these buckeroos going to. The more of them, the more difficult to account for.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.