Posted on 03/01/2006 1:20:56 PM PST by STARWISE
Good reading. Thanks for the link.
My main concern is that the Net Capital balance described here may be coming largely at the expense of our treasury deficit, and consumer debt. Gov't spending trickle-down to consumers who buy overseas goods.
GDP has grown, but so has population. Is that taken into account in the 'real GDP' calculations used here? Also doesn't take into account the rising number of hours worked per-cap due to longer hours at work, increasing number of women in the workforce, and workers retiring later in life. Think the proper measure of an economy should be GDP/hours-worked adjusted, for inflation.
Basically, my impression (feel free to offer criticism if you feel I'm wrong) is that we're going in hawk up to our eyeballs for what amounts to useless junk in the big scheme of things.
Agree that it has led to the housing boom that we've experienced lately due to the availability of loans.
Has been great for those who have the credentials necessary to acquire capital, but think that portion of the population is currently shrinking. Not sure where alot of the capital is going right now (sure isn't high-end manufacturing). Think alot of it may be getting soaked up by rising domestic healthcare costs. Might it be flowing back out in overseas investment?
Has almost completely wiped-out the middle-class wage-earners.
Wage-growth has been fairly slack lately. Rising debt + stagnant wages + inflation (not bad lately, but still a factor) = inorganic (unsustainable) growth. The only valid reason to assume consumer debt load is when dollars spent today can be offset by inflation and wage-growth over the period of the loan. That's not current conditions. Interest rates are well above the rate of inflation.
I see this all leading to a fatal debt-load, and a dip in the real-estate market causing losses to all whose primary investment is the home they own. We're already close to market-saturation in home-ownership, IMHO, and I don't see interest rates going down any time soon.
I see all this adding up to bigtime trouble for the average household in the next decade or so.
We did great during the Reagan years. Think we've been living well above our means ever since. During Reagan's heyday we had an enormous boom in hi-tech manufacturing sectors that provided nice wages for skilled-labor and engineering/R&D types who seem to be the ones that spur innovation (the best, and most sustainable way to grow). That trend seems to be reversing currently.
I see us trying to turn ourselves into a massive version of HK. HK has some advantages, though, in being small, isolated, and under the protection of China. They're also not a military player in any sense.
Think we're setting ourselves up for a fall in the mid-to-long term, by assuming too much debt, and leaving ourselves vulnerable to shortages in critical areas. The flu-vaccine shortage a couple of years back is a good example. Recent oil-price fluctuations are another.
Have had thorough discussions on this with my little sis, on these topics, who holds an MBA from a good school, and had a dual major as an undergrad in Econ and Inernational Trade.
I'm thinking about doing a little digging, and writing a nice long research paper on Globalization at some point.
Be glad to have any feedback.
See lines 9 & 11 of this table
Take line #1 of This table [along with tables 6.9A, 6.9B, 6.9C in order to take you back as far as you need] and divide by line #38 of this table. Oh, and while you're looking at that table, check out line #37...it should match up identically with the very first provided link. Now, I do not know what the working hours divided by population will yield, but you can do the calculations.
Though you may want to use statistics from the Bureau of Labor Statistics in order to get labor force participation numbers instead of a straight population numbers. Let me know if you find something damning to my position and I'll take a look at it.
But, before you do any of this, check out these two blog entries in the following order - 1st that one and then this one 2nd.
Good luck with the reasearch!
Thanks for the links, Joe.
Bookmark for later.
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