Posted on 02/01/2010 6:33:06 PM PST by raptor22
Competitiveness: The latest index of economic freedom shows America falling fast, being ranked for the first time as "mostly free." We've fallen behind Canada, and it's look out below.
Our accelerating descent into a command-and-control economy with government pulling the strings is taking its toll.
The Heritage Foundation's 2010 index of leading economic indicators shows that the land of the free is only mostly free, falling to eighth in the world from sixth last year, now sandwiched between Canada and Denmark.
That Canada, long considered a bastion of socialized medicine, is ranked as economically freer may surprise some. But our neighbor to the north has at least been trying to develop its domestic energy reserves, from hydroelectric to natural gas to oil extracted from its tar sands. Energy is the lifeblood of a free economy.
We have shackled our domestic energy producers with environmental regulations, leaving vast pools of energy lying offshore and in the ground. We regulate what you can build, where you can build it, even how. Endangered critters rank above equally endangered entrepreneurs. Climate change is more important than the business climate.
(Excerpt) Read more at investors.com ...
Fact one - consumption has not decreased. Consumption is now running at the same rate as before the recession.
Yes Virginia, even with 10% unemployment rather than 4%.
Business investment fell by a quarter. Tax receipts fell by a sixth. Transfer payment benefits increased by 3% of GDP. The trade deficit was cut in half (halving oil prices alone added several percent to GDP).
Initially, consumption fell by all of 3%, to finance the increase in the savings rate, from 0 to 7%. Then the stock market turned around, and as soon as it did, consumption began to recover. The savings rate fell back to 4%, then rose again slowly to 5%, where it is now. Consumption came back first from the savings rate turning around, and then from higher disposable income as GDP began growing again.
That is the reality. There has been no great hardship in the aggregate reflected in American consumers behavior. They took a sixth month hiatus from big ticket purchases like cars, and things are now back to normal - on the consumption side.
On the income side, a portion of the population is now dependent on transfers and on not paying taxes, and another portion is benefitting from recovering financial markets, netting to zero between them - the same level of overall consumption we have back before the recession began.
No one pays my health care costs except for me. And that is the way it should be. Unfortunately my tax dollars are being used to fund other's health care (abortions etc) and that is a loss.
Obamacare is stupid but because of the dead losses and inefficiencies it involves, not because it is a transfer. Transfers as such do not create or destroy wealth, or cause loss.
Say What!?. If someone transfers wealth from me it most certainly is a loss. I no longer have my wealth. It is lost to me forever. It is as much a loss as if I took the bills out of my pocket and burned them. In fact, it is more of a loss than that (If I burned them at least I profit from the heat produced).
They may be inequitable for other reasons; they may have secondary incentive effects. But you are pretending that a transfer is a loss, and that's just incorrect.
Your frame of reference must be really wacked. If someone takes money from me, it's a loss.
Doctors deserve their incomes. Medicine companies earn their profits. Johnson and Johnson is not a den of thieves. Health care spending is entire legitimate economic activity and part of our overall production and income.
I agree entirely. But what does any of that have to do with my money being stolen and used to pay for someone else's health care?
“So you’ve never smelled money, your problem.”
What does that mean?
No country in the history of the world borrowed their way to wealth.
“Obamacare is stupid but because of the dead losses and inefficiencies it involves, not because it is a transfer. Transfers as such do not create or destroy wealth, or cause loss.”
Dude, that is economic ignorance in the first order.
Money is a tool like any other tool. Some people know how to use that tool and create things of value beyond the value of the tools used to create it. Others do not. When you take away the tools from the people who know how to use them and give them to people who do not, the result is a loss of productivity and a loss of future wealth. Your claim is the lamest thing I’ve heard a Freeper say in a long time.
Some actions of government or investment or markets, increase the total size of the value pie shared by all of us combined. Others reduce the value of that pie. Others leave it unchanged.
Actions and policies that add value overall are economic, even if and when they change who the winners and losers are who reap those gains. Buggy whip manufacturers making lower profits when cars are invented does not harm us as a whole. "But hey, it is a loss of their profits, that's an outright loss to their pockets, its horrible it must be stopped!!!" is not economic analysis.
Government transfer are largely neutral in overall value. They can have a secondary cost on incentives that is negative - which are more severe the least productive or deserving the end beneficiary is - and sometimes entail useless bureaucracy costs to implement, which are dead weight losses to everyone. Those are legitimate economic concerns against them. That they moved money from A to B is *not*. It isn't a net loss to society that someone else has the benefit - a car manufacturer - instead of the sainted makers of buggy whips.
The economic perspective is precisely to look at the whole pie effect of policies, and not on the one-entry accounting of their benefit or cost to one individual. Every action you can mention can be made to benefit somebody or other, who would on that basis support it - which way lies sorrow.
And yes, the Dutch borrowed their way to wealth, and the British, and America. They actually paid for the services of capital and lo and behold, capital therefore flocked to their shores, they invested it wisely, and it made them rich.
India has been hording wealth since the dawn of time, continually running trade surpluses and saving it in imported specie. As recently as 50 years ago, the entire wealth of the country consisted of assorted manure piles.
Fear of finance is economic stupidity, embrace of finance has caused all the economic outperformance and commercial ascendency ever seen on this globe, anywhere.
“It means if you think it impossible in the insanely rich society that is modern America to save even just 5% of income, you haven’t got the sense God gave squirrels.”
Learn to read. I didn’t say it was “impossible”.
I said I simply don’t know anyone doing it TODAY. Most the people I know are barely making it TODAY.
Grow up.
Producing things of value is what made us rich.
Dunno.
Based on how Afghanistan and Iraq are turning out, if you hang on long enough the Democrats will sabotage the war. Might make betting against the US military safe bet.
Of course, actually meeting the US military in a pitched battle will still be suicidal.
They sincerely tell me, endlessly, that America is "broke" and cite as proof the existence of debt of any kind. When I tell them Americans have $55 trillion in net worth they stare in incredulity and cannot wrap their minds around it. They think Americans have a net worth of minus that amount somehow, without asking how that is even possible. Something or other to do with money and that mysterious Federal Reserve.
The first order of business with such ignorance is to start with the basics - that nothing can be owed from without being owed to, and similarly nothing can be transfered from without being transfered to.
They endlessly tell me that "unfunded liabilities" for entitlements prove Americans have negative net worth, without ever asking what Martians are supposedly going to receive these benefits.
Commercial Foreclosure Bomb about to burst...
Almost 10% of FHA Mortgaes now 90+ Days late..
Warnings already out of January’s unexpectedly unexpected increase in Unemployment...
Highest black (ie. Inner-city) Unemployment in 25 years.
Air Freight Volumes down 10% over last year.
U.S. railroads reported originating 227,327 carloads, down 1.5 percent compared with the same week in 2008 and down 17.9 percent from the same week in 2007.
Construction spending DOWN for January...
There is NOTHING propping up Wall Street except 401K Payroll withdrawals looking for a home.
Forgot to add FEDERAL TAX RECEIPTS DROP 12.4% IN JANUARY.
The Public Sector is spending money we don’t have, while the Private Sector CONTINUES TO DIE.
And you haven't the foggiest notion what made us rich or what value is. Hint, it does not inhere in things. We made *too many* houses recently, for example, and that is exactly what the economic mess consisted in. Houses remain valuable things, but making them with abandon did not create value. Because sometimes the valuable things made do not justify the cost of their inputs.
Efficient allocation creates all value. It is not a matter of "making things", but of providing the actually desired mix of goods and services in the most practical manner.
You’ve turned your own argument on its head.
It is the government who is moving money to the “buggy whip manufactures” and their unions right NOW and taking it from the companies and individuals that the market is rewarding for their innovation. Government is choosing the winners and losers against the market. That makes us all a little poorer and the longer it goes on the more we lose.
WELL SHIT, BOY! WHY ARE ALL THESE CLOWNS LETTING THEIR HOMES GET REPOSSESSED WHEN THEY CAN JUST PUT THE WHOLE SHEBANG ON THEIR AMERICAN EXPRESS PLATINUM CARD!
jesus mary and joseph what a bunch of chuckle-heads we are. Obama should just give everyone in “the community” platinum american express cards! I mean goddam, let them BORROW their way to wealth just like you said.
HELL YEAH! I’m glad you got this all figured out for us. Now we don’t even have to bother with these silly tea parties anymore. AND IT WAS SO DAM EASY. I can’t believe you aren’t running the world bank by now.
I hereby nominate you for the job.
America and Americans are not broke in terms of net wealth.
We do have a serious cash flow problem.
Cash flow that is largely diverted to trying to pay down/off past borrowing binges.
As Obama and crew siphon off my earnings from my business and redistributes it to largely unproductive people we as a nation slowly become less wealthy. I did not say “money is wealth”. I said money is a tool. And I’ll repeat, taking a tool from people who know how to use it as proven by the fact that they earned it and giving it to others who do not know how to use it over time makes us all poorer, not just the ones its coming from. Less is produced with that tool overall as a result.
Overall our standard of living will decline, particularly for our children, as a result of government consuming ever larger parts of our productivity.
As Thatcher said, the problem with socialism is, “They always run out of other people’s money”.
“It is a valuable benefit that people voluntarily pay for”
Sorry, when government pays over half the tab, that ain’t exactly something “voluntarily” paid for. Likewise, countless empirical studies have documented the waste that attends 3rd party payment of medical bills (even when it is private rather than public insurers paying those bills). Thus, IF the entire tab were bankrolled out-of-pocket the way our spending on computers, electronic games, pets and any other expenditure people might regard as frivolous, then health care share’s of GDP would be of no importance to me and certainly none of the government’s business.
The waste in U.S. health care due to overregulation, inefficiencies induced by 3rd party payment etc. can be measured in hundreds of billions of dollars. A truly market-oriented approach could deliver identical quality care at a far lower cost, so until that day arrives, I regard the hundreds of billions in avoidable spending to be a “problem” in need of solution as opposed to a molehill safely ignored.
Dude just go away.
You say I have no idea about money or value.
I own half of a multi-million dollar company and know something about business. My business partner and I built it from the ground up. We design, manufacture and export millions of dollars of high tech communications products all over the world every year.
You are just all talk.
The Federal Government and it’s leviathan bureaucracy must be dismantled or it will destroy America.
I think we are already past the point of no return. Our only way out is inflation and rampant money printing...or a new currency.
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