## Economic Recovery

I disagree with President Obama on most things, but I think it is too soon to be expecting a recovery. Remember, when Ronald Reagan came into office, and the Federal Reserve employed a contractionary monetary policy to contol inflation, which drove the economy into a steep recession, and taxes were cut to help the economy recover, the recession lasted from July 1981 to Novermber 1982. That is more than a year.

We cannot expect the economy to turn around within six months, especially with a financial crises of this magnitude. I am surprised the Obama administration itself seems to be a bit surprised on this, that the economy isn't "recovering" so fast. Give it at least another six months or a bit more to make a recovery IMO.

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 Quote by Ivan Seeking So your position is that once Obama waved his magic wand, all of the numbers should instantly reverse?
How do you go there from a question about the claims of recovery?
 The question is whether the contraction is slowing or not...
Your question. It appears that it is slowing in some sectors, to the good, but that does not make a recovery.

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 Quote by Astronuc Well - I keep hearing that the rate of decline is lessening. But unemployment will apparently continue to increase to something like 10%.
Same here.

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 Quote by Ivan Seeking ... Keep in mind that a normal recession turned disasterous because of the hidden CDS losses, and reckless lending practices.
Evidence?

 Quote by mheslep evidence?
Good question. Googling names of institutions along with Credit Default Swaps might do it.

I got hits on GM and AIG... and GSE.

If you can make your way through this gruelingly long article (I'm going to print it and read it later) it might help give you an overview of the financial insurance web.

http://www.financialsense.com/fsu/ed...2008/0910.html

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 Quote by Phrak aig?
Does not a recession make. Small potatoes compared to Fannie and Freddie losses.

 Quote by mheslep Does not a recession make. Small potatoes compared to Fannie and Freddie losses.
Right. Sorry about that. I completely rewrote my snippish remark. See above ^

I think the economic recovery is being postponed.

Much-needed tax refunds delayed from Ga. to Calif.
http://news.yahoo.com/s/ap/20090703/...ts_tax_returns
 Tax day — April 15 — has long since come and gone, but sharp budget cuts and falling revenues have forced many states to delay income tax returns for months — and left taxpayers longing for their money. . . . . Some states say plummeting tax collections drove them to hold on to the money so they can make ends meet. Others complain of not being able to keep up because the economic downturn has forced staffing cuts in revenue departments. But critics worry governments are withholding funds that rightly belong to taxpayers when they need the extra cash the most. And some of the tardy states are fast approaching a stiff deadline of their own: The longer they wait, the more likely they'll have to pony up interest from thinning state coffers. That prospect could soon become a reality in Georgia and Alabama, where tax officials are racing to beat a mid-July deadline to send hundreds of thousands of tax refunds or risk racking up millions of dollars in interest. . . . .
In Alabama, more than 120,000 taxpayers are waiting for at least $63 million in income tax refunds! In Georgia, tax officials say that more than 320,000 returns still need to be processed! Admin Perhaps the recovery will look like a super slide. MOUNTAIN OF DEBT: Rising debt may be next crisis http://news.yahoo.com/s/ap/20090703/...untain_of_debt  The country first got into debt to help pay for the Revolutionary War. Growing ever since, the debt stands today at a staggering$11.5 trillion — equivalent to over $37,000 for each and every American. And it's expanding by over$1 trillion a year. The mountain of debt easily could become the next full-fledged economic crisis without firm action from Washington, economists of all stripes warn. . . . . Interest payments on the debt alone cost $452 billion last year — the largest federal spending category after Medicare-Medicaid, Social Security and defense. It's quickly crowding out all other government spending. And the Treasury is finding it harder to find new lenders. . . . . According to the Treasury Department, which updates the number "to the penny" every few days, the national debt was$11,518,472,742,288 on Wednesday. The overall debt is now slightly over 80 percent of the annual output of the entire U.S. economy, as measured by the gross domestic product. By historical standards, it's not proportionately as high as during World War II, when it briefly rose to 120 percent of GDP. But it's still a huge liability. Also, the United States is not the only nation struggling under a huge national debt. Among major countries, Japan, Italy, India, France, Germany and Canada have comparable debts as percentages of their GDPs. . . . . Treasury securities are suitable for individual investors and popular with other countries, especially China, Japan and the Persian Gulf oil exporters, the three top foreign holders of U.S. debt. . . . . And if major holders of U.S. debt were to flee, it would send shock waves through the global economy — and sharply force up U.S. interest rates. As time goes by, demographics suggest things will get worse before they get better, even after the recession ends, . . . . . While the president remains personally popular, polls show there is rising public concern over his handling of the economy and the government's mushrooming debt — and what it might mean for future generations. . . . . The Peter G. Peterson Foundation, established by a former commerce secretary and investment banker, argues that the $11.4 trillion debt figures does not take into account roughly$45 trillion in unlisted liabilities and unfunded retirement and health care commitments! That would put the nation's full obligations at $56 trillion, or roughly$184,000 per American, according to this calculation!!
Well - I wasn't planning to retire anyway.

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 Quote by Phrak Good question. Googling names of institutions along with Credit Default Swaps might do it

One thing that is rather amusing: We keep hearing from Republicans how the stimulus plan hasn't worked. The fact is that only about one-third of the available money has been spent.
http://www.recovery.gov/?q=content/report-progress

By all accounts that I've heard, the money is only now really beginning to move.

If the Obama admin had recklessly rushed the money out, the Republicans would be complaining about that. Honestly, this is a great example of why I am no longer a Republican. If they want to save their party, then they need to quit assuming that Americans are all idiots. Spin only works for so long and people eventually get wise to it.

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 Quote by Astronuc Perhaps the recovery will look like a super slide. MOUNTAIN OF DEBT: Rising debt may be next crisis http://news.yahoo.com/s/ap/20090703/...untain_of_debt Well - I wasn't planning to retire anyway.
Everything depends on the US regrowing industry and creating wealth. That and immigration will be what saves us. Obama is targeting the soft money first - the $500 Billion+ that we literally burn every year; money sent to foreign energy suppliers. Note that at 122%, our debt as a percentage of GDP reached its peak just after WWII. What followed was a period of properity like the world had never seen. I have not seen any projections that would put our debt on par with that after WWII. Also, to say or imply that we have 45 trillion in debt right now is a bit like crying the sky is falling. Future debt is not debt today. One has to take into account the GDP, growth, and the fact that it represents payments made over many years.  It couldn't have been a serious question. We have had tons of information about this. One thing that is rather amusing: We keep hearing from Republicans how the stimulus plan hasn't worked. The fact is that only about one-third of the available money has been spent. http://www.recovery.gov/?q=content/report-progress By all accounts that I've heard, the money is only now really beginning to move. Politics. The Obama administration said this stimulus was necessary to prevent unemployment from going over 8%. It hasn't.  If the Obama admin had recklessly rushed the money out, the Republicans would be complaining about that. Why would Republicans complain about the money going out immediately to recover the economy?  Honestly, this is a great example of why I am no longer a Republican. If they want to save their party, then they need to quit assuming that Americans are all idiots. Spin only works for so long and people eventually get wise to it. The Obama administration rammed this stimulus down everyone's throat claiming if we did not enact it right away, then we would go into a full-on depression. So then they proceed to create something that takes months or even over a year to go into full effect? The only spin here is on the Democrats side.  Everything depends on the US regrowing industry and creating wealth. So let's just enact the largest tax increase in history and hamstring industry completely.  That and immigration will be what saves us. Then why not just cut taxes? America's tax on capital is too high, and so is our corporate income tax rate, along with our taxes on small businesses, which employ about 80% of the workforce. Entrepreneurs and businesses create jobs, not government. Why should people and businesses have to pay more money overall for the government's messes? Why cannot the government just cut back their spending? Our corporate tax rate is the second-highest in the world. Our tax on capital is about 15%, which is high from a global point-of-view (some countries don't tax capital at all).  Obama is targeting the soft money first - the$500 Billion+ that we literally burn every year; money sent to foreign energy suppliers.
It's going to increase as we are forced to move onto so-called "green" technology that isn't viable at all.

 Note that at 122%, our debt as a percentage of GDP reached its peak just after WWII. What followed was a period of properity like the world had never seen. I have not seen any projections that would put our debt on par with that after WWII.
That was a war, where we built up actual industry and so forth, while the rest of the world got bombed to smithereens. We aren't building up industry right now, nor are foreign competitors being bombed out.

The only real prosperity was during the 1950s, when the U.S. economy had all that industry built up, with no real overseas competition.

After the 1950s, the U.S. economy was stalled more. And then in the 1970s, we got Nixon, who in the name of politics did many things to completely wreck the economy.

Meanwhile, American companies began getting creamed by foreign competition. Automobiles, electronics, appliances, American companies were on the decline.

When Reagan came in and enacted his policies, our economy was able to turn around and we were able to restructure our corporations to once again be competitive. The financial sector was revolutionized as well. The Reagan reforms gave us a period of prosperity unmatched in history. More wealth has been created over the last thirty years then over the prior two hundred. Even if one considers that a lot of phony paper wealth was created over the last ten years, starting in 2000, that still doesn't change that much wealth was still created over the period from 1980 to 2000 and much from 2000 to 2008 as well, albeit not as much when one takes into account the crash.

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 Quote by WheelsRCool America's tax on capital is too high, and so is our corporate income tax rate, along with our taxes on small businesses, which employ about 80% of the workforce. Entrepreneurs and businesses create jobs, not government. Why should people and businesses have to pay more money overall for the government's messes? Why cannot the government just cut back their spending? Our corporate tax rate is the second-highest in the world. Our tax on capital is about 15%, which is high from a global point-of-view (some countries don't tax capital at all).
Umm... According to Forbes, we have one of the lowest tax burdens on the planet.
http://www.forbes.com/global/2008/0407/060_3.html
 It's going to increase as we are forced to move onto so-called "green" technology that isn't viable at all.
I think it's viable.
 The Reagan reforms gave us a period of prosperity unmatched in history.
I hope you're not talking about the bubble that just popped.

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 Quote by OmCheeto Umm... According to Forbes, we have one of the lowest tax burdens on the planet. http://www.forbes.com/global/2008/0407/060_3.html
Which lists total income taxes as 10%? That is detached from reality somewhere.

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 Quote by mheslep Which lists total income taxes as 10%? That is detached from reality somewhere.
I don't know how they get that number either.

But this supposedly right wing website seems to think we've got it pretty good also:

 The 2009 Index of Economic Freedom Covers 183 countries across 10 specific freedoms such as trade freedom, business freedom, investment freedom, and property rights.
They list us 6th overall out of 183 countries.

They do mention that our taxes are "burdensome", but the number they quote overall is the same as Forbes: 28.2%

I think the reason we show up below the average on the "Heritage" tax scale(Fiscal Freedom) and number 5 from the top on the "Forbes" scale is that the Heritage people have included most every country in the world, whereas Forbes only lists 30 countries.

I wonder how effective the other 153 countries are at collecting income tax.

 Umm... According to Forbes, we have one of the lowest tax burdens on the planet. http://www.forbes.com/global/2008/0407/060_3.html
Overall, perhaps, that doesn't mean our tax burden still is not too high in many ways. Remember, it isn't just Federal income tax. There's state tax, county tax, local tax, property tax, etc...and we have among the highest corporate and capital taxes, oftentimes which businesses pass on to others. Businesses can pass on their taxes to their workers through lower wages or worse working conditions or less benefits, etc...or their shareholders through lower dividends, or to their customers through higher prices, and so on.

 I think it's viable.
None of them, wind, solar, geothermal, etc...are viable right now. Both must be subsidized financially and power-wise (have a reliable 24/7 plant to back them up in case the wind stops or the sun dies or whatever).

Wind farms kill birds. They're also ugly. Could you imagine the rolling fields of America, the great plains, all filled with huge wind turbines?

Solar power isn't reliable enough if the sun is blocked by clouds and weather, and it also requires huge amounts of water, which is a problem as how to supply fresh water out West is a problem unto itself coming up.

Even nuclear power is limited. There's only so much uranium we have available. And most of it we have to import, so nuclear power doesn't make us energy independent per se I don't think.

And none of these solve the problems of oil. Many seem to think we can just magically create this paradise of no more coal powerplants and instead an economy powered by wind and solar, and it's just evil oil and coal companies stopping this, but that is not the case. The technology isn't there.

 I hope you're not talking about the bubble that just popped.
1980 to 2008 was a period of great prosperity that had three bubbles: one under Reagan that popped in 1987, the Dot Com bubble that popped under Clinton in 2000, then the housing bubble under Bush that just popped.

But a real-estate bubble is a HARD blow to an economy is a thing, unto itself. Japan's government played a very large role in their economy (still does I think) and for most of the 1980s, it was the economy many said America should copy. Then their real-estate bubble popped on them. Since then their incursions in trying to "fix" their economy have created in a sense a lost decade for them.
 Recognitions: Gold Member Here is comparison of predictions from Obama's economic adviser Romer w/ and w/out stimulus vs reality, at least so far. Now VP Biden may be calling for more of the same? Attached Thumbnails