Economic Recovery

WheelsRCool

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.

mheslep

How do you go there from a question about the claims of recovery?
Your question. It appears that it is slowing in some sectors, to the good, but that does not make a recovery.

mheslep

Same here.

mheslep

Evidence?

Phrak

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

mheslep

Does not a recession make. Small potatoes compared to Fannie and Freddie losses.

Phrak

Right. Sorry about that. I completely rewrote my snippish remark. See above ^

Astronuc

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
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!

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.

Ivan Seeking

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.

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.

Ivan Seeking

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.

WheelsRCool

Politics. The Obama administration said this stimulus was necessary to prevent unemployment from going over 8%. It hasn't.

Why would Republicans complain about the money going out immediately to recover the economy?

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.

So let's just enact the largest tax increase in history and hamstring industry completely.

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).

It's going to increase as we are forced to move onto so-called "green" technology that isn't viable at all.

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.

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
I think it's viable.
I hope you're not talking about the bubble that just popped.

mheslep

Which lists total income taxes as 10%? That is detached from reality somewhere.

OmCheeto

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:

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.

WheelsRCool

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.

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.

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.

mheslep

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?

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