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What U.S. Economic Recovery? Five Destructive Myths

  1. Jul 14, 2011 #1


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    I am no economics expert but I think this http://www.time.com/time/nation/article/0,8599,2076568-4,00.html" [Broken] is fair IMO, however, you decide...
    I am interested in what PFer's below the age of 30 have to say about the above paragraph, particulary the section I highlighted. What plans do you have to adapt to this, and even turn it to your advantage ?

    Rhody... :wink:
    Last edited by a moderator: May 5, 2017
  2. jcsd
  3. Jul 14, 2011 #2
    I've got a lot of young adult friends straight out of college who are having to take low income jobs not in the fields they are studying for. Not only does that not help society, but it will seriously delay and hamstring these peoples careers. One friend who graduated in finance is working at a coffee shop.
  4. Jul 14, 2011 #3

    Ivan Seeking

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    Yeah, now everyone's a physicist. :biggrin:
  5. Jul 14, 2011 #4
    "Nobel laureate Michael Spence, author of The Next Convergence, has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home."

    My bold
    I don't doubt this at all.

    We faced similar job challenges in the late 1970's and early 80's in the Rust Belt. Fortunately for us, if we headed West or South the prospects improved. Now it's not so simple.

    I know several recent college grads that are going back to school - they hope things will be better in 2 years. I also know several unemployed adults that are back in school.
  6. Jul 14, 2011 #5


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    I know a couple of young graduate's doing the same thing, going back for masters, and with it a ton of debt that comes along with it. I work with one guy who pays 800 $ a month to pay off 140K worth of student loans (undergrad degree only). He will be 40 before he can even think of buying a home. It just doesn't seem fair. I really feel for some of these people.

    Rhody... :grumpy: :mad:
  7. Jul 14, 2011 #6
    It's probably still a good decision - I think it will take another 2 to 5 years for the economy to regain strength. The graduate degrees will certainly provide greater earnings potential long term. We dug in for $60k for my wife to go back for a Masters - I can assure you it hurt us a good bit at the time.
  8. Jul 15, 2011 #7


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    My younger sister's kids entered the job market at a good time. They secured pretty good positions before everything went to hell, and are doing OK. The youngest got engineering/type internships in pulp and paper mills every summer in college and has a solid position. His older sister is a very popular HS teacher and has pegged away at extra course-work for a few years until she was awarded her masters this spring. His other siblings are doing quite well for themselves, too though they had to move away to get employment opportunities that matched their talents.

    The oldest sister has had to work full-time, leave some of the care of their toddler to her husband, who is a finish carpenter/cabinet-maker, and work long hours studying nights to earn that masters. I am very proud of her.
  9. Jul 17, 2011 #8


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    We’re Spent By DAVID LEONHARDT

    Consider that what recovery there has been has been riding on borrowed money (federal deficit), and that cannot continue. Consumer spending is down, and probably will be for the forseeable future. The government cannot continue increasing debt indefinitely without severe consequences when the well runs dry.

    Another commentary indicated that 2% growth in the GDP is the new norm. Compare that to a federal budget deficit of ~10% of GDP.



    Eliminating the deficit in 2010, the GDP would have dropped 8%!

    On the other hand, one cannot deficit-spend oneself toward prosperity. Chronic deficit spending increases indebtedness, and that is the opposite direction from prosperity!
    Last edited: Jul 18, 2011
  10. Jul 19, 2011 #9
    My oldest son now 27 could not find work after his B.A.. He worked chopping firewood, doing yard work, cleaning out freezers, etc. His highest standard of living since graduating was the year he taught English at a university in China. He is in the US now and thinking of returning to China.

    It is a global village no point in staying in an area that has no jobs. Go west young person far far west.
  11. Jul 19, 2011 #10


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    Oddly enough this is the most hilarious irony being a physics graduate. In a city with 17% unemployment, I don't know any physics grads without a middle class job (who all graduated within the last 2 years).
  12. Jul 19, 2011 #11
    What city?
  13. Jul 19, 2011 #12
    That is with 1% immigration population growth per year. So 1% to support the enlarged population and 1% growth. This is assuming inflation is really zero like they say (no social security COLA). If they are off by 1% in their inflation calculation (as my experimental observations at the grocery store suggest) then that would be zero percent real growth.
  14. Jul 19, 2011 #13


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    Fresno, CA
  15. Jul 19, 2011 #14
    My friend's son has been teaching English in Russia for about 6 years. He said the pay is modest by US standards but he doesn't have many expenses. I believe his housing and transportation are supplemented. He's enjoyed the experience and has traveled a good bit.
  16. Jul 19, 2011 #15
    My son also taught in Russia for half a year. They pay a lot less than China. Or more carefully pay relative to expenses is much less in Russia.
  17. Jul 19, 2011 #16
    Full disclosure, my friend's son met a Russian girl and...it looks like Christmas in St. Petersburg every few years might be the new norm for my friend.
  18. Jul 20, 2011 #17
    That is surprising to me. The phds I know who finished in the last year and a half are all out of work or in part time positions.

    Admittedly, this depends on what you count as a middle-class job. I'm bartending, and make enough to be in the top half of households.
  19. Jul 20, 2011 #18


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    Something to ponder...

    http://www.newsweek.com/2011/07/17/american-kids-immersed-in-chinese-asian-education.html" [Broken]
    Interesting perspective, eh ?

    Last edited by a moderator: May 5, 2017
  20. Aug 11, 2011 #19


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    This is a bit dated, but -

    Why has the US economy stalled? (July 29)
  21. Aug 11, 2011 #20
    I like their analysis of "chicken and egg" - and the 70% of the economy being consumer driven statement is startling.

    My guess is that even if the unemployment rate begins to drop - economic growth will be slower than expected. The reason is tightened credit. In the 2000's credit was loose and spending was wild - the high unemployment is coupled with massive credit default and bankruptcies. Folks who previously had $5,000 to $25,000 credit limits (or even much greater) may now find themselves carrying a pre-paid card or a $300 to $500 credit re-builder card.
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