about that 7.2% quarter

[zimv20]

link (http://www.nytimes.com/2003/10/31/opinion/31KRUG.html)


October 31, 2003

A Big Quarter

By PAUL KRUGMAN

The Commerce Department announces very good growth during the previous quarter. Many observers declare the economy's troubles over. And the administration's supporters claim that the economy's turnaround validates its policies.

That's what happened 18 months ago, when a preliminary estimate put first-quarter 2002 growth at 5.8 percent. That was later revised down to 5.0. More important, growth in the next quarter slumped to 1.3 percent, and we now know that the economy wasn't really on the mend: after that brief spurt, the nation proceeded to lose another 600,000 jobs.

The same story unfolded in the third quarter of 2002, when growth rose to 4 percent, and the economy actually gained 200,000 jobs. But growth slipped back down to 1.4 percent, and job losses resumed.

My purpose is not to denigrate the impressive estimated 7.2 percent growth rate for the third quarter of 2003. It is, rather, to stress the obvious: we've had our hopes dashed in the past, and it remains to be seen whether this is just another one-hit wonder.

The weakness of that spurt 18 months ago was obvious to those who bothered to look at it closely. Half the growth came simply because businesses, having drawn down their inventories in the previous quarter, had to ramp up production even though demand was growing slowly. This time around growth has a much better foundation: final demand — demand excluding changes in inventories — actually grew even faster than G.D.P. So it's unlikely that growth will drop off as sharply as it did back then.

But — you knew there would be a but — there are still some reasons to wonder whether the economy has really turned the corner.

First, while there was a significant pickup in business investment, the bulk of last quarter's growth came from a huge surge in consumer spending, with a further boost from housing. These components of spending stayed strong even when the economy was weak, so there shouldn't have been any pent-up demand. Yet housing grew at a 20 percent rate, while spending on consumer durables (that's stuff like cars and TV sets) — which last year grew three times as fast as the economy — rose at an incredible 27 percent rate last quarter.

This can't go on — in the long run, consumer spending can't outpace the growth in consumer income. Stephen Roach of Morgan Stanley has suggested, plausibly, that much of last quarter's consumer splurge was "borrowed" from the future: consumers took advantage of low-interest financing, cash from home refinancing and tax rebate checks to accelerate purchases they would otherwise have made later. If he's right, we'll see below-normal purchases and slower growth in the months ahead.

The big question, of course, is jobs. Despite all that growth in the third quarter, the number of jobs actually fell. And new claims for unemployment insurance, a leading indicator for the job market, still show no sign of a hiring boom. (By the way, for the last month there's been a peculiar pattern: each week, headlines declare that new claims fell from the previous week; a week later, the past week's number is revised upward, and the apparent decline disappears.)

And unless we start to see serious job growth — by which I mean increases in payroll employment of more than 200,000 a month — consumer spending will eventually slide, and bring growth down with it.

Still, it's possible that we really have reached a turning point. If so, does it validate the Bush economic program? Well, no.

Stimulating the economy in the short run is supposed to be easy, as long as you don't worry about how much debt you run up in the process. As William Gale of the Brookings Institution puts it, "Almost any tax cut or spending increase would succeed in boosting a sluggish economy if the Federal Reserve Board follows an accommodative monetary policy. . . . The key question is, therefore, not whether the proposals provide any short-term stimulus, but whether they are the most effective way to provide stimulus." Mr. Gale doesn't think the Bush tax cuts meet that criterion, and neither do I.

To put it more bluntly: it would be quite a trick to run the biggest budget deficit in the history of the planet, and still end a presidential term with fewer jobs than when you started. And despite yesterday's good news, that's a trick President Bush still seems likely to pull off.__

[Sayhey]

Reagan proved that huge tax cuts and even greater deficit spending (particularly on the military) will provide an economic stimulus. Heck, the deficit spending part of it was the crime the Republicans used to accuse Democrats of doing for years. The problem is at what cost to the structure of our economy and whose grandchildren will eventually have to pay the bill? Reagan almost sank us in an ocean of red ink and now Bush seems to wish to do him one better.

[Ugg]

I am continually amazed at the changes in the US in the last 20 years. The Republicans have run the highest deficits and the press has become a right wing citadel. Could hell indeed be freezing over:D

[mactastic]

Sure will be interesting to see how that all-important holiday buying season goes. People without jobs aren't likely to go nuts shopping, but I guess we'll see.

[Desertrat]

I guess my gripe with the worship of GDP is that it doesn't matter if you're buying a food item or a movie ticket. It's all equal, in the eyes of those who count money movement.

The extra costs of fighting the fires in California add to the GDP. The federal dollars spent on Iraq add to the GDP--as do those spent on procurement in general.

So, yeah, it's an important factor. But, looking ahead, how are we better off if one person's $100,000/year job goes to somebody in India, and he and his wife then both go to work at $10/hr? I don't think that's the sort of rise in employment we need.

'Rat

[Code101]

You just don't like that fact that the economy is turning around. The liberals success depends on the failure of America. Things are turning around for President Bush and that makes you scared.

[3rdpath]

Originally posted by Code101
You just don't like that fact that the economy is turning around. The liberals success depends on the failure of America. Things are turning around for President Bush and that makes you scared.

if i wanted silly am radio commentary i wouldn't be sitting on my butt in front of my computer...

truly, i don't know of anyone who wants the economy to continue south...my gripe is numbers rarely tell the complete story. and a short-term turnaround may not signal the end of long-term problems.

it's a little early to hang out another " mission accomplished" sign...

[Desertrat]

Code101, I'd behappy as all get-out if I could believe the economy is really turning around.

My problem is that I run across numbers about late house payments, bankruptcy filings and credit card debt, and they don't look good, to me. We export a half-trillion dollars a year to foreign sellers, who are supporting our equities market or buying US Treasuries. I worry somewhat, with a falling dollar, what will happen if those folks decide to sell.

Our work, our employment, is shifting from fairly high-pay manufacturing jobs to lesser-pay service jobs.

When you add up the numbers for unemployed-but-looking, unemployed-but-not-looking, and then add in the part-timers, I can't help but wonder how they can contribute to this turnaround in the economy.

So, I dunno. It may look good on paper, but I just don't think it's real, nor will it last for long...

'Rat

[g5man]

Originally posted by 3rdpath
and a short-term turnaround may not signal the end of long-term problems.

it's a little early to hang out another " mission accomplished" sign...

While I agree with you that it is much too early to declare mission accomplished, I am not sure if I would call this a short-term turnaround.

I don't have the actual numbers in front of me but since we had two quarters with negative GDP (two years ago) we have seen a gradual upward positive move. I would call this a fairly steady long term move.

And yes I know we can talk about unemployment and wages, which is why mission is not accomplished.

[zimv20]

Originally posted by Code101
You just don't like that fact that the economy is turning around. The liberals success depends on the failure of America. Things are turning around for President Bush and that makes you scared.

good news! i've figured out why your posts are so ineffective.

1. when presented w/ something that should put you on the defensive, you elect to skip defending it and instead, go on the offensive

2. you are unable to use facts or evidence to dispute something with which you don't agree

3. you are unable to refrain from name calling and/or generalizations

4. you use the second person ineffectively. many times, i don't know who you're talking to

5. you mistakenly assume that fear mongering is effective in this forum

6. you think bush is infallible

7. you have no understanding of positions other than your own

8. you react emotionally and, worse, assume emotions can trump facts

[g5man]

Originally posted by zimv20
good news! i've figured out why your posts are so ineffective.


5. you mistakenly assume that fear mongering is effective in this forum



Lets try to stay on subject, but for the record 90% of the thread titles you would have to agree come across as negative in nature and leaning towards fear mongering.

http://forums.macrumors.com/showthread.php?s=&threadid=45215

[zimv20]

Originally posted by g5man
90% of the thread titles you would have to agree come across as negative in nature and leaning towards fear mongering.

http://forums.macrumors.com/showthread.php?s=&threadid=45215

touche.

one difference i notice is that some fear is coming from external sources ("the terrorists are gonna getcha 'less we kill 'em all first!") and others from ourselves ("we're shredding our own constitution when we allow secret arrests and trials").

fwiw, i'm _much_ more frightened by the latter. and the former is relatively easily solved -- and not the way we're going about it.

[g5man]

Well now that we have gotten that out of the way, I wonder what type of a impact does a 7.2% number have on politics.

The Presidential Candidates have all pretty much said what Krugman wrote. Will people now understand that GDP does not effect them right now anymore than deficits do in the future?

Yes I think I just relaized something. The big issue will not be GDP or Unemployment next year but rather deficits.

[Sayhey]

Originally posted by g5man
Yes I think I just relaized something. The big issue will not be GDP or Unemployment next year but rather deficits.

It, of course, will be GDP (don't bank on these numbers being repeated), Unemployment, (there is no job growth as of yet), the deficits (just how large can we grow them?), and trade policy. If Bush's economic policy remains limited to these kinds of tax cuts, and I see no hope for any change, there will be lots for Democrats to talk about.

[g5man]

Originally posted by Sayhey
It, of course, will be GDP (don't bank on these numbers being repeated), Unemployment, (there is no job growth as of yet), the deficits (just how large can we grow them?), and trade policy. If Bush's economic policy remains limited to these kinds of tax cuts, and I see no hope for any change, there will be lots for Democrats to talk about.

If the main issue becomes GDP and unemployment numbers, then the Democrats are setting themselvs up.

A quarter with good strong GDP growth such as the last, could be the catalyst for strong economic growth for years to come. If this takes place then the tax cut will not be the sole contributor.

I read some place that if the yearly GDP grows at a conservative 4% the deficit will decrease along with unemployment by 1% in one year. Many have preached the the present economic policy will not help the economy. No one said it will help it short term.

Some say next quarter we may see 5% growth in GDP. We will have to wait and see in January.

[Taft]

Originally posted by g5man
I read some place that if the yearly GDP grows at a conservative 4% the deficit will decrease along with unemployment by 1% in one year. Many have preached the the present economic policy will not help the economy. No one said it will help it short term.

I don't know how one could come to that conclusion. The GDP is a hugely variable figure reflecting a wide variety of considerations. Our imports effect the GDP almost as much as how much US corporations produce. Thus, its use as a predictor of the US government's budget deficit or general unemployment is shaky at best.

Sure the GDP may correlate with the rise and fall of such figures (I'm not sure about that), but to use it as a predictor would be dangerous.

Think about the fact that the GDP doesn't reflect how much debt consumers are in. In a scenario where consumers as a whole are up to their eyeballs in debt, the GDP could very well be identical to the GDP in a scenario where consumer debt was very low.

Yet the level off consumer debt could very well impact consumers' ability to purchase goods in the future. If consumers are less likely to buy goods due to debt, the economic outlook for the future would likely be damaged.

Do you see the potential disconnect between the GDP and overall economic health?

I agree that the 7.2% GDP is good news, but I'm uncertain about the future health of the economy. There are a lot of other bad signs out there. I outlined those in the other thread where you brought this subject up.

Taft

[pseudobrit]

A 7.2% improvement is a 7.2% improvement on an eonomy that was already screwed up.

It's like my car is rusted out, has no doors and no brakes and the engine won't start, then lo one day the engine starts. It's still a piece of crap.

[Ugg]

Originally posted by g5man
A quarter with good strong GDP growth such as the last, could be the catalyst for strong economic growth for years to come. If this takes place then the tax cut will not be the sole contributor.

I read some place that if the yearly GDP grows at a conservative 4% the deficit will decrease along with unemployment by 1% in one year. Many have preached the the present economic policy will not help the economy. No one said it will help it short term.



I would like to see when those numbers were calculated, before gw's tax cuts took place or after. Also, future budget deficit projections do not take into account the continuation of those tax cuts. Without the taxes to pay the bills, how can the govt. get itself out of the hole it has dug for itself? Time will tell but methinks gw has dug the US its grave.

If the EU is able to put itself back on its feet again and with the massive changes in social programs occurring in the big five, Germany, France, the UK, Spain and Italy, it is very likely that they will become much stronger in the next year. With the EU recently taking an anti-Israel stance on peace in the middle-east there is a very strong chance that the Euro will become a much more attractive investment tool for all those petro dollars. As well as appeal to those who find the US' anti world stance to be intolerable.

A company's largest asset is its goodwill, based on that the US was the richest company in the world in the months following 9/11. Based on current world opinion, we are the poorest and until we are able to convince the world that we have not become fortress America instead of America Inc., they are going to look for other markets. Those taxcuts and business handouts that have been occurring for the last 3 years could be irrelevant if nobody is willing to invest in this country.

[g5man]

Originally posted by Taft
I don't know how one could come to that conclusion. The GDP is a hugely variable figure reflecting a wide variety of considerations. Our imports effect the GDP almost as much as how much US corporations produce. Thus, its use as a predictor of the US government's budget deficit or general unemployment is shaky at best.

It is rather easy. An increase in GDP indicates an increase in economic activity. If more goods and services are bought and sold, company will invest in capital and hire more people. As more people work more taxes are paid. The 7.2% gives us but half the story. A large portion of it was due to investing by companies in capital.

Originally posted by Taft
Sure the GDP may correlate with the rise and fall of such figures (I'm not sure about that), but to use it as a predictor would be dangerous.

No more dangerous than predicting that lowering taxes will lead to economic free fall.

Originally posted by Taft
Think about the fact that the GDP doesn't reflect how much debt consumers are in. In a scenario where consumers as a whole are up to their eyeballs in debt, the GDP could very well be identical to the GDP in a scenario where consumer debt was very low.

I agree. However, most debt accumulated by consumers have nothing to do with economic policies of an Administration.

Originally posted by Taft
Yet the level off consumer debt could very well impact consumers' ability to purchase goods in the future. If consumers are less likely to buy goods due to debt, the economic outlook for the future would likely be damaged.

Very true. Everything is based on the assumption that one has a job and one will make more money while spending less. This does not always happen therefore we see record bankruptcies. All part of the free market economic cycle. This does not worry me since in a free market such as ours we have 96% employment. With each person falling behind someone else benefits.

[g5man]

Originally posted by Ugg
I would like to see when those numbers were calculated, before gw's tax cuts took place or after. Also, future budget deficit projections do not take into account the continuation of those tax cuts. Without the taxes to pay the bills, how can the govt. get itself out of the hole it has dug for itself? Time will tell but methinks gw has dug the US its grave.

I don't have the link so I don't know. In fact they do take into account tax cuts. This is why there will be a big debate come summer on making them permanent. Increase in taxes can lower the revenue that the gov. takes in. Here is one example. When the car tax in California tripled, sales for luxury cars when down 40%. That means the manufactures will have to layoff people if their products are not selling.

Originally posted by Ugg
If the EU is able to put itself back on its feet again and with the massive changes in social programs occurring in the big five, Germany, France, the UK, Spain and Italy, it is very likely that they will become much stronger in the next year. With the EU recently taking an anti-Israel stance on peace in the middle-east there is a very strong chance that the Euro will become a much more attractive investment tool for all those petro dollars. As well as appeal to those who find the US' anti world stance to be intolerable.

The EU economy is far weaker than ours. In the next 50 years unless they move towards a more capitalistic model they will be further behind. Unemployment is high and the birthrate is dropping. When the whole economy is based on having lots of services provided by the gov. and the population is getting older while there are fewer new workers to pay taxes, well you do the math.


Originally posted by Ugg
A company's largest asset is its goodwill, based on that the US was the richest company in the world in the months following 9/11. Based on current world opinion, we are the poorest and until we are able to convince the world that we have not become fortress America instead of America Inc., they are going to look for other markets. Those taxcuts and business handouts that have been occurring for the last 3 years could be irrelevant if nobody is willing to invest in this country.

We continue to have excellent economic relations with most of the world. We still do billions of dollars worth of business with France and Germany regardless of how they feel about Iraq. Business is not personal it is business.

[Sayhey]

Originally posted by g5man
The EU economy is far weaker than ours. In the next 50 years unless they move towards a more capitalistic model they will be further behind. Unemployment is high and the birthrate is dropping. When the whole economy is based on having lots of services provided by the gov. and the population is getting older while there are fewer new workers to pay taxes, well you do the math.


Where do you get the idea that the EU is somehow less "capitalistic" than the US? Have you looked at the criteria for joining the EU? The privatization of industry and "free markets" are all part of what a nation must do to join this club. The EU has such a huge variation of economic development in the nations that make up its membership that it is hard to predict where it will be in 50 years, but the potential is huge.

On the 7.2% rise in the last quarter, I hope you are right and we have a continuation that leads to sustained growth and lower unemployment. Having gone through this economic policy once before with Reagan, I have my doubts that we will get by without serious structural problems. Whatever the outcome, politics continue and the Democrats will have plenty to run on next year.

[Desertrat]

Sayhey, while I agree with you about the variety within the EU, I note that on the continent, Germany and France are the "Big Kids" of that bloc. Their governmental socioeconomic policies have created major problems in governmental costs--and it's hurting them, now as their unemployment rates have risen to 10% or more. And that unemployment rate has been nearly constant for several years, now.

At some point, the cost of government services, coupled with things like mandatory six-week vacations and 35-hour work weeks jumps up and bite you in the billfold.

As an example, "Free health services" sounds great, until you're in an ambulance whose driver is radioing for information as to which emergency room is staffed that night. Budget cuts, doncha know. (This is a real-life example, and is not new.)

Yes, there's capitalism. No argument. But, they've just gone too far in thinking that government can provide all manner of services for all people, all the time. You can get away with a lot of spending during boom times, when tax revenues are high, but booms don't last forever.

So, yeah, the potential is huge, but that's based in great part on the aggregate number of people. Many of the EU countries are in no way major producers of exports, which is what leads to economic strength. Fifty years? Yeah, there easily could be changes. Seems to me they generally have access to today's technology, but are generally in a production mode similar to that of the US a hundred years back.

'Rat

[pseudobrit]

Originally posted by Desertrat
As an example, "Free health services" sounds great, until you're in an ambulance whose driver is radioing for information as to which emergency room is staffed that night. Budget cuts, doncha know. (This is a real-life example, and is not new.)

What's so different about US healthcare other than the fact that the same waits or ER redirections will cost you thousands?

[Desertrat]

SFAIK, we don't have that emergency room problem here. It's ararity, more than customary. Further, here, ERs must take whoever comes in, whether they can pay or not--which is why so many hospitals are going broke. (That's one of the cost-burdens that illegal immigrants impose on a community.)

And, insured people owe as they usually would; otherwise there is either Medicaid or the law requiring treatment without regard to payment.

Which is why doctors' and hospitals' fees are like they are: Just like government, they get money from those who have it, in order to cover the costs of those who don't.

'Rat

[Ugg]

Originally posted by Desertrat
As an example, "Free health services" sounds great, until you're in an ambulance whose driver is radioing for information as to which emergency room is staffed that night. Budget cuts, doncha know. (This is a real-life example, and is not new.)

So, yeah, the potential is huge, but that's based in great part on the aggregate number of people. Many of the EU countries are in no way major producers of exports, which is what leads to economic strength. Fifty years? Yeah, there easily could be changes. Seems to me they generally have access to today's technology, but are generally in a production mode similar to that of the US a hundred years back.

'Rat

It sounds like that real life example is from the US. The closure of emergency rooms across this country is a real threat to our national well-being. Some hospitals are beginning to refuse patients in ERs if they don't have insurance and are ambulatory. There was a case in Colo. a few months back where a guy with a broken jaw was sent away because he was from NM. As posted elsewhere, the US ranks 37th in health care yet pays twice as much as the next lowest on the list. Capitalism isn't a cure all for a society's ills.

Throughout the former Eastern block, Germany remains the largest single source of direct foreign investment. If you were to take a look at the economies of CZ, Slovakia, Hungary, Ukraine, etc, you would see that the exports of these countries are growing by leaps and bounds. While the US is outsourcing to Asia the EU is outsourcing to future members thereby strengthening future ties. The industrial output of the future EU members is destined to match that of the current members by 2025. German is studied just as frequently as English in those countries due to this investment.

The massive restructuring of Germany, France, Spain and Italy's social welfare programs means that these countries will be much more competitive in the future. The fact that their lower social welfare costs per capita means that they will be more competitive than the US. Our increasingly unhealthy workforce and retirees means that our net costs, whether private or public will cripple this country economically. Social welfare has been proven again and again to be much more effective in preventative medicine. Something that free market systems such as ours have no interest in because the profits from preventative care are miniscule in comparison to crisis based health care.

My prediction is that by 2015 the EU will be a massive force to be reckoned with. The major issue amongst EU nations both current and future, at this point is agricultural subsidies. The EU has decided to reward the organic farmers at the expense of those who lay waste to the environment. This will reduce future cleanup costs, increase water quality and reduce health care costs. While the US relies on massive infusions of foreign investment to fund its deficit spending, the EU is for the most part following a conservative economic plan.

We'll see, we'll see....

[Ugg]

Link (http://www.zeit.de/2003/45/M-Auxologie)

An interesting article in Die Zeit, in German about height and its correlation with a healthy population.

There are two tables that show that young Americans are actually shorter than older Americans. It's worth taking a look at even if you don't read German. This normally only happens during times of stress or extreme societal change. The last time it happened in the US was during the Industrial Revolution when malnourishment went hand in hand with the subjugation and virtual enslavement of the US workforce.

The US is the only industrialized nation experiencing such a change. Some of it can be attributed to immigration but the author of the study, John Komlos an American, claims that it is due to social inequality in the US and the fact that health care is available increasingly only to the well to do.

Here (http://www.oah.org/pubs/magazine/Communication/komlos.html) is a link to an article published by him in 1992, in English about the historical aspects of anthropometric history. It is quite interesting.

[Taft]

Originally posted by g5man
It is rather easy. An increase in GDP indicates an increase in economic activity. If more goods and services are bought and sold, company will invest in capital and hire more people. As more people work more taxes are paid. The 7.2% gives us but half the story. A large portion of it was due to investing by companies in capital.


That is completely hypothetical. The amount of assumptions you make is staggering. There is absolutely nothing that says a company coming off a profitable quarter (or a quarter where more product is sold) will turn around and invest in their workforce.

Also, where were those goods and services bought? At the corporate level, or at the local level? Local workforces tend to be less fluid than corporate workforces, which means they are less likely to ramp up their personnel.



No more dangerous than predicting that lowering taxes will lead to economic free fall.

Red herring alert! Red herring alert!

Who exactly said that?? Wasn't me.

I did say that I thought the tax cuts were a bad idea and wouldn't lead to sustained economic growth but were rather a quick fix for the numerous economic problems this country faces.

Stick to the argument we were having. You haven't given me any evidence that the GDP is a good indicator of future economic growth. Your hypothetical above proves nothing.


I agree. However, most debt accumulated by consumers have nothing to do with economic policies of an Administration.

You are absolutely correct. But I wasn't arguing that the economic situation was the current administration's fault.

I was making a point to address why I believe the GDP to be a bad indicator of future economic growth, not to rip on the current administration.

The level of consumer debt effects the future economic outlook. It may not be this administrations fault, but it certainly does cast doubt on your assertion that a 7.2% GDP equates to future economic growth.



Very true. Everything is based on the assumption that one has a job and one will make more money while spending less. This does not always happen therefore we see record bankruptcies. All part of the free market economic cycle. This does not worry me since in a free market such as ours we have 96% employment. With each person falling behind someone else benefits.

Who benefits when a bankruptcy occurs??

Generally, when a person or company goes bankrupt, it means they don't have enough money to pay against their loans. When that happens, the lenders generally don't recoup all of their investment. Why? Because assets depreciate in value. Because the assets a company has may be specially tailored to a specific industry and worth less outside that specific context. Because of court costs. Because of lawyer costs. Because companies often spend their money on things like payroll, which, like rent, doesn't result in a tangible assert. Because the company or person might owe a whole lot of people money (including customers).

Bankruptcy isn't a situation a lender likes to see a borrower get into. It usually results in a loss on the investment. Sure, the lawyers might benefit, but that probably won't lead to any economic growth via jobs created, etc.

Finally, a bankruptcy might actually result in money flowing out of our economy. If a US company goes bankrupt, chances are, some of the money that company has borrowed comes from foreign investments. Who's to say that when a foreign investor recoups some of his money from a bankrupt investment that he'll reinvest in another US company. It could easily result in a negative cash flow for the US economy.

In short, a bankruptcy isn't always a catastrophe, but I'd hardly say its a good thing for the economy, or its "no loss."

Taft

[Rower_CPU]

g5man is most likely bond003/sanfelipe/Ovi (IP match).

DNFTT

[pseudobrit]

Originally posted by Rower_CPU
g5man is most likely bond003/sanfelipe/Ovi (IP match).

DNFTT

Good find. Thanks for the heads-up. He seemed a little more restrained this time around, but he usually took awhile to get nasty with a new SN.

[Desertrat]

"My prediction is that by 2015 the EU will be a massive force to be reckoned with."

Well, hope they are. Economics is not a zero-sum game.

"The major issue amongst EU nations both current and future, at this point is agricultural subsidies. The EU has decided to reward the organic farmers at the expense of those who lay waste to the environment."

Ran across a datum, just today, in a little Georgia farm magazine. The Japanese government subsidizes farming at an expense of some $4,500 dollars per acre. Europeans, $320 per acre; the U.S., $49 per acre.


"This will reduce future cleanup costs, increase water quality and reduce health care costs."

I'd certainly agree about water quality, depending on how much and where commercial fertilizers are used. A question is that of crop yields per acre. However, that will vary with the crop.

"While the US relies on massive infusions of foreign investment to fund its deficit spending, the EU is for the most part following a conservative economic plan."

I wouldn't call what we're doing to ourselves with our trade imbalance a "plan". :D

'Rat

[zimv20]

Originally posted by Desertrat

Ran across a datum, just today, in a little Georgia farm magazine. The Japanese government subsidizes farming at an expense of some $4,500 dollars per acre. Europeans, $320 per acre; the U.S., $49 per acre.


did the article state the number of subsidized acres in japan vs. the number in the US? or, is there a total amount spent in the article?

[mactastic]

Ah yes, and are little Georgia farm magazines known for their unbiased viewpoint and ability to keep a firewall between their news reporting and editorial content?:D

Regardless, I'd still like to read it to see what they were talking about.

[g5man]

Originally posted by Taft
That is completely hypothetical. The amount of assumptions you make is staggering. There is absolutely nothing that says a company coming off a profitable quarter (or a quarter where more product is sold) will turn around and invest in their workforce.

If six months from now we don't see a significant increase in jobs as a result of solid GDP growth, then I will stand corrected. If Apple sold more G5 you don't they would increase production thereby increasing jobs with more store openings?

Originally posted by Taft
Also, where were those goods and services bought? At the corporate level, or at the local level? Local workforces tend to be less fluid than corporate workforces, which means they are less likely to ramp up their personnel.

Actually I would hope at both levels. If at the corporate level then we will see an increase in workforce. A complany does not invest in a plant for it to stay empty.



Originally posted by Taft

Red herring alert! Red herring alert!

Who exactly said that?? Wasn't me.

I did say that I thought the tax cuts were a bad idea and wouldn't lead to sustained economic growth but were rather a quick fix for the numerous economic problems this country faces.

You are correct. I threw that out to point out what others have said, not you.

Originally posted by Taft
Stick to the argument we were having. You haven't given me any evidence that the GDP is a good indicator of future economic growth. Your hypothetical above proves nothing.

Actually the average yearly GDP growth under Clinton's terms was 4%. With those numbers we saw 25 million jobs created. GDP growth does translate into job growth.



Originally posted by Taft
You are absolutely correct. But I wasn't arguing that the economic situation was the current administration's fault.

I was making a point to address why I believe the GDP to be a bad indicator of future economic growth, not to rip on the current administration.

You can not have it both ways. Argue against tax cuts and then not give credit to them for an economic turnaround.


Originally posted by Taft
The level of consumer debt effects the future economic outlook. It may not be this administrations fault, but it certainly does cast doubt on your assertion that a 7.2% GDP equates to future economic growth.

I would agree with you if consumer debt increased along with a decrease in economic activity. But if you agree with the theory that a growth in GDP translates into more jobs (I know you don't) then debt becomes less of a factor. As long as people pay their bills and have steady jobs, some will have less debt while others will have more. If there are less jobs then those who have too much debt will be in real trouble. If that number increases substantially year after year, then I would agree with you that we would have a major problem.

One thing worth mentioning is that the more one makes the more one spends and the bigger their debt burden is.





Originally posted by Taft
Who benefits when a bankruptcy occurs??

Generally, when a person or company goes bankrupt, it means they don't have enough money to pay against their loans. When that happens, the lenders generally don't recoup all of their investment. Why? Because assets depreciate in value. Because the assets a company has may be specially tailored to a specific industry and worth less outside that specific context. Because of court costs. Because of lawyer costs. Because companies often spend their money on things like payroll, which, like rent, doesn't result in a tangible assert. Because the company or person might owe a whole lot of people money (including customers).

Bankruptcy isn't a situation a lender likes to see a borrower get into. It usually results in a loss on the investment. Sure, the lawyers might benefit, but that probably won't lead to any economic growth via jobs created, etc.

First of all don't feel sorry for the banks since they make plenty of money in interest from those who do pay their bills.

For the sake of argument lets look at a someone who goes bankrupt and looses their home. That house is either bought by an investor who gets it cheap and turns around and makes a profit on it. Or it is bought by a first time home owner who could not afford that house on the open market. That new first time owner will spend more money on fixing it up and maybe take a second to pay off other debt.


Originally posted by Taft
Finally, a bankruptcy might actually result in money flowing out of our economy. If a US company goes bankrupt, chances are, some of the money that company has borrowed comes from foreign investments. Who's to say that when a foreign investor recoups some of his money from a bankrupt investment that he'll reinvest in another US company. It could easily result in a negative cash flow for the US economy.

In short, a bankruptcy isn't always a catastrophe, but I'd hardly say its a good thing for the economy, or its "no loss."

Taft

I don't argue with you here. The point I was trying to make is that in a growing economy bankruptcy does not impact future growth. A bankruptcy of a company in a free market society means that a healthier stronger company will take over. I have lost track of how many companies I have seen come and go, while others have taken their place and year after year the overall economy keeps getting bigger and bigger.

On a side note, I don't consider your responses nor anyone elses as feeding a troll. There have been too many moderate and conservative posters either banned or have choosen to stop feeding what others make consider trolls around here.

[mactastic]

Originally posted by g5man
One thing worth mentioning is that the more one makes the more one spends and the bigger their debt burden is.

True to a point. Once you begin to afford to be able to invest in tax-sheltered areas, or hire a wonder-accountant to find the loopholes, your tax burden may still go up in actual dollars, but as a percentage of your total burden it will start to drop as your income keeps increasing.

Thus the need to stimulate growth in the middle class rather than for the wealthy. Trickle down takes to long.

[Rower_CPU]

Originally posted by g5man
...

On a side note, I don't consider your responses nor anyone elses as feeding a troll. There have been too many moderate and conservative posters either banned or have choosen to stop feeding what others make consider trolls around here.

You may not, but those of us who run this site and have had to ban you several times already for your outbursts do.

Why do you keep coming back when you make it painfully obvious each time that you can't abide by the rules?

[Desertrat]

Back to the original subject :) :

"There are two tables that show that young Americans are actually shorter than older Americans. It's worth taking a look at even if you don't read German. This normally only happens during times of stress or extreme societal change."

First off, I gotta disagree with the comment about immigration. We've had just way too many quite-small Asians come here, and when I see the numbers from Mexico, I'm reminded that they are generally of much shorter stature than traditional Anglos.

I find the comment about stress to be interesting. Should I assume there is a lack of it in South Korea? I read that the Korean soldiers of the Vietnam era were several inches taller, plus a concomitant amount heavier, than their counterparts of the 1950s. A vastly improved diet there, nationwide.

Note that Frenchmen born during 1940-1945 reached adulthood with a smaller physical size than their parents. Again, diet. It is alleged that this was a deliberate effort on the part of th Nazis, taking much of the French crops and leaving a minimal amount for French consumption.

In the U.S., while numerous comments have been made about our pudginess, I haven't seen any data about changes in height. Where are we getting all these basketball players?

:),'Rat

[zimv20]

Originally posted by Desertrat
I haven't seen any data about changes in height. Where are we getting all these basketball players?


they all attended Standard Deviation State :-)

[mactastic]

Originally posted by zimv20
they all attended Standard Deviation State :-)

SDSU? I think one of our mods actually goes there....:D

[Rower_CPU]

Originally posted by mactastic
SDSU? I think one of our mods actually goes there....:D

:p :D

Funny/sad thing is that not many students here would get that joke. :eek:

[Ugg]

Originally posted by Desertrat
Back to the original subject :) :
First off, I gotta disagree with the comment about immigration. We've had just way too many quite-small Asians come here, and when I see the numbers from Mexico, I'm reminded that they are generally of much shorter stature than traditional Anglos.

I find the comment about stress to be interesting. Should I assume there is a lack of it in South Korea? I read that the Korean soldiers of the Vietnam era were several inches taller, plus a concomitant amount heavier, than their counterparts of the 1950s. A vastly improved diet there, nationwide.

In the U.S., while numerous comments have been made about our pudginess, I haven't seen any data about changes in height. Where are we getting all these basketball players?

:),'Rat

I don't know about TX but there has been a large influx of North Africans to the West Coast. They tend to tower above most Americans. Most Asian and Hispanic kids born here, also tend to be much taller than their parents from what I've seen so immigration, while somewhat heavier in the 90s than in earlier decades can only account for so much.

The US being a multicultural country is full of fat ones, short ones, skinny ones, exercisers, couch potatoes, etc. The interesting aspect about obesity is that it unduly affects the lower income kids. Which means that it affects about 40 percent of all kids in the US.

Perhaps the US was ahead of the game due to lack of domestic war in the 1900s? Dunno for sure but it would also be interesting to see a graph of Americans weight and height along with income levels and time of immigration. I'm sure the above study would be echoed in it.

[mactastic]

Ah well, the CSU system is a mystery to many from outside the state. The idea that we have TWO state university systems baffles them. Specially in places like SD and SF where there are a UC and a CSU. At least when I mention that I'm from Cal Poly a decent amount of them have at least heard of it.