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Discussion in 'Politics, Religion, Social Issues' started by zimv20, Oct 30, 2003.
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.
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
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.
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.
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...
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...
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
No more dangerous than predicting that lowering taxes will lead to economic free fall.
I agree. However, most debt accumulated by consumers have nothing to do with economic policies of an Administration.
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.
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.
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.
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.
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.
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.
What's so different about US healthcare other than the fact that the same waits or ER redirections will cost you thousands?
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.
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....