More Signs of Economic Recovery

Discussion in 'Politics, Religion, Social Issues' started by citizenzen, Oct 17, 2012.

  1. citizenzen macrumors 65816

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    #1
    From the Wall Street Journal ...


    So why do we need to get rid of Obama?

    Seems like more and more news comes out pointing to reasons to re-elect him.
     
  2. MadeTheSwitch macrumors 6502a

    MadeTheSwitch

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    #2
    Well, from a lot of Republican's point of view, because he's:

    A: A Socialist
    B: A Communist
    C: Someone born in Kenya
    D: Black
    E: An evil liberal
    F: Is a constant reminder that our guy failed while your guy is succeeding despite our best efforts to undermine him anyway.
    G: That guy that put in that healthcare plan we don't like. So I'm going to vote for the other guy with the healthcare plan.

    So, take your pick.

    Nevermind that given a choice they would actually not pick Romney as someone they would want to vote for. Instead they have a "anyone is better than Obama" mentality even though the facts do not back that up and the statement itself would be ludicrous to say about anyone much less someone who has turned things around.
     
  3. IBradMac macrumors 68000

    IBradMac

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    #3
    I can attest to the home building growth. I'm a timber buyer and I have seen the price of lumber particularly in the flooring sector take a slight upward turn.

    However, from past experience this usually happens about this time before an election. ;)
     
  4. BladesOfSteel macrumors regular

    BladesOfSteel

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    #4
    You forgot Marxist. :confused:
     
  5. MadeTheSwitch macrumors 6502a

    MadeTheSwitch

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    #5
    Sorry. There's so many things made up, that it's hard to keep track of them all. I don't mind if someone criticizes him for something legitimate, but then they need to hold Romney or anyone else to the same standard. And the BS labels and reasons they make up for hating Obama really need to stop.
     
  6. NickZac macrumors 68000

    NickZac

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    #6
    Attributing economic stagnancy or recovery to one individual is quite a jump.
     
  7. whoknows87 macrumors 6502a

    whoknows87

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    #7
    definitely true, all you have to do is listen to the nut jobs on the radio , Rush, Hannity, Savage etc, listening to the radio last night some nut job forgot his name was this is us vs Obama, we like our constitution, we are americans, we we we , complete lack of respect to the president like he is some bug planted in the Oval office, freaking idiots
     
  8. classicaliberal macrumors regular

    classicaliberal

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    #8
    You pump enough dollars in to a system, and it's going to grow temporarily. It's not complicated - it's just math.

    Eventually though, we'll realize that the shot of morphine was just that... a temporary solution.

    Nothing in this life comes for free. For every action there is a reaction... and unfortunately, a consequence.

    The housing bubble was caused by easy money and loose monetary policy. Keep interest rates low enough, long enough, and lots of people are going to buy houses they have no business buying. So, the bubble begins to burst, and prices begin to fall to normal levels and what do we do? Both sides agree, we bail out the banks, subsidize new homeowners, print Trillions, and push interest rates even lower.

    The housing boom today is caused by the same thing that caused the housing boom of yesterday. It will end in the same burst, only this time it will be far larger and no amount of money printing will prevent the inevitable.
     
  9. Ugg macrumors 68000

    Ugg

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    #9
    As usual, your myopia distorts your view of the world. After five years of virtually no demand, it's not at all surprising that people are starting to buy. What we'll see in the future is that the Keynesians were correct and that the Austrian School, whoever they really are (Koch minions perhaps?), will return to obscurity.

    The debt needs to be paid down but that can't happen until the economy begins to function which it is. The next four years will be about trimming the excess from the military which continues to be a drag on the US economy.
     
  10. stubeeef macrumors 68030

    stubeeef

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    #10
    :eek::p:p:p:p:p:p:p:p:p:p:p:p:p:p:p:p:p:p;)
     
  11. senseless macrumors 68000

    senseless

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    I'm surprised to see activity in new home construction. Don't we have enough inventory already?
     
  12. Ugg macrumors 68000

    Ugg

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    #12
    Not everyone wants to live in Ca's Central Valley, Las Vegas or Phoenix much less in some far flung,disconnected exurb elsewhere.
     
  13. blackfox macrumors 65816

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    #13
    Well, while in some cases (perhaps most), I can't argue with your post, I will remind you of the subset of society that is reasonable and fiscally/culturally conservative and/or libertarian. In their minds, the president is at odds with how they feel things should work. Your list is irrelevant to them, as they have more legitimate gripes via their mindset. Thankfully. At least it's a reasonable argument...
     
  14. Dmunjal macrumors 65816

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    There's no way the Keynesian approach will work. We might get another bubble followed by a bust with even more debt. Cutting military spending to zero won't even begin to address the problem. The deficit is larger than the entire military budget. Mandatory spending takes up all revenue right now as well.

    This demand driven argument also makes no sense to me. If we give people (borrowed) money to spend through government programs, demand is created but most of it goes to consumption with a majority of the money ending up in China as opposed to being invested here. And we still have to pay back the debt.

    If we print it instead, it just causes inflation which drives up prices hurting the middle class.

    The only way out is to suck it up and slowly pay off the debt over time. Partly through lower spending, partly through higher taxes (on everyone), and partly through a weaker dollar. This may take 10 years or more. A lost decade to pay for the sins of the past.
     
  15. Eraserhead macrumors G4

    Eraserhead

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    #15
    Except that it did work in China - so well that their economy overheated.
     
  16. jnpy!$4g3cwk macrumors 65816

    jnpy!$4g3cwk

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    I agree with you that the recovery will take a while. But, I'm curious what your criteria are for economic success. You see, you have already asserted that the any moves the Fed makes will be harmful. But, you haven't set your success measures are, so your predictions are not falsifiable.
     
  17. MadeTheSwitch macrumors 6502a

    MadeTheSwitch

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    No it will not end in the same burst. Lending requirements have been tightened up since the days of giving anyone who walked through the door a loan with no income verification at all. We are not in the same place. Therefore your comparison is flawed.

    Yes there are some in the party who are more reasonable. I know that. However they are voting for a false premise as well if they are voting fiscally conservative. The party they are voting for, despite the rhetoric, is anything but that.
     
  18. astrorider macrumors 6502

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    #18
    I hope this part comes true, but right now the GDP growth rate is heading in the wrong direction.
     
  19. NickZac macrumors 68000

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    #19
    There's a little bit more to it than that IMO. As a start, the Community Reinvestment Act and the US Trade Balance have likely (negatively) affected the housing market. Average housing debt shot up almost 5x in 10 years, but the standard of living never rose anything near that rate. Housing demands are also influenced by a variety of factors, many completely out of government control.

    Some argue the housing crisis is the fault of economic institutions/government oversight but I feel a strong cause of it was end consumers making reckless decisions. People were buying homes so expensive that they would take out 'interest-only' loans with the intention of 'flipping' the house within a few years once the value rose...it was bound to break because the standard of living was not increasing all that much and it hit a stagnant point in the mid 2000s that we are still recovering from to this day. Personal responsibility went the way of the dodo. Quite a few economists and politicians said this was bound to crash in the late 90s and early 2000s, and it did. When you have people with a family income of 50k a year buying 500k homes, what do you expect to happen? For most US families, a house is their largest single asset, so any negative effect to house value can be catastrophic to one's financial outlook

    Also, the US national debt is far beyond just the military. While I agree military expenses need to be cut, there will also have to be cuts to domestic programs and foreign aid, which many people refuse to accept. But the reality is that it is unavoidable. You increase taxes and slash all government programs and that still may not be enough to knock out the debt which is such a large figure it is hard to conceptualize.

    And it is a double edged sword. Economic recovery will be hampered as the US' credit rating continues to go down the crapper, and it will continue to fall until the national debt is substantially lowered.

    Then you have the affect of the global economy on local ones. There was a balanced budget for many nations during the mid-late 1990s. Then, a global trend of government debt accumulation was noted. Some argue this does influence local economies and others say the latter.

    There is also the question on how government oversight should play a role within the private sector. Some argue it is beneficial and others the latter. Both sides have pretty good proof.

    Finally, you have the question of how government policy and stimulus programs affects economies on a variety of scales. We don't even know for sure if the ARRA was successful...views on this vary wildly from it wasn't enough to it was enough to it was a moot point. So there is a lot at play.

    And politicians slow the recovery. They oversimplify things so much and they try to place credit/blame one single individuals, which is just plain silly. Then people start to believe that reasoning and next thing you know, people expect one person to single handedly revive and/or destroy the economy.
     
  20. classicaliberal, Oct 19, 2012
    Last edited: Oct 19, 2012

    classicaliberal macrumors regular

    classicaliberal

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    I find it rather telling that instead of arguing with ideas, you simply claim I or my ideas have an association with someone you don't like. It really makes it easy to argue I suppose... right on par with those 'crazy republicans' who look at you and say 'just like Stalin!'

    I find it further telling that you honestly believe that the only source of our problems is spending on the military. Here's a statistic that will blow your mind. Within the next 10 years, if you add up all of our spending on Medicare, SS, Welfare, and Medicaid... combined with interest payments on our debt, those expenses alone would take up our ENTIRE BUDGET! No military, no schools, no roads, no other programs of any kind. Just those.

    Now, I'm all for cutting our military significantly and undertaking a 'defensive' foreign policy instead of an interventionist foreign policy, but to suggest that this would solve our budget problems is laughable, misinformed, and misguided.

    Pretty much. Although if we're willing to accept less government, less intervention, less nanny-state, we can do just find with the tax revenue we have right now. I do agree though, that there is a reckoning coming.

    You overestimate the influence of bad debt as a requirement for a bubble bursting while simultaneously underestimating the remaining bubble and the number of homeowners who are one market swing away from being underwater.

    There are plenty of Republicans who know all too well that their party has been big spenders too... unlike us Libertarians and Ron Paul supporters they simply haven't come to the conclusion that it's pointless to vote for the lesser of two evils.

    Agreed on most points.
     
  21. Dmunjal macrumors 65816

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    It's amazing that people actually believe this. I've been to China. Yes, it's growing because of some good reasons (manufacturing and exports) but it's also growing for bad reasons (malinvestments in real estate). There are literally 100-story buildings and residential complexes that are completely empty. They have overbuilt their infrastructure for at least ten years. Let's see if demographics and migration from villages to cities can accommodate this expansion. Either way, there is a crash coming no different than ours.

    The Keynesian approach always results in booms and busts because you have government policty replacing market dynamics that would have kept that boom in check in the first place.
     
  22. classicaliberal macrumors regular

    classicaliberal

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    #22
    +1
     
  23. Dmunjal, Oct 19, 2012
    Last edited: Oct 19, 2012

    Dmunjal macrumors 65816

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    Here is my criteria for economic success. Just like at home, a sustainable economy requires saving and investing for the future. You invest in yourself, in your education and save for a rainy day. Your jobs or your business make more than you spend and when you do go into debt, you do it for the right reasons (buy a home, pay for college, start a new business, etc.) as opposed to immediate gratifications that pay no future dividends (gratuitous consumption). There's nothing wrong with consumption but it should be done with disposable income and not with debt. The fact is we all want to consume. In fact, we are born with insatiable demand. We want it all! But we teach our kids that to get those things we want, we need to work for it.

    Now extrapolate that to the macro economy and it isn't much different. The country as a whole should have a business economy that is focused on profit, growth, and exports. That kind of economy allows for full employment and an increasing standard of living for the entire population. We tax that income, those profits, and the government takes that revenue and invests for the country. These investments can be infrastructure, education, science, etc. We all benefit from this.

    Somewhere along the line, we decided that the federal government (not state, not local, not private charity) should be responsilbe for the elderly, the poor, the sick, the homeless, etc. That's where we went wrong. All of these things can be provided by the government but not at the federal level. Why? Because state and local governments can only provide services based on the revenue they generate and the money they can borrow. If they go too far, their borrowing rates go up and they have to adjust. If citizens decide they are paying too much tax, they have to adjust.

    The problem with doing this at the federal level is not just lack of accountability but that the Federal government actually has a blank check. Because of the reserve status of the US dollar and the Federal Reserve Bank, we can borrow or print as much as we want to support every Congressmen's constituency. We can support Defense, Medicare, Medicaid, Social Security, to the point we are in so much debt that we can never hope to pay it back.

    This blank check didn't always exist. The founders knew this could be an issue and kept the Federal government's spending in check by tying the currency to gold and silver. But in 1971, Nixon severed that link. I blame Nixon but he really didn't have any choice. He had to do it to pay for Johnson's guns and butter policy of the 1960s. All of our financial problems in this country can be traced back to that day. That is the day we began our 40-year journey of debt that can never hope to be paid back by any amount of spending cuts or higher taxes.

    Someone made the point that all of these expenses are crowding out what the Federal Government SHOULD be doing. That is exactly what is happening.

    I stand by my point that there is no way out without either a currency crisis or a decade long no-growth economy that has to pay all the bills that we have incurred. It's just math.
     
  24. Dmunjal macrumors 65816

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    Reading my post over assumes doom and gloom. I do see possible ways out but it won't be because of the Federal Government or the Federal Reserve.

    Why has this taken so long to unfold over the last 40+ years? Lots of unforeseen events. Women entering the work force, globalization, the high tech revolution.

    Two major events could help us recover and rebuild. A major export boom led by oil and gas. Or a major breakthrough in health science that dramatically lowers the cost of care.
     
  25. AhmedFaisal, Oct 19, 2012
    Last edited by a moderator: Nov 10, 2013

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