Be Careful!

[Diapered Jason]

I'm not necessarily plugging in to the doomsayers' clique just yet, but the fact is, this collapse has been brewing for 40 years. The PC revolution, the rise in consumer credit, and irresponsible fiscal policy starting with Reagan are what staved off the inevitable and created growth.

Note that only one of those things was tangible production. The other two are smoke and mirrors - spending future money now in order to support an economic house of cards.

Fact is, China doesn't dare call in their markers on US public debt because they know we'd default, and if we defaulted, their economy would be destroyed as fast as ours, since we're their biggest customer.

That said, just as the pound sterling was replaced by the dollar due to Britain's fiscal irresponsibility, so the dollar can be replaced by another strong currency, and the rupee looks to be the leading candidate at this juncture. If that happens, in the short term it will be total chaos in this country as imported goods (upon which we rely heavily) will become insanely expensive as the dollar collapses. However, in the long term, it will bring manufacturing back home simply because the "cheap foreign labor" won't be anywhere near as cheap anymore.

I don't understand. Can you please edit your statement?

[WBDaddy]

I don't understand. Can you please edit your statement?

What don't you understand? I'm happy to elaborate on points.

[Diapered Jason]

Well, the first paragraph contradicts itself. I also don't understand how the rupee could replace the dollar. After all, it all comes down to comparative advantages when you are talking about labor, and that advantage can be taken away.

[WBDaddy]

Well, the first paragraph contradicts itself. I also don't understand how the rupee could replace the dollar. After all, it all comes down to comparative advantages when you are talking about labor, and that advantage can be taken away.

To clarify the first paragraph:

The PC revolution created enormous growth in this country - but that growth was coapted by the Japanese chip-dumpers right around 1986. So the only economic "growth" that happened as a result was in the retail segment.

Meanwhile, the rise of easy consumer credit in the late 70's fueled spending which, in turn, fueled corporate growth. This spiral continued throughout the next 3 decades as credit got easier and consumers spent more and more, until credit seized and suddenly people couldn't borrow money to buy stuff they didn't need, so instead confined themselves to buying necessities...

The Reagan economic concept comes into play where the government was willing to borrow money in order to stimulate domestic growth (during the Reagan administration, it was military hardware, to fuel the Cold War). Once Bush Sr. found out the hard way that removing such stimulus crashed the economy, his successor, Clinton, continued the charade, with the GOP Congress right in tow, claiming they had "balanced the budget" and "produced a surplus" when the surplus (and the "balanced budget") were both based on SS tax receipts and the IOU's Reagan taught them to use to borrow against the Ponzi scheme we had built prior to that point.

Not many are aware that Reagan's "biggest tax cuts in history" were paid for by the single largest increase in SS tax history. He literally shifted the tax burden from the wealthy to the middle class in one swift motion.

[WBDaddy]

To clarify the suggestion of the rupee replacing the dollar as world reserve currency, it's pretty simple. If there is not sufficient international confidence in a given currency, that currency cannot stand as reserve currency. It is only this international confidence (once held by the British pound sterling, then by the US Dollar) that gives a currency such standing. The rupee is the product of a highly stable economy in India, one that is growing, with a government that is not only stable and financially solvent, but also highly capitalistic, meaning there is little-to-no risk of sudden socialization of wealth in that country. All the pieces are in place for the rupee to replace the dollar as world reserve currency - the only barrier is the rest of the planet's fear of US military strength.

[Diapered Jason]

Meanwhile, the rise of easy consumer credit in the late 70's fueled spending which, in turn, fueled corporate growth. This spiral continued throughout the next 3 decades as credit got easier and consumers spent more and more, until credit seized and suddenly people couldn't borrow money to buy stuff they didn't need, so instead confined themselves to buying necessities...

The Reagan economic concept comes into play where the government was willing to borrow money in order to stimulate domestic growth (during the Reagan administration, it was military hardware, to fuel the Cold War). Once Bush Sr. found out the hard way that removing such stimulus crashed the economy, his successor, Clinton, continued the charade, with the GOP Congress right in tow, claiming they had "balanced the budget" and "produced a surplus" when the surplus (and the "balanced budget") were both based on SS tax receipts and the IOU's Reagan taught them to use to borrow against the Ponzi scheme we had built prior to that point.

I disagree with your analysis of this.

Not many are aware that Reagan's "biggest tax cuts in history" were paid for by the single largest increase in SS tax history. He literally shifted the tax burden from the wealthy to the middle class in one swift motion.

Most of us know how corrupt Reagan was.

[Diapered Jason]

To clarify the suggestion of the rupee replacing the dollar as world reserve currency, it's pretty simple. If there is not sufficient international confidence in a given currency, that currency cannot stand as reserve currency. It is only this international confidence (once held by the British pound sterling, then by the US Dollar) that gives a currency such standing. The rupee is the product of a highly stable economy in India, one that is growing, with a government that is not only stable and financially solvent, but also highly capitalistic, meaning there is little-to-no risk of sudden socialization of wealth in that country. All the pieces are in place for the rupee to replace the dollar as world reserve currency - the only barrier is the rest of the planet's fear of US military strength.

Actually, the rupee has been falling compared to the dollar and I would be willing to bet this would never happen.

Anyways, the currency has never been the issue. We face political issues more than anything else, because the U.S. politicians keep kicking the problems down the road. You know that is what they will do this time too. This will lead to even greater problems down the road. Like I said, there will still be economic recovery, but the problem still lingers. History will repeat itself.

[WBDaddy]

Actually, the rupee has been falling compared to the dollar and I would be willing to bet this would never happen.

They said the same thing in GB in the 70's... the pound sterling would never be replaced...

[aleyxsis]

turtle pins was only trying to say stop and smell the roses how did this post get(however interesting ) get so off track ??

[Diapered Jason]

turtle pins was only trying to say stop and smell the roses how did this post get(however interesting ) get so off track ??

Well, I always enjoy a good debate, but my point from the beginning has been to be optimistic about these things that we really have little control over.

[Bettypooh]

....If you truly believe what you said Bettypooh, go buy your gold as a hedge fund and wait for the decline of the United States.

First I wouldn't be so stupid as to think I owned something just because I had a piece of paper that said I did If I had gold I'd have the object itself (and nobody else would be getting a cut on my selling any of it) and I wouldn't be doing business with one of the cause factors of the coming failure either Second, I can't afford a tiny piece of gold dust, much less any salable quantity- many times I've said how poor I am but I can handle that since poverty has never been far away in my life Third and last, it ain't just the US that will hurt; it will be every nation that does not back it's currency in gold so there will be nowhere else to go to escape it

There is no hope for the patient- the disease has gone too far and it is now incurably terminal All there is to do is wait till the end.

Bettypooh

[Diapered Jason]

First I wouldn't be so stupid as to think I owned something just because I had a piece of paper that said I did If I had gold I'd have the object itself (and nobody else would be getting a cut on my selling any of it) and I wouldn't be doing business with one of the cause factors of the coming failure either Second, I can't afford a tiny piece of gold dust, much less any salable quantity- many times I've said how poor I am but I can handle that since poverty has never been far away in my life Third and last, it ain't just the US that will hurt; it will be every nation that does not back it's currency in gold so there will be nowhere else to go to escape it

There is no hope for the patient- the disease has gone too far and it is now incurably terminal All there is to do is wait till the end.

Bettypooh

That is quitter talk and I still do not see how currency is a big issue as this is certainly not what caused the recession. I think this is still very salvageable.

Anyways, despite how the media makes things appear, we have actually not been in decline. What has been happening is our growth has slowed down over the years while the rest of the countries have been catching up. I think the reason for the persistence of this stagnation is largely due to U.S. politics. I know the economy will recover, but like you Bettypooh, I fear bigger problems down the road if solutions to our economic problems are not found now. I guess the next thing to watch out for is Greece.

Still, I am optimistic, albeit cautiously optimistic, but really all I can do about this is vote and pay my bills unless I run for office.

[Backindiapers]

Ummmm......Is this still the Adult Baby Forum??? Did the name change? Sorry I didn't read all the rants and nor do I care to. I just wanna read about some adult baby stuff and not people throwing temper tantrum type. So bring back the diaper talk please!

[WBDaddy]

Ummmm......Is this still the Adult Baby Forum??? Did the name change? Sorry I didn't read all the rants and nor do I care to. I just wanna read about some adult baby stuff and not people throwing temper tantrum type. So bring back the diaper talk please!

Because there aren't a hundred thousand other threads you could read that would satisfy that need, instead you have to complain about the one that doesn't...

[wetman]

Because there aren't a hundred thousand other threads you could read that would satisfy that need, instead you have to complain about the one that doesn't...

He's got a point there...

[Koko]

These posts need a TL;DR

[wetman]

These posts need a TL;DR

Well then, DR.

Tada, problem solved.

[BriGuy]

The one thing that's keeps purchasing power with with dollar is the fact that the worlds floating monetary system is based in the American dollar. Aside from pound sterling, when the dollar dips in value the other monies follow. Now there have been talks of changing the basis for the float. If that happens the American dollar is in big trouble! Fortunately America has such a large purchasing power that other economies are contingent of our buying, if we loose the ability to purchase other economies will whither up and die.

This whole situation is much more complicated than bush did it, or Obama did it, or it's all regans fault. If you want anything to blame, blame the American public. Lack of voters have lead to extreme left and extreme right voting because most middle of the line voters haven't been voting. We've literally left our country in the hands of the right wing or left wing radicals. There isn't much moderate thought in the country right now.

[Diapered Jason]

This whole situation is much more complicated than bush did it, or Obama did it, or it's all regans fault. If you want anything to blame, blame the American public. Lack of voters have lead to extreme left and extreme right voting because most middle of the line voters haven't been voting. We've literally left our country in the hands of the right wing or left wing radicals. There isn't much moderate thought in the country right now.

It is called political casting, but sometimes I doubt the existence of independent voters. I think the right has become more extreme than the left over the years, but I am biased. I am of course referring to the Tea Party, which take conservative principles and push them over the edge. They say they are for fiscal conservatory, but all I see from them are complaints about how America is changing socially. They want no abortion or no gay marriage, and there capacity to think does not go beyond these things. These issues though are actually distractions from the real issues and is all part of a political strategy to garner support. In addition, what you are seeing is GOP candidates have to cater to this party so they become more extreme. I think the Tea Party has tainted the Republican Party, which is sad, because in the next election, I will have no choice but to vote Democrat unless given a better alternative. The current Republican candidates for president are stupider than I ever thought possible. Do I vote for the Mormon or the witch?

[BriGuy]

It is called political casting, but sometimes I doubt the existence of independent voters. I think the right has become more extreme than the left over the years, but I am biased. I am of course referring to the Tea Party, which take conservative principles and push them over the edge. They say they are for fiscal conservatory, but all I see from them are complaints about how America is changing socially. They want no abortion or no gay marriage, and there capacity to think does not go beyond these things. These issues though are actually distractions from the real issues and is all part of a political strategy to garner support. In addition, what you are seeing is GOP candidates have to cater to this party so they become more extreme. I think the Tea Party has tainted the Republican Party, which is sad, because in the next election, I will have no choice but to vote Democrat unless given a better alternative. The current Republican candidates for president are stupider than I ever thought possible. Do I vote for the Mormon or the witch?

Vote for neither. They are all doing the bidding of those who paid to have them run for office. Not only are things more polarized but name the last president who actually worked for the American public and not the money bags that elected them.

You want real change, march on DC with pitch forks, stick, and torches... I fear though, that the time to throw rocks has long since passed us...

All is not lost, REMEMBER! IT HAS ELECTROLYTES!!!!!! (guess that movie and win 3 extra cool points.)

[underwhere]

If you think that this is anything like the Great Depression then you need an education. These folks did not have the time to take time for themselves. That is a luxury of the past 2-1/2 generations.

Some people suggest the great depression never ended, and will say that the great depression was caused largely by an insatiable appetite for corporate greed to squeeze out as much productivity from a workforce as could be squeezed without acknowledging that said workforce also contains the vast majority of economic consumers. When you reduce wages and increase productivity, who then can afford to buy the products or services being produced? This, of course, explains your later point in a very different light.

Christine Daryleanne wrote:

"What has happened in the last 3 years is mild even in our lifetimes. Surely you remember the 1979-81 timeframe: 9.5+ unemployment, average inflation rate at 15% and interest at 18-20%. In 1979, I paid a discount rate of $1.28/gallon for heating oil; up from 14 cents in 1971l, in 1985 it was 85 cents. The Depression unemployment rate ranged from 15-25% and lasted for a decade. Much of our modern economic problems center around debt; and not just the government, either, that is a symptom more than the a cause. for the last 15 years it has been "laissez les bon temps roulez" with the credit card and using the house as an ATM with second and third mortgages so that you can have the 52" plasma "home theatre", 2 or 3 new cars, the cell phone and other toys."

I'm not debating that this has happened. With that point I agree, but I would ask a different question: What caused it? Who is really responsible for this situation?

You have banks and investors also playing "laissez les bon temps roulez", eager to cash in on consumer debt. You have a government fully willing to encourage banks and investors to do so while at the same time telling consumers, "SPEND SPEND SPEND! GOT TO KEEP THE ECONOMY GOING!" The problem is that, historically, the economy has gotten a lot weaker, because there are fewer and fewer decent paying jobs out there. While manufacturing used to be a pivotal ingredient in the stable lifestyle of the middle class, that is no longer the case. Multi-million and multi-billion dollar corporations have long since figured out that they can produce products a lot more cheaply, and with a lot less care to environmental and health regulations, by going to places with fewer regulations and a lot of willing cheap laborers. (Cheap laborers are also often a factor of countries where the government supports the working class a lot better than the government does so here in the USA, or where there is no effective government, for example.)

Coincidentally, the cause of the Great Depression was rather identical to the cause of our current economic crisis: investors wanting more, combined with employers wanting to eek out ever more output from their employees (in part to satisfy investors), combined with wages which, although earned, can not afford to pay for life's basic necessities. Given that the cost of living is higher than the wages being earned, and given that people are forced to spend the money they don't have anyway in order to survive, is it any wonder that when it comes time to pay the piper, there is nothing with which to pay? Is it any wonder why crime tends to be higher when families still need food, clothing, shelter, electricity, but they can not afford some or all of these basic necessities?

So yeah, let the good times roll. However, they roll a lot better on Wall Street than on Main Street. When you look closer at main Street, you wonder how time is measured when nobody can really afford a clock battery anymore.

Christine Daryleanne wrote:

"Sooner or later you get the "account overdrawn" notice with the accompanying mp3: "Oh what will we do with the drunken sailor what will we do with the drunken sailor what will we do with the drunken sailor earl-eye in the morning". But that was self-inflicted and eminently predictable; therfore avoidable. If you doubt that. look at the growth of crdit card debt over the past 15 years or just listen to the sorry stories that the debt-ridden tell to Dave Ramsey."

Again, you are correct, by why are you blaming the consumer, who lacks an adequately paying job in the first place, instead of the economic system to which the consumer is trapped? "SPEND SPEND SPEND! GOTTA KEEP THE ECONOMY MOVING! SPEND SPEND SPEND!"

Christine Daryleanne wrote:

"It just shows how person can live in a veritable Paradise (if you doubt that then when is the boat fuller, coming here or leaving here? I do not see India, China, Russia, Brazil or Mexico complaining about illegal immigration from the US: People want what you have. What do they know that you do not that makes them risk life and limb to come here?) and make themselves miserable by thinking of the Monsters in the Dark. I can say from experience and knowledge that you do not know what you are talking about."

Unfortunately, I disagree with this point, and I will do so loudly. People come here illegally because they are told, usually by large multi-million and multi-billion dollar corporations, that America is the land of opportunity. What they are not told is whose opportunity is typically being enriched when they come here.

Who is complaining about illegal immigration? More to the point, who is not complaining?

Supposing I own a multi-million dollar corporation whose main goal is to reward top executives, stock holders, and bond holders. Wouldn't it make the most sense for me to hire laborers who cross over the border illegally BECAUSE I could pay them next to nothing (or perhaps nothing at all), and they would have little recourse if they were not looking to be deported? Don't you think I would even encourage such illegal border crossings? After all, my multi-million dollar business profits handsomely every time I do, and my stock holders and bond holders love me for it every step of the way. When my costs are low, my profits are up, and my stock price goes through the roof, making a very small number of people very happy.

This doesn't even address the other economnic and political and social reasons people might do this. People have their reasons, and typically, if you take the time to listen to those reasons, as I have on some occasions through the volunteer work I have done, these people have some pretty scary stories to tell which led to them wanting to leave, and the risks they took in doing so, as you said, often risked life and limb. In m,any cases, had they stayed behind, they would have been lucky to have done any better.

Christine Daryleanne wrote:

"Demographically there is a larger gap between rich and poor by virtue of the fact that look who is having more children"

That would be an irrelevent statistic if you looked at the values that our society holds, combined with the underlying economics. I mean, its a venture capitalists dream state out there. All you got to do to make it is convince consumers that they NEED things, and create enough buzz to make it true, and you'll get investors willing to pay you millions to make it happen. A quote attributed to Joseph Goebbels, Adolph Hitler's propaganda minister (incorrectly, according to wikiquote) is "If you repeat a lie often enough, it becomes the truth." So all these things we just "got to have" even if we can't afford them make us poor, but we buy anyway because people tell us we "got to have" them. Marketing genius, perhaps, but individual and collective economic suicide.

Rich people are rich, in part, because they save their money and spend less, (contrary to what Wall Street economists tell them they should do) but also because they have the luxury of not needing to spend all of their money on basic life necessities. Also, to become rich seems to require not just a little bit of skill, but also a lot of luck. I'm really sick of people blaming the victim for circumstances outside of their ability to control. People who are poor are typically not lazy asses. They are people who can not meet even their basic life necessities on their meager (if any) income.

It is interesting to watch how economic numbers get twisted to meet the needs of economists and politicians. Take a look at this web page for a discussion of how the "unemployed" population is measured. This kind of data is not generally trumped up in the media, largely because it doesn't meet the desire of media insiders and politicians to be able say "the economy is getting better! See! You lazy ass for not finding a job! We should cut more money from social service programs!"

Don't even get me started on tax policies. Thats a whole different topic for how the wealthy have undo influence on the poor.

Christine Daryleanne wrote:

"The whole stress mania is a creation of the intellectual establishmentmedia complex over the last 20 years to create discontent so that they can benefit. No people anywhere or anywhen have had it easier. That is not to say that there are not bumps in the road, to get a grip on what those bumps are. look at ALL expenses over the last 65 years and see which have gone up the most. But then, those who generated those increases were put in powere not by armed revolution but by public assent. Even given that, my statement of relative and absolute ease still stands"

While it is true that the public has generally slept idly by while those who wish to take political and financial control have done so by raping the rest of us without any qualms, circumstances to allow this to happen have largely been set up for a long time, even to the point where people who might do something to counter such economic and political pressures find themselves unable to do so due to the wily nature of how laws are created and subsequently applied in favor of those who control the resources. (Has the Sherman Antitrust Act ever been used successfully to break up a corporation? No, and yet it has been successfully used to counter a wide variety of labor protests which were set up in favor of workers' rights.) In the USA, for example, we have, at least according to our Constitution, the freedom of speech, freedom of assembly, and freedom of religion. However, when such freedoms are put to the test, industry and government have frequently colluded to squelch the opposition of the working class, often with military force.

Public assent was not required to force through these and other business-friendly laws. All that was required was an understanding of The Golden Rule, i.e., he with the gold makes the rules.

Christine Daryleanne wrote:

"My point is this; most of the modern "stress" is not only self-inflicted but would be a cause for derision from those over 50 under the aegis of "you have had it too easy and did this to yourself""

Perhaps, but even those over 50 were victims of the same system. During World War I, for example, while men were being shipped off en masse to fight a war essentially to preserve the financial houses of Great Britain and the USA, (both of which were in shambles at the time, which was caused by greedy investors and corporations), wages at home, in order to support the war efforts in the USA, were held stagnant. Wall Street loved it. Production was at an all time high, and war materials were being produced at record profits all in the name of solidarity, but the people producing the goods made for the war were economically abused. That doesn't even mention anything about the soldiers who came home to find the jobs they left to go to war didn't exist anymore and what they could find paid less money than before they went off to war. "Thanks so much for your service, guys. Don't need you any more. Go fend for yourselves now."

I find it interesting, though not surprising when you consider who typically writes the historical accounts, that hisory is typically taught as a collection of people and dates without any real understanding of the interconnectedness of events in one place and time to that in another place and time. Of course, if we all knew who was really in charge, and we all decided to protest against the powers that be, we could also expect our lives to be on the line. It's happened before. Surely it will happen again if we are not more careful next time.

[dl_ashlee]

Holy %*&# Batman!

Lol, can't believe you took the time to write that all up! Add more details and it easily could be a college paper!