Deficit Economy Booming
 

The last time the deficit was high and Republican Speaker of the House Newt Gingrich lead President Clinton and the country out of it, it happened faster than expected. It may not happen as fast this time, but it will go away. Percentage-wise, it's not as high as most of our mortgages. Other than that the economy is booming. Unemployment at 4.4%!

The gap between the poor and the rich may be increasing, but our "poor" are looking increasingly richer than most of the world.

A) If you seriously think Gingrich was responsible for eliminating the deficit. . . there's not a whole lot we can do to help you.

B) The 4.4% unemployment number is bullshit, and is designed to trick you. I see it worked. Sure, it's 4.4% unemployment, which by the way is not down from the 3.9% Clinton got in September of 2000. Two problems:
1) you want some unemployment in an economy - otherwise it can't grow.
2) While the numbers look good on the surface, when you realize that Bush and his policies have elimintated scores of well paying middle class jobs and have replaced them with jobs at Walmart, where "living wage" is considered a swear word, things don't look as good.

So now we have Bush, still at a higher unemployment level than Clinton, and with more low-wage jobs than Clinton had, and you sit there and tell us the economy is rosy?

And I'm confused as to why you think increasing the gap between the poor and the rich is a good idea, no matter what the rest of the world looks like by comparison. If you're poor and you think increasing your poverty level is good then again, there's no help for you. If you're rich and you think increasing the gap is good, you should realize that there are a lot more poor people than there are rich people and eventually they're going to get pissed and do something about it.

Plus, our poor are looking increasingly richer only if you compare them to 3rd world countries. Running around cheering that "our poor are living better than starving people in 3rd world countries!" does not sound like a ringing endorsement for current economic policies to me.

God I love when people say Not only does it show arrogance but it tells us that some people truly have no desire to better society.... they'd rather let it rot.... which in turn destroys their lives but they are too short sighted and egotistical to see that.

Our (the U.S.) economy is not booming. The cost of raw materials continues to rise, while productivity remains low.

Unemployment figures do not mean a damn thing. They are calculated based upon the number of people that are enrolled for unemployment benefits. Those benefits expire, and enrolees are dropped from the tally. Also, you have to factor in the fact that as more and more relatively well paying manufacturing jobs are moved offshore, those that were employed in those jobs are now having to resort to accepting much lower paying positions.

Really so I guess the 15% pay raise I got a couple of weeks ago, and the 45% that my salary has increased in under 4 years means that the eonomy is in the tank? Or does it mean that productivity is low?

CJ....you are very fortunate.

Real median income is still slighly lower today than it was 5 years ago and the number of people in poverty has increased in each of the last 5 years (after dropping in each of the 4 years before that).

<a href="http://www.parade.com/articles/editions/2006/edition_09-03-2006/Social_Intelligence">"Empathy and social skills are the two main ingredients of social intelligence."</a>

I recognize that I am fortunate, and I also recognize that I am likely the exception to the rule. While I believe that we are currently in an economic upswing, I don't believe that things are as good as the right would like make them out to be, however they also aren't as bad as the left would lead us to believe, just as is the case w/ many other current issues.

Then why on earth did you try to use your raises as an example of why we're wrong?

Because reality is, that the economy is currently in an upswing, I wouldn't go so far as to say it's booming, but it's certainly far from being in the shitter.

it's in an unsustainable upswing. Any time you have the bottom 40% scrapping for 3% of the wealth your economy is in trouble. Any time you've borrowed TRILLIONS of dollars your economy is in trouble. Any time you've failed to prepare for a mass retirement that's going to start in 7 or so years when the baby boomers reach that age, your economy is in trouble.

So yes, I would say it's in the shitter, and it's swirling around the bowl as we speak. It just hasn't completely gotten down the drain. Yet.

Wait. Shakran, 40% and 3%? Are those actual figures or are you just throwing them out there?

I don't know what the figures are for other developed countries, but that is more skewed than I would have expected.

they won't be as bad....they will be much. much worse. If this is what "full employment" looks like:

<img src="http://photos1.blogger.com/hello/101/3984/1024/EPIJobs2.jpg">
http://globaleconomicanalysis.blogsp...ants-jobs.html

<b>A Job Prospect Lures, Then Frustrates, Thousands</b>
<img src="http://graphics8.nytimes.com/images/2006/11/04/nyregion/04jobs600.1.jpg">
Andrea Mohin/The New York Times

<i>Several thousand people lined up in Manhattan Friday, many for hours, to apply for some 200 jobs at a new Times Square candy store to open next month.</i>

...actually, hiredgun, the distribution of waelth in the US is much worse than Shakran described it. I've documented at the following link on the minimum wage thread, that the bottom half holds just 2-1/2 percent of the total wealth. The bottom 25 to 35 percent actually "enjoy" negative wealth:

http://www.tfproject.org/tfp/showpos...5&postcount=37

....consider this:
<b>Mexico's Gini number is 54....</b>

I hate to slow down to get into great details the day before an election so I'll just say this...

The economy was clearly slowing down before Bush took over, the dot com bubble had burst and the market was in retreat. Then there was 911, and the wars.

But I have to say something is wrong in your calculations when you reference the present to the great depression and what happen after a natural disaster.

Most people have great creature comforts and eat very well in this country despite how much Bill Gates has. I don't need statistics to know that, I see the "poor" at Wal-mart buying video games all the time.

Goods and services are cheaper now as well. Does that not count?

Btw, that's some giant candy store, isn't it? "Brother, can you spare a dime."

Now to be fair both Host and I are using admittedly old data. Both of our figures come from 2001 wealth distribution surveys. He's already cited his - mine comes from the Survey of Consumer Finances conducted by the Federal Reserve.

I chose the more conservative one to be on the safe side, but in reality the 2006 numbers are very likely much worse than either one of our figures.

True enough, but granting tax relief to millionaires was not a move targeted to help the economy. Keep in mind that today's "booming" economy is largely funded by people racking up thousands of dollars in credit card debt in an attempt to maintain the lifestyle they enjoyed 10 years ago. That is also not sustainable, and the longer we wait the worse it's gonna hurt when it all comes crashing down. Project for yourself what you think will happen when more than half of the country is forced to declare bankruptcy (if they still can, since those laws have been changed to, again, favor the rich). What do you think will happen when people who have $30,000 or more of credit card debt (and there are a LOT of them out there) suddenly discover that they can't afford to make any payments at all?

You're right. Today's situation is nothing like the great depression. In the great depression there wasn't any such thing as credit card debt. People started off much better financially just before the depression. If you think the great depression was bad, just wait until the coming downturn.



And I'd be willing to bet you most of them are putting those games on credit cards.

And most people do not eat very well - they have to buy cheap foods, which means highly processed foods and fast foods. It's a lot more expensive to eat healthy foods.

Um, goods and services are more expensive. Just using your video game example, I NEVER paid $50-70 for an Atari 2600 game back in the 80's. If I still bothered with consoles today, I'd be spending that much just about every time.

Sure crap goods are cheap. You can get ramen for next to nothing, but have fun with your weight management if that kind of thing is all you eat.

Aren't you paying attention? When you get a line of THOUSANDS to apply for a couple hundred low paying jobs at a freaking candy store, you're in trouble. Simple as that.

Just because you're doing okay doesn't mean everybody is.

Isaiah,

Welcome to the forum.

You are correct in your observation about the economy.

Be prepared - anytime you present good news about the economy you are going to get blasted from people focused on the negatives.

Is that today's new talking point? Two people here at TFP have described critics of the status quo as "focused on the negatives" this morning. It's a bit hypocritical, given how deep into the mud much of the right has gone in these midterm campaigns.

I'm not focused on the negative. I'm focused on change. That's very, very positive.

The Fed has been focused on slowing the economy to prevent it from "over-heating", and cooling off the housing market becuase too much wealth was being created. They have caused the housing market to decline and they have slowed the economy. The Fed thought things were too good.

You say you want change. What do you want: High inflation, high unemployment, low productivity, no growth in housing prices, stock market crash, no job creation, and higher taxes. Perhaps it would be easier for you to move to France.:lol:

Ace....when you and Isaiah make insensitive,if not absurd, comments that our "poor" are better off than those in Darfur or are looking increasingly richer than most of the world, why is it negative to point out the facts about poverty in America.

The number of people in poverty in the US went down in most of the 90s to 32 million in 2001, then increased in each of the last four years to 37 million in 2005?

http://www.census.gov/hhes/www/pover...pov05fig04.pdf (pdf file)

Maybe you can also provide economic indicators that the middle class is better off in this "booming" economy then it was 5 years ago. (no anectdote please).

I agree....most American have food on the table every day. So lets not attribute the fact that "hunger in American households has risen by 43 percent over the last five years" to this "booming" economy.

http://www.sciencedaily.com/releases...1029093925.htm

If you read the thread, you'll see it's not net wealth that most people are pointing to so much as distribution.

Those are the exact things that are in our future that I'm interested in preventing. Do you honestly think the US can keep mortgaging itself into the appearance of a growing economy indefinitely? Do you think the growth in personal debt is sustainable?

Well...yeeaaah. :rolleyes:
Think about it.
If Visa & Mastercard are still willing to send me preapproved applications...then I must be ok. Right?
Right?

Right?:confused:

I really like the people aho say something and then back it up with proof.
Not those people who say something and expect everybody to believe because they said it.
If you are going to try and pass something off as fact, then show us where you are getting your information please.

As an aside.

Specifically relating to the pic of the line-up for jobs at the candy store?

Any idea how many of the people lined up are jobless?
I think (this is my opinion) it is more likely people in crappy jobs that lines up.
I know, it does not make a difference, these people are still in the lower income class and it does not have an impact on this thread, but...

This is not just any "candy store". Look it up, it is for the new M&M store in Manhattan.
There is a draw to this job becuase it is percieved as an exciting place to work. (think FAO or Disney Store).
http://www.gothamist.com/attachments...11_mmworld.jpg

On top of that look what they were promised according to the ad that brought everybody out there:
http://www.nytimes.com/2006/11/04/nyregion/04jobs.html
That's very good if you are in a minimum wage job.

/tangent

This statement is intelectually dishonest. It shows how someone can take statements out of context to infer a new meaning. I understand the risks of posting and you have to take the good with the bad. Please understand that I percieve this tatic as a weak attempt to score points, with who I don't know.
Because you make things seem far worse than they are. How about an objective view. I know there are poor people. There will always be poor. But the term is relative, isn't it. Do you define poor today on the same standard used 70 years ago, no. Do you use the same standard in the US as you do in third world nations, no. So what is your point about the poor??? Please be clear.


Why do you think that happend? (This is a loaded question or a set up, so be prepared if you dare answer)

By what standard do we use to measure "better off"? If you want to define that, I will give a direct and clear answer.


How do you explain the weight gain by Americans if hunger is up 43%?

Ace....I did get a laugh out of your last question....."How do you explain the weight gain by Americans if hunger is up 43%?". But in fact its not funny at all, but a quite sad commentary on your understanding of poverty and hunger.

Your entire last post is a "loaded" response and not worthy of further discussion. Pat yourself on the back and declare yourself the victor.

Ok lets look at a hypothetical situation. Let's say I decide to use my credit cards to build a new house, in doing so i build up $200,000 debt. But in the process of building the house I pay my kids to do some chores that involve the building the house. My children's income has gone way up but 2 months from now when the creditors knock on my door will the extra money my children made make any difference?

Yes. I think you have to factor in the value added by your children.

Assuming all other things equal

If you build a $200,000 house and you pay your children $100,000 but they added no value, what do you really have? A $200,000 house. So when the creditors come you can only sell the house for $200,000 and you get screwed (unless they give back the money)

On the otherhand.

If you build a $200, 000 house and you pay your children $100,000 and they added $200,000 in value. What do you have? Either a $200,000 and your cost was $100,000. Or a $400,000 house and your cost was $300,000. When the creditors come knocking, you sell for a $100,000 profit, and your kids made $100,000 - Brilliant! Brilliant!:thumbsup:

What if the majority of the money I spent was either given to a contractor or spent on goods that do not retain value. And that contractor over charged me to the point of fleecing me. So now the house only retained 10% of the value I put into it. Is it still a good idea?

If you think what i'm saying is far fetched, bombs and munitions are expendables and do not retain value. Also Halliburton is charging the US government $45 for a 6 pack of coke, i wonder what they are charging for other things...

If the money was given to a contractor his wealth increased. He might offer you a job if you need work to pay your debt.

If you spent the money on goods that don't retain their value, I hope you at least had some enjoyment from the goods, but again, the guy who sold you the goods got cash and hopefully you got enjoyment. Looks like you will have to work to pay your debt.

It happens, but I am sure you won't let it happen twice. Next time if you do a better job upfront screening contractors, checking references, etc, you will minimize the risk of getting fleeced. We all have to live and learn.
I think we define " adding value" in different ways. If the value you add is in reality only 10% of what you thought, in my view what you thought is not important. The only thing that matters is what the real value added is.

I don't.

Sorry for the way this sounds...but...If a bomb kills the guy who is trying to kill you, I think that is retained value. On the otherhand, if a bomb sits in a bunker not used while your enemy attacks, kills you and steals your bomb, then that was a total waste of a good bomb.
The last time I went to the movies, I paid about $10 for $.05 worth of popcorn and about $.25 worth of Coke. Sometimes I wish I owed a movie theater, then I think about the headaches.

Sometimes I wish I had military contracts, then I think it is easier just to buy stock in Haliburton (symbol: HAL)

Ding Ding Ding, we have a right answer! Maybe we should start trying to work off our debt instead of spending more and more.....


Ohh but I didn't get a choice on who to pick for the contractor, someone else chose it. Oddly this person who chose my contractor used to be a CEO for that company and still has lots of money invested in them and probably receives or will receive kickbacks from them also.

Here are some charts from IBD on consumer debt:



http://epaper.investors.com/Reposito.../Pc0022200.png
http://epaper.investors.com/Reposito.../Pc0022300.png
http://epaper.investors.com/Reposito.../Pc0022100.png
http://epaper.investors.com/Reposito.../Pc0022000.png