Thread: USA loses AAA credit Rating

Originally Posted by LAM

those that are blaming the downturn in the economy on Obama have the economic intelligence of a twig and apparently sleep through 1990-2001. the current economy is the grand sum of many very counter productive decisions made over decades and it would take an equal amount of time to reverse it if allowed.

This started back in the 1960's with the "Great Society" policy by Johnson. Since then ever congress has found way to bring pork home to their districts, Then the congress critters got into bed with big business, making sure their favorite donors get inflated contracts for government service work. Then the icon of democrat/semi-socialist Ted Kennedy got a bill passed under the Carter administration to help "bail out" the fed when Carter was running a deficit. That blew to doors off the SSI trust fund and the congress has been using it as their private piggy bank since. Now the bills are coming due, and like a flash pimp, they do not have the money to pay it off. This problem is all about the corruption in government, the lazy government manager, the "don't rock the boat" mentality of the entire system. You have Senators funding a aircraft the Air Force said they don't need, and don't want. But it is being built any way for billions on the government dime only to be put into mothballs without being put into service.

I do blame Obama for much of what has happened. I agree he was handed a shit stick when he took office. But what has he done since then? He was handed a 1 trillion dollar deficit, he did not control congress which were all dems and libs at that point, so now it is 3 Trillion. His answer to everything is to print more money. Money is a commodity, printing unbacked dollars devalues the money. And what the fuck was that Libya thing all about anyway? Get with it, Obama and his crew are socialist academics with no real experience outside of the classroom. They are so far over their heads, they can't see anything. They lived in a world of theory and now the theories are being tested. Their thinking is failing and they do not know what to do.

Originally Posted by dogsoldier

I do blame Obama for much of what has happened. I agree he was handed a shit stick when he took office. But what has he done since then? He was handed a 1 trillion dollar deficit, he did not control congress which were a libs at that point, so now it is 3 Trillion. His answer to everything is to print more money. Money is a commodity, printing unbacked dollars devalues the money. And what the fuck was that Libya thing all about anyway? Get with it, Obama and his crew are socialist academics who are so far over their heads, they can't see anything. They lived in a world of theory and now the theories are failing and they do not know what to do.

* reduced tax receipts have caused the deficit to "explode" under Obama, this is US economic history 101 and it's what happens after every recession to every president. with a total GDP of 14T the contraction of GDP is fueled by reduced consumption in place of increased personal savings and the paying down of private debt (credit cards, etc.).

* the POTUS has no control over how much money the FRB prints, never has you are dead wrong. monetary policy is decided by the FRB the POTUS has nothing to do with this at all. the current trend of quantitative easing and low interest rates are policies implemented by the central bank which is not part of the US government it is privately held.

* balancing the budget does not increase GDP. if Obama had reduced spending and balanced the budget when he first came into office like conservatives have been crying about. we would have less debt but the unemployment rate would be about 15%. this would have made things better how?

you have not one clue about the topic at hand. I suggest not "learning" economics from TV

Lam your boy is going to lose buy some tissue

Originally Posted by DEATH MATCH

Lam your boy is going to lose buy some tissue

does not effect me at all, I buy houses & cars with checks....

Originally Posted by LAM

* reduced tax receipts have caused the deficit to "explode" under Obama, this is US economic history 101 and it's what happens after every recession to every president. with a total GDP of 14T the contraction of GDP is fueled by reduced consumption in place of increased personal savings and the paying down of private debt (credit cards, etc.).

You are the one who needs a fact check. The reduction in individual tax receipts represents 3-5% of the deficit. The reduction in business taxes is about 20% goive or take. The increase in the deficit is because of increased obligation with no money to back them up. There are factors that I will agree are out of Obama's control, like Iraq and Afghanistan. But BY HIS OWN POICY he and his cronies have INCREASED the budgets of the DEPARTMENT OF Education, EPA, Justice (primarily TSA) and Labor by over 150%. As of right now the second largest budget is held by the Department of Ed, the First is Health and Human Services, the Military is third. The TARP and other bail outs have produced NOTHING except for some really cool magic tricks at making moeny disappear. When Obama came in, he was facing a one trillion dollar hole, but HIS policies and the ridiculous behavior of congress has increased that to 3 and is growing.

* the POTUS has no control over how much money the FRB prints, never has you are dead wrong. monetary policy is decided by the FRB the POTUS has nothing to do with this at all. the current trend of quantitative easing and low interest rates are policies implemented by the central bank which is not part of the US government it is privately held.

* balancing the budget does not increase GDP. if Obama had reduced spending and balanced the budget when he first came into office like conservatives have been crying about. we would have less debt but the unemployment rate would be about 15%. this would have made things better how?

BULLSHIT! POTUS sets the climate and the Secretary of the Treasury works for HIM. Gitner or whoever you spell his name openly stated when asked about how he was planning on paying for all the shit they have been doing, was "print more money". Money is not infinite. It actually has a supply and demand value. By printing more money without anything to back it up, because of the shrinking GDP and heavy debt, the money is worth less.

this statement of yours

we would have less debt but the unemployment rate would be about 15%. this would have made things better how?

Tells me you are so off base on your understanding of how businesses operate, it is almost pointless to go on. If the money supply is not being gobbled up by the government, there is more to go around. Business are more able to secure loans and willing to take risks. That leads to jobs. But with the current wigged out fiscal policies of the government, the inability or unwillingness of congress to act like adults, businesses are unsure of what is going to happen next, so they pull back. Employment always suffers in times of economic uncertainty.

you have not one clue about the topic at hand. I suggest not "learning" economics from TV

Well buster, I think you are the one who turned the corner. I recommend you read some Milton Friedman and skip the John Maynard Keynes.

Originally Posted by dogsoldier

Well buster, I think you are the one who turned the corner. I recommend you read some Milton Friedman and skip the John Maynard Keynes.

I have read just about all of the works from Freedman, Keynes, Ricardo, Smith, Malthus, Fisher, Marshall and Marx.

I also read ALL the reports from the OECD, ILO, the FRB and the IMF.

there is no healthy economy in the world that has these 3 things:

low corporate tax rates
stagnant average wages
low percentage of social protections as a percentage of GDP

* all 3 of these are favorites of conservative economic policy in the US. the IMF even recommends to developing nations to NOT follow the US model of low wages and low unionization...now why would they do that?

Originally Posted by dogsoldier

Tells me you are so off base on your understanding of how businesses operate, it is almost pointless to go on.

If the money supply is not being gobbled up by the government, there is more to go around. Business are more able to secure loans and willing to take risks. That leads to jobs. But with the current wigged out fiscal policies of the government, the inability or unwillingness of congress to act like adults, businesses are unsure of what is going to happen next, so they pull back. Employment always suffers in times of economic uncertainty.

to your 1st statement:

that I doubt...I have held senior engineering positions several silicon valley based company's with revenue's of 5-20B a year and done consulting work for just as many in the UK. I've personally controlled budgets ranging from 2-5M a year to handle the expenses of those r&d facilities. the last r&d lab that I ran in silicon valley employed 3 full time engineers and we grossed about 30M a year in profit, all in labor after paying expenses at the lab for rent, utilities, etc. we were the first lab in the world to offer WiFi testing certification so every manufacture had to send all of there wireless (802.11x) products to us for testing. every time that made a revision to their code or hardware, they had to come back in for re-certification. we automated all the testing, it took 15min to test each device at $4,500 a pop, it was brilliant.

I started my own business at the beginning of the recession in '06 with one employee (myself) and my annual revenue has increased 6x since then. so it's safe to say I know a "little" about running and working at big and small businesses in good and bad economy's.

* you stated that the money supply is being gobbled up by the government, that may be the most ridiculous statement I have ever heard in regards to economics. the fed gov (US treas) has no real assets, it spends more than it takes in so how exactly is it gobbling up the money supply? it holds a couple of trillion dollars in "assets" but those monies are for retirement funds, etc. so it money that is basically already spent it just hasn't been dispersed.

the money supply is being gobbled up by the top 2% in the country as more and more profits are being removed from the active economy and sit idle as accumulated wealth. but this is not localized to the US it is happening in every country that has adopted neo-liberal economic policies, it causes a concentration of wealth at the top and increased poverty at the bottom. the GDP of every single country that adopts neo-liberal economic policy with the exception of Luxemburg and Chile have seen a decrease in GDP. it is why the world's richest 300 people have more combined wealth than the bottom 3.5B combined. right now there is a global recession because of this concentration of wealth. the people at the lower income quintiles in their respective countries have simply run out of money and they are the ones that spend just about everything they make, they are the major consumers. the top wage earners in every country only spend a fraction of the income that they make.

there is always a point of diminishing-returns in EVERYTHING.

Luxemburg makes this very clear in the assay about the accumulation of capital which was written pre 1919:

"The money accruing to the state as taxes from the peasant masses – as our generic term for all non-proletarian consumers – was not originally advanced by capital and has not split off from capital in circulation. In the hand of the peasant it is the equivalent of goods that have been realised, the exchange value of simple commodity production. The state now gets part of the purchasing power of the non-capitalist consumers, purchasing power, that is to say, which is already free to realise the surplus value for capitalist accumulation. Now the question arises, whether economic changes will result for capital, and if so, of what nature, from diverting the purchasing power of such strata to the state for militarist purposes. It almost looks as if we had come up against yet another shift in the material form of reproduction. Capital will now produce an equivalent of war materials for the state instead of producing large quantities of means of production and subsistence for peasant consumers. But in fact the changes go deeper. First and foremost, the state can use the mechanism of taxation to mobilise much larger amounts of purchasing power from the non-capitalist consumers than they would ordinarily spend on their own consumption.

Indeed the modern system of taxation itself is largely responsible for forcing commodity economy on the peasants. Under pressure of taxes, the peasant must turn more and more of his produce into commodities, and at the same time he must buy more and more. Taxation presses the produce of peasant economy into circulation and compels the peasants to become buyers of capitalist products. Finally, on a basis of commodity production in the peasant style, the system of taxation lures more purchasing power from peasant economy than would otherwise become active.

What would normally have been hoarded by the peasants and the lower middle classes until it has grown big enough to invest in savings banks and other banks is now set free to constitute an effective demand and an opportunity for investment. Further the multitude of individual and insignificant demands for a whole range of commodities, which will become effective at different times and which might often be met just as well by simple commodity production, is now replaced by a comprehensive and homogeneous demand of the state. And the satisfaction of this demand presupposes a big industry of the highest order. It requires the most favourable conditions for the production of surplus value and for accumulation. In the form of government contracts for army supplies the scattered purchasing power of the consumers is concentrated in large quantities and, free of the vagaries and subjective fluctuations of personal consumption, it achieves an almost automatic regularity and rhythmic growth. Capital itself ultimately controls this automatic and rhythmic movement of militarist production through the legislature and a press whose function is to mould so-called ‘public opinion’. That is why this particular province of capitalist accumulation at first seems capable of infinite expansion. All other attempts to expand markets and set up operational bases for capital largely depend on historical, social and political factors beyond the control of capital, whereas production for militarism represents a province whose regular and progressive expansion seems primarily determined by capital itself.

In this way capital turns historical necessity into a virtue: the ever fiercer ‘competition’ in the capitalist world itself provides a field for accumulation of the first magnitude. Capital increasingly employs militarism for implementing a foreign and colonial policy to get hold of the means of production and labour power of non-capitalist countries and societies. This same militarism works in a like manner in the capitalist countries to divert purchasing power away from the non-capitalist strata. The representatives of simple commodity production and the working class are affected alike in this way. At their expense, the accumulation of capital is raised to the highest power, by robbing the one of their productive forces and by depressing the other’s standard of living. Needless to say, after a certain stage the conditions for the accumulation of capital both at home and abroad turn into their very opposite – they become conditions for the decline of capitalism."

* does this sound familiar to anyone?

Dogsoldier, how can you write this:

Originally Posted by dogsoldier

Could be worse. I have had two job changes where I work, all increased responsibilities. Bigger title, more responsibilities no extra money. We haven't had a pay raise in three years.

And say the gov't gobbles up the money so that businesses can't invest. Our gov't takes in less than it ever has, businesses are recording record profits, wall street is sitting on trillions, and the economy is shittier than it has ever been.

Dale is spot on.

federal gov spending has averaged just about 21-22% since 1970 and since then federal revenues have averaged nearly 19 percent of the U.S. economy. 2011 revenues are expected to equal just over 14 percent of the economy, the lowest level since 1950.

businesses in the US have no place to invest their monies, not with a service sector being the largest employer. how exactly do fast food restaurants and retailers "re-invest" ? there are only so many stores one can build when people have no money to spend in those stores.

Originally Posted by Dale Mabry

Dogsoldier, how can you write this:




And say the gov't gobbles up the money so that businesses can't invest. Our gov't takes in less than it ever has, businesses are recording record profits, wall street is sitting on trillions, and the economy is shittier than it has ever been.

This is f***king spot on. Every one of these is true.