Economic Downturn and Bush Policies Continue to Drive Large Projected Deficits

[oufinny]

tax receipts always decrease during and after recessions, this is nothing new but US economic history. increased gov spending kept the country out of a double-dip recession. of course Obama spent more, as each recession hits the economy for the middle class gets worst as the population grows and there are less jobs to return to.

many world economists said the fed gov should have continued to spend since interest rates are so low while the private sectors paid down consumer debt. personal consumption accounts for 70% of our GDP. if you look at the personal savings rate on the graph below it shows a marked decline from the 80's until now but the personal consumption rate (PCE) continued to increase as credit was made readily available.

U.S. Department of Commerce. Bureau of Economic Analysis

there's simply is no quick fix to the economy and putting all the unemployed people back to work, forget about the underemployed for now. this thing did not happen over-night and it will take many, many years to fix if ever.

the US and UK are now feeling the full effects of globalization, prosperity for some and austerity for the rest...

people had very unrealistic expectations of Obama but that is the nature of our society here, everybody wants everything fast and they want it now.

the economic problems caused by the long marriage of big corp and the gov traded the financial future of the middle class for short-term economic growth. we now have a huge surplus of labor on one end and a huge surplus of capital on the other, both sitting idle..what a brilliant long term plan

You asked for solutions, or whoever that other guy above is I don't care about. Well, here are just a few that no one can deny need to be handled.

1) The US needs a DEFINED, with goals for output, Energy policy to allow for that sector of the economy to grow and make investments in its future. The House passed a bill as such last week, for my industry it is great though it leaves out much of what needs to be addressed, all other forms of energy generation and most importantly, nuclear. Yes, I said nuclear, we need it and it can be done safely.

2) Complete overhaul of the tax code with the removal of almost all deductions and a the rates to stay where they are. The receipts will go up so much from the deduction removal that there is no need to raise taxes any higher (in my view, others may disagree).

3) Corporate taxes need to drop to 20-25% so the US is once again competitive, loopholes and deductions need to greatly diminish and there needs to be huge penalties for off-shoring money and jobs. I am all for a free market but there have to be limits.

4) Healthcare, medicare, medicade and social security need a lot of work. I don't believe a word out of Harry Reed's mouth about some of these programs being funded until 2037, I think that is clever math not reality.

5) There needs to be a bill that prevents deficit spending outside of times of DECLARED war where it may be absolutely necessary for the countries survival.

If you get these problems dealt with and there is consistency for some years to come, jobs will come back and companies can make long term investment plans. That is a huge stopgap to job creation in America, the country has a different policy every two years so long term is just that, 2 years, not 10-20 when companies can really start to make an impact. Give stability, known cost structure and some incentives to keep jobs in America and that will happen. The cost to do otherwise will compel companies to make smart decisions or shareholders will change management. This is a case where public and privately held companies will work to our advantage; they have to improve to be more profitable and it forces ingenuity.

So there, this is what I think about. I don't have every answer, nor does LAM or anyone else here. If you don't agree wtih anything I said above, we will never agree then but there will surely be one.

 

[LAM]

all of those would help in some way but in others not at all. until we get some term limits in gov nothing is going to change a single bit. and at what point in time do you see our politicians voting on that? and not just this bunch but all the rest before them?

* for instance when I lived in PA there were 3 nuke plants within an hours drive yet we paid some of the highest rates in the country.

* Improvements in tech are making a lot of jobs obsolete. Many of my lawyer friends now use software to preform research so they need less real people to do this kind of research, those jobs are lost and gone forever.

* corporate taxation is not the problem, it's at it's lowest rate in history and company's are sitting on trillions of capital and have the highest revenues in 25 years. last year only 9% of the fed revenue came from corp taxes at 191b, and the gov dished out almost 100b annually in corporate welfare according to the cato institute. the end of 3rd quarter of 2010 total corp profits were at 1.7T annually and holding stead while jobs continue to be shed. that bs simply doesn't fly anymore.

CORPORATE PROFITS: THIRD QUARTER 2010 (PRELIMINARY)
http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_2nd.pdf

Corporate Profits Were the Highest on Record Last Quarter
http://www.nytimes.com/2010/11/24/business/economy/24econ.html

* the US has the lions share of the Global 500 company's and the most millionaires and billionaires in the world. there is also a misconception about the size of many of these billion dollar corps that get special treatment. 75% of Exxon's workforce is located out of the country as one example and some investment houses have less than 10-20 employees.

* there are too many big corporations that funnel all the money to be made up to the top for instance. AT&T just acquired T-mobile which gives them and Verizon 80% of the market. that means no real competition for them and not much of a "choice" for consumers and for those that work there no real choice to go work somewhere else that will pay more as their corporate structure and pay are comparable. where's the free market there?

* I've been in Vegas now for 8-9 years and on occasion do some residential work to repair home healthcare devices. All of the old timers that I talk to EVERY single person tells me that things were better before the big casino's and everyone made more money "back in the day". And this is Vegas so I'm talking about old average white people not minorities claiming to have been held down by the man.

* Hedge fund managers pulling in 1-3B annually. why is one person's right to "capitalism" allowed greater mobility to triumph over another?

* in 2010 the M&A rate was 23%! How many company's do you think are lost in M&A annually and sold for scrap? those jobs are not replaced.

* What about the FRB and Wallstreet? 2x now the american people have payed the price for their gambling in the past 100 years and it's going to happen again.

* What about the derivatives markets? Company's like Goldman's shouldn't be allowed by law to play in that game. Quite frankly forget the taxes and all that if you don't have the capacity to actually receive the goods then you can't play. jacking up the prices of commodities across the globe is immoral, people die every year so some rich bastards can have even more wealthy sitting idle somewhere.

* So basically what do we do about American Greed in general? Our CEO's get paid several times more than their foreign counter parts. Profit's can't increase by leeps and bounds every quarter. The working class in the US can't afford it, the CPI is an inefficient tool in this high tech world for use to calculate wage increases. We can't keep sending out our military to "spread democracy" which anyone that studies economics knows is the pre-requisite for capitalism (you can't sell goods and services to a bunch of savages).

When is enough money enough? How do we change our culture so that happiness doesn't have to equal financial success or a big house full of shit that doesn't really increase the quality of life?

the manipulators of capital and others are completely out of touch with the real world these people do not live in the same world as you and I but they are the ones that pull the strings. in the study of psychology research has found out time and time again that past behavior is the biggest predictor of future behavior.

 

[oufinny]

all of those would help in some way but in others not at all. until we get some term limits in gov nothing is going to change a single bit. and at what point in time do you see our politicians voting on that? and not just this bunch but all the rest before them?

* for instance when I lived in PA there were 3 nuke plants within an hours drive yet we paid some of the highest rates in the country.

* Improvements in tech are making a lot of jobs obsolete. Many of my lawyer friends now use software to preform research so they need less real people to do this kind of research, those jobs are lost and gone forever.

* corporate taxation is not the problem, it's at it's lowest rate in history and company's are sitting on trillions of capital and have the highest revenues in 25 years. last year only 9% of the fed revenue came from corp taxes at 191b, and the gov dished out almost 100b annually in corporate welfare according to the cato institute. the end of 3rd quarter of 2010 total corp profits were at 1.7T annually and holding stead while jobs continue to be shed. that bs simply doesn't fly anymore.

CORPORATE PROFITS: THIRD QUARTER 2010 (PRELIMINARY)
http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp3q10_2nd.pdf

Corporate Profits Were the Highest on Record Last Quarter
http://www.nytimes.com/2010/11/24/business/economy/24econ.html

* the US has the lions share of the Global 500 company's and the most millionaires and billionaires in the world. there is also a misconception about the size of many of these billion dollar corps that get special treatment. 75% of Exxon's workforce is located out of the country as one example and some investment houses have less than 10-20 employees.

* there are too many big corporations that funnel all the money to be made up to the top for instance. AT&T just acquired T-mobile which gives them and Verizon 80% of the market. that means no real competition for them and not much of a "choice" for consumers and for those that work there no real choice to go work somewhere else that will pay more as their corporate structure and pay are comparable. where's the free market there?

* I've been in Vegas now for 8-9 years and on occasion do some residential work to repair home healthcare devices. All of the old timers that I talk to EVERY single person tells me that things were better before the big casino's and everyone made more money "back in the day". And this is Vegas so I'm talking about old average white people not minorities claiming to have been held down by the man.

* Hedge fund managers pulling in 1-3B annually. why is one person's right to "capitalism" allowed greater mobility to triumph over another?

* in 2010 the M&A rate was 23%! How many company's do you think are lost in M&A annually and sold for scrap? those jobs are not replaced.

* What about the FRB and Wallstreet? 2x now the american people have payed the price for their gambling in the past 100 years and it's going to happen again.

* What about the derivatives markets? Company's like Goldman's shouldn't be allowed by law to play in that game. Quite frankly forget the taxes and all that if you don't have the capacity to actually receive the goods then you can't play. jacking up the prices of commodities across the globe is immoral, people die every year so some rich bastards can have even more wealthy sitting idle somewhere.

* So basically what do we do about American Greed in general? Our CEO's get paid several times more than their foreign counter parts. Profit's can't increase by leeps and bounds every quarter. The working class in the US can't afford it, the CPI is an inefficient tool in this high tech world for use to calculate wage increases. We can't keep sending out our military to "spread democracy" which anyone that studies economics knows is the pre-requisite for capitalism (you can't sell goods and services to a bunch of savages).

When is enough money enough? How do we change our culture so that happiness doesn't have to equal financial success or a big house full of shit that doesn't really increase the quality of life?

the manipulators of capital and others are completely out of touch with the real world these people do not live in the same world as you and I but they are the ones that pull the strings. in the study of psychology research has found out time and time again that past behavior is the biggest predictor of future behavior.

Term limits need to be there, I knew I forgot something. As for corporate profits, they pay so little because they can offshore all the money. Remove that, force the money to stay here and be re-invested in American jobs and you will start to re-grow the US jobs. 35% is not the lowest rate in history, the effective charged rate once you take away all the handouts may equate to that so why would you opposed a 20% corporate tax with little to know deductions or credits? It will be a hit to companies but that forces innovation and investment without the need for the government to spend anymore money.

As for the financial markets, they need to be regulated but like Gordon Gekko said, greed is good. If there is no incentive to make money, it will stop growth. Let me make something clear, I want to be wealthy one day through my own work, heck I am doing pretty good for someone my age even if I am not a millionaire. That said, I don't dislike or feel people that are successful need to be stiphled out, far from it, they should have the successes celebrated. People are mad because we had to bail out Wall Street, again (I am still pissed cause a lot regulation would have prevented), but without them making the markets, they don't exist. It is a double edged sword, market makers have to be there and they have to be regulated, but you can't choke it down too much or the markets suffer. There is no cut and dry solution to this, I admit I have no clue what the best course of action is and I studied Finance and watch financial news with some damn smart people on everyday. Still, no idea what is the solution to that debacle.

You mentioned M&A, well that is based on attrition and my comments about putting stability into the markets will stop some of that, not all mind you. Companies grow, get bought, get sold all the time, that is how markets work. If the system was not sending jobs overseas, technically the job loss should be minor though it sadly is not. I have been laid off before after getting a stellar evaluation less than a month before... yeah I was pissed and empathize with those that are unemployed now. The biggest thing this country can do is pick a damn direction and stick to it. Both parties have some reasonably good ideas, why not cut the fucking bull shit and actually legislate. The debt ceiling needs to be raised, ONE more time along with a law to prevent deficit spending, a budget needs to be put together that is aggressive and tax policy needs to be part of that. My ideas of what is best many don't like and that is fine but something right now is better than the complacency we are seeing in Washington.

That complacency is what is making me so pissed. The House is trying to do some things but none of it makes it past there... I really question WTF the Senate is doing besides playing partisan politics. The President is quite possibly the worst leader in my memory, he can't rally anyone behind his cause. Chastising over spilled milk shows no leadership, it shows finger pointing and scapegoating his own mistakes. Drop it, follow through on the promises you made that I almost believed and prove that actually deserve the office! This will never happen as Washington doesn't work in a logical manor but one can dream.

 

[LAM]

sorry to hear bout your job loss, that totally blows and even worst when the individual like you performs his/her best. not sure what industry your are in or state but the BLS website does have useful info for job seekers, etc.

I'm all for making money and creating wealth for ones family but not at the expense of others or the environment, we can't continue to be that short sighted others have to live here long after we are all dead.

I know some just think I'm another angry Vet that feels used by the gov or crazy lib but it's not even that. I've spent my entire life trying to help people from doing volunteer work in eagle scouts, the military to habitat for humanity when I have the time now. I grew up in an environment were success was guaranteed for me, college educated parents and a high school with a 98% graduation rate in one of the wealthiest suburbs in the country, not many are not that fortunate. My dad's father died when he was 3 in '41, he was an asbestos installer (most likely he would have been killed in WWII anyway) left his mother to raise 5 kids by-herself. my father the youngest never had new clothes until he got to college and some alumni at wichita state bought him some. fast forward and my sister and I didn't have to borrow or spend a dime to pay for any of our degrees, and I am very thankful for that. I just want others to have the same opportunities that I had and I see that becoming less and less possible for many in the future.

I know that in the past I have been unkind to some, insulted people, trampled on peoples belief systems, etc. and that was wrong of me. so I do apologize to you, DOMS, bio-chem, MDR, and any others (but not Death-Match..lol) for doing so.

* DOMS made a great point the other day about TV. in our house there was none except for the weekends. parents came home during the week and the tv was warm, that was a beating, it was read or go play outside. needless to say my sister and I don't consume like most. i buy a new sports car every once and a while but even that get old to me quick. I get more out of travel and enjoying new places and experiences vs buying things.

 

[oufinny]

sorry to hear bout your job loss, that totally blows and even worst when the individual like you performs his/her best. not sure what industry your are in or state but the BLS website does have useful info for job seekers, etc.

I'm all for making money and creating wealth for ones family but not at the expense of others or the environment, we can't continue to be that short sighted others have to live here long after we are all dead.

I know some just think I'm another angry Vet that feels used by the gov or crazy lib but it's not even that. I've spent my entire life trying to help people from doing volunteer work in eagle scouts, the military to habitat for humanity when I have the time now. I grew up in an environment were success was guaranteed for me, college educated parents and a high school with a 98% graduation rate in one of the wealthiest suburbs in the country, not many are not that fortunate. My dad's father died when he was 3 in '41, he was an asbestos installer (most likely he would have been killed in WWII anyway) left his mother to raise 5 kids by-herself. my father the youngest never had new clothes until he got to college and some alumni at wichita state bought him some. fast forward and my sister and I didn't have to borrow or spend a dime to pay for any of our degrees, and I am very thankful for that. I just want others to have the same opportunities that I had and I see that becoming less and less possible for many in the future.

I know that in the past I have been unkind to some, insulted people, trampled on peoples belief systems, etc. and that was wrong of me. so I do apologize to you, DOMS, bio-chem, MDR, and any others (but not Death-Match..lol) for doing so.

* DOMS made a great point the other day about TV. in our house there was none except for the weekends. parents came home during the week and the tv was warm, that was a beating, it was read or go play outside. needless to say my sister and I don't consume like most. i buy a new sports car every once and a while but even that get old to me quick. I get more out of travel and enjoying new places and experiences vs buying things.

We shared a very similar upbringing though your family seems to have had it much rougher than mine in the mid 1900s. The school I went to and expectations were the same, you achieve what you make for yourself and that alone was a huge driving force to succeed; that seems to have gone the wayside and it is freaking sad.

I need to clarify, I am very employed right now, busy as hell actually now that O'Bama pulled his head from wherever and is issuing drilling/pipeline permits again. Just by doing that the Gulf Coast will add 1000s of jobs in months; stick to that trend for 3-5 years and the Oil&Gas industry will off and running along with people paying less at the pump. Without going off on a tangent, the American people desperately needs to rally around the Oil industry because we need to utilize all the domestic oil we have. Doing so lowers the trade deficit, gets us out of Chavez's pocket (and so many others) and creates a MASSIVE amount of jobs. That is what people don't understand, it is the same in the auto industry mind you, once you get the cogs in motion they are very far reaching. We used to source so much from small towns throughout the US [and some in Canada] at my last job it was amazing how far the wealth spread. Heck we even went to Detroit and over the boarder to Windsor to find shops to give business to in an effort to help that part of the country.

LAM - We will never agree on how to go about things in most cases, the one thing that is happening that needs to more and more, we are talking about the issues. There is so little of this going on, just let Washington solve the problem is not a solution!