Economic REALITY thread

[editec]

Neubarth is proof that Eugenics works

Good genes are good genes. MY Great Grandfather was the World famous naturalist Berthold Neubarth. My mother's father was a doctor. Her brother was a doctor. My father was a doctor. My mother was president of her class in college and editor of her school newspaper. Very capable minds usually produce children who are equally capable. I had the highest SAT score in my high school class yet enlisted in the Navy out of high school because we were in the Vietnam War and I wanted to serve.

I retired at 51, a millionaire.

I left the Navy after having spent 12 years of my life in service to my country (You do not get rich that way.) So, even though I had orders to Naval Post Graduate School, I quit a very successful naval officer career to become a manager with Pacific Bell Telephone. 18 years later in 2000 I retired. I have used my funds to raise children 90 percent of whom were not mine. We just took them in off of the streets.

Instead of watching mindless drivel on television every night, I read and learn. I have done so all of my adult life. My family motto for all of my 30+ children has been, "Learn as much as you can about everything!"

All of my children have done so and are very well rounded individuals. You can take average potential kids and turn them into A students. I have proven that many, many times. Sadly, you can not take stupid and turn them into honor students. You have to start with some potential. If you are starting with an 85 or lower IQ, you are lucky if you can teach them to read with limited understanding. That does not mean that you can not teach them to work.

\

Commendable life, there Neibarth.

But teach them to do what kind of work?

Seriously, so many of the jobs they might have been able to do -- jobs that might have kept them solvent and off welfare rolls -- have migrated offshore or are being taken by illegals.

Besides, teachers in elementary and Junior high don't give people employment skills, they teach them academics.

At best people start getting technical training at the HS level.

FREE TRADE is a disaster precisely because it makes so many formerly productive members of our society dedundant.

And reducdant workers go from being an asset to this society to a net deficiet to this society.

And when we have enough of those displaced workers on food stampts and such, then guess what happens?

Tax revenues fall, even at the same time government spending has to rise to deal with these displaced and now basically unemployable, workers.

Dumb policies like FREE TRADE are what's killing our economy.

 

[KissMy]

the great depression came about when the government took no action to increase the money supply in a recession. the US has not required banks to leverage more assets. how do you or your article account for what is going on in the US?

i account for it as continued, persistent deflation. the inflationary indications of spending, deficit spending in particular, is a solution, rather than a problem - a solution out of milton friedman's action plan, rather than the misattribution to maynard keynes your article made. typical brits, taking all the credit.

in light of the deflation indicated in the housing market, the upward trending dollar, and this money supply trend, the idea that austerity will solve anything for the US is ignorance. what do you think will happen if the government pulls the brakes on expenditure? do y'all have a clue?

The verdict is in. Paying people to sit on their ass & not produce does not add any real sustainable GDP. It only creates debt + interest = DEFAULT & CURRENCY CRISIS.

Had the stimulus money went for real assets that returned real product & value, we would not be in this situation. Paying for political favors & votes has doomed this country.

The M3 money supply will continue to decline while the M1 currency rises causing a global currency crisis. You people may think that our currency is strengthening but it is falling. It is only strengthening against most other paper currencies of the world that are worse off than ours. Most investments will no longer keep up with real future inflation rates. This will deter more investment & encourage hording of assets.

The official U.S. debt now stands at 90.36373% of GDP.

Greece National Debt hit the point of no return at 115% of GDP.

If you include Fannie & Freddie the current US debt to GDP ratio is currently very close to 115%. If we do not end the government backed pensions, or stop Fannie & Freddie then we are Greece.

Fannie and Freddie Make the U.S. Look a Lot Like Greece

The numbers on our federal debt are becoming frighteningly familiar. The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger.

 

[antagon]

you've hurled a shovel load of what you subscribe to in response to my statement. i will look at what may have some actual relationship to what i'd said.

The verdict is in. Paying people to sit on their ass & not produce does not add any real sustainable GDP. It only creates debt + interest = DEFAULT & CURRENCY CRISIS.

Had the stimulus money went for real assets that returned real product & value, we would not be in this situation. Paying for political favors & votes has doomed this country.

lets us argue the case rather than declare a foregone conclusion as to how economies like ours work, or fail to.

i'll start by arguing that your inflationary currency crisis is not real, and is the opposite of what is actually happening in our economy at present. furthermore, sustainable GDP is utopian mythology, and i believe that nothing will bring that about. lastly, i dont concur entirely with what stimulus spending decisions have been made, but i simply dont understand what you are implying with your real asset investment idea.

i see our economy to be in a deflationary spiral exacerbated by lack of demand resulting from near stagflationary credit availability, fear of job security, and a reduction in middle-class incomes due to under-/un-employment. what would throwing 'assets that returned real product & value' at that situation do, other than drive down said value due to the function of the supply/demand mechanism?

The M3 money supply will continue to decline while the M1 currency rises causing a global currency crisis. You people may think that our currency is strengthening but it is falling. It is only strengthening against most other paper currencies of the world that are worse off than ours. Most investments will no longer keep up with real future inflation rates. This will deter more investment & encourage hording of assets.

can you expand on the mechanism of your money supply crisis? it is blurry to me. is there a reason you feel the M3 wont reverse? what about the fed's eventual disposition on all of those assets they've snatched up? does your model account for those and their role as the economy begins to expand, and they are re-introduced? have you considered the weight of the chinese economy on the dollar, and that the indications of their breakaway are inflationary?

 

[Zander]

More Reality.....1st qtr growth is revised downward....UPDATE: US 1Q GDP Growth Revised Down, Weekly Jobless Claims Fall

Gross domestic product increased by a 3.0% annual rate January through March, the Commerce Department said Thursday. The growth figure was revised down from an initial 3.2% estimate from a month ago, and is below the 3.4% rate expected among economists surveyed by Dow Jones Newswires.

The economic expansion has also slowed from the 5.6% increase in GDP recorded in the fourth quarter. But the October-December surge was largely due to technical changes involving inventories and not consumer spending, a fundamental part of the U.S. economy that accounts for about two-thirds of GDP

 

[Zander]

More warning signs -

Credit swap spreads - were at 9.6 basis points in March. they are now at 64 basis points. This is a crisis indicator that rises when banks are more leery of doing business with each other. They charge higher premiums at times when they're worried about credit quality and extreme volatility.

Libor rates - The 3-month, dollar-based LIBOR has more than doubled to 54 basis points from 25 points in December. LIBOR costs rise as banks price in the risk that the people they're lending to won't be able to pay them back.

Bottom line - We're already seeing the stock market begin to crack. But the declines so far could be just a walk in the park compared to what lies ahead. Be prepared. Cut back your exposure to Stocks and Corporate Bonds.

 

[Neubarth]

But teach them to do what kind of work?

Seriously, so many of the jobs they might have been able to do -- jobs that might have kept them solvent and off welfare rolls -- have migrated offshore or are being taken by illegals.

Besides, teachers in elementary and Junior high don't give people employment skills, they teach them academics.

At best people start getting technical training at the HS level.

FREE TRADE is a disaster precisely because it makes so many formerly productive members of our society dedundant.

And reducdant workers go from being an asset to this society to a net deficiet to this society.

And when we have enough of those displaced workers on food stampts and such, then guess what happens?

Tax revenues fall, even at the same time government spending has to rise to deal with these displaced and now basically unemployable, workers.

Dumb policies like FREE TRADE are what's killing our economy.

Indeed, free trade is a very dumb policy. Allowing the Communist Chinese to peg their currency to the dollar is a very dumb policy, too. If we had a president with balls, he would have done something about that well over a year ago. So far, nothing! Only promises from the State Department.

Free Trade? Ha, if I were president, I'd shut the door on China overnight until they floated their currency. We have the right to the driver's seat, but we don't have a driver.

 

[Neubarth]

i'll start by arguing that your inflationary currency crisis is not real, and is the opposite of what is actually happening in our economy at present. furthermore, sustainable GDP is utopian mythology, and i believe that nothing will bring that about. lastly, i dont concur entirely with what stimulus spending decisions have been made, but i simply dont understand what you are implying with your real asset investment idea.

i see our economy to be in a deflationary spiral exacerbated by lack of demand resulting from near stagflationary credit availability, fear of job security, and a reduction in middle-class incomes due to under-/un-employment. what would throwing 'assets that returned real product & value' at that situation do, other than drive down said value due to the function of the supply/demand mechanism?

As I have been telling you guys. The inflationary crisis is not real, and GDP is a joke. People need to learn to look at reality.

 

[Zander]

U.S. Stocks, Oil, Euro Tumble; Dow Ends Worst May Since 1940 - Bloomberg.com

Sell your stocks and bonds people, move to cash or short term treasuries. We are about to enter a wave 3 downturn - it will be fast and furious...........

May 28 (Bloomberg) -- U.S. stocks slid, capping the worst May for the Dow Jones Industrial Average since 1940, while the euro slumped and Treasuries rose as a downgrade of Spain’s debt rating and escalating tensions on the Korean peninsula triggered a flight from riskier assets.

The Dow tumbled 122.36 points, or 1.2 percent, to 10,136.63 at 4 p.m. in New York and lost 7.9 percent this month. The Standard & Poor’s 500 Index sank 1.2 percent to 1,089.41, led by financial shares on the Spanish downgrade and energy companies after U.S. President Barack Obama extended a moratorium on new deep-water drilling. Oil erased gains after rallying as much as 1.6 percent to more than $75 a barrel. Ten-year Treasury yields decreased 7 basis points to 3.3 percent. The euro slipped 0.7 percent to $1.2273.

Equities and commodities extended losses after Fitch Ratings stripped Spain of the AAA rating it’s held since 2003, saying the nation’s economic growth will slow as it attempts to cut its debts. Earlier losses followed disappointing U.S. economic data and a North Korean general’s warning of “all-out war” if any accidental clashes with South Korea break out.

“Spain’s downgrade just adds to more uncertainty,” said Quincy Krosby, chief market strategist for Newark, New Jersey- based Prudential Financial Inc., which oversees about $667 billion. “There are too many geopolitical events. We have a three-day weekend in the U.S., and traders will definitely want to lighten their books.”

 

[boedicca]

the great depression came about when the government took no action to increase the money supply in a recession. the US has not required banks to leverage more assets. how do you or your article account for what is going on in the US?

i account for it as continued, persistent deflation. the inflationary indications of spending, deficit spending in particular, is a solution, rather than a problem - a solution out of milton friedman's action plan, rather than the misattribution to maynard keynes your article made. typical brits, taking all the credit.

in light of the deflation indicated in the housing market, the upward trending dollar, and this money supply trend, the idea that austerity will solve anything for the US is ignorance. what do you think will happen if the government pulls the brakes on expenditure? do y'all have a clue?

The debt won't explode to $20T?

Sounds good to me.

 

[Paulie]

the great depression came about when the government took no action to increase the money supply in a recession. the US has not required banks to leverage more assets. how do you or your article account for what is going on in the US?

i account for it as continued, persistent deflation. the inflationary indications of spending, deficit spending in particular, is a solution, rather than a problem - a solution out of milton friedman's action plan, rather than the misattribution to maynard keynes your article made. typical brits, taking all the credit.

in light of the deflation indicated in the housing market, the upward trending dollar, and this money supply trend, the idea that austerity will solve anything for the US is ignorance. what do you think will happen if the government pulls the brakes on expenditure? do y'all have a clue?

Government spending had no effect on the growth in GDP in the 1st qtr.

News Headlines

Yet the latest GDP report from the U.S. Department of Commerce shows that the 3.2 percent first-quarter economic growth rate got no help from government spending.

In fact, combined federal, state, and local spending actually fell 1.8 percent. What’s more, over the last three quarters of a mild V-shaped recovery, with an average quarterly rebound of 3.7 percent, government spending actually exerted a small net drag (-0.03%) on growth.

 

[Polk]

Contrary to the title, this thread will contain little to no reality.

 

[antagon]

the great depression came about when the government took no action to increase the money supply in a recession. the US has not required banks to leverage more assets. how do you or your article account for what is going on in the US?

i account for it as continued, persistent deflation. the inflationary indications of spending, deficit spending in particular, is a solution, rather than a problem - a solution out of milton friedman's action plan, rather than the misattribution to maynard keynes your article made. typical brits, taking all the credit.

in light of the deflation indicated in the housing market, the upward trending dollar, and this money supply trend, the idea that austerity will solve anything for the US is ignorance. what do you think will happen if the government pulls the brakes on expenditure? do y'all have a clue?

Government spending had no effect on the growth in GDP in the 1st qtr.

News Headlines

Yet the latest GDP report from the U.S. Department of Commerce shows that the 3.2 percent first-quarter economic growth rate got no help from government spending.

In fact, combined federal, state, and local spending actually fell 1.8 percent. What’s more, over the last three quarters of a mild V-shaped recovery, with an average quarterly rebound of 3.7 percent, government spending actually exerted a small net drag (-0.03%) on growth.

point taken: you'll believe anything spun your way.

did your brilliant editorialist make a little chart accounting for the role government spending played in QI 2009 and QII 2009? at that juncture, government input was virtually all there was to turn around the economy - about 6 points. did he in his wisdom consider the monetary implications of government expenditure? well, that wouldn't be a pre-digested over-simplified conclusion for gullible, ignorant skeptics to consume.

of course the recovery will be of the private sector's making, but selective acknowledgment of the role the government plays sets low marks for this kudlow's credibility. as for fish like yourself that bite, it sets marks for intellect. he argues that where government spending declined, that it didn't contribute to the latest growth. captain obvious strikes again. on the basis of that argument alone, he's concluded that government shouldn't increase spending in a recession. you bought it. what can i say?

 

[Zander]

Contrary to the title, this thread will contain little to no reality.

Your "contribution" is worthless.

 

[Polk]

Contrary to the title, this thread will contain little to no reality.

Your "contribution" is worthless.

So is this thread.

 

[pans trogladyta]

The economy is still in the dumps and likely to get worse. Unemployment is growing, foreclosures are increasing, the stock market is ready to tank, and our debt is skyrocketing. This thread is about the economic reality that we are facing.

You could also add, that no laws have been reinstalled or passed that would prevent a repeat of the crisis.

 

[Toro]

the great depression came about when the government took no action to increase the money supply in a recession. the US has not required banks to leverage more assets. how do you or your article account for what is going on in the US?

i account for it as continued, persistent deflation. the inflationary indications of spending, deficit spending in particular, is a solution, rather than a problem - a solution out of milton friedman's action plan, rather than the misattribution to maynard keynes your article made. typical brits, taking all the credit.

in light of the deflation indicated in the housing market, the upward trending dollar, and this money supply trend, the idea that austerity will solve anything for the US is ignorance. what do you think will happen if the government pulls the brakes on expenditure? do y'all have a clue?

Government spending had no effect on the growth in GDP in the 1st qtr.

News Headlines

Yet the latest GDP report from the U.S. Department of Commerce shows that the 3.2 percent first-quarter economic growth rate got no help from government spending.

In fact, combined federal, state, and local spending actually fell 1.8 percent. What’s more, over the last three quarters of a mild V-shaped recovery, with an average quarterly rebound of 3.7 percent, government spending actually exerted a small net drag (-0.03%) on growth.

point taken: you'll believe anything spun your way.

did your brilliant editorialist make a little chart accounting for the role government spending played in QI 2009 and QII 2009? at that juncture, government input was virtually all there was to turn around the economy - about 6 points. did he in his wisdom consider the monetary implications of government expenditure? well, that wouldn't be a pre-digested over-simplified conclusion for gullible, ignorant skeptics to consume.

of course the recovery will be of the private sector's making, but selective acknowledgment of the role the government plays sets low marks for this kudlow's credibility. as for fish like yourself that bite, it sets marks for intellect. he argues that where government spending declined, that it didn't contribute to the latest growth. captain obvious strikes again. on the basis of that argument alone, he's concluded that government shouldn't increase spending in a recession. you bought it. what can i say?

I think Paulie's choice of words, "no effect in the first quarter" was not what he was trying to convey. Of course government had an effect, its just that it didn't contribute to economic growth.

There is no doubt in my mind that the government actions at the beginning of the recession mitigated the recession, in two ways. First, the actions of the Fed and the Treasury to backstop the financial system avoided a repeat of the Great Depression. Second, the automatic stabilizers built into the budget cushioned the decline. The former was more important than the latter IMHO.

The fact that government didn't contribute to Q1 growth is a positive as it shows that the private sector is beginning to recover. There are still serious problems in the economy, however, and we are liable to have subpar growth for some time, maybe even slip back into recession.

 

[Neubarth]

Government spending had no effect on the growth in GDP in the 1st qtr.

News Headlines

point taken: you'll believe anything spun your way.

did your brilliant editorialist make a little chart accounting for the role government spending played in QI 2009 and QII 2009? at that juncture, government input was virtually all there was to turn around the economy - about 6 points. did he in his wisdom consider the monetary implications of government expenditure? well, that wouldn't be a pre-digested over-simplified conclusion for gullible, ignorant skeptics to consume.

of course the recovery will be of the private sector's making, but selective acknowledgment of the role the government plays sets low marks for this kudlow's credibility. as for fish like yourself that bite, it sets marks for intellect. he argues that where government spending declined, that it didn't contribute to the latest growth. captain obvious strikes again. on the basis of that argument alone, he's concluded that government shouldn't increase spending in a recession. you bought it. what can i say?

I think Paulie's choice of words, "no effect in the first quarter" was not what he was trying to convey. Of course government had an effect, its just that it didn't contribute to economic growth.

There is no doubt in my mind that the government actions at the beginning of the recession mitigated the recession, in two ways. First, the actions of the Fed and the Treasury to backstop the financial system avoided a repeat of the Great Depression. Second, the automatic stabilizers built into the budget cushioned the decline. The former was more important than the latter IMHO.

The fact that government didn't contribute to Q1 growth is a positive as it shows that the private sector is beginning to recover. There are still serious problems in the economy, however, and we are liable to have subpar growth for some time, maybe even slip back into recession.

As previously stated, the Government spending of money did have an effect on GDP. Hell, we are a Service Sector Economy. Any government spending will result in positive GDP being added to the economy. The only problem is that it is not lasting. We need to create lasting jobs. I favor farming jobs so we can put all of these illegals to work. They are also net additive to our GDP. Besides very few city slickers would be willing to work in dirt. Bring the water west and put millions of more acres under cultivation. DO IT NOW.

 

[antagon]

Government spending had no effect on the growth in GDP in the 1st qtr.

News Headlines

point taken: you'll believe anything spun your way.

did your brilliant editorialist make a little chart accounting for the role government spending played in QI 2009 and QII 2009? at that juncture, government input was virtually all there was to turn around the economy - about 6 points. did he in his wisdom consider the monetary implications of government expenditure? well, that wouldn't be a pre-digested over-simplified conclusion for gullible, ignorant skeptics to consume.

of course the recovery will be of the private sector's making, but selective acknowledgment of the role the government plays sets low marks for this kudlow's credibility. as for fish like yourself that bite, it sets marks for intellect. he argues that where government spending declined, that it didn't contribute to the latest growth. captain obvious strikes again. on the basis of that argument alone, he's concluded that government shouldn't increase spending in a recession. you bought it. what can i say?

I think Paulie's choice of words, "no effect in the first quarter" was not what he was trying to convey. Of course government had an effect, its just that it didn't contribute to economic growth.

There is no doubt in my mind that the government actions at the beginning of the recession mitigated the recession, in two ways. First, the actions of the Fed and the Treasury to backstop the financial system avoided a repeat of the Great Depression. Second, the automatic stabilizers built into the budget cushioned the decline. The former was more important than the latter IMHO.

The fact that government didn't contribute to Q1 growth is a positive as it shows that the private sector is beginning to recover. There are still serious problems in the economy, however, and we are liable to have subpar growth for some time, maybe even slip back into recession.

i think that the selection of the first quarter 2010 to base an argument against government spending is a method widely called spin, toro. paulie mentioned it because a spinstar economist based his editorial on it.

i'd agree that the fed's action was most crucial to the recovery, but looking at targeted spending, from the cash for clunkers to the extension of unemployment benefits, tangible contirbutions to the demand base were contributed by the government. shoring up this base helped to prevent further reactions to low consumer demand: increased layoffs and downsizing, weariness among investors, etc.

the objective is not to set the economy back to peak performance exclusively on the government's bill, but the intention is to veer it off a collision course with depression. hard to say if what we've recovered so far might stick, or if some of the lagging effects and future hurdles may drag us back below par growth. nevertheless, it is crystal clear some folks don't understand how the government can and has played a roll in our recovery (or decline) and are quick to snap up spin laid for simpletons such as paulie has. end of the day: i wouldn't post any swiss cheese like that kudlow garbage, unless for a joke.

 

[Paulie]

point taken: you'll believe anything spun your way.

did your brilliant editorialist make a little chart accounting for the role government spending played in QI 2009 and QII 2009? at that juncture, government input was virtually all there was to turn around the economy - about 6 points. did he in his wisdom consider the monetary implications of government expenditure? well, that wouldn't be a pre-digested over-simplified conclusion for gullible, ignorant skeptics to consume.

of course the recovery will be of the private sector's making, but selective acknowledgment of the role the government plays sets low marks for this kudlow's credibility. as for fish like yourself that bite, it sets marks for intellect. he argues that where government spending declined, that it didn't contribute to the latest growth. captain obvious strikes again. on the basis of that argument alone, he's concluded that government shouldn't increase spending in a recession. you bought it. what can i say?

I think Paulie's choice of words, "no effect in the first quarter" was not what he was trying to convey. Of course government had an effect, its just that it didn't contribute to economic growth.

There is no doubt in my mind that the government actions at the beginning of the recession mitigated the recession, in two ways. First, the actions of the Fed and the Treasury to backstop the financial system avoided a repeat of the Great Depression. Second, the automatic stabilizers built into the budget cushioned the decline. The former was more important than the latter IMHO.

The fact that government didn't contribute to Q1 growth is a positive as it shows that the private sector is beginning to recover. There are still serious problems in the economy, however, and we are liable to have subpar growth for some time, maybe even slip back into recession.

i think that the selection of the first quarter 2010 to base an argument against government spending is a method widely called spin, toro. paulie mentioned it because a spinstar economist based his editorial on it.

i'd agree that the fed's action was most crucial to the recovery, but looking at targeted spending, from the cash for clunkers to the extension of unemployment benefits, tangible contirbutions to the demand base were contributed by the government. shoring up this base helped to prevent further reactions to low consumer demand: increased layoffs and downsizing, weariness among investors, etc.

the objective is not to set the economy back to peak performance exclusively on the government's bill, but the intention is to veer it off a collision course with depression. hard to say if what we've recovered so far might stick, or if some of the lagging effects and future hurdles may drag us back below par growth. nevertheless, it is crystal clear some folks don't understand how the government can and has played a roll in our recovery (or decline) and are quick to snap up spin laid for simpletons such as paulie has. end of the day: i wouldn't post any swiss cheese like that kudlow garbage, unless for a joke.

Well we all have our economic ideologies. Even your point makes a great case for cancelling any additional "stimulus" spending from the government from here on out.

I still choose for my children not to have to foot the bill for a bunch of idiotic mistakes made by their generational predecessors.

You want government spending of this magnitude because you can't stomach a correction that should be YOUR responsibility. You'd rather kick that can down the road to our children.

 

[Toro]

I still choose for my children not to have to foot the bill for a bunch of idiotic mistakes made by their generational predecessors.

You want government spending of this magnitude because you can't stomach a correction that should be YOUR responsibility. You'd rather kick that can down the road to our children.

The good news is that our children and grandchildren won't be paying for our mistakes.

The bad news is that WE will be paying for our mistakes.