Deleveraging the economy

Wiseacre

Retired USAF Chief
Joined
Apr 8, 2011
Messages
6,025
Reaction score
1,297
Points
48
Location
San Antonio, TX
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation. Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat. It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
 

william the wie

Gold Member
Joined
Nov 18, 2009
Messages
16,667
Reaction score
2,385
Points
280
Wiseacre, economics assumed its current form under speculators such as Ricardo and Keynes, as such macro-economic is great training for Wall St. not so great for running a country much less an empire.
 

uscitizen

Senior Member
Joined
May 6, 2007
Messages
45,940
Reaction score
4,908
Points
48
Location
My Shack
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation. Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat. It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
Yep this is one of the major causes of where we are.
Global competition for wages is the other major one.
 

Sundial

Class Warrior
Joined
Aug 1, 2011
Messages
1,231
Reaction score
110
Points
48
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.
Without jobs, where will Americans obtain the money to pay their debts?

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation.
Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat.
Without sales, how will companies justify hiring more people?

It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
Without a jobs bill, how do you get people back to work?
 

iamwhatiseem

Platinum Member
Joined
Aug 19, 2010
Messages
25,772
Reaction score
8,044
Points
900
Location
On a hill
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation. Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat. It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
Yep this is one of the major causes of where we are.
Global competition for wages is the other major one.
You left out one very large factor - trust me on this...

Price shopping.
While price has long been a consideration among consumers, but nothing like the last 30 years. Retailers like WalMart, Cosco, KMart, Target etc. have driven prices down to a point where companies have no choice but to move manufacturing off-shore. The few product manufacturers left in this country are absolutely struggling...most making single digit margins.
 

editec

Mr. Forgot-it-All
Joined
Jun 5, 2008
Messages
41,421
Reaction score
5,660
Points
48
Location
Maine
Post deindustrialization of the economy, deleveraging was bound to come.
 

expat_panama

Gold Member
Joined
Apr 12, 2011
Messages
2,948
Reaction score
356
Points
130
...According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending...
This lie about American households going hopelessly into debt just won't quit. Seems it's pushed mostly by leftists that want to justify increasing government debt to sloppy voters. Let's clean up our act.

First, the 60's were 50 years ago and Regan cut taxes in the 80's. Second, after Reagan's tax cut revenue doubled. Third, we're fortunate we live in an age that we can get the facts, because we can see debt % income has been falling for four years years now:

Americans don't accept runaway debt, which is why they're tightening the leash on democrat spenders.
 

Truthmatters

Rookie
Joined
May 10, 2007
Messages
80,182
Reaction score
2,263
Points
0
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation. Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat. It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
Yep this is one of the major causes of where we are.
Global competition for wages is the other major one.
You left out one very large factor - trust me on this...

Price shopping.
While price has long been a consideration among consumers, but nothing like the last 30 years. Retailers like WalMart, Cosco, KMart, Target etc. have driven prices down to a point where companies have no choice but to move manufacturing off-shore. The few product manufacturers left in this country are absolutely struggling...most making single digit margins.
remember when we tried to tell you why walmart and its cheap goods while killing massive amounts of mom and pops was BAD for this country?
 

uscitizen

Senior Member
Joined
May 6, 2007
Messages
45,940
Reaction score
4,908
Points
48
Location
My Shack
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation. Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat. It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
Yep this is one of the major causes of where we are.
Global competition for wages is the other major one.
You left out one very large factor - trust me on this...

Price shopping.
While price has long been a consideration among consumers, but nothing like the last 30 years. Retailers like WalMart, Cosco, KMart, Target etc. have driven prices down to a point where companies have no choice but to move manufacturing off-shore. The few product manufacturers left in this country are absolutely struggling...most making single digit margins.
Price shopping drove cheap imports and personal debt and pretty much stagnant wagesd after inflation was figured in helped to drive the consumer price shopping.

It is all a multi loop vicious cycle we are locked into.
We have not had real growth in this country for at least 2 decades.

real sustainable growth comes from the bottom up not the top down.
 
Last edited:

expat_panama

Gold Member
Joined
Apr 12, 2011
Messages
2,948
Reaction score
356
Points
130
...remember when we tried to tell you why walmart and its cheap goods while killing massive amounts of mom and pops was BAD for this country?
Put a sock in it. The first Wal-mart opened in 1945. America is a lot better off now.
 

Sallow

The Big Bad Wolf.
Joined
Oct 4, 2010
Messages
56,532
Reaction score
6,241
Points
1,840
Location
New York City
10 years ago a Republican President inherited a 100 billion dollar surplus..and if he had just kept up with the program..the government would have paid down it's debt by now.

True story.
 

uscitizen

Senior Member
Joined
May 6, 2007
Messages
45,940
Reaction score
4,908
Points
48
Location
My Shack
10 years ago a Republican President inherited a 100 billion dollar surplus..and if he had just kept up with the program..the government would have paid down it's debt by now.

True story.
And about 20 years before that a Republican president inherited a debt of maybe 800 billion.
3 republican terms later....
But in all honesty they were just following their corporate masters as both party's now do.
 
OP
Wiseacre

Wiseacre

Retired USAF Chief
Joined
Apr 8, 2011
Messages
6,025
Reaction score
1,297
Points
48
Location
San Antonio, TX
One of the possible reasons why we're in the pickle we're in economically speaking, is because we've been borrowing and spending too much over the past 30 years or so. As individuals and as a gov't, we spent a lot more than we had and now it's catching up to us. So, whatever President Obama says in his speech tonight or whatever the GOP says/does in response, it may well be that the public is just not going to return to those prolifigate spending ways. At least not until they feel better about their financial situation and their job security if they even have a job.
Without jobs, where will Americans obtain the money to pay their debts?

According to an article in today's WSJ, household debt as a % of after tax income is around 120% (source: Federal Reserve). That's up from the mid 60s approx 30 years ago, which coincidentally is about the time Reagan cut taxes and Congress did not cut spending. Not interested in getting into a fight over who was at fault, but our national debt started to rise rapidly, and so did the household debt. Don't know if one fed the other, but as a country it's like we just gave up on fiscal responsibility.

There is a sense among most Americans that we should not leave our debts to our children, we should be passing to them a better situation.
Not sure if that sentiment is as strong as it was 40-50 years ago, but it ain't dead yet either. So it may be that for some years ahead a lot of Americans are going to rein in the spending somewhat.
Without sales, how will companies justify hiring more people?

It is my opinion that jobs bills and stimulus spending will help assuage some of the pain people are in, but only temporarily. Until we get to the point where your equity in your house is a positive number and you feel your job is save and your brother/sister is back to work, it's all bandaids and bactine.
Without a jobs bill, how do you get people back to work?

How much more debt/deficits do you want to run up?

What makes you think the shovel ready jobs that we can do "right now" will be any more "shovel ready" than last time? What makes you think another $450 Billion will be better spent, better controlled, better managed?

What makes you think these jobs will not go away once the job is over?

What makes you think if you raise taxes only on the wealthy to pay for all this you can still get economic growth? I heard there was a dem proposal to raise their taxes up to near 50%. HAVE YOU LOST YOUR FUCKING MINDS?


You want to know how to get people back to work?

1. Reform the tax code, reduce the rates for personal and business income and pay for it with deleting the loopholes, subsidies, and tax breaks. Revenue neutral.

2. Open the gulf and Alaska and other places to oil drilling. Finish the Canadaian pipeline to the gulf.

3. Tell the EPA to go fuck themselves. Rollback everything they've done in the last 3 years unless it can be shown the change was really needed and couldn't be done in a more cost effective way.

4. Repeal ObamaCare. Gotta be a better way than that piece of crap. Find it, if the best we can do is Ryan's plan, so be it.

5. Repeal Dodd-Frank. Instead of institutionalizing too big to fail, the new policy is if you fail you go done the tubes. Tough shit.

6. Hiring freeze at the federal level. No pay raises for 5 years.

7. Examine every federal dept, reduce or eliminate duplicate or wasteful or out dated offices.

8. No need for a balanced budget amendment that takes years to get passed at the state level, if ever. Just require that every increase in the federal debt ceiling be accomplanied by at least an equal or greater cut in spending. Require a 2/3 majority vote in both Houses of Congress to get around it.

There's other stuff to do, but you get the picture. You dont have to spend 450 billion bucks and go deeper in debt, you just have to get gov't out of the way. Problemis, this president won't do any of those things.
 

expat_panama

Gold Member
Joined
Apr 12, 2011
Messages
2,948
Reaction score
356
Points
130
...just following their corporate masters as both party's now do.
--as well they should considering that politicians are the hired help and people like you and I own the corporations. The thing is that you and I are not helplessly wallowing in debt, so we need to put our government affairs in order like we've done at home.
 

expat_panama

Gold Member
Joined
Apr 12, 2011
Messages
2,948
Reaction score
356
Points
130
1. Reform the tax code, reduce the rates for personal and business income and pay for it with deleting the loopholes, subsidies, and tax breaks. Revenue neutral.

2. Open the gulf and Alaska and other places to oil drilling. Finish the Canadaian pipeline to the gulf.

3. Tell the EPA to go fuck themselves. Rollback everything they've done in the last 3 years unless it can be shown the change was really needed and couldn't be done in a more cost effective way.

4. Repeal ObamaCare. Gotta be a better way than that piece of crap. Find it, if the best we can do is Ryan's plan, so be it.

5. Repeal Dodd-Frank. Instead of institutionalizing too big to fail, the new policy is if you fail you go done the tubes. Tough shit.

6. Hiring freeze at the federal level. No pay raises for 5 years.

7. Examine every federal dept, reduce or eliminate duplicate or wasteful or out dated offices.

8. No need for a balanced budget amendment that takes years to get passed at the state level, if ever. Just require that every increase in the federal debt ceiling be accomplanied by at least an equal or greater cut in spending. Require a 2/3 majority vote in both Houses of Congress to get around it.

There's other stuff to do, but you get the picture. You dont have to spend 450 billion bucks and go deeper in debt, you just have to get gov't out of the way. Problemis, this president won't do any of those things.
Now there's a campaign platform I'd vote for and it wouldn't matter which party presented it.
 

Truthmatters

Rookie
Joined
May 10, 2007
Messages
80,182
Reaction score
2,263
Points
0
listen to them advocate for recrashing the world economy.
 

iamwhatiseem

Platinum Member
Joined
Aug 19, 2010
Messages
25,772
Reaction score
8,044
Points
900
Location
On a hill
10 years ago a Republican President inherited a 100 billion dollar surplus..and if he had just kept up with the program..the government would have paid down it's debt by now.

True story.
And a decade later a Democrat ballooned the debt by soon to be $5 trillion.
 
OP
Wiseacre

Wiseacre

Retired USAF Chief
Joined
Apr 8, 2011
Messages
6,025
Reaction score
1,297
Points
48
Location
San Antonio, TX
...a Democrat ballooned the debt by soon to be $5 trillion.
Hmmm, is that counting the latest 1/2 T proposal?

Obama is already up to 4 trillion already, you know damn well he's gonna tack on another trillion plus in his last year. Even if they cut spending as part of the supercommitee debt ceiling deal, I'd bet the farm he's going to exceed 5 trillion before his 1st (and hopefully last) term is over.
 

New Topics

Most reactions - Past 7 days

Forum List

Top