United States Heading towards a Depression?

The United States will be fine...trust me

 

Oh, ok. That makes me feel SOOOO much better!

 

Honestly I really think that way because I trust in the American strength and dynamism. This country has been a lot though and always stood up at the end of the day. True...lot of things need to be improved. Unemployment rates are alarming. Folks are still getting their homes foreclosed here in Illinois...(Cant speak for the rest of the country!)

Time IS though! But I believe that America will survive...and prevail better than any other country on the face of the earth had they faced a similar eco-politic turmoil.

 

The private business sector and the average American are ultimately to blame for these troubles. We are a nation of greedy gluttens and it was simply time to pay the piper.

And while I do believe that Bush's government could have taken steps to prevent this, you can blame the government only so much. In all reality, the only thing the federal government can do at this point is hold off a depression. Yet so many Americans look at their situation and expect the government to make it better by next month. Voting the Dems out of Congress or Obama out of the White House isn't going to change anything. This is a process that is going to play it's way out on it's own terms, and whoever is in power when it happens is going to take the credit.

 

Very well said...

 

Since both parties are sub serving to the Federal Reserve, this is not an issue of partisanship.

 

Hey? DubDubDubDot, what do you think you're doing? I'm forced to agree with you again!

Any, excellent post. Depressing, but excellent.

I heard that the federal government is deliberately inefficient. It allows money to get, uh, "lost". For example, in the Cash for Caulkers campaign, it costs the government $30,000 to caulk the average house. That's $10,000 in materials and labor to work on the house, and $20,000 for "administration" costs for that $10,000. Good luck trying to track down that twenty grand.

You can't fix a problem by throwing more money at it. In some cases, you can actually make it worse.

 

Yes, in 2015!

 

The Roman empire was doing fine at one time also, and the Greeks before them.

It looks like the American culture has lost it's fire. Americans have lost their sense of self-sufficiency and their sense of self-respect. The scales have tipped and more Americans now demand to suck off the teats of government than are willing to work to earn what they want. We don't have the faith in ourselves to work and we've instead replaced it with faith in government. People throw their hands up in the air and scream "Someone has to fix this!", when really only they themselves can provide the solution.

We've crossed the tipping point and it's unlikely we'll be coming back. No nation of consumers can long endure. Eventually you run out of other people's money.

 

the new thing is the global economy and global dependence on each other.

i think the "american" empire is not going to collapse unless the world follows with it.

 

Au contraire mon ami!

Let's drill down into what's being exchanged here...

The U.S. government has saddled the American economy with so many taxes, laws, and regulations that U.S. businesses are no longer able to compete globally. As a direct result of this, the U.S. trade deficit has skyrocketed out of control.

Other nations send us stuff. They send us fuel, electronics, raw materials, food, clothing -- almost everything we need to live.

In return, we send them ... debt. We send them a promise to pay them later for what they are sending us today. Forget just for a moment that we are quite effectively selling our children into slavery. Instead, focus on what's going to happen when the productive nations of the world realize that American debt isn't worth the paper it's printed on.

What will they send us then?

Right now, this flood of phony dollars rushing overseas in the form of debt obligations is the only thing stopping the U.S. from going into the largest spiral of hyperinflation in recorded history. When those dollars come home, as they eventually must, a loaf of bread (if you can get one) will come with a six digit price tag.

The U.S. is dependent upon the world for almost everything we consume. Most of the world is dependent upon the U.S. for global security. When the rest of the world realizes that there's no way in hell that we can pay our debts, they will stop sending us their valuable property. When that happens, the U.S. will fail. That will, in turn, cause us to fail to be able to provide global security. This will usher in a new era of war and the accompanying loss of global trade and ensuing global poverty.

 

but without america who is the world going to sell to? you can use the peter schiff argument that other countries are better off selling to themselves but the influx of money from america helps the economies of other countries.

 

We're not sending them money. We're sending them promises. When hyperinflation comes, they will see the value of those promises evaporate.

Let's say you're in Singapore and the U.S. owes you $1M. How much will the $1M debt obligation you hold be worth after a few years of 10,000% inflation?

How willing will you be to export to the United States in return for more promises of future dollars?

 

well i hope your wrong, hyperinflation scares me.

 

That is the bad part.

 

To further this point. If you look at the number of jobs the "stimulus" created and the cost? It equates to over $400,000.00 per job! And these jobs will only last 1 year at best. That said, $400,000.00 to employ people making under $40k/yr.

Imagine what would have happened if the government let small businesses keep more of their income? Or if they simply gave us $400k each?

Do you have any idea how many jobs I could create with $400k in one year?

Better yet, the feds could have just given each of those workers $400k over time and kept them with an income for 10 years!

 

A common misconception is that foreign countries like China are individually our largest holder of debt. When actually, the US Treasury is. We buy and flip our own debt in a huge ponzi scheme that makes Maddoff seem like a rank amateur.

"We're not sending them money. We're sending them promises." - That's not true in the context of what eric was saying. He's saying that even though we've got huge debt we are still one of the largest consumers in the global economy.

I think you got caught up in your desire to keep pounding home the point (and a good one) that foreign countries are buying a lot of our debt. But you appear to be inadvertently making the statement that we buy goods and services from other countries with IOUs. We don't. Else the middle east oil conglomerate, for example, would have imploded long ago. They're not building palaces and buying Mercedes with IOUs.

And don't sell America short. We don't produce as many tangible products as we used to but last time I checked Google, Yahoo, Microsoft, Cisco, Twitter, Facebook, and Myspace were all American companies and they all produce multiple products and services. Not to mention our telecom dominance. And in a world where nearly everything we do is moving to the cloud, he who controls the information controls everything.

We still grow our own food and if we could just take the lead on energy and drop foreign oil we'd be back on top rather quickly me thinks

 

George and Will, I really think the US's largest creditor is us the small businesses, tax payers, etc. We're the one that bears the brunt of their stupidity and spending. We are the ones that they borrow/take from. The difference for us though? We have no hope of ever being paid back. We're not willing lenders.

It's about time we called the note and said enough is enough.

 

Tu parles francais? C'est curieux de trouver quelqu'in qui parle francais ici. J'ai vecu sept ans a Toulouse Mais je suis Americain!

 

4.3 Million small businesses multiplied by $400,000 is $1.72 Trillion.

But even if you want to limit the small businesses the money goes to, it still wouldn't fly because so many Americans would feel left out and there would be a firestorm of negativity because they wanted free money too.

How are you going to decide which workers get the money? And again, same problem as above.... Your neighbor gets $400,000 for free and you don't. That is a big problem.