Yep, but it's only important to point out when those stats show a different story than was intended. I agree, though broader and accurate are different terms! That's why I also posted about tax receipts and a thriving economy. There's so much more that *could* be posted: http://news.google.com/news?hl=en&ned=us&q=us+economy&btnG=Search+News Or we could talk about the thriving economies of the UK and Scotland?
The predefined search strings to google with millions of pages? I don't have time to go through millions of search results. Perhaps you could pick a few that you wish to make a point with?
Very eloquently put. I do believe there is major economic upheaval on the horizon for the US and any move away from the US dollar will be a currency shock from which it may never recover. Gtech - the economy here is, on paper, very strong. The UK has one of the largest and strongest economies in the world ... on paper, using all of the massaged and party-politic driven distorted statistics available. Yet, as the article you referred to points out, a massive proportion need to claim some form of welfare assistance. If anything, I would say the figures are understated. I recall reading a few years back that one third of the UK population required some form of means-tested benefit or allowance. In the late 1970's, early 1980's Britain was subjected to what is now know as Thatcherism, where this drip-down, bottom-feeder policy of tax breaks for the rich and more taxes for the poor was implemented with Thatcher famously saying that inequality was necessary for the economy to thrive. Well, you see the results now, some twenty years on. On paper everything is rosey but walk onto a housing estate where the unemployment rate is 25%, 40% or 50% and ask them if inequality is good for their economy. Everyone lives on credit. No-one saves any money. Pension funds have been plundered or disappeared into an economic black hole. That appears to be the general idealism behind the tax breaks for the rich in the US, imo. I would wager the eventual outcome is similar.
mcfox, I don't know enough about that time period nor am I going to take the time to research it. It's not important. You contend America is bankrupt, I contend (as does everything I've sourced) otherwise. The rich hire people. The poor do not. You can't give a poor person that doesn't make enough money to pay taxes in the first place, a tax break. 10% of ZERO is 0. By giving tax incentives to those that DO HIRE people, our unemployment rate (after the devastation of 9/11, inheriting an economy that was spiraling downwards from Clinton) has continued to move downward. So much so, that as one article I posted points out, there is a concern that unemployment is going TOO LOW causing inflation, which the feds continue to raise rates on to curtail. All the trivial details are just that. Your post contends "America is Bankrupt." I've simply taken the time to show otherwise. Perhaps next we can do a "Scotland is Bankrupt?" post? America is not bankrupt. If it were, millions of illegal immigrants would not continue fleeing here in hopes of something better.
The U.S. is in horrible financial shape. But the rest of the world is in worse financial shape. Margaret Thatcher's reforms saved Great Britain -- for a time. Reform is not a one-phase process. Reform is a constant struggle against the forces of ignorance. Most of America's current financial woes could be improved immeasurable by abolishing the income tax and implementing a national sales tax. Abolishing the income tax would motivate Americans to produce more, because they would get to keep the fruits of their labor. Establishing a national sales tax would motivate Americans to spend less, because everything would cost more. (Remember supply and demand?) Our national savings rate would skyrocket. Right now, Americans aren't saving because cash is cheap. This is true by both historical and global standards. In addition, a national sales tax would be levied equally on both domestic and imported goods. Our current income tax causes our domestic goods to be more expensive -- both for domestic consumers and for foreign consumers. Folks -- our tax system is the #1 cause of our trade deficit. Our tax system is also the #1 cause of our negative savings rate. It's time to reform this uneconomic system -- before our children and our grandchildren have to pay the price for our lack of understanding of basic economics.
Will, do you know of any studies on "National Sales Tax" vs "Income Tax?" I'd be interested in seeing them.
You might start by reviewing these web sites: Americans for Fair Taxation National Retail Sales Tax Alliance Taxpayers Revolution Americans for Fair Taxation Earl's Taxation Home Page Citizens for an Alternative Tax System
Here is what I am saying, GTech: You chose some short term, overall stats to support your position that the economy is doing well. I am saying that no short term, overall, stats are all that helpful in saying what is going on structurally. I think it is more useful to take a longer-term view, and to look at structural shifts in the economy - i.e., not overall output, but structural changes in terms of what kind of output is happening, and over what kind of term period? A quick example. From 1996-2005, business investment peaked in 2000 and has now declined to pre-2000 levels (not good, by itself). But the division between "hard" industry and service industries - specifically, between construction and manufacturing, on the one hand, and service industries (like finance and insurance; health care; real estate, rental and leasing, etc.) on the other, paints an even less rosy picture (in billions): 1998 2003 Construction 26.9 23.1 Manufacturing 203.6 149.5 Finance and insurance 118.2 125.1 Retail Trade 57.3 65.5 -and so on. The data is clear. America is abandoning its investment in manufacturing and "old-school" sectors for some perceived "new era" of service industries. The problem is, manufacturing health is the key to long term, structural health in any economy. Service, after all, means, by an large, poorly trained, low-value added sectors - McDonald's, anyone? See Manufacturing Matters, by John Zysman, for a cogent argument in this way. Another: Employment (1000's): 1995 2005 Manufacturing 17,241 14,270 Financial Services 6,827 8,305 Leisure and Hospitality 10,501 12,777 There are plenty more. The data is not hard to find (these were from the GPO and the Bureau of Labor Statistics). Given this, I would argue, we are running out of our ability to act as Saudi Arabia is supposed to act within OPEC - as the bulwark against exogenous and non-exogenous shocks to the world financial and economic structure. When that happens, be prepared for a paradigm shift on a significantly higher order than that of the end of the Pax Brittanica. By "bankrupt" I am speaking of the above, speaking of the article by "Mike in Japan" (provided in McFox's first post) and speaking of the arrogance I have seen take hold in my country; speaking of a president who in my opinion doesn't give a damn about the community of nations, and, it seems to me, carries this arrogant abrogation of the rule of law into the domestic arena, with gems like the Patriot Act. Who thus ushers in a new age of the "pre-emptive strike" against a nation that has not attacked us; or against a citizen engaged in, well, being a law-abiding citizen; of the rise of the politics of righteousness, and an ideology of some skewed version of fervent, zealous, Christian political evangelism. All of these are benchmarks of the Bush Doctrine and its offshoots and all run against everything I believe in with respect to being an American.
Oh my god, that has to be one of the most ridiculous things I've ever heard in my life. What happens when America prints more money? It's called a monetary expansion, and it results in lower interest rates and a SHORT RUN increase in output. The lower interest rates cause a decrease in investment which leads to long run economic depression. Not to mention the macroeconomic international effects of such a move as "printing more money whenever we need it." If this were the case the value of the dollar would immediately go down (think increase in supply of dollars). You can only use dollars to buy American goods. To buy foreign goods you need FOREIGN currency, meaning you have to sell your dollars and buy Yen, DKK, Pounds, whatever. I would recommend taking an introductory economics course before debating something like this in such a way (I'm not being snobby here--just to the point--if you don't like school i understand completely; just read some economics books on your own). It would be one thing if you were posing questions and looking to learn, but you're acting like you know what you're talking about. I hope this doesn't come across as harsh, and my intent is not to be mean, but what you're saying is simply untrue. (this is all not to mention the fact that repeated monetary expansions to fund a failing economy would quickly cause other governments to remove a peg to the dollar) I'm sorry but everytime I read this I find new things that are incorrect; if Denmark buys clothing from Turkey (this could just as easily be oil or any other good) no dollars are involved. DKK is exchanged for Turkey New Lira (TRY). This is with respect to the following specific statement: It's not some mistake that politicians and economists in the US almost universally complain about China's policy w/respect to the dollar. The goal of the Chinese is to keep their currency relatively inexpensive so that it is CHEAP for foreign nations (e.g. the US) to buy their goods. This means American goods are tougher to sell (Chinese goods are comparatively cheaper).
This is not correct. Adding value is the key to long term structural health in any economy. Manufacturing is one possible means of adding value, but it is far from the only means. I'm sorry, your historical viewpoint is completely upside down. Americans are proud to be Americans. We are different from the rest of the world. We are the best and the brightest from every country on Earth. We represent a radical departure from everything that came before us -- and a successful departure. It is only through the insanity of 1960's and the Berkley hippies that have lost what it truly means to be an American. American's are not humble. We do not cow-tow to European fashions, be it in clothes, movies, or politics. We are progressive, we show them -- the old world -- how things are done today. We are better and we don't mind sharing that viewpoint. This is America from long before we became the United States right up to the 1960's. The America you long for never existed outside of a few patently un-American strongholds, such as Berkeley, Boulder, and Hollywood.
Short term, overall stats are indicative of what is going on and where things are going. Opposite of this, it's not bad to look at what has happened over the last ten years in comparison, but to that, one must account for things that have happened during that time frame. 9/11 caused a serious financial burden on our country, coupled with corporate scandals. The dotcom boom and subsequently dotcom bust. Manufacturing is speeding up, according to a Bloomberg report. Were our country bankrupt, gains in manufacturing would not be happening. "If" that happens. However economic reports are clearly and consistently showing strong increases in manufacturing and service industries as well as a thriving economy. Ah, personal issues. I'm pretty sure the patriot act has no impact on manufacturing jobs or bankruptcy. No worries though, there are plenty of people who prefer not to use tools that both democrats and republicans voted on to protect our country, choosing instead to wait and be a victim of an attack. And then they can give aid and comfort to those that do by suggesting it wasn't them in the first place. So it's about bashing Bush, afterall. Makes sense now. Maybe you should move. Patriotism does not have a four year shelf life.
Haha, interesting to read your perspective. I'm also American so it sounds a bit flattering but I think you go too far. I don't agree that American's are the best and the brightest--I would however say that we are some of the most ambitious. I've lived in other countries and found the people to be equally smart in all the places I spent time (I'm talking smarts here--not education). I did however feel less of an ambitious aura in the other nations I've lived in.
This is incorrect. I could write 10 pages about why, but I'll try to make it simple (difficult without the ability to draw ISLM models). Basically, picture an X. The upward sloping curve is called the LM curve and represents the money markets. The downward sloping curve represents the goods market. Vertical axis is interest, horizontal axis is output. In the short run, an economy can look very very good by just spending a bunch of money. government spending (or a decrease in taxes, or especially BOTH) causes the "IS" [downward sloping] curve to shift out.). This results in an increase in output and an increase in the interest rate. (I'm going to skip the full explanation on why. If you want to learn about it search ISLM in google or buy a textbook on macroeconomics) This change leads to a SHORT run improvement. But this short run improvement DECREASES investment, which is (and this generally accepted economic principle here--not something im hypothesizing) a BAD thing in the long run. This is why running a deficit (e.g. increasing spending or decreasing taxes or both) can be a big problem. Not right away (necessarily), but in the long run.
I do so enjoy reading your posts and your ability to cut right to the heart of matters! If only we could get the self-loathing, punishment seeking pacificsts to move somewhere else, like the Middle East where freedom abounds with no worry over which religion you'll choose.
Pretty accurate except for China. At least Europe has a lot of savings. The U.S. dollar is still wildly over valued.