Guerilla: Its wonderful to take stands. Making absolutist comments full of assuredness when it comes to the economy is IMHO thoroughly misleading. A huge volume of such statements without being countered is neither a sign of knowledge or a sign of absolute correctness. The economy is so complex and so subject to changing market conditions it is the height of hubris to be so definitive. Again. There is no existing group/groups/ideas/changes that would "supercharge" the economy. I don't care what you do. Cut taxes 50%. (and cut govt expenditures by a like or even greater amt) That is a lot. That doesn't automatically make the ENTIRE economy work. The same dunderheads might make the same good or bad decisions about business. In the past most (that is the vast vast majority) of strong (successful and/or large) economic decisions (investment decisions) are made totally independant of tax consequences. Classic investment decisions are made based on investment and then rate of return (ROI). Then taxes get factored in long after that. The best thing I learned for active business investment decsions was: 1. Do your analysis. 2. Ascertain if the return is sufficient. 3. Figure out a f*ck up factor that will probably double costs (time frame, other issues) 4. Refigure out your ROI. 5. If the ROI based on an analysis with the f*ck up factor makes sense then go ahead. 6. That f*ck up factor is very very important. The amazing thing about the economy is that it is so large and diverse. Even as the housing component of the economy is totally screwed it doesn't mean the national economy will go into recession (recession is formally defined as 2 consecutive quarters in which GDP is less than previous quarters.) It might happen, it might not. It depends if the housing crisis spreads across the board in lots of other areas. (some of that is happening.) If other segments of the economy are strong or expanding it might result in a slow down and not a recession. That is what has happened on so many other similar sets of circumstances in the past. Of interest, the Chinese economy in real terms (not verbiage such as "economic freedom" has exploded for several reasons including the following: 1. It is huge -> millions of more workers than any other nation. 2. Incredibly low wages. That is why China is producing so many goods for so many nations where wages are dramatically higher. 3. Possible artificial or natural low value to their currency. 4. A great work/production effort relative to some other select national groups (better work ethic than in Russia, by example). 5. Now that production has soared and more income is being generated and spread within the Chinese economy the natives are spending more to up their life styles. That further spurs the economy. All of that is also happening in a similar vein in India at this time. Of interest the Chinese have despotic leadership also. Their leaders kill dissenters, limit access to free thought (limit access to the internet, etc. They have a huge govt beaurocracy. It is interesting about Bin Laden's comments vis a vis bankrupting the US similar to what happened to Russia. It is scary. That is one reason why there is a majority of the population that wants the US involvement in a war in Iraq to end. It is only one of the reasons....but it certainly is having an effect on the US economy. Guerilla: It is the constant level of self assuredness that is irking to someone who has worked markets for several decades. Markets are the best way to develop economics. I have lived it and worked it. The market is the economic description of (hundreds,thousands, millions) of independant decision makers deciding to buy or not buy--to act or not act. It is always the sum total of numerous individual decisions. That is partly why they are so incredibly unpredictable. Big volumes of decision makers change their minds (each one independantly) and markets change. Nobody is capable of predicting future activity. (I guess God is but he has granted humans the right to make up our own minds.) With out the ability to predict the future it is ridiculous to go around making absolutist definitive statements about how the economy is going to work or what works or doesn't work. Where is the Austrian school of economics applied? What nations have dramatically cut the size of govt and given private business full rein? How can one be so sure it is the answer to all economic issues. Simply stating certain economic theories endlessly is no guarantee that they either work or will flourish or are better or worse than any other application in existence. I have been a business person and more entrepreneurial for most of my career. In fact the entrepreneur is the epitome of the Austrian school of thought. I've had winners and business losers. While in these fields govt intrusion has mostly been a sidelight issue as one surges ahead trying to make money, manage people, trying to bring in more than one spends, and trying to expand. I and partners have usually worked to get govt intrusion issues settled and responded to as soon as possible so the business of business can be practiced. Most businesses act that way, putting necessary people and time into dealing with govt issues as quickly as possible simply to be able to go about the difficult task of making more money than one spends. I suppose I find it deeply disingenuous to see you spouting definitive statements about economies when they are thoroughly theoretical and consequently are all theory and dramatically unknowns for the vast majority of the human population.
I certainly didn't intend to imply that all Chineses are slaves even though any system which includes coerced income taxation is a form of indentured servitude. Slavery in China is certainly not mandated by the state but there is a lot of problems with slavery in China and throughout the world. There is an estimated 27 million slaves in the world currently many of whom are in China due to corruption. I'm not sure what things are like in the US but in Australia in New Zealand the government doesn't just appropriate large tracts of privately owned land and force people off it. China is not economically free. Capitalism is successful in China despite the centralized management and tyranny of the government. And its mainly due to basic cultural traits of the Chinese who understand how to make money. Go to South East Asia and you will see throughout those nations the Chinese are often the most successful business people in those countries even though they make up a minority of the populations.
Well I can't speak for Australia, but in NZ, it's not an industrialized nation. Lots of infrastructure in the way of roads and where necessary, cities, but nothing like the former steel town, Pittsburgh or Motor City, Detroit.
America should reintroduce tariff's to encourage companies to stay here and even the playing field for those that are already manufacturing and selling products in local stores. Thus, more American made products being bought, and making money off of those large companies that are outsourcing the labor to make a penny.
balance the budget so the goverment takes in more mony then it spends. it might take time but if we can stay on that path america should get out of debt
Could you rephrase this sentence please? I don't quite understand what you're trying to say here. New Zealand is a first world industrialized nation. It manufactures steel and has in the past manufactured cars etc. Like a lot of western countries though, most manufacturing has moved to Asia. New Zealand like Australia consistently ranks highly in economic freedom indexes from various institutes.
Selling subprime (junk) loans to Asian and European banks is a good way to pay off the national debt.
Tariffs are a tax on the consumer and a disincentive to lower prices through competition. We don't need protectionism, we need competition.
They aren't going to pay more than the market value for those junk loans. If history is any indication, foreign investors can be quite savvy when buying American securities and properties. Has anyone considered America having a big bake sale? That's how my elementary school used to raise money for field trips. I think we can get this country back into shape one $.50 brownie at a time. I actually stole this idea from someone else. It was Bush's "Plan A" before one of his staff members suggested the new economic stimulus package.
The Europeans and Asian Banks have already paid face value for the loans and the US has beat them for at least $500 billion. Wall Street and the Fed inflated homes values as much as 300 percent and as the prices correct, the foreign banks are left holding bonds with negative equity. The brownie idea will only work if you put hash in them and raise the price to $5
Ah yes, the "you are not smart enough to understand the massive economy, no one is, but I am smart enough to know you are not smart enough" argument. You're still not addressing my assertions, point by point, but writing in generalities and focusing on diminishing the poster, or his background/foundation, not the post content itself. Nonsense. Free markets are the key to prosperity. You might not see supercharged growth, but you could see a continuation of the supercharged development brought about by free markets in our past. We didn't have a history of funding and protecting failure. Of hiding and enabling corruption. But now, it's so common place, and accepted, that each of us goes out every day to earn our living with the weight of this already taxing the first 2, 3 or 5 hours of our daily work day. You're missing the bigger picture though, as many people do. It's our need to look for quick answers, black and white, absolutes. The USSR also had a welfare state. It also maintained an empire, with subsidies for it's allies. The problem is much bigger than Iraq. It's subsidizing our friends and enemies with American prosperity. It's maintaining the defense of nations capable of defending themselves, at our expense. 1 in 600 Americans serves abroad in our armed forces, many times with their family by their side. The money they earn is spent in the South Korean, Japanese and German economies, not here. It's a drain. Afghanistan for Russia was merely the tipping point. It wasn't the precipice. Iraq is our tipping point, but we have been on the precipice for some time now. But then, when I think big, I get smacked down for being some sort of theoretical dreamer. This is the foundation of Austrian Economics. Disagree. Entrepreneurs are not just "lucky" people. They are people who know how to read a market, to understand the collective of individual actions, and make appropriate decisions to survive in that atmosphere. Of course no one can predict perfectly, absolutely or totally accurately. But entrepreneurs have a talent for understanding the bigger picture and making those calculated risks, understanding when the odds are in their favor. Austrian type Economics was exercised in Germany after WWII. The Germans received less American aid than the British, and rebuilt much quicker. The Swiss also practice aspects of Austrian economics. America (with some deviances at times) between 1778 and 1913. China, Hong Kong and Iceland all adopted Austrian principles into their economic planning through Milton Friedman, who was not a pure Austrian economist, but used that school as a foundation for his monetarist theories as part of the Chicago school. I'm not sure if it is your hubris as an entrepreneur that is the issue here. Because nothing I have proposed is "way out in left field". In fact, it's pretty consistent with economic liberty, which involves non-interventionism. The world has Siamese cats, and bulldogs, tabbies and chihuahuas, but at the end of the day, cats are cats, and dogs are dogs. The number of complex instruments and layers of verbose jargon, still conform to the basics of supply, demand, capital and debt.
I lived in NZ for a few years. The primary industries are tourism, socialism (working for the government), service, technology and the agrarian economy. Now maybe things have changed since 1993, but when I went back for a month in 1997 and toured the country from Auckland to Christchurch, I didn't see it. Beautiful place with wonderful people, but far from an industrial zone.
You could say the same thing about the US now days. By the time you got to New Zealand all of the manufacturing base had been shut down. It was more industrial before that but shifted more to a service based economy. People say New Zealand is socialist but I find Australia far more socialist than New Zealand and there's lots more red tape for business. In New Zealand you can start almost any kind of business without a license and you can incorporate a limited liability company for a little over $100. You can set up a private trust which does not require registration with the government. Starting a business in New Zealand is like starting a business in the wild west, almost anything goes. The commodity food base of the New Zealand economy will serve it well for the next couple of decades.
The US trade defecit is a really bring problem that totaled 750 billion in 2007. The US was -250 billion China, -82 billion Japan, approx -75 billion Canada, -72 billion Mexico, -100 billion EU The US only ran a 10 billion surplus with 5 Countries: UAE, Hong Kong, Belgium, Netherlands and Austraila The highest US surplus was with Netherlands. At least I can feel good about drinking Heiniken Top Ten Countries with which the U.S. has a Trade Surplus http://www.census.gov/foreign-trade/top/dst/current/surplus.html