United States Heading towards a Depression?

Discussion in 'Politics & Religion' started by decoyjames, Dec 27, 2007.

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  1. Chrissy17

    Chrissy17 Peon

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    #6901
    S&P: concerned about rising burden of the federal debt

     
    Chrissy17, Aug 5, 2011 IP
  2. Breeze Wood

    Breeze Wood Peon

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    #6902

    “Any acceptance of the committee proposal will be dependent on the ability of the American people to fully view its proceedings,”


    An understatement by Pelosi or any other elected official in regards to a massive redistribution of Gov't funding and the affected constituencies.

    Does anyone have any idea what programs and by how much in expenditures the just enacted legislation to raise the National Debit Ceiling specifically includes?

    Negotiating with Republicans in private or vise-versa the Republicans negotiating privately with the Administration has served no purpose than sheltering the politicians and is a resounding reason for the advent of the Tea Party or the 08 Coalition that voted in favor of Obama that is still not being addressed.

    Nancy Pelosi is not only correct in her assessment, the negotiations made public would also help give an advantage for the difficult position to continue funding legitimate projects that otherwise are being cut using generalities by Special Interests to their advantage rather than for the Countries well being.  

    The Administration would be better served to negotiate for its 08 Coalition in public rather than conducting private sessions with the Opposition. 
     
    Breeze Wood, Aug 6, 2011 IP
  3. Corwin

    Corwin Well-Known Member

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    #6903
    Pelosi cracks me up - she calls for transparency for things Republicans do, while the majority of her actions while Speaker were held behind closed doors. Hypocrisy at it's purest.

    Yes, it happened - Standard and Poor's lowered the U.S.'s credit rating from AAA+ to AA+, and wrote that they might lower from AA+ to AA over the next two years. I read the S&P report and they have no kind words for the Obama administration. Basically, the S&P report is skeptical of everything the Obama administration has claimed. The reports also slams Republicans for not raising taxes.

    It's really a facinating read. For example, from the S&P report:
    S&P Translation: "the $1.2 Trillion in spending cuts that the Administration claims will happen is total bullshit"

    The Administration tried to convince S&P that their math was off by $2 trillion. Rather than laugh at them for bullshit like the above, S&P downgraded anyway.

    S&P blames it all on the U.S.'s "mounting debt".

    Moody's is next considering lowering the U.S.'s credit rating.

    The apocalypse has come - and it has knives.
     
    Corwin, Aug 6, 2011 IP
  4. earlpearl

    earlpearl Well-Known Member

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    #6904
    Corwin:  Standard & Poors emphasized and reemphasized the political climate and inability of Washington to make a deal to address the debt.  You can find the link on the   Standard & Poors Website

    Repeatedly in the document it mentions the political situation.  It feels that the US government cannot address the debt issue within the political climate.  It specifically refers to "political brinkmanship"  

    The brinkmanship characterization is solely the responsibility of the GOP and its minority radical right, the Tea Party...that engaged in blackmail rather than negotiations.  

    Actually there were a lot of proposals put forth.  The GOP refuses to accept any change in tax revenues.   The GOP steadfastly refuses to change the tax rates on any entity or individuals that would include higher taxes.  

    Hedge fund operators averaging $1 billion/year which = $2.8 million/day   and being taxed at 15%  are not having their tax advantage addressed.  The GOP would rather play politics than address the debt issue by sharing the burden of everyone taking a hit.

    Its quite probable that interest rates will rise across the board.  They'll probably hit variable rates first.  If you have a variable rate credit card debt, a car, student loans, a mortgage, a business loan:  if your big company with corporate debt you will probably see increases in costs.   Probably new loans will get hit next with higher fees.   

    Industries with enormous debt loads will suffer.  Take the telecommunications industry--one of the most debt dependent industries in the nation.  If you use a cell phone or ever make a phone call to anyone....probably rates will go up.  

    Its not a pretty site.

    Again...S & P specifically blames brinkmanship.

    If you have costs that go up in the near future blame the GOP for ensuring that hedge fund operators get to keep about $2.3-2.4 million/day in after tax costs rather than about $1.8million/day.  

    If you have problems with paying those expenses ask a hedge fund operator for some help in paying off your expenses.  Of course he'll probably charge you a lot of interest.  
     
    earlpearl, Aug 6, 2011 IP
  5. BRUm

    BRUm Well-Known Member

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    #6905
    I'm beginning to see a pattern here... Breeze and Earl allege Republican mistakes and banker evil with statistics, Obamanation, Corwin, Mia and BlueStar refute them with their own statistics. I'm amazed how far this thread has come. 346 pages!
     
    BRUm, Aug 6, 2011 IP
  6. Blue Star Ent.

    Blue Star Ent. Well-Known Member

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    #6906
    ...what a name.. Standard and Poors. They are certainly taking part in that effort, eh ?


    What just happened ? The bankers just got their way, but apparently they are not happy enough. They want to punish us more for being so "sub-prime". Who here is seeing a copy of what just happened in Greece ?
     
    Blue Star Ent., Aug 6, 2011 IP
  7. Corwin

    Corwin Well-Known Member

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    #6907
    Wow. Glad you aren't engaging in brinksmanship, Earl...

    There is no question that this all falls on Obama's shoulders. The President is responsible for the political climate. And in case you forget, nothing that was done when the Democrats controlled both Houses did anything to alleviate the debt. They even told us that they had to spend $3 trillion to lower the debt - remember?

    The President's leadership, or lack thereof, is responsible for the political climate. Obama isn't leading, Pelosi is. She froze the President out of the debt talks and now has more political power than Obama.

    I'd rather see Hillary Clinton as President. I'd even settle for Biden. Obama's leadership is pathetic.
     
    Corwin, Aug 6, 2011 IP
  8. Obamanation

    Obamanation Well-Known Member

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    #6908
    Its true, the document does mention brinksmanship as one of the contributing factors to it's downgrade.  I found that to be rather humorous, considering the document mentions there are more downgrades coming in the next 6-24 months if either a) the 1.2 trillion in cuts promised in the current negotiation don't happen, or b) another 2.4 trillion in cuts don't happen. When you consider that the only reason there were any cuts at all in the debt deal is the  Tea Party, it seems crystal clear that a downgrade was coming no matter what. They probably threw the wording in there so they, as an "independent" rating organization would seem more non-partisan.

    In retrospect, from a political standpoint, the Tea Party should have given the president the "clean" debt ceiling increase he was asking for. The downgrade would have promptly followed, and the Dems would own 100% of it. Personally, I'm glad they put up a fight. To do otherwise would be like a fire crew not spraying water on your burning house because it was going to burn down anyway.
     
    Obamanation, Aug 7, 2011 IP
  9. Bushranger

    Bushranger Notable Member

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    #6909
    In my recollection both S&P and Moody's proved to be corrupt pre-GFC. Surely most wouldn't listen to their advice anyway and can see this is political. As a huge corporation they have about as much creedence as itty bitty me!
     
    Bushranger, Aug 7, 2011 IP
  10. Obamanation

    Obamanation Well-Known Member

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    #6910
    Obamanation, Aug 7, 2011 IP
  11. Corwin

    Corwin Well-Known Member

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    #6911
    Well, the talking points are out on S&P's downgrade and Moody's potential downgrade and it is this:

    The Republicans: It's not important.
    The Democrats: It's the Tea Party's fault
    Obama: The S&P is wrong.

    Let's ignore China, Japan and Germany, who have been warning Obama since 2008 that the USA cannot sustain this level of debt and that the USA must put a plan in place to pay it down.

    I think that the S&P downgrade is a warning from the USA's creditors that they are serious about the USA putting a credible plan in place to pay it down. The finger-pointing for the downgrade has to point to China. If your chief debt holder isn't happy about your debt, and if you keep ignoring their warnings, you are going to get called out on it.

    According to China's official news agency, "China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets"
     
    Corwin, Aug 7, 2011 IP
  12. earlpearl

    earlpearl Well-Known Member

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    #6912
    O_Nation.  Either you are purposefully lying or you know nothing about the issue.  Very specific legislation was written to exclusively change the nature of the hedge fund operators and change their income treated as capital gains into management income;  treated as normal income.   Ignorance or deliberate lies--which one are you guilty of.

      That is not what I said.  I did say that 1/2 the extra $4 billion from just 25 guys could be converted into 50,000 jobs.  It could be govt workers.  It could be incentive payments to businesses to hire these people.  It could be used for rebuilding infrastructure...something the US could use in lots of places.   The biggest issue is that the excessive funds the hedge fund managers make could easily put an incredible number of people to work.  The last 30 years have seen a deliberate effort at redistributing wealth into the hands of the few at the cost of the many.  With that the economy has broken.    
     Once again just as with the Ikea thread you move into standard GOP fear mongering.

    The GOP, whose comments are always political and care not a whit for the state of the economy, the plight of about 16% out of work or underemployed prefer to see 25 individuals keep the kinds of personal income that has led to the most massive level of income redistribution in history.

    O_Nation:  you obviously are either totally ignorant of the situation or you are outright lying as your statements show no knowledge or understanding of the structure of hedgefund partnerships at all or their history.  Hedge fund deals are essentially limited partnerships.  Are you familiar with them?  I am.  Limited partnerships generally have two types of partners the managing partners, or General Partner (GP) (in this case the hedge fund management) and the limited partners  (LP) (the outside investors).  The GP sets all the rules.   They set up a fee system in which its often heavily skewed to pull huge payments from the investment(s).  Now I partook in a couple of Limited Partnerships, both as an LP and part of a GP.  Investors returns are reduced by the fees of the GPs.  If anything widespread returns to investors are most severely restricted by the returns of the GP's.  Limiting payments to GP's would dramatically improve returns for an enormous volume of investors.  That would probably have a dramatically better impact on the economy as better returns would be spread throughout a huge range of investors rather than in the hands of the relatively few GP's whose major focus is on controlling everything and putting huge bucks into their own pockets essentially by leveraging their management fees through other people's money.  

    In the case of the hedge funds they have structured their fees to typically run along the following lines:  2% management fees and 20% or higher of the profits of the hedge fund into a fee for them.  They get to treat the management fee for running the business as a capital gain....giving them incredible returns while simultaneously reducing the returns for the investors.  Over the last decade the returns into the hedgefund managers have exploded.  Meanwhile as a nation or as investors in these funds the returns are muted by ever larger fees.    At the same time the economy stagnated and then collapsed.   You would prefer to see 25 or so people get outsized rewards sucking up cash from the rest of the economy through deliberate redistribution of income into the hands of the few.  I'd rather see this process reversed for the time being as the economy and millions of Americans need help and clearly the hedge fund guys aren't doing squat in that regard. 
     
    earlpearl, Aug 7, 2011 IP
  13. Obamanation

    Obamanation Well-Known Member

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    #6913
    @Earlpearl: Thanks for the details on how hedge fund managers make their money. I actually am familiar with limited partnerships and, having been a limited partner on a few wildly successful ventures, can reaffirm what you are saying about the deck always being stacked in favor of the general partners and managers. Granted, I still made money on the deals, far in excess of what the street was returning, but when we looked at what the general partners made, I felt as though I should have at least gotten a reach around. This is the nature of business in America, and everywhere else for that matter. People create investment opportunities with huge upside potential, they bring in OPM and cut them in for a much smaller chunk of the profit while sharing 100% of the risk. In smaller ventures, the limited partners often have their contracts renegotiated and their shares diluted prior to a buy out.

    What I didn't get out of your post is specifically how you would change the current law to reclassify what are obviously capital gains into income for these hedge fund managers, without reclassifying the capital gains for other, smaller ventures, into income as well. Perhaps you had something more draconian in mind, like legislating how much profit a limited partner could take out of a deal, or reclassifying all gains earned by general partners as income.  I'm dying to hear what you come up with as it seems clear that those investing in hedge funds just hate being forced to do so. Perhaps we should have a government agency check every limited partnership to make sure there are not too many profits built in for the GP.

    I noticed you avoided dealing with the consequences I pointed out of expansive government hiring with your newly generated tax revenues. Should I take that as an admission you have no response? With our recent credit downgrade, wouldn't it make more sense to you to take apply any new revenues toward the debt?

    I find it just incredible how much time those on the left spend focused on the fortune 500 and hedge fund managers who account for only 20% of the jobs in this country, when focusing on the bolstering the 80% of jobs that come from small business would make a lot more sense. The answers are obvious.

    1) Simplify and flatten the tax code  to get the everyone to pay their fair share
    2) Reduce the size of government, and government spending
    3) Restructure government entitlements, specifically welfare, and now unemployment, to force people back into the job market
    4) Enforce our existing immigration laws and deport illegals of every stripe.
    5) Dramatically cut back our H1B program, which has caused skilled wage stagnation in this country for a decade
    6) Bust/Break/Illegalize government employee unions. Teachers. Fireman, Police, you name it. END THEM ALL.

    Any one of those changes would dramatically improve our economy, without even dealing with our broken medical system, Social Security and Medicare reform, and tort reform.   
     
    Obamanation, Aug 7, 2011 IP
  14. Bushranger

    Bushranger Notable Member

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    #6914
    An Aussie economist just said on TV: "US treasury bonds remain the worlds safest investment". How could that be?
     
    Bushranger, Aug 7, 2011 IP
  15. Breeze Wood

    Breeze Wood Peon

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    #6915

     


    It is a little odd how well the market held up during the debt limit negotiations and then tanked after they put together their deal....

    At their Insistence, everyone knows it was the Republicans that negotiated the "compromise".  

    After their feel good moment however what has transpired is the realization that the Republicans have produced a very poorly developed plan for debit reduction that in fact does not solve the problem, few have faith in and has led to the downgrading of the Nations debt ratting by Standard & Poors.

    The feel good Republicans might better have accepted the 4 trillion proposal offered by the Administation with a tax increase and and held their ground for additional cuts leading into the elections than the position they have now placed themselves in as intransigent negotiators that are willing to produce negative results.

    With the approval rating for Congress at an alltime low mixed with a downgrade reflective of the State of Affairs in the Nation, the Republicans may very well have handed Obama a chance to capitalize on their refusal to negotiate and convince the American people (the truth) that the Administrations sound approach for fiscal discipline is the correct alternative to the hindrances offered by the Republicans in finding real solutions for the Countries problems.
     
    Breeze Wood, Aug 7, 2011 IP
  16. Rebecca

    Rebecca Prominent Member

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    #6916
    Here's an idea that I had for a site. Because of things I have going on (and being a horrible webmaster and all :)), I wouldn't be able to implement it anytime soon. Anyone in the US that likes this idea, feel free to use it.

    It would be a social networking site for the unemployed and struggling working class in the US. The main function would be to promote entrepreneurship. It would seek to eliminate unemployment, underemployment, and help workers struggling to get by with low paying jobs. There should be over 100 small ventures that workers can easily start with less than a $100 investment. With no iffy ideas (mulit-level, pyramid) - but, ventures that revolve around mastering the creation of one product or service and selling it. It would be nice if there were a section where members could advertise their goods - all made in the USA stuff. There might even be a cheap consulting service by email. Members could interact and throw ideas back and forth. Possibly, interested investors getting involved to help members get started. In addition, they could organize against, and advocate boycotts of all corporations that outsource, and/or offer poor working conditions. And, perhaps even political news and petitions as well, for issues that effect the plight of workers? Stuff like that...
     
    Rebecca, Aug 8, 2011 IP
  17. BRUm

    BRUm Well-Known Member

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    #6917
    I think you've found a good niche Rebecca. With the poor financial state of the target audience make sure you use appropriate means of marketing, i.e. more physical face-to-face contact like walking neighbourhoods, handing out flyers and frequenting their leisure outlets and possibly some form of relevant incentive/reward. Also, bear in mind this socio-economic group will statistically have the lowest ownership of computers and internet access, but higher rate of using public computer services (i.e. internet café, libraries ..), which itself is another place and opportunity for marketing. I say go for it!
     
    Last edited: Aug 8, 2011
    BRUm, Aug 8, 2011 IP
  18. Obamanation

    Obamanation Well-Known Member

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    #6918
    That is a fascinating idea. I watch a lot of (too much)  cable news, and one of the stories that seems to be re-occurring across every channel is this story about the 14 million permanently unemployed people in this country. These people are the people who have been out of work for more than 7 months and are now discriminated against by most employers and head hunting agencies with job requirements such as "Recent experience required". They tend to be older(+40) and from previously well paying jobs that frankly just don't pay as much now. Not even accounted for in that 14 million number are the millions of business owners who got cleaned out and don't even count as unemployed because they were employers, not employees. According to the news stories, the unemployment number is not really expected to dip too much in the next couple years, which really begs the question of the fate of those "lost 14 million people".

    I like the idea of teaching entrepreneurship, but I see a couple problems with that. First, working for yourself requires a mindset and a commitment that we have been breeding out of Americans for more than 20 years. When I was growing up, at 8 years old I had a lemonade stand and a tomato stand where my brother and I sold tomatoes and lemonade to people driving down our street. I can't remember the last time I've seen something similar in the last two decades, either because it has gone out of fashion, or more likely because you will get a ticket from the police asking for a business license. Like most of my peers, I worked my way through high school in construction work, but those jobs are nearly 100% occupied by latinos(mexicans? Illegal?) now.

    Political action is probably a much better call to action for the long term unemployed, which is exactly where the Tea Party came from. Though I've never been to a rally, I have several friends who have. To the last one, they are small business guys who wouldn't even show up on your unemployment numbers, outside of the fact they were/are employers who fired/laid people off. 

    I kind of like the idea of front loading a site as a jobs social networking site, with the out product being political action. Sort of a free enterprise equivalent to what the unions have been doing for decades.
     
    Obamanation, Aug 8, 2011 IP
  19. Corwin

    Corwin Well-Known Member

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    #6919
    I really like this idea. But OB took the words right out of my mouth:

    I started my own company 12 years ago. I initially had a mindset problem - I was used to being middle management and not running everything.

    Soon after, I started dating a girl of privilege who had been educated in exclusive private schools. We compared backgrounds. I had been educated in public schools. I had been taught about the people of the United States, about the workers of the Industrial Revolution, about the people of Europe. In Social Studies I learned how the Eskimo boys would fish and care for their families.

    She had been taught about Julius Caesar, George Washington, Henry Ford, Napoleon, Andrew Carnegie. She never heard of "Social Studies".

    See the difference? I had been taught how to be an employee. She had been taught how to be a leader and independent thinker in many many ways. Soon after, I started a self-education campaign. I bought books written by Julius Caesar ("Experience is the teacher of all things") and Napoleon ("We rule men with words").

    I've encountered this many times with new business leaders. IMO, it comes down to education and self-esteem.
     
    Corwin, Aug 8, 2011 IP
  20. Mia

    Mia R.I.P. STEVE JOBS

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    #6920
    Seriously? You find it odd that investors are unhappy, unsure and uncertain? Breeze, are you retarded?

    Jesus. Seriously? What next? Maybe blame this on an "Economic Headwind" like say, the tsunami?

    S&P thinks they did not go far enough.

    You really think a tax increase would have meant no lowering in the credit rating? Breeze, S&P and everyone else on the planet is concerned with the spending problem and the debt problem. We don't have a revenue problem.

    The only way they could have avoided this was if they cut social spending by 1/3rd, eliminated Obama care and actually balanced the budget on the long term. I figure it would have taken about 8 trillion in cuts in ONE year, not 1 trillion over 10 years. Because lord knows we will spend more than that over that 10 year period in additional waste.

    Breeze, I really think you might want to take a break and stop posting for a while. You've gone from looking like a clown to a complete buffoon. Its really embarrassing.
    With the approval rating for Congress at an alltime low mixed with a downgrade reflective of the State of Affairs in the Nation, the Republicans may very well have handed Obama a chance to capitalize on their refusal to negotiate and convince the American people (the truth) that the Administrations sound approach for fiscal discipline is the correct alternative to the hindrances offered by the Republicans in finding real solutions for the Countries problems.[/quote]
     
    Mia, Aug 8, 2011 IP
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