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Cash for Clunkers - Good or Bad Idea?

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Comments

  • berriberri Member Posts: 10,165
    There was a big mess and something had to be done. Herbert Hoover showed what can happen when you are inflexible in doctrine. However, it seemed a bit haphazard. The decisions on who on Wall Street stayed and who went was not clear in basis (except Goldman Sachs has exceptional and unfair clout - e.g. AIG bailout). I wasn't upset about GM given the situation, but why Chrysler? I'm not convinced C4C did anything but temporarily distort prices and pull sales forward. Another one is foolish. They don't seem to know how to stop, now we're supposed to have an appliance C4C type program which really will help China and Mexico more than the US. Now a medical plan that doesn't really seem to accomplish anything more than a simple law outlawing pre-existing conditions in health insurance would have accomplshed less bureaucratically and much more cheaply. Its getting out of control. At some point the economy has stabilized sufficiently that it needs to run its course or risk a worse relapse like what happens when you don't take your antibiotics properly. I think we're at that point. If we keep it up we risk creating new bubbles and further eroding our economy and financial security longer term. This continuing profligate government spending with money it doesn't actually have is selfish, foolish and risks our kids and grandkids futures. And its both political parties putting partisan matters above the citizens best interests. I'm afraid more than the economy has become broken.
  • kdhspyderkdhspyder Member Posts: 7,160
    Yes this is the viewpoint of those that would not have done anything in the depths of the crisis early last year. It is one valid opinion. Tighten the belt and hunker down.

    Every industrialized nation on earth however and a majority of the leading economists advising these nations believed that massive stimuli were needed across the full spectrum of these economies. This opinion prevailed.

    Doing nothing is a luxury for one who has no responsibilities other than himself. When an entire nation and an entire economy are teetering on the brink of chaos and the leading economists in that country say 'The government must step in, right now', then doing nothing in the face of potential disaster is just not possible.

    Your view is perfectly valid for your personal situation. However you are in the minority with respect to those in the world that actually have influence and power. Those with minority views simply don't get heard.

    Looking at one month or even one quarter is worthless. We'll reassess this 20 to 50 yrs from now. I will grant that everyone that is for massive stimulus spending is basing it on Keynsian theory and they do say that this is the first time that any crisis was deep enough to really give Keynes his test. We'll see.

    Hunkering down, tightening the belt and telling the American public to 'suck it up because we're not going to do anything, you'll just have to ride this out' is a non-flyer.
  • gagricegagrice Member Posts: 31,450
    I will grant that everyone that is for massive stimulus spending is basing it on Keynsian theory and they do say that this is the first time that any crisis was deep enough to really give Keynes his test. We'll see.

    My take is it will lead US into a deeper depression than it should. We will not likely see 5% unemployment that we had 3-5 years ago. The Government has taken a run of the mill recession and made it into a full blown depression. About like the 1930s.
  • steverstever Guest Posts: 52,454
    We are borrowing more and more $ from foreigners each year

    I don't think that's anything new. Maybe a history buff knows the percentage of borrowing vs the GNP that occurred when we financed all the wars over the last two centuries, for example. We're probably still paying off the War of 1812 and the Civil War. :shades:

    Berri, it sounds like Chrysler was almost left to their own devices. It'll be interesting to see if they wind up going away anyway.
  • kdhspyderkdhspyder Member Posts: 7,160
    Actually I think it's less and less true, steve. It would be interesting to track.

    For the reasons noted above and because the currency has weakened dramatically China and Japan are less interested in our debt instruments. As a result the biggest lender to the Treasury is...the Fed.

    The benefit (?) to having the Fed be the borrower of last resort is that it's all our money. Also the Fed can print money at will. So the huger and huger debts can be absorbed by the Fed as it wishes or needs. The risk of course is inflating the money supply and thus igniting inflation. That's where interest rate policy comes into play.

    I'll search for the link but I believe that the biggest US debt holder is ourselves, we don't lose any money. It's very much like taking a loan against your 401k account.
  • kdhspyderkdhspyder Member Posts: 7,160
    From CNBC..biggest US Debt Holders

    15 Luxembourg
    14 Our own banking system, credit unions, etc.
    13 Russia
    12 Insurance companies
    11 Brazil
    10 Caribbean banking centers
    9. OPEC
    8. UK
    7. Our own Pension Funds
    6. US State and Local Govts
    5. 'Other' Investors ... $630 Billion
    4. Japan.................. $712 Billion
    3. China.................. $776 Billion
    2. Mutual Funds...... $769 Billion
    1. Federal Reserve... $4.785 Trillion

    It's not even close between No 1 and No 2. Why $769 ranks higher than $776, IDK it's their list.
  • kernickkernick Member Posts: 4,072
    to understand that the nation and consumers can't continually go into so much debt. Just as you can't continue to spend 25% more than you make each year. Sure you can do that for a year or so, if you lose your job, but the bills come due someday. Similarly the governemnt has a limit to the money it can borrow, and what the Federal Reserve and Treasury can create. We have already seen some of the effect of creating money - the U.S. $ now is near all-time lows versus other currencies.

    Remember last year when gasoline spiked to $4.25/gal. Well a large part of that is due to the weak U.S. $ (and relatively stronger purchasing power of foreigners who can now "bid" for the same gasoline supplies we want)!

    If you need another indicator of how bad the debt is - how quickly it is and will grow, consider that our Congressmen have been talking about the 3rd-Rail of cutting Social Security. When all the obligations of the Federal Government are looked at, we're not just talking the ticking $12T in debt. Considering Medicare, SS, government pensions, bonds, the federal government has obligations in the $50T area (read in CBS Marketwatch a few months ago); compare that to the GDP!

    http://www.chrismartenson.com/blog/crisis-explained-one-chart-debt-gdp/11570

    http://www.marketwatch.com/story/flashforward-what-obamas-sellout-costs-us-2009-- 12-08
  • vinnynyvinnyny Member Posts: 764
    This administration ranks right up there with Woodrow Wilson--but at least Wilson had the sense to try to take care of Americans first.

    It's time to reward only companies that work in our nation's best interest and punish those who don't. As long as we keep exporting jobs and importing goods, our country will continue to decline.
  • lemkolemko Member Posts: 15,261
    Give it enough time and we'll end up like Haiti. Haiti spent like 80% of its GNP on reparations to France for the Slave Rebellions that happened over 200 years ago. They didn't pay off the debt until 1947. They have been living since then on borrowed money that was squandered by their corrupt government and psychotic leaders. Nothing is made there. Nothing is grown there. All they have is imported from elsewhere. Unemployment is something like 80%.
  • steverstever Guest Posts: 52,454
    France caused the slave rebellions and set the seeds for conflict between the various slave groups they sent there. They kept the slaves fighting among themselves so they wouldn't uprise against the French (didn't work - the Afro-Haitians still whipped Napoleon). France still robbed the country blind. (Newsweek)

    All that hate has carried over as a non-functioning society to this day.

    But we are way, way off topic at this point.

    /hint :)
  • kdhspyderkdhspyder Member Posts: 7,160
    Your point fails because in equating the government ( any major government ) to an individual you omit the key point that none of us has a printing press in our basements. The Federal Gov't does.

    The Fed can create as much money as it wants to create. In the extreme it could print enough so that Treasury could buy back every debt instrument in foreign hands. Then the entire debt would be held by us ourselves. Whatever the interest 'expense' was on the National Debt would be 'income' to the Fed which then by law has to be turned over to US Treasury. This is simply taking from one pocket and putting it in another pocket.

    Yes this would devalue the US$ in world market tremendously. However by doing that it would create US jobs here. It would also start an economic war and potentially loosen the bonds that tie countries together economically. Nobody wants to start a war with their banker nor their main customer...it's bad for business.
  • fezofezo Member Posts: 10,386
    Sure they make stuff in Haiti. They make tons of baseballs for import into the US. Maybe clothing, too.

    When Gary said we're looking like the 1930s I thought look at Haiti. Now THAT looks like depression.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • berriberri Member Posts: 10,165
    Yes this would devalue the US$ in world market tremendously. However by doing that it would create US jobs here

    Maybe not though because such an action would savage US corporate balance sheets. I think such an extreme move would turn the US into a third world nation status. Corporations aren't going to base in a place with an unstable currency. Investors aren't likely to continue buying debt instruments from countries or their companies and citizens with an unreliable currency and if they do the interest rate for risk will be astronomical.

    Nobody wants to start a war with their banker nor their main customer

    I think such an action might actually precipitate a real combat war with the countries that it stiffed.

    A weak currency may have some short term advantages, but longer term it will reduce the standard of living because of the atrophy in buying ability. Shorter term you're already seeing impacts in commodity prices.
  • gagricegagrice Member Posts: 31,450
    I think that we owe the Social Security administration somewhere in the $3 Trillion range. It all started when they dumped the surplus from SS into the general fund. So in reality SS is far from broke. It is all BS from DC. The more they print the less the dollar is worth. That is part of the fallacy behind the Keynes economic theory. It makes wages smaller without cutting the size of the paycheck. That is part of the grand plan. Then throw a biscuit to the masses in the form of C4C.
  • dtownfbdtownfb Member Posts: 2,918
    "My take is it will lead US into a deeper depression than it should. We will not likely see 5% unemployment that we had 3-5 years ago. The Government has taken a run of the mill recession and made it into a full blown depression. About like the 1930s. "

    You're assuming that the 5% unemployment was based on a solid foundation. I do think it was manipulated along with much of our economic growth over the past decade. I think everything came "due" about 2 years ago. As a society, we have a lot of "adjusting" to do.

    I guess it's easier to blame the folks in Washington than looking in the mirror. Everyone wants a polictical solution for what is really a societal problem.
  • gagricegagrice Member Posts: 31,450
    I guess it's easier to blame the folks in Washington than looking in the mirror. Everyone wants a polictical solution for what is really a societal problem.

    I agree with you. The problem is the government has gotten involved in every aspect of our lives. That makes them responsible to most voters. Think about katrina. Why was it the government's responsibility to get all those people out of harms way? They just believed what politicians have told them.

    Getting back to the subject. For some reason people think it is the government that is responsible to get car sales moving. So they come up with a scatter brained C4C plan. Made all the salesmen happy for a couple weeks now it is back to the doldrums. Did not save or add a single job. Getting one or two more paychecks would be the extent for most that were on the ragged edge.
  • steverstever Guest Posts: 52,454
    Someone emailed me over the weekend about their dying car and wanted to know if they could clunk it out.

    So there's still some interest in the program.

    I haven't seen any dealer clunker promotions for a while though.
  • kernickkernick Member Posts: 4,072
    The Fed can create as much money as it wants to create.

    Are you inferring that because the Fed can print money, and put more into the banking system, that somehow this is free of negative consequences of debt that needs repayment, or further devaluation of the $, or inflation? That would be ridiculous.

    If the Fed could simply print money that has the same relative value as today, why wouldn't they and we'd just pay off all our debts, make all our citizens millionaires, and sit back and enjoy the good-life?

    It does no one any good if the economy is revived by devaluation where the $80 barrel of oil now becomes $120, and everything else imported goes up 50%. We would be POORER as a nation. This is happening in small steps through our governments policies. They are keeping the masses somewhat satiated as this country continues to decline.

    It does not matter how much money a country can print, or what number they put on the bills!! What matters with money is the WEALTH that stands behind the money. Debt is the opposite of WEALTH! :(

    C4C and other things that put us deeper into debt would be okay if it were only done once-in-a-while, and otherwise our country did not consume more than we produce. But programs like C4C are the norm now, and are not having a lasting positive effect because the nation continues to try and support lifestyles we can't afford. These programs are simply like giving a drug-addict or alcoholic more and more drugs and alcohol, to keep them from suffering the withdrawal. We are making the situation worse, in avoiding the pain.

    The scenario our politicians want you to see is that their programs to put every citizen in a nice house, with free health-care, all the kids go to college, and there are 2 new cars in the drive-way is possible, even though we don't earn that. It is a fallacy that other people are going to loan the U.S. government 1 trillion $ year-after-year after-year to support this. They certainly will not do this if the U.S. dollar declines (say 10%) and they don't get a very good interest rate (say 15%) to compensate.

    Read some of the statements from Greenspan and Bernanke concerning the Economic problems lat year, and you will see them humbly sneak in a few sentences that THEY DIDN'T UNDERSTAND THE PROBLEMS THEIR POLICIES WERE CREATING. :mad: It was the Fed and Congress that created the very problems they now claim they will fix with the same methods! Insanity!

    Anyway keep believing in these failed economic distorters of the free-market-system, who create bubbles and crashes, and who put us deeper into debt every day. Everyday of the future becomes darker with these continuing policies. I hope you guys remember this when you're over on the $5/gal gas forum, and can't figure out why, while the rest of the world seems to be paying about the same as they have. :P
  • gagricegagrice Member Posts: 31,450
    It does not matter how much money a country can print, or what number they put on the bills!! What matters with money is the WEALTH that stands behind the money. Debt is the opposite of WEALTH!

    Is this the direction our country is headed?

    In November 1923, during Weimar Germany's hyperinflation, a loaf of bread cost 3,000,000,000 (3 billion) marks, however the German treasury printed 1,000,000,000 (1 billion) mark notes, so you would only(!) need 3 notes to pay for a loaf. If you had to pay with lower denomination, older notes you can imagine that, even with 1,000 mark notes, it would take more than a wheelbarrow to transport 3 million of them.

    Some worried commentators are predicting a massive hyperinflation of the sort suffered by Weimar Germany in 1923, when a wheelbarrow full of paper money could barely buy a loaf of bread. An April 29 editorial in the San Francisco Examiner warned:

    “With an unprecedented deficit that’s approaching $2 trillion, [the President’s 2010] budget proposal is a surefire prescription for hyperinflation. So every senator and representative who votes for this monster $3.6 trillion budget will be endorsing a spending spree that could very well turn America into the next Weimar Republic.


    C4C may be a small bit in the picture. Just remember a billion here, and a billion there, soon you are talking serious money. Now it seems we have to say $trillion too often. To keep it in perspective, no one is even close to being a $trillionaire$.
  • imidazol97imidazol97 Member Posts: 27,675
    >dealer clunker promotions

    A few local dealers use the word "clunker" in their advertisements to try to use the halo effect in potential customers' minds. A few also use the word "stimulus" to make the same connotations. However, I imagine the end pricing the customer pays is just during the clunker by the Obama administration and that is they pay more than they would have without the excitement thinking that the government or someone else is paying partly for their next car.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • steverstever Guest Posts: 52,454
    Heh, haven't seen a "stimulus" ad - that's a good one.

    Turns out there's some Cash for Clunker news out there:

    Japan urged to open 'cash for clunkers' to Detroit Big 3 (Detroit News).

    Trade embargo anyone?

    Ross Calls for New U.S. ‘Cash-for-Clunkers’ Program (Business Week)

    Ross is a billionaire auto supply company owner.

    Senator driven to know full cost of running 'Cash for Clunkers' (Sun Times)

    Grassley is trying to find out how much C4C really cost.

    And don't forget to buy your MayTag. (CNN)
  • lemkolemko Member Posts: 15,261
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  • bpraxisbpraxis Member Posts: 292
    There is a great quote I believe from De Toqueville in the 19th century:

    " In a social democracy every election becomes an advanced auction of stolen goods. This process continues until bankruptcy usually followed by a dictator to restore order"

    Another quote by the mass murderer Lenin: ( approximately 50 million dead to create their collectivist paradise)

    " The quickest way to destroy capitalism is to debase the currency"

    The "Broken Window Falacy" describes Cash for Clunkers.

    The looter has a great new idea that the way to create wealth is to break windows so the repairman has more money. (Destruction of used cars)

    Moochers get in line for the stolen largess.
  • kernickkernick Member Posts: 4,072
    Is this the direction our country is headed?

    I think the devaluation of the U.S. $ is much more politically-acceptable than our politicians trying to tell the various "give me" groups, which is the vast majority of the population these days, that they are being given too much.
    What I mean is it is very difficult politically to cut someone's check or cut a program - politicians don't like to lose their lobbyist money and votes. They'd rather give you your check, which everyone understands, and allow the currency to fall, which not many people (as I see here understands). So if your government check went up 3% you're probably sort-of happy and not going to demand reform; but you're probably ignorant that compared to the rest of the world your savings and income is now worth less - especially since it's a global economy. So enjoy your 3% increase, and the 10% decline will stay hidden in the business-pages (3-10 = loss).

    Next year when you hear others countries demand for oil, steel, food, and other goods has increased - due to their higher value currency, I'm sure you'll see our government blame "Big Business". To see a fine auto example of this shift, just look at auto sales figures, which now put Chinese vehicle sales higher than the U.S. We're losing, folks, and our government hasn't had a solution in many years! They are just trying to delay the result for as long as possible.
  • kdhspyderkdhspyder Member Posts: 7,160
    Yes I specifically said that it is free of debt implications,i.e. interest expense, because in one pocket it's interest expense and in the other pocket it's interest income. We own both pockets, there's no net change.

    I also said that it does devalue the currency - when it put into international circulation. This is good for American jobs and American companies' competitiveness. It also has little or no effect on products made, sold and used here within our borders. It does make imports more expensive. That was my business for 30 yrs.

    The devaluation of the currency has another plus and minus effect. First the minus. The wealth within the US is lessened but only in comparison to those outside the US. Not amongst ourselves. On the positive side it also makes everything we own much more attractive to foreign buyers. The Trump children with their own new developments in NYC are loving this devaluation of the currency. They can market their new buildings and developments to Europeans and Chinese and Japanese at full sticker or higher. It all depends on your frame of reference.

    Rant on about theory. These are actual situations, I've been there and benefitted from both sides. Also to assuage your fears nothing continues in a straight line forever. Again for 30+ yrs I benefitted from currency shifts in both directions. Only the rigid are frozen in place unable to react.
  • millwood0millwood0 Member Posts: 451
    "1. Federal Reserve... $4.785 Trillion "

    what you should really do is to view that $4.8trillion as money redistributed through the government from one group to others, aka legalized robbery.

    someone somewhere benefited from those near $5 trillions of debt, and that price is to be paid for by the rest of us.

    If anyone still thinks that there is no limit and no consequences to our never-ending overspending, think again.
  • kernickkernick Member Posts: 4,072
    This is good for American jobs and American companies' competitiveness.

    So those of us who still have jobs should look forward to the U.S. economy becoming like Mexico? Low wages relative to the purchasing power of consumers globally which means the limited resources of the globe are going elsewhere. So we'll have little buying power, 10% official unemployment, and another 10-20% discouraged or underemployed. This sounds like decline to me.

    The wealth within the US is lessened but only in comparison to those outside the US. Not amongst ourselves.

    Since much of what we buy is imported, a weaker $ makes those resources more expensive. Oil and gasoline increase in price when the $ weakens. I'm not going to feel better when my neighbor and I both can't afford gasoline.

    They can market their new buildings and developments to Europeans and Chinese and Japanese at full sticker or higher.

    American Indians sold Manhattan for sticker too, as those beads and mirrors were wonderful currency in their society. They could buy and sell a lot with them. Reference was worth about $24 then. :D

    Also to assuage your fears nothing continues in a straight line forever.

    You're right, even the Roman Empire failed. What you are missing is that the U.S. manufacturing sector which creates the wealth of this country - it is the actual PRODUCTION of THINGS that creates wealth; has been on a continual decline. These jobs paid relative wages several times the wages of other people in other economies.

    The problem is that other people around the world have become as educated as the U.S., make products as good or better, and were paid so much less and have room to increase wages while still undercutting U.S. costs. These jobs aren't coming back until either the U.S. becomes a lot smarter (unlikely genetic advance), or work for about the same wages.

    We are in the process of redividing the pie - the resources of the Earth. The U.S. had a huge, huge piece before, but it is getting smaller and smaller each year. As you said it is all relative, and our "relative piece" is getting smaller. Our government though continues to try and maintain our piece artificially by going deeper and deeper into debt, giving IOU's to Social Security and investors around the world. This is real money, real enough that it is likely that Social Security will not get repaid, and there will be real cuts to retirees checks. Tt is REAL money, with REAL consequences, and not just a number on a slip of paper which is just a pocket-transfer.

    One last thing: don't just worry about the current debt. Consider the current debt + what the government has promised to pay in future years that is unfunded. Now you're looking at somethig on the order of $40T. Examples of this are the money they take from most of us now and give away, meanwhile promising to pay us in Social Security and Medicare in the future. There are 20M government employees that are owed pensions. There's a big list of these obligations. So with a declining economy, lower tax revenues, but increasing obligations, future generations are going to see very high tax rates, or the government is going to have to renege on many of their contract promises! :mad: SO ... you have lower net incomes, few jobs, cut pensions, and poor medical service as Medicare doesn't pay for very good hospitals.
  • dtownfbdtownfb Member Posts: 2,918
    One was enough.... It accomplished what it was intended; it gave the auto industry a shot in the arm and allowed folks to get rid of gas guzzlers. Now the car manufacturers have to reduce capacity to meet the new demand. This may mean some manufacturers don't make it, including Chrysler.
  • gagricegagrice Member Posts: 31,450
    There are 20M government employees that are owed pensions

    Your points are well taken and spot on. Look at GM and the UAW ponzi scheme. It was all based on continued growth and selling more cars every year. That is a microcosm of our Federal, State and Local governments. They are all spending future funds that are not guaranteed to be there. In fact it is very likely they will not be there.

    Programs like C4C were to distract the American public from the much deeper problems. I will admit that it gave the auto industry a momentary high. Much like heroin. That is why the addicts are crying for another fix.

    Add to that the lie the Feds put out saying their was no inflation in 2009. I find it hard to believe the 35% increase in gasoline over the year did not tick the inflation meter up one tick. Nothing else I bought throughout the year went down to compensate. 2010 model cars are higher than equal 2009 model cars.
  • berriberri Member Posts: 10,165
    Its all in how they play the "formula"! I also think that when you pay the same, or even lower price for a poor quality Chinese item that doesn't last as long, there actually is some inflation in that down the road as well since you are now paying out more over time by having to purchase the item replacement more frequently, but it won't show up in the "stats". I think health care is an even bigger whammy than energy prices.They are jacking up premiums, as well as co-pays, deductibles, etc.
  • kernickkernick Member Posts: 4,072
    Yep, we are being led mostly by people who are corrupted by power and money, stupidly arrogant that they may be wrong, or some of both.

    Our leaders are short-term planners. They are interested in the next few years, such that their decisions are not necessarily the best overall choice. They know that stock-holders care about the next quarter. And politicians care about the time up to the next election. They do what make people happy now and in the near future.

    The outsourcing of manufacturing jobs from this country, the selling of technology to foreign concerns, pork-barrel projects, the Ponzi schemes of the UAW, the raiding of social security for general funding, writing laws that forced banks to loan 100% funds to risky people, the continued expansion of many branches of government; all are converging together to the economic decline of this country. the government has spent and promised to its citizenry far more than can it ever pay, unless it prints so much money, that it becomes like a peso when purchasing foreign goods.

    I also agree with you that the statistics you get from many of our leaders are severely massaged - the official unemployment rate, the size of the deficit, how many jobs have been created by the stimulus, or how much the climate has changed. Too bad more e-mail systems of our leaders aren't hacked into, like that bunch of U.N. loser climatoligists who got caught with their pants-down (adjusting data).

    And yes you'll see low inflation, no matter how many times the formula has to be changed, as many salaries, bonds, pensions, and social security adjustments are tied to that number. Any money the government cheats people out of now, carries thru in each successful year!
  • bpraxisbpraxis Member Posts: 292
    My guess is that the vast majority of Americans are not aware of the Depression of 1920.

    The strategy then was reality based and President Harding did the following to get the US out of depression:

    1. A dramatic cut in government expenditures up to 50 percent.

    2. A dramatic cut in taxes up to 50 percent.

    This methodology laid the groundwork for the great boom of the 1920s before the Fed created another bust.

    If every county could attain prosperity by printing money, ( Cash for Clunkers
    ), then every country in the world would be in good financial shape.

    Prosperity comes from:

    1. Hard Hard Work

    2. Savings in the form of capital accumulation, (Chinese save 30 percent of income)

    3. Entrepreneurship

    With liberty the amount of prosperity is limitless.

    The enemy of prosperity are the bed bugs who want to control your life, liberty and property.
  • millwood0millwood0 Member Posts: 451
    "The outsourcing of manufacturing jobs from this country, the selling of technology to foreign concerns, pork-barrel projects, the Ponzi schemes of the UAW, the raiding of social security for general funding, writing laws that forced banks to loan 100% funds to risky people, the continued expansion of many branches of government; all are converging together to the economic decline of this country. the government has spent and promised to its citizenry far more than can it ever pay, unless it prints so much money, that it becomes like a peso when purchasing foreign goods. "

    well said.
  • millwood0millwood0 Member Posts: 451
    'With liberty the amount of prosperity is limitless.

    The enemy of prosperity are the bed bugs who want to control your life, liberty and property.'

    well said. only if our people could understood that, they would have voted out the corrupt politicians.
  • kernickkernick Member Posts: 4,072
    BRAVO!! I see quite a few posts that people get what history and their parents taught them. A society, economy, family, or individual can not survive long and well by continually spending more than it produces. AND that wealth is created by actually manufacturing, constructing, mining, or farming physical goods; an economy based on service jobs and consumption is burning through the wealth created in prior decades, and putting future generations in debt.

    Currently the government is growing debt a lot faster than GDP. And that GDP growth of the last decade or so is based on a bubble-economy, which was being driven by putting more and more borrowed money in circulation! And if you note over the last few years each time a stimulus was presented it was bigger than before, and what were the results - 10% unemployment, still record mortgage defaults and bankruptcies, and an unsustainable budget deficit combined with states that are also broke! Maybe CA ought to start printing $'s or their own currency, as KDH thinks that solves budget problems and makes debt irrelevant. :P
  • kdhspyderkdhspyder Member Posts: 7,160
    Write as much as you want complaining about a system that works and is not going to change. It's good to vent your frustrations, it also accomplishes nothing. Don't bother saying 'Throw the bums out' either because this is our system and it's supported by every party and every think tank and every economist. And the system works.

    You simply are in a tiny minority. It's good for the soul to be able to vent your frustrations. Carry on.

    Our relative piece of this world is getting smaller because we have generally been successful in convincing the rest of the world to buy into the 'Pax Americana' doctrine by adopting our capitalistic model of economics. We are growing but the world is growing faster because it has a lot of catching up to do. Presumably with our greater resources and greater wealth our population should be able to stay ahead of the curve of worldwide development. But I recognize that some herein are not as capable as those in other countries and there are some herein that should fall behind the curve and lose position relative to new agressive up-and-comers.

    The UAW is one such group in my opinion. Capitalism is punishing them for years and years of static intransigence by driving jobs to the West and South of our country and driving jobs overseas. In the end this is very efficient.

    Businesses in this country are salivating over the fall in the value of the US$; c.f. the Trump kids example from before. Domestically the fall has no effect on their costs and sales. On exports a) their costs just went way way down so that they can make windfall profits, thus increasing our wealth at the expense of foreign companies; or b) they can sell more with lower prices in the international market vis-a-vis the foreign competition thus increasing their profits in another way.

    For flexible companies and workers these times of dramatic change are often bonanza's in terms of wealth generation. So complain all you want. A lot of people see you as a walker in the street with a poster board over your shoulder crying 'The world is coming to an end, REPENT'. They tend to walk away and turn a deaf ear. Harsh but true.
  • millwood0millwood0 Member Posts: 451
    "Don't bother saying 'Throw the bums out' either because this is our system"

    while that may be unfortunately true, the flight of capital is suggesting otherwise. Large amount of money is going oveseas precisely because of that.

    " and it's supported by every party"

    true, but only unfortunately.

    " and every think tank and every economist."

    unless you read poorly or define "think tank" or "economist" as those in support of your view.

    " And the system works. "

    saying so doesn't make it so.

    "You simply are in a tiny minority."

    I don't think we are debating what's popular. Instead, we are debating what's right. and sometimes, it is the minority that holds the truth.

    Carry on.
  • kernickkernick Member Posts: 4,072
    You simply are in a tiny minority. It's good for the soul to be able to vent your frustrations. Carry on.

    Thank you. That puts me in good company with what many have said from the Bible thru to the founders of this country.

    The reality is that Greenspan and Bernanke's policies combined with those in power in DC over the last few decades have made terrible mistakes. Go back and read what they have stated over the last year concerning how this meltdown occurred. They basically said they did not see this coming! What's their solution? Prop up sales of houses and vehicles to keep the bubble-society going! Insanity.

    This is not about religion, it is about getting society to realize that they need to work harder and smarter than their foreign competition, IF they wish to maintain a lifestyle like we're used to. Our country is supporting our lifestyle right now by using credit (limited by the market willing to buy, considering the national GDP vs. debt).

    I have a simple message: "Live within your Means." and stop screwing everyone who will have to pay for this mess in the future. The government needs to get out of the business of playing games providing for favored or destitute individuals and corporations. Let the marketplace work, within some fair, simple rules.
  • kdhspyderkdhspyder Member Posts: 7,160
    I find debates about 'right' and 'wrong' and 'good' and 'evil' to be a waste of breath. It's the provenence of those who feel displaced and without power. It's exactly what we did in college dorms in the 60's. It's what college students do now in dorms and meetings. Debating over the different types of utopia that can be created accomplishes?? Nothing.

    Getting involved and actually making money and creating wealth from the system that we've got is what got Gates, Dell, Buffett and others out of the 'wouldn't it be wonderful if.....' group and into the 'I can create wealth no matter what's thrown at me' group.

    In the steel business we made money both ways, tons of it, no matter what way the currency fluctuated. In the end the company was merged with Mittal and now it's the largest steel company in the world.
  • kdhspyderkdhspyder Member Posts: 7,160
    Your personal pov, your simple message, is noted.

    Since we are not the US of the 1810 your wish for a simple solution to a complex world is simply a dream. The best solution IMO is do the best you can for yourself and keep the agita to a minimum. You're going to be at odds with the business community, the government and most of the population, why cause yourself unnecessary emotional strain?

    You do know of course that our economy is exactly in the middle of the range of the rest of the developed nations on earth as regards public debt vs GDP. I looked up that stat before posting. Want the link?
  • kernickkernick Member Posts: 4,072
    The outsourcing of manufacturing jobs from this country and the selling of technology to foreign concerns is a perfect fit with laissez-faire capitalism. If you don't like that, then you have to accept an expanded government.

    Not really. There are other options than just expanded government. Did GM and Chrysler have other options before their crash and bankruptcy? Yes. They had several decades in which they saw their market-share decline in which they did not make enough good decisions, both from management and the UAW. They were both obstinant and arrogant in their actions and words. Maybe they understood that they had nothing to lose, as the government would be there as a backstop. They were operating under a form of diplomatic immunity, just like many of the banks, and Fannie Mae have. So we have a bunch of risk-taking, child-like running-to-mommy organizations operating.

    BTW: here's a wonderful story of the quasi-government organization - Fannie Mae, which has had to be backed up with a blank check from the Treasury. Talk about falling in a dung-heap and walking away in a new suit.
    http://www.mortgagenewsdaily.com/12292004_Fannie_Mae_Executives_Forced_Out.asp

    And the government and Fed who instituted the programs that created the risky 0% loans to low income people, inflating the value of houses, is now the people who are running to fix the problem by giving bailouts not just to these risk-taking organizations, but to the individuals who got sucked into the housing bubble!

    Well at least our government didn't give GM and Chrysler a mandate and $$ to INCREASE auto production; and give the consumers $10,000 each to go buy a new GM or Chrysler. Well not yet!
  • gagricegagrice Member Posts: 31,450
    We may be in the minority here. But the experts are saying the same thing you have been preaching.

    Experts say curb US debt or suffer a dollar crisis
    Wed Jan 13, 2010 3:40pm EST

    * US is on unsustainable fiscal path

    WASHINGTON, Jan 13 (Reuters) - The United States must soon raise taxes or cut government spending to curb its debt, and failure to act will risk a crippling dollar crisis as investor confidence ebbs, a panel of experts said on Wednesday.

    "It has got to be done. It will be done some day. It may be done with enormous pain. Or it may be done more rationally," said Rudolph Penner, a former head of the nonpartisan Congressional Budget office who co-chaired the 24-strong Committee on the Fiscal Future of the United States.

    President Barack Obama's administration will present his budget for fiscal 2011 early next month amid intense pressure to live up to election campaign promises not to raise taxes on middle class Americans, while confronting a record deficit.

    The national debt has risen above 50 percent of GDP (gross domestic product) from 40 percent two years ago, and within 20 years will blow past a previous record above 100 percent of GDP set after World War Two without stern official steps.

    Mounting debt could sap investor confidence in the economy, and the nation's ability to honor its obligations, pushing up interest rates and causing a steep fall in the value of the dollar as international creditors seek safer returns elsewhere.

    CUT HEALTHCARE

    The committee identified curbing Medicare, Medicaid and Social Security spending as the top challenge, and had a lukewarm assessment of cost containment in healthcare reform currently before Congress that Obama hopes to sign soon.


    http://www.reuters.com/article/idUSN1311550220100113?type=marketsNews

    To me that means NO MORE C4C programs and the like. Quit running the country like it is a Monopoly Game.
  • millwood0millwood0 Member Posts: 451
    "I find debates about 'right' and 'wrong' and 'good' and 'evil' to be a waste of breath. "

    only to the extent that you have no conviction.

    "In the steel business we made money both ways, tons of it, no matter what way the currency fluctuated. In the end the company was merged with Mittal and now it's the largest steel company in the world."

    ISG was in the right business at the right time, managed by the right people and supported by a union that learned its lesson. If you think you are, just look up how the steel industry put punitive tariff in place, and how that hurt the rest of the country.
  • kdhspyderkdhspyder Member Posts: 7,160
    I lived through the punitive tariffs and quota systems. I had to assist in filling out reams of forms for the ITC the various dumping and countervailing duty cases of the 80s and 90s. We prevailed.

    Then Nucor ate the integrated mills alive and put them out of business. Then our company bought a good number of them.

    In business trying to impute 'good' and 'evil' is a serious waste of time and effort. If an action is legal and ethical and done according to the laws then not taking full advantage of every opportunity is simply foolish and naive. Cold hard cash, profits, and wealth have no blue ribbons for Miss Congeniality.
  • vinnynyvinnyny Member Posts: 764
    You simply are in a tiny minority. It's good for the soul to be able to vent your frustrations. Carry on.

    We commoners know what the elitists are up to and the tides are about to shift in our favor. The first evidence will occur tomorrow when Scott Brown wipes out the annointed one's comrade in MA. Yes, the dems will demand their recounts, but I don't think they'll be able to steal this one (assuming the Republicans learned anything from the Al Franken debacle). 2010 will be the beginning of the end for Democrats and Republicans who think we will act like lemmings forever. We tried the social experiment when we elected an unqualified minority just to say that we had evolved enough to do it. Most thinking people see that the experiment is doomed to failure and is leading us down a path from which we might not recover.

    "The times, they are a changin'."
  • kernickkernick Member Posts: 4,072
    eth⋅i⋅cal  /ˈɛθɪkəl/ Show Spelled Pronunciation [eth-i-kuhl] Show IPA
    Use ethical in a Sentence
    See images of ethical
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    –adjective 1. pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.
    2. being in accordance with the rules or standards for right conduct or practice, esp. the standards of a profession: It was not considered ethical for physicians to advertise.

    In business trying to impute 'good' and 'evil' is a serious waste of time and effort. If an action is legal and ethical and done according to the laws then not taking full advantage of every opportunity is simply foolish and naive

    I equate the definition of "moral right and wrong" with "good and evil". Are you sure you know what ethical means? :P

    Cold hard cash, profits, and wealth have no blue ribbons for Miss Congeniality.

    You have given a wonderful explanation on how Wall Street traders and the executives of many companies have bankrupted their firms, and hurt many millions of U.S. citizens by damaging the economy with their short-term gains and greed! :P :P You're digging your hole much deeper today.
  • berriberri Member Posts: 10,165
    There can be micro exceptions, but generally whenever economic matters get seriously out of equilibrium its not a good thing over the long run. I don't think an overly weak or strong currency is something you want long term. Even if a company or industry does well initially in such a circumstance, eventually the impacts on the overall economy will bring everyone down if they are not remedied. You are right that there are things that a savy investor or company can do to manuever effectively sometimes, but realistically no one bats anywhere near 1.000 over a longer course of time. Even Buffet makes mistakes. Speaking of whom, he is not a proponent of a seriously out of whack dollar and I'll go with him on this.

    Having said all of this, I believe there are two things that are keeping the dollar from plunging right now. Obviously the economy around the world (even BRIC nations are cooling a bit). The other is that I believe the Euro is artificially inflated and due for an adjustment. However, longer term the US needs to stop all of this free wheeling public dole and start getting a handle on the defecit. A little red ink is alright and can even help leverage an economy, but I think we are going too far out.
  • kdhspyderkdhspyder Member Posts: 7,160
    Hellooo this is a non-political forum but I was speaking of good Republican mores; i.e. make as much as you can off the common man as fast as you can. This is just solid capitalism. As long as it's legal and ethical, grab all you can.

    Political rants this way =======> Dead End.
  • kdhspyderkdhspyder Member Posts: 7,160
    I don't get too excited about economic or politic 'trends'. Our system is weighted toward the center. It always swings back and forth around the sensible mean.

    Currency is simply a reflection of what others will pay for it in terms of what it returns in interest. The one immediate sure-fire way to stabilize the fall of the US$ is to raise interest rates and kill this newborn recovery in the cradle. BTW that'll never happen.

    The US$ is simply a commodity that is bought and sold in the world market. Since the Plaza Accord in Sept 1985 we have been actively forcing down the value of the US$ in order to make our companies here more competitive. This has seriously PO'd the Germans, French, Japanese and now Chinese.

    This has been the official strategy of the US Government for 25 yrs.

    I made money in both directions. It's simply a matter of being flexible and recognizing where to go to do business.

    At the time of the Plaza Accord the JY/US$ rate was ~320:1. By the mid-90's it was down to ~120:1 and stayed fairly stable for the next 13 yrs. Now it's fallen to 90:1 It's dropped like this because ....
    a) we've dropped our interest rates to negligible levels making interest-bearing notes less and less attractive;
    b) increased the volume of US$ in international circulation. Domestic circulation has no bearing on the value of the US$

    US companies are rejoicing at this fall in the value; international competitors hate us for it;
    US workers gain more work because of it; international workers lose work because of it;
    US citizens with assets and investments in US$ neither lose nor gain anything; international investors have taken a 20% bath in the last 24 months;
    US citizens can buy any domestic products or assets at the same prices that they paid back in the 90's ( adj for inflation ); international investors now can buy any US asset or investment at a 20% discount - this stimulates (!) investments here inside the US as opposed to our traditional foreign competitors ( Toyota is a prime example ).
  • bpraxisbpraxis Member Posts: 292
    Some may remember the quote:

    He who rob's Peter to pay Paul, ( C4C ), can usually count on the support of Paul at the voting booth.

    A quote from Voltaire:

    Eventually every fiat currency returns to it's intrinsic value which is nothing.

    Why are we buying things we dont need and cant afford?

    Actions have consequences......... Lets live an honorable life.
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