I just spent the past week fishing and camping with old college buddies of mine and we got to talking about the economy and gas prices and what-not. Being of fairly diverse political backgrounds, everyone seemed to have different ways of fixing things, but the one thing we all agreed on is no matter the means, things have to get worse before they get better. So, I turn to you PF for your opinion on the matter. The following are my opinions based on the discussions we had over the last week. I don't mean to speak for anyone so please feel free to correct me/add your own opinions. First, we made the assumption that gas prices are the driving force behind any economy. Fuel is the primary factor in production, manufacturing, shipping, and tourism. As fuel prices rise, the cost of living rises as well. There is essentially no part of the economy that is not affected by the price of fossil fuels. What I think must be discussed is if foreign demand is the driving force behind rising gas prices then we have to look at the economic connections between the U.S. and China/India. The Chinese manufacturing-driven economy depends on rampant consumerism in the United States. As the Chinese economy expands they demand more of the commodities that have traditionally been consumed in the U.S. This in turn means less discretionary spending for U.S. citizens and the eventual downfall of manufacturing-based economies as their primary markets disappear. I've seen two solutions to this problem: Conservative: Become energy independent (fossil fuels first) followed by expansion into green energy. Should our domestic production reach levels that are self-sustainable we can end our reliance on foreign energy, thus keeping costs down. This would decrease our input costs on the aforementioned segments of the economy and prolong global economic stability. Deregulation of the oil industry would further decrease the costs of energy. The issue I see here is the only way true domestic self-sufficiency can be attained is by nationalizing the oil industry and forcing suppliers to sell locally. Otherwise, the only effect expanded drilling will have is an increase in supply which would lower costs but not to the desired levels. Nationalization is a violation of the basic principles which govern free market economies. Liberal: Become energy independent by further expansion into green energy, decrease our demand by becoming more "Green." While I feel this is the final solution to future prosperity, the question is can we get there before everything falls apart around us? What green energy methods we have are incredibly inefficient and far from cost-effective. Environmental regulation has historically driven prices even higher which would serve to hasten our descent into an economic collapse as the levels of discretionary spending fall even lower due to increased costs. That's the short of it at least, I'm interested in hearing what others have to say.
we also need to look at American made gas vs foreign made is there a cost difference America is using less and producing more, prices are not going down... why?
Well, production is up on private land, not federal. Federal permits, as signed by the POTUS, can dictate what amounts are to be sold on local markets. Production on federal land is actually down. This increase in private production has not kept pace with global demand. Why would a private entity sell locally when there are higher profits if they sell on foreign markets? It's why I laugh when I hear Obama mention our production increasing and us becoming a net exporter. If people actually looked into what was really going on, they'd realize how bad that statement really is for us.
Green energy just makes sense...we've known that now for about 40 years. Big oil interests refuse to share the revenues of energy with any other group is what it all boils down to. Just like the 1% controlling the 99%. We're a country of privilege now. That's the failure of capitalism....whatever the original idea was with this concept, it has morphed into something perverse now and has all but destroyed the country. Of course, the rich will disagree, but it's all worked out just fine for them so, I understand that mentality to a point. Somewhere along the way, morality and humanity got "bought out" by profit and greed, and greed just becomes more greedy, winds up eating itself and everything else along the way...which is where we're at today. I have a feeling though, that we ain't seen nothin' yet...
Is the economy doomed to fail? American Middle Class Dwindles As Household Income Drops To 1996 Levels Back in 1999, middle-class Americans were following the impeachment trial of President Clinton, reeling from the Columbine shootings, and fretting about Y2K. But if they knew then what we know today, they would have also been holding onto every penny of their savings with a kung-fu grip. Why? Because in that year the average American household earned its peak income, and though it has fluctuated during its decline over more than a decade, a post-recession nosedive has sunk income three years in a row to 1996 levels, according to a recent report from the Census Bureau. This has prompted a flood of media coverage about the end of the middle class, including the recent We Are the 99.9% op-ed in the New York Times, which effectively draws the line between the super rich and everyone else. As in previous tough times, the middle class could hunker down and weather the storm if it werent for certain detrimental factors at play (Im looking at you globalization). While one would hope that analysts could read economic statistics like tea leaves to uncover something promising for the future, the numbers dont look good. http://singularityhub.com/2011/12/0...les-as-household-income-drops-to-1996-levels/
Here's the thing: I don't like oil companies any more than the next guy. What's to prevent these green companies from doing the same thing though? I won't argue that renewable energy might be harder to control as solar/wind/water are available to everyone. I'm seriously starting to entertain the thought that energy should become a public works concern. Another thing I found interesting was listening to David Graeber speak on a radio show a while back. He wrote the book "Debt: The First Five Thousand Years". While speaking, he alluded to civilizations essentially wiping debt and starting over... and the relationship of violence to debt. I've yet to read it but it definitely looks like a good read.
Well, it would be competition to the oil conglomerates then wouldn't it? That "free market" competition you always hear right wing advocates blowing out. Competition would be good...it might bring oil prices down, and it would give people "choices". Yup...."free market". Let it work itself out instead of a large monopoly. (you know, that BS you always hear from advocates of mergers and big conglomerates gobbling up everybody else).
Responding to the "debt" part of your post, "wiping out" of the country's debt is inevitable as it is so large it has already eaten itself. It can't possibly be repaid, so default has to happen. That's a foregone conclusion in my opinion.
Of course it's doomed fail - it's being planned to fail. See - http://www.usdebtclock.org/ Planned. We're simply pre-collapse at this point. The economy will be manipulated to go up or down, commodity prices will swing, governments will continue to meddle in the economy and peoples lives, gold will continue high, the stock market will continue to be driven by hyperbole and emotion... until of course, we get to the end of the line. Even by His Lordness's own budget projections (which are ludicrous) he plans are increasing the debt by a minimum of $7 trillion in the next 10 years - and that's if you believe the laughable numbers they use for Obamacare... that alone gets you to $23 trillion by 2021. Here's the projected 2016 clock - http://www.usdebtclock.org/current-rates.html More wars, more bailouts, more inflation, more all things Mr. Toads Wild Ride are coming. If you've been paying any attention at all, which of course most haven't, surely you've noticed a decades long pattern of consistant movement toward centralization, globalization, debauching of currencies, loss of freedom, the build up of the police state, strangling regulation, etc... Even if things smooth out for a few years here and there, the end is not in doubt. Just a matter of when the timing comes together and the house of cards is brought down.
Supply and demand...when demand is down prices go up so profits remain intact. You expect investors to lose money? That is not the concept behind "investing". Drill now and drill more.
Drill until what? We run dry? Then what? Investors lose money? Of course not...only regular average Joes are expected to lose money...not the kings of the cash piles. What a silly thought. The super rich are only supposed to become super duper rich.
Is recession or protectionism causing the global economic slowdown?... The global economy is slowing down. But is it recession or protectionism? Saturday 14 November 2015 - As exporters feel the pinch, one analyst is suggesting that a surreptitious retreat from globalisation may be provoking the decline
Uncle Ferd fixin' Granny's apple stand in case she needs to sell apples onna street corner again... The West is out of options and out of time Mar. 2, 2016 - While oil has arrested its march toward $20 at $32 due to short covering, it is worth a pause to see where the next leg down may lie. In short, the long-term picture isnt pretty: 2008 was potentially just a warm-up.
The answer is Yes. The most telling point is that people cannot even pinpoint the most important issue that is keeping the economy down. They just know that it is and expect it to be fixed. This leads you to get convinced that gas prices or whatever is the problem and it can be fixed soley by looking at energy. Which is so far from what needs to be done and so little that you may as well just not do it. The main problem is debt. As a country we have decided that we would give our younger generations access to college but only if they take massive amounts of student debt to pay it at ruinous interest rates. We have then decided that we would take away from them protections that everyone else in the country including corporations are entitled too because they cannot even use bankrupcy to make it go away. Think about it. Instead of daring to ask our institutions to play by the free market and lower their prices to bring back demand we have said it is ok. We will prop you up by selling the futures of our young. After all you provide respectability for the next generation of our leaders by giving these idiots degrees cloaked by your prestige. People will then say but this is only one issue so what if the young have essentially been sold to indentured servitude. There are other things that make the economy run. First off this is objectively not true. We have made it so that a caring grandparent can co sign these loans and have their social security checks garnished when payments are missed. Lets take a look at the effects of this. If you have to take part of your meager income and pay it toward student debt how are you going to live? Well you have to go by Credit Card or god forbid payday loans. Both of which the politicians we have continually elected, you know the rubios bushes and clintons of the world protect. The younger generation get deeper and deeper into the hole we started for them with every passing pay check. But then you say so what? Well if you have a business and your client base is so deeply in debt that they cannot buy your product, how will you sell to them? Let's look at another part of the equation. If you are an employee how are you going to effectively bargain for a better wage scale when there are so many people desperate for a job because of the massive hole they are in? Well the government can then increase demand by providing an economic stimulus right? Wrong. Have you tried living in debt? It is very difficult to wake up and realize you are in this prison and that every paycheck you get has already been allocated before you even recieve it. Any stimulus the government provides is immediatly thrown into the hole to cover it meaning that no new demand for business is actually created. It would be different if these degrees lead to better jobs when you graduated but no while we are doing this we have also decided to ship out our manufacturing base to other countries on the altar of free trade. BUt then you cry we are producing service sector jobs now! Yes because a workforce of waiters and fast food burger flippers will be able to get out of their debt. Tl dr. Yes the economy is screwed and there is no way forward without massive debt relief and caps or removal of interest. All because people insist on voting for the clintons, bushes, rubios, and whatever incarnation of the establishment is forced upon them.
Way to resurrect an old thread! Anyway, as we see with today's record low oil prices, cheap energy doesn't stimulate the economy as it used to under the Reagan years. That's because other factors are holding it back as well. I agree with you that a major one is debt (private, not public): The truth is that over decades economic expansion has been fueled mainly by accelerating debt taking. This came to a halt in 2008, when debt loads became too high and deleveraging set in. Now, if you look the graph, the deleveraging since 2008 looks promising. However, the truth is that most of it came from default, not from consumers actually paying back debt. Now, if there is another economic boom, it will surely lead to even increased debt levels, leading to an even more severe future downturn. The reason is that the debt levels are so high, they are limiting demand, which already is limited by stagnating median wage. I do not, however, agree with you on student loans. At least student loans are in investment into bettering oneself, increasing marketability. A bigger culprit, however, is consumer debt, such as car loans and home equity loans. hey are mainily for consumption of depreciating assets, and, thus, dangerous for the individual. However, they were the ONLY thing that drove the GW Bush economy.
@___@ i only post on stuff in the front page. I still disagree with you on student loans. It is a good thing to go to college and build up your skill set. It is not a good thing to structure these loans in such a way that they cannot be discharged and they can garnish your wages and that of your grandmother living on social security. Lets say you want to start a business. Getting a debt is good right? To get it started and all. Would it still be good at double the interest rate and without a corporate shield to protect your personal assets? I mean there is a point where the deal is bad. Im saying student loans are at this point and the deal should have been better. After all the alternative would have been for enrollment to drop so much that colleges would have to lower price. Yes the debt is a main problem because it is not used to generate additional income in the form of investments but to buy a tv or have dinner at outback. It also artificially drives up prices as companies can charge prices that the consumer can only afford by mortgaging his future. Which is why I believe trump is right we are on a credit card bubble. Eventually people will run out of credit. Look at banks now. They have secured cards, credit building cards, and other gimmicks just to beg people to get back in the credit market. Yeah government debt is not such a big problem cuz they can always print more money and they have the guys with guns to enforce taxation so revenue will always be there. It will blow up in the future though. Remember people are always willing to loan because you pay interest. If your paying more and more interest and eventually your budget is so taken by them that you cannot pay then it becomes a problem but thats far away.
I would be all for reducing the amount of student debt by 1) reducing tuition (this is a complex subject, though) and 2) strengthening public universities by increasing state allocation of funds (currently, most state universities receive less than 15% of operating expenses from state funds). Bernie is talking about these issues, but he is decried as a socialist whenever he touches them. Therefore, either nothing will change or we get more universities run like Trump university, where the students have the honor to be ripped off for a worthless degree. After all, in the free market profit at any cost rules supreme, doesn't it?
the sad thing is its not even a free market. the onerous student loans guarantee high tuiton prices because demand is not limited by the capacity to pay. trump has also said govt should not make anything off student loans btw
