Discussion in 'Current Events' started by Giftedone, Mar 9, 2019.
For sure. A lot of different ways to define it.
I mention this in a previous post (tax cuts and increasing the deficit go hand in hand). Consumer spending is the largest part of the economy - hard for the little people to spend more when most of the wealth created by productivity increase goes to the top.
One of the most disturbing facts is that it is not just the Gov't that is drowing in debt - Consumer debt levels are also at all time highs and the Fed has nothing to fight with = interest rates are already at rock bottom lows = the pressure is for rates to move higher. Either way - the fed has nothing left to fight with. It tried to get some ammo back into the chest ( by raising interest rates) but quickly got bitch slapped and changed course. The Fed is up a creek without a paddle. The market is controlling the Fed now - not the reverse. The Fed is like a leaf blowing in the wind. The Fed tried to mess with the invisible hand and we know that this never ends well ... now the invisible hand is bitch slapping the Fed.
People criticizing the economy today forget what the Bush admin era felt like.
Hey, I’ve been pondering our discussion and found this today.
I’m still digesting it. Do you have any thoughts on this correlation of states supposedly being less dependent on the federal government having poor asset to liability ratios?
What difference does this make to anything I have said - so long as apples are being compared to apples - which is the case here.
The bottom line is that the nitrous oxide injection was just that - a nitrous oxide injection. Short term gain for long term pain.
What is your mission here ? are you trying to defend the massive increase in the deficit ? Perhaps I am mistaken but, I thought you were a fiscal conservative.
When everyone was jumping up and down cheering with glee over the GDP increase in 2018 - I was the one pointing out that this was a largely artificially created short term bump. I used the analogy of a household that gets a limit increase on their credit cards - followed by going out and maxing out those credit cards over 3 months - and then telling people "look how good we are doing" on the basis of the increase in household GDP.
Obviously this is lunacy but, that is exactly what folks were doing. What did we expect would happen in the face of a massive credit card spending spree ?
Strictly from a mathematical perspective the problem is this: Assume GDP is 1000 dollars in one year. We go out and do credit card spending and this GDP increases to 1100 dollars the next year - an increase of 10%. The next year we have to get GDP up to 1210 to maintain that 10 % increase.
Now assume that the underlying economy is growing at 5%. This means that GDP, as per growth from the economy - Sans Credit card spending - was actually 1050 (not 1100). In the next year - assuming the same 5% economic growth the economy -Sans credit card spending- the real non credit card spending economy is producing 1102 in GDP - not 1210.
It is not that the economy is not growing in the above scenario ... It has ! The problem that actual numbers do not reflect the real economy - meaning economy sans credit card stimulus. At some point in the future that stimulus will be removed - everyone will then panic because GDP numbers will decline - when in reality the real economy is still growing.
What is very disturbing is that despite increasing the deficit in 2018 - and a further massive increase in deficit spending for 2019 over 2018 - we are not managing an overall increase - meaning that we have hit the above number wall much sooner than would be expected if the real economy (sans credit card spending) was growing.
"Had" being the operative word. I would hope we would increase GDP growth on the back of a massive deficit increase - what else did you expect ?
You then make this absurd comparison - Growth in the "debt 7%" to growth in "GDP growth rate" ridiculously absurd. Do I seriously need to explain in detail why this comparison is so absurd ?
Regardless - the fact of the matter is that the GDP growth has declined to almost negative.
Unemployment at 50 year lows and wages gaining at the fastest rate in nearly a decade.
Newsflash for the economic illiterate. That IS TRICKLE down.
Uh... what was the percentage of tax liability of those 6% prior to the tax cut? Kind of important information for comparison.
If so, you make too much and itemize too many deductions. The people that really got hurt were the upper middle income earners, living in high property tax states, and with minimal deductions.
2 kids, 4000 SF home, in a liberal haven state with absurd property taxes. This must be you, huh?
So you are of the crowd that we should outsource all of our manufacturing and only retain service job? Low wage jobs?
The only thing that I saw was pension labilities. Which kind of makes sense I guess. the farm states with lower population would have fewer gov't employees and more apt not to have promised payments with future dollars????
In case you haven't noticed we are a full employment.
So are you saying we should stop building 787s and put those people back making Barbies?
We need to build stuff other people can't or don't want to build that we need.
Yeap AKS knows but Trump doesn't. We've been through this, your opinion is your opinion only and has zero to do with tariffs.
Job growth for 10 years and you think it's Trump's trickle down??
What happened to your ETR ?
My ETR went UP 2% points this year....
I fully agree. GOP tax cuts just get consumers to open their wallets temporarily, based on the promise of more prosperity. The corporations, however, always knew that this was only only temporary, so they didn't invest into innovation, new products, jobs and durable goods, they rater bought back stocks to increase CEO compensation.
In reality, we are held back by low money velocity:
Why? Because consumers don't have enough money to spend, they have been squeezed by decades of stagnating wages, while ALL of the gains went to the top, to people who don't need to spend, and who don't invest in the light of low demand.
Wages are up, but not as much as Inflation:
Inflation 2018 = 2.44%
Hourly wages = 0%
Salary wages = 3%
Salaried workers make up 82% of the work force
Take it up with New York, California, Mass, or whatever high tax state you live in.
So 10 years of growth, 8 being under Obama, and 2 under Trump, and now you think thats “trickle down”? When Obama was president you said he was doing the exact opposite of trickle down. Which is it ?
Do you have any idea what jobs make up the service industry? Hint: they aren't all waitstaff and fry cooks. And yes, given the choice between a factory job and a white collar service industry job, id' pick service 100 times out of 100. Why are you against Americans raising their standards of living?
The crumbs that fell from table of corporate greed and self interest - mostly in the form of one time bonuses rather than real wage increases - did help a little but only in the short term.
The corporate welfare payments were mostly used to buy back shares rather than invest in growth. This has the effect of artificially propping up the stock market. A healthy stock market improves consumer sentiment which result's in more liberal consumer spending. When one's 401 K investments are stable or improving - rather than declining due to a declining stock market - one tends to spend more liberally.
The price for this growth was massive deficits = increased debt. As such it is a small short term gain for large long term losses.
So you have the Trump translator.
What does he want.
LOL it's not just AKS, don't act imply that I'm the one taking the controversial position. Why don't you start with Adam Smith, I seem to remember that he addressed trade in a book or something.
Manufacture is a low value add process compared to design, engineering, service, marketing, and sales functions. The service sector consists of professionals, technicians, doctors, lawyers, nurses, medical techs, education, etc. Hardly the low tier jobs. Today's manufacturing is mostly semi skilled or steel collar workers (robots and factory automation). Everything else has headed to low wage areas.
Oh yeah we know AKS we know, your opinion is that Trump is raising tariffs to hurt our economy and not get close to free trade. We got it makes perfect sense in unicorn land.
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