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RE: Historically, only a 99% free-market economy - 9/25/2008 3:32:21 PM
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blessedinnyc
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quote:
ORIGINAL: kernsfamily
true...but, it's certainly the most "free market"/"Free Enterprise"/"Captialistic" country that there is.......which, is what makes our economic system as great as it is....(even in it's "down cycles" and "downturns")
it's not a "perfect" system...but, certainly "more perfect" than anything else out there.
In all honesty, that would probably Hong Kong or Singapore, but the US does top the list.
I am saddened that the government has to intervene- and recognize that it will come with a lot of new regulations (that in all honesty, aren't completely unreasonable.) However, this isn't a radical departure from the economic model the US has had at least for the past 75 years and arguably, since the feds started regulating the railroads over 125 years ago.
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RE: Historically, only a 99% free-market economy - 9/25/2008 8:27:39 PM
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prophet
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Another issue is that $700 bil may not be the end ........yet 
Bailout Could Deepen Crisis, CBO Chief Says
Asset Sales May Lead to Write-Downs, Insolvencies, Orszag Tells Congress
By Frank Ahrens
Washington Post Staff Writer
Thursday, September 25, 2008; D04
The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.
During testimony before the House Budget Committee, Peter R. Orszag -- Congress's top bookkeeper -- said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.
"Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values," Orszag said in his testimony. "Establishing clearer prices might reveal those institutions to be insolvent."
In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X's real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company.
Such companies "look solvent today only because it's kind of hidden," Orszag said. "They actually are insolvent" already, he said.
In hearings on Capitol Hill so far this week, criticism of the bailout plan put forward by Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke has largely been restricted to the shape of the $700 billion proposal, how the money will be spent and what sort of oversight Treasury should have.
But Orszag yesterday questioned the wisdom of the plan itself, testifying that "it therefore remains uncertain whether the program will be sufficient to restore trust."
In yesterday's interview, Orszag said, "The key question is: What are we buying and what are we paying for it?"
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092402799_pf.html
_____________________________
Create in me a Clean Heart, O Lord.
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RE: Historically, only a 99% free-market economy - 9/25/2008 8:31:11 PM
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prophet
Posts: 691
Joined: 4/19/2005
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YES The execs are gettin paid for failures!!!
Fury at $2.5bn Lehman bonus
Nomura and Barclays table bids today for US giant’s London operation as bank’s administrator likens collapse to Enron
John Waples and Danny Fortson
STAFF at Lehman’s New York office who helped to cause the world’s biggest corporate bankruptcy are to share in a $2.5 billion bonanza.
The bonus, which has been described by London staff as a “scandal” has been pledged by Barclays Capital, the British-based bank that last week acquired Lehman’s American operation and took on 10,000 staff.
The $2.5 billion (£1.4 billion) pot, which has been ring-fenced as part of the acquisition, has caused huge resentment among the 5,000 staff in the firm’s European and Middle Eastern operations who are not guaranteed to be paid after this month. There are, however, hopes that half the jobs in Lehman’s Canary Wharf office could be saved today by either Barclays or Nomura. Bids are being submitted for its UK equities and investment-banking business.
A Chapter 11 bankruptcy document filed by Lehman Brothers Holdings Inc says that Barclays has identified eight individuals out of the New York staff of 10,000 who are vital to make the deal succeed and a further 200 who are identified as “key”. It is thought that these eight directors will be locked into two-year contracts worth between $10m and $25m a year.
The $2.5 billion had been accrued as part of the contribution to Lehman’s group profits for the first nine months of the year. Barclays said there is no obligation to pay it out but analysts say the competitive pressure to keep key staff means he will have to. Bob Diamond, president of Barclays Capital, said: “You can expect us to manage this with the same discipline and performance terms that we have at BarCap”.
The biggest bonuses are likely to be for Michael Gelband, the bank's global head of capital markets, and Eric Felder and Hyung Soon Lee, global co-heads of fixed income.
Barclays has asked all 10,000 employees to attend work tomorrow at the bank’s Manhattan headquarters. Over the next three months
it will decide how many to keep and will use some of the bonus to meet remuneration packages. It is thought several thousand could be made redundant.
One London-based Lehman employee said: “It’s an absolute scandal. I will never work for an American firm again. It looks like they are prepared to cut you off at the knees. Nobody from America has been in touch since we went into administration on Monday.”
Another said: “Every other financial institution has been saved, including Lehman Brothers in the US, but it’s another story for the employees in Europe.”
Lehman has attempted to demonstrate in recent years that it is a global united company. Its mission statement says: “We are one firm.”
Price Waterhouse Coopers (PWC), the administrator to Lehman’s European operation has demanded that the firm repay £4.4 billion that was transferred from the UK to Lehman’s US holding company just hours before the firm collapsed. This left London with no money to pay staff.
If PWC is successful, the European operation would be Lehman’s third-biggest creditor after Citigroup and Bank of New York. It is thought that PWC will want to look closely at how $2.5 billion had been ring-fenced as part of the deal with Barclays. It will want to know who negotiated the sale and the precise details surrounding who benefited.
_____________________________
Create in me a Clean Heart, O Lord.
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Economic Stimulus Package - 9/25/2008 10:10:13 PM
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InfoCentral
Posts: 158
Joined: 8/1/2008
Status: offline
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Economic Stimulus Package
A little over 6 months ago...."we are going to give back to you about $500 each to stimulate the economy."
Present time..."we are going to take from you about $3,000 each to stimulate the economy."
Hummmm....what's wrong with this picture?
<IXOYE><
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RE: Historically, only a 99% free-market economy - 9/26/2008 8:08:42 AM
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NoShow
Posts: 454
Joined: 5/10/2005
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quote:
ORIGINAL: prophet
Another issue is that $700 bil may not be the end ........yet
Bailout Could Deepen Crisis, CBO Chief Says
Asset Sales May Lead to Write-Downs, Insolvencies, Orszag Tells Congress
By Frank Ahrens
Washington Post Staff Writer
Thursday, September 25, 2008; D04
The director of the Congressional Budget Office said yesterday that the proposed Wall Street bailout could actually worsen the current financial crisis.
During testimony before the House Budget Committee, Peter R. Orszag -- Congress's top bookkeeper -- said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.
"Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values," Orszag said in his testimony. "Establishing clearer prices might reveal those institutions to be insolvent."
In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X's real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company.
Such companies "look solvent today only because it's kind of hidden," Orszag said. "They actually are insolvent" already, he said.
In hearings on Capitol Hill so far this week, criticism of the bailout plan put forward by Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke has largely been restricted to the shape of the $700 billion proposal, how the money will be spent and what sort of oversight Treasury should have.
But Orszag yesterday questioned the wisdom of the plan itself, testifying that "it therefore remains uncertain whether the program will be sufficient to restore trust."
In yesterday's interview, Orszag said, "The key question is: What are we buying and what are we paying for it?"
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092402799_pf.html
I just don't know what to say.
So a lie is better as long as it doesn't make us feel as bad as the truth does?
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RE: Historically, only a 99% free-market economy - 9/26/2008 8:12:25 AM
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NoShow
Posts: 454
Joined: 5/10/2005
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quote:
ORIGINAL: prophet
YES The execs are gettin paid for failures!!!
This has been going on for a long time. I've been in and out of the stock market fro a good 30 years. In that time, I've had my share (of ownership) in companies that ended up in bankruptcy (protection). Almost always, some senior management team gets a great deal to "save" the company, because "they're the most qualified to fix it, since they created the mess."
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RE: Economic Stimulus Package - 9/26/2008 8:14:19 AM
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NoShow
Posts: 454
Joined: 5/10/2005
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quote:
ORIGINAL: InfoCentral
Economic Stimulus Package
A little over 6 months ago...."we are going to give back to you about $500 each to stimulate the economy."
Present time..."we are going to take from you about $3,000 each to stimulate the economy."
Hummmm....what's wrong with this picture?
<IXOYE><
Don't you see the change? Have you no hope?
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RE: Economic Stimulus Package - 9/26/2008 11:13:49 AM
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InfoCentral
Posts: 158
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quote:
ORIGINAL: NoShow
Don't you see the change?
I think that even an imbecile would be able to discern the difference between someone giving you $500 cash and someone giving you a bill for $3,000. Not only do I see change that has happened but I can see changes that are going to take place.
One month ago on the Classified Ads topic the following dialogue took place:
quote:
ORIGINAL: InfoCentral (8/28/2008 11:22:56 AM)
Job market good? No, that isn't what Bloomberg has to say. Certainly not what I am looking at. News keeps telling me companies are planning more lay offs for the bottom line and more stores are closing. Heard yesterday that the Feds say 30% more banks are on the default watch list. No, we have had it pretty good for and unusually long period of time. I hope you have been storing some away because the storm is on the horizon. This is a time to dig in.
quote:
ORIGINAL: GroupW (8/28/2008 11:45:34 AM)
And where you're looking. The job market is really a local and industry specific thing. It's a bit misleading to talk about a "national" job market. Overall, the job market is relatively good by historical standards. Jobless claims are at mild recessionary levels, but overall unemployment is still at a reasonably healthy level. GDP in the 2nd quarter was up strongly on export activity - that seems to be the brick holding up the entire wall.
Sure, there are storm clouds on the horizon. US GDP is likely to decline from the 2nd quarter's 3.3% increase as some of the overseas economies are showing signs of slowing (notably Germany). Home prices continue to erode. Unemployment is likely to increase, and jobless claims will probably stay elevated for some time to come.
Still, I'm cautiously optimistic. We entered this crisis from a stronger position than normal…
quote:
ORIGINAL: InfoCentral (8/28/2008 12:54:57 PM)
Stay tuned...we are only in the beginning. I would start storing up right now if I hadn't done so already.
Have I ever changed my position? No, I said from the beginning that things are going to get increasing worse and they are. I also said that the severity would be double what it was a month ago. Is it? No. So my position is LOOK OUT! Things are going to get much, much, much, more worse.
quote:
ORIGINAL: NoShow
Have you no hope?
My Hope is in Jesus Christ and He alone and the wisdom the Father has given me to see the things of this world and make sense of foolishness it contains. <IXOYE><
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RE: Economic Stimulus Package - 9/26/2008 11:49:39 AM
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GroupW
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From: Up in the hills of Colorado (very BIG hills...)
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InfoCentral-
We'll have to check back in with each other in about a year. I'm still holding to my prediction that we don't have a super-deep recession like the early 80's. We are still heading into this crisis with a fundamentally more resilient economy than we had back then. The odds of a recession have risen quite a bit over the last 3 months, but the future picture remains very opaque. It really could go either way.
Either of us could be right, but I'm still sticking with what I wrote earlier. Note a couple of things, though. Home price declines are already starting to moderate. The pace of decline in the Case Shiller indices slowed, while the broader OFHEO purchase index actually held flat. The inventory of unsold homes held reasonably steady at 11-12 months. Unemployment took a big jump upwards, but we're just 1% or so over what the government & economists have long considered an equilibrium or full employment. We entered this crisis with the lowest unemployment rates we've seen in decades. Oil price increases have moderated - the price of oil is down significantly and should head lower yet when Houston facilities come back on line.
The pace of new subprime defaults is slowing. Prime defaults are rising, but at a pace that one could normally associate with an economic slowdown and home price decline. With some stability in home prices, which we are starting to see, that trend shouldn't get too far out of hand. Some markets will see some surprisingly high defaults (Las Vegas, Miami, SoCal) but overall things in prime borrower world shouldn't fare too badly.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 12:25:20 PM
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blessedinnyc
Posts: 2007
Joined: 10/12/2007
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quote:
ORIGINAL: InfoCentral
I think that even an imbecile would be able to discern the difference between someone giving you $500 cash and someone giving you a bill for $3,000. Not only do I see change that has happened but I can see changes that are going to take place.
ad-hominem
This is where someone attacks an opponent's character rather than answering his argument.
What you're missing:
The federal government borrowed $600 +$700 Billion/300 million= $2900 on your behalf. It gave you $600 in cash, and is going to spend $2300 investing in your mortgage. Federal borrowing drives inflation and provides more capital for the economy to operate.
quote:
Have I ever changed my position? No, I said from the beginning that things are going to get increasing worse and they are. I also said that the severity would be double what it was a month ago. Is it? No. So my position is LOOK OUT! Things are going to get much, much, much, more worse.
The DJIA is higher today than it was a week ago, for the record.
quote:
We'll have to check back in with each other in about a year. I'm still holding to my prediction that we don't have a super-deep recession like the early 80's. We are still heading into this crisis with a fundamentally more resilient economy than we had back then. The odds of a recession have risen quite a bit over the last 3 months, but the future picture remains very opaque. It really could go either way.
Brian,
You've got a lot more experience at this than I do, but I still have to disagree (in a humble way). We've got higher levels of consumer debt- and lower savings rates than we had back in the late '70s and early '80s. We've also got higher oil prices and more foreign competition in terms of resource demand and labor supply. Finally, of course, we had lower interest rates with high growth for much longer than we had in the '70s. Corporate balance sheets in some areas are in better shape, but I still think the economy is going to need to consolidate as much as it needed to in the early '80s.
I think that without a bail-out, the recession will be worse than the late '80s but not half as bad as the Depression. I think the (arguably) worst postwar recession- the early '80s, might be a good start.
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RE: Economic Stimulus Package - 9/26/2008 12:36:11 PM
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GroupW
Posts: 2863
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: blessedinnyc
Brian,
You've got a lot more experience at this than I do, but I still have to disagree (in a humble way). We've got higher levels of consumer debt- and lower savings rates than we had back in the late '70s and early '80s. We've also got higher oil prices and more foreign competition in terms of resource demand and labor supply. Finally, of course, we had lower interest rates with high growth for much longer than we had in the '70s. Corporate balance sheets in some areas are in better shape, but I still think the economy is going to need to consolidate as much as it needed to in the early '80s.
I think that without a bail-out, the recession will be worse than the late '80s but not half as bad as the Depression. I think the (arguably) worst postwar recession- the early '80s, might be a good start.
Blessed-
Feel free to disagree. Noone has the answers here - we're in somewhat uncharted territory.
My point though is that we enter this crisis with corporate balance sheets in far better shape and better relative productivity in the economy at large (productivity had seriously stagnated in the years leading up to the 1982 recession. We were not nearly as competitive internationally as we are today.)
Unemployment heading into that recession was already at historically very high levels. Interest rates and inflation were heading through the roof. We had high oil prices then too, very high tax marginal tax rates in the years prior that impeded capital investment, and a significantly weakened financial system to to asset/liability mismanagement issues.
If you're going to have a crisis like this, starting out with a 2005-2006 economy is a much better place to begin from than a 1979 economy. The depth of any recession is in part determined by the point from which you start. We really did begin from a decent spot.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 1:22:28 PM
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InfoCentral
Posts: 158
Joined: 8/1/2008
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quote:
ORIGINAL: GroupW
The odds of a recession have risen quite a bit over the last 3 months, but the future picture remains very opaque. It really could go either way.
Sure, it could go either way but it is really only going one way...
quote:
ORIGINAL: Associated Press (updated 7:13 p.m. ET Sept. 25, 2008)
Analysts said the trio of bad reports meant the third quarter was ending on an extremely weak note and raised the risks that the October-December quarter will actually slip into negative territory. Many economists believe the gross domestic product will be negative in both the final three months of this year and the first three months of 2009, meeting the classic definition of a recession.
U.S. gets a triple dose of bad economic news Home sales tumble, jobless rate soars, durable goods orders plunge
Hold on the your hats, you haven't seen anything yet!
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RE: Economic Stimulus Package - 9/26/2008 2:21:12 PM
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GroupW
Posts: 2863
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: InfoCentral
quote:
ORIGINAL: GroupW
The odds of a recession have risen quite a bit over the last 3 months, but the future picture remains very opaque. It really could go either way.
Sure, it could go either way but it is really only going one way...
quote:
ORIGINAL: Associated Press (updated 7:13 p.m. ET Sept. 25, 2008)
Analysts said the trio of bad reports meant the third quarter was ending on an extremely weak note and raised the risks that the October-December quarter will actually slip into negative territory. Many economists believe the gross domestic product will be negative in both the final three months of this year and the first three months of 2009, meeting the classic definition of a recession.
U.S. gets a triple dose of bad economic news Home sales tumble, jobless rate soars, durable goods orders plunge
Hold on the your hats, you haven't seen anything yet!
Because? I'd need to see statistics to support the idea that we'll be seeing anything deeper than the normal recession. There's still the chance of either no recession at all or a mild one. At this point, noone really knows where we go from here. Folks that are making dire predictions are really just speculating. I don't think that helps us right now.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 2:34:19 PM
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InfoCentral
Posts: 158
Joined: 8/1/2008
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quote:
ORIGINAL: blessedinnyc
ad-hominem
This is where someone attacks an opponent's character rather than answering his argument.
Not. Question was a yes or no and since it was answered with the correct response it couldn't be an ad-homonym. Also, since the answer given was in agreement with the implied in the question, it couldn't be an ad-homonym. Finally, the attack was not on the person presenting the argument but upon anyone who fits into a certain category i.e. someone who doesn't know the difference between someone putting $5 into their wallet and someone taking $30 out of their wallet.
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RE: Economic Stimulus Package - 9/26/2008 2:37:08 PM
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GroupW
Posts: 2863
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From: Up in the hills of Colorado (very BIG hills...)
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Of course, someone putting $5 in my pocket or taking $30 out of it isn't good or bad on its own. Depends why they're doing that. If they put $5 in and it's going to cost me $10 later when I pay it back, it's not necessarily a good thing.
If I take $30 out and later get 40 back in, I might be perfectly pleased.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 2:46:35 PM
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InfoCentral
Posts: 158
Joined: 8/1/2008
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I don't know, I guess we could develop all kinds of scenarios and fantasies. But at this point, in the real world, what we are looking at is $5 went into the wallet and $30 is coming out. Both are being done to "stimulate the economy."
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RE: Economic Stimulus Package - 9/26/2008 3:09:26 PM
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GroupW
Posts: 2863
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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There's no fantasy there. The government sent folks a few hundred dollars in tax rebates and had to borrow the money. We eventually get to pay that back with interest. That's the $5 bucks in my wallet with the $10 going back out.
The government is now borrowing $700 billion with the goal of a) putting banks back into a position where they can lend and unlock the financial system which is boogered up at the moment. They will be buying earning assets, so should actually book a profit on that and return something more than $700 billion to the budget.
I think your example oversimplifies the sitution and leaves off some critical componentry. I think that's easy to do in the current environment - it's not like the Treasury has given out tons of detail to the taxpayers here.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 3:35:13 PM
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GroupW
Posts: 2863
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: blessedinnyc
Brian,
You've got a lot more experience at this than I do....
I just went back and re-read this. Dude - did you just call me old???? 
(seriously though - meant to add a question in my response to see how your job was holding up in this mess.)
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 3:44:06 PM
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InfoCentral
Posts: 158
Joined: 8/1/2008
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Then let me simplify it even more. The United States will resemble the poorest of third world countries and this will happen very rapidly. The world will be awe struck at it and be in wonder how this could ever have happened…
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RE: Economic Stimulus Package - 9/26/2008 4:28:44 PM
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blessedinnyc
Posts: 2007
Joined: 10/12/2007
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quote:
ORIGINAL: GroupW
quote:
ORIGINAL: blessedinnyc
Brian,
You've got a lot more experience at this than I do....
I just went back and re-read this. Dude - did you just call me old????
(seriously though - meant to add a question in my response to see how your job was holding up in this mess.)
LOL. I think I may have stumbled on your linkedin profile, and everyone I know with the title I saw has made it through at least one more downturn than I have (this is my first).
The next several years look pretty gloomy, but it looks like I will survive for now. We have been through Chapter 11 and a merger in the past two weeks, so right now I'm happy just to have a job. The business my system supports- CDS and Corporate Bond market making- is still in good shape.
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RE: Economic Stimulus Package - 9/26/2008 4:33:47 PM
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GroupW
Posts: 2863
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: blessedinnyc
LOL. I think I may have stumbled on your linkedin profile,
No way! Possible since I'm on there. Would be funny if we actually had acquaintances in common. Glad to hear you're ok for now.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 4:35:27 PM
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GroupW
Posts: 2863
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: InfoCentral
Then let me simplify it even more. The United States will resemble the poorest of third world countries and this will happen very rapidly. The world will be awe struck at it and be in wonder how this could ever have happened…
To post such things responsibly, I think it would be good to provide some statistical back up. People sometimes take action based on the things they read.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Economic Stimulus Package - 9/26/2008 4:40:53 PM
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blessedinnyc
Posts: 2007
Joined: 10/12/2007
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quote:
ORIGINAL: InfoCentral
Then let me simplify it even more. The United States will resemble the poorest of third world countries and this will happen very rapidly. The world will be awe struck at it and be in wonder how this could ever have happened…
Someone has either got their eschatology way different than me- and is applying prophecy in Revelation to the US instead of ancient Rome- or someone isn't looking at our situation in context.
The severity of the recession will depend on how much our economy will have to consolidate to get back to normal. We are less leveraged, in general, than we were back in 1929. Investors are less leveraged, corporations are less leveraged; even consumers are less leveraged. (The only exception is the government.) We certainly didn't go back to being the poorest of the third world countries during the Great Depression.
What separates us from third-world countries isn't about capital, spending habits, or anything else: it's the high level of education. If you took away everything from the US but the natural resources and people and didn't let us trade with anyone, you'd have a $2 Trillion/year economy by the end of the year, and within 15 years, the US would have an economy on par with the EU, again.
In order for the US to be reduced to a third-world country for more than six months, IMHO, you would need a foreign invasion, a nuclear war, or 150 million people to leave the country. Which scenario do you foresee?
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RE: Economic Stimulus Package - 9/26/2008 5:53:49 PM
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InfoCentral
Posts: 158
Joined: 8/1/2008
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quote:
ORIGINAL: blessedinnyc
In order for the US to be reduced to a third-world country for more than six months, IMHO, you would need a foreign invasion, a nuclear war, or 150 million people to leave the country.
Or a domino effect of business sectors going under followed by a run by investors cashing in their stash of dollars while they are still worth something.
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RE: Economic Stimulus Package - 9/26/2008 6:07:02 PM
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blessedinnyc
Posts: 2007
Joined: 10/12/2007
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quote:
ORIGINAL: InfoCentral
Or a domino effect of business sectors going under followed by a run by investors cashing in their stash of dollars while they are still worth something.
Ok. So foreigners come and buy everything except the farmland and some of the natural resources- which most states mandate must be owned by a resident of the state. We are left with people and food.
In six months, we will be rebuilding power plants and power lines. A lot of it will be wind turbines- they're easy to install and there's enough wind to meet the US's entire electrical needs several times over. GM and the factories will be back on their feet within 18 months, and within two years, we'll be back to full employment. In four years, everyone will have a plug-in hybrid, and in fifteen years, we will certainly be back to managing the world's agricultural commodities markets- as well as probably the equities markets as well. You ignore the fact that this is a country with several million engineers, not to mention ~70 million college graduates.
So you haven't really made the case that we will stay a third-world country for more than six months.
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