Looming recession

[AstroProdigy]

Well if we aren't in one now we will be soon. In what world does borrowing 200 billion dollars from China to give people enough money to buy more products from China sound like a solution to an AMERICAN recession? Who is our government working for anyway? This is a bipartisan criticism as both sides chose to play politics rather than actually try to solve the problem. Seems like the extreme right and the extreme left are both trying to push their agenda and the compromise is something that once again only makes things worse, but does so closer to the "center". Edited February 2, 2008 by AstroProdigy

[tcsoccerman]

As far as i know, it seems like a good idea. It will give people extra money too spend and get cycling in the economy. From China? didn't know that...wierd.

[AstroProdigy]

GET CYCLING IN THE ECONOMY?! Clearly you have no idea what you're talking about and are willing to throw around some terms you heard on one of the corporate owned media conglomerates, which you don't seem to even have the capacity to do so correctly.

[SeVeR]

The markets are up alot this week.

 

Big deals are being proposed such as Microsoft's purchase of Yahoo. There are two bidders for the stricken UK bank "Northern Rock". The oil companies have posted massive profits as expected but so have firms such as HMV and British Airways. Lots of other good news is piping through this week, interest rates are going down...

 

A recession? This is all a load of hullabaloo. People are going crazy and they shouldn't be.

 

It sure is nice to be liberal and to blame all this on America's economic policy; but what has changed in the last 50 years?

[Aileron]

These 'recessions' affect few people other than day to day stock market traders. What happens is that some stock gets overvalued, and then some day the value of that stock corrects itself. That's what happened this time. That's what happened the last time and the time before that.

 

The last example was when the Tech stocks 'crashed'. Before that there was a bunch of internet companies, who had websites which nobody went to, but survived because they were in the field of technology and a bunch of stock investors !@#$%^&*igned those companies more value than they were worth. Then, people realized they were not worth it, and stock values to those companies plummeted.

 

 

That being said...I still don't like us trading with China. The way things are done in China is that there is always some shortcut taken, some hazard ignored, or some poor construction. That mindset seems to be in everything they do from coal mining to toy construction. The Japanese for instance tend to find ways to make products or processes more efficient, doing more with less. China however continually do less with less.

 

I know though, companies love China for outsourcing. First off, they make products cheaper. Secondly, they suck at it, so the products break faster, causing the customer to need to by replacement products. Personally though, I like products from a first world country. Usually, they cost about 50% more but have triple the durability.

 

And to top it off, they're still communists.

[AstroProdigy]

You both seem to be ignoring the actual problem here. The credit crunch isn't going to end with a token $200 billion gesture. The military budget and war supplemental price tags are getting bigger and bigger. On top of that we can't use common sense to realize that heavy spending requires a raise in taxes. It's not going to be solved by cutting social services as that is an agenda that is being pushed in the name of a balanced budget. The debt continues to mount and while China is our number one debt buyer they see the falling dollar as a liability to their profits. One stroke of the policy pen and China bankrupts the "all powerful" United States.

 

The housing crisis isn't the problem in itself. If it wasn't that it would eventually be something else. That major weakness is somewhere along the way America has turned into a heavily overfed consumerist country that has no notion of sustainability. The stability has only been kept by our dominance and that is only going to be challenged more and more with the rise of other countries and ins!@#$%^&*utions, but especially China and the EU. What Republicans and Democrats have both so gladly compromised on is a reinforcement of the over consumerism. People seem convinced that all problems in the US can be solved by consuming more. Here's a newsflash. Skewed production/consumption ratios are the ruin of countries! Going further into debt for the sake of more consumption solves absolutely nothing and only furthers the underlying weakness in the US economy. You don't fix the housing crisis by giving everyone 600-1200 dollars.

 

Sever: In the last 50 years we went from a lender country to a debtor country. It was fairly stable all the while because of decent economic policies, but first Reagan and now Bush Jr pushed that debt with their "economic know-how". I think the Democrats are very much to blame for letting Republicans regain the mantle of "fiscal conservatism" despite the fact that they have been the opposite of that throughout the Bush presidency and continue today.

[NBVegita]

One stroke of the policy pen and China bankrupts the "all powerful" United States.

 

lol

 

It sure is nice to be liberal and to blame all this on America's economic policy

 

Sounds about right.

 

They're not trying to solve the housing crisis by giving everyone 600-1200 dollars, they're trying to help balance out this "housing crisis" by lowering federal interest rates. And such a crisis is directly caused by the rapid influx of banks approving interest only non-fixed interest rate housing loans with no collateral. In the past decade its gotten to the point that someone with no money down, with a credit score under 500 can get a very high priced mortgage, which of course will default. Then the banks foreclose, resell the house for the balance of the foreclosure, which being you've been paying nothing but interest and have not paid any principle on your house, can be sold for the full market value to the next poor sap waiting to foreclose.

 

The sheer concept of an interest only non-fixed rate mortgage is mortifying, but the longing to own a house, and the instant gratification it causes has turned our society into naive consumers. Yes you can blame the government and the banks for it, but ultimately we're the ones accepting the terms and conditions.

 

I agree with Sever and Ail on this that any recession people are claiming is not really hurting the general public.

 

Being in the middle class I've not felt any repercussions of this so called recession.

[AstroProdigy]

Being in the middle class I've not felt any repercussions of this so called recession.

 

Looming- To seem imminent; impend.

 

This is what isn't the definition of looming:

 

Looming- To already be here.

Edited February 8, 2008 by AstroProdigy

[NBVegita]

Actually a lot economists are claiming we are already in a recession.

 

And the fact is that a recession doesn't happen over night, if we are "looming" on a recession, then you would already be experiencing some of the economical influences of said recession.

 

The economy isn't going to be fine today and when you wake up tomorrow a recession.

 

I will restate:

 

If we are looming on a recession, being a middle class citizen I am yet to feel any repercussions of this impending recession, which would lead me to believe that we are not as close to a recession as is aforementioned.

[rootbear75]

our government's economy is controlled by int'l bankers...

thats what happens when you have a centralized bank

[AstroProdigy]

Actually a lot economists are claiming we are already in a recession.

 

And the fact is that a recession doesn't happen over night, if we are "looming" on a recession, then you would already be experiencing some of the economical influences of said recession.

 

The economy isn't going to be fine today and when you wake up tomorrow a recession.

 

I will restate:

 

If we are looming on a recession, being a middle class citizen I am yet to feel any repercussions of this impending recession, which would lead me to believe that we are not as close to a recession as is aforementioned.

 

What do you do for a living?

[NBVegita]

I am a Senior Information Systems analyst working for Nationalgrid.

[»doc flabby]

These 'recessions' affect few people other than day to day stock market traders. What happens is that some stock gets overvalued, and then some day the value of that stock corrects itself. That's what happened this time. That's what happened the last time and the time before that.

 

The last example was when the Tech stocks 'crashed'. Before that there was a bunch of internet companies, who had websites which nobody went to, but survived because they were in the field of technology and a bunch of stock investors !@#$%^&*igned those companies more value than they were worth. Then, people realized they were not worth it, and stock values to those companies plummeted.

That was a stock market crash, not a recession.... A recession was postponed by people spending like crazy and racking up massive debts. The problem is now the lending markets mean people and companies cannot borrow any more money, or borrow as easily.

 

If you are not scared of a recession, you do not understand what it means. suggest you read into 1930's American history http://en.wikipedia.org/wiki/Great_Depression

 

A quote from the page.

"In their view, the key cause of the Depression was the expansion of the money supply in the 1920s that lead to an unsustainable credit driven boom"

The similarities are very much there

 

I doubt many people are old enough here to remember a real recession. We've had a very long and unpresedented (prehaps unsutainable?) peiriod of growth.

 

The last recession in the UK was around 1990-92 time. I was only around 6-8 at the time...

Alot of people lost everything, their business, jobs, and homes. I think interest rates ended up running at around 15%.

 

The things that happen in the market DO affect us directly

 

In a recession demand drops, people stop spending, they are making less money, companies to cut costs and overheads (one way of doing this is reducing there staff). Less people with money (as they have been fired) means less money being spend. This also means that companies make less stuff, so prices of stuff rises. As stuff is more expensive even less people buy it. As the company can't sell anything more, it goes bankrupt and all the people there lose there jobs.

 

People without jobs dont spend much so another company now has less sales and is forced to cut costs. Its a cycle.

 

How do we get out of a recession? We need the rich people hoarding money to spend, so it filters down...

 

The situation we are at the moment is on the brink. If we sucess in getting out of the current situation or not, we will find out by next year..

Edited February 12, 2008 by doc flabby

[NBVegita]

Actually I'm fully aware of what a reccession means, but I personally am not scared.

 

I have no debt, besides one minor credit card.

 

All of my college loans are paid off, both my fiance and I have our cars paid off, we have a large nest egg we're sitting on, and quite frankly don't spend a lot of money on most "consumer products" as we have everything we need, and a good amount of things we want.

 

I'm not worried about my 401k as if we have a reccession as soon as we rebound so will my 401k.

 

Actually we're in such solid financial shape that we're strongly considering buying a house because with the fed cutting interest rates and the market the way it is, we'd be almost stupid not to.

 

Call it selfish, but being in a middle class bracket, with a secure economic future, no debt, well budgeted money and a nice nest egg, the thought of a recession doesn't scare me.

[Sass]

I'm in IT as well NB, but I wouldn't go around stating that things are secure. As you probably already know, the outsourcing wave has hit again and although it is again failing (how many times will they try), the number of knowledgable natural born Americans is falling giving way to work-hard and win at!@#$%^&*ude that foreigners bring with them to this country. This is causing a shift in who is seen as a reliable internal resource. I'm thinking about taking a deep russian accent with me to my next interview.

[NBVegita]

Haha, yes over half of our department is contracted.

 

Fortunately for me I'm the "team lead" basically a manager without the !@#$%^&*le for a minimum of the next year ( a probation period) because no matter how much outsourcing we do, they don't want to outsource management.

 

In addition with our new merger we've got a new director who doesn't like outsourcing, and it's nearly impossible to be fired from my company. It's a company that unless you kill someone or sleep with your secretary under the desk (and get caught) you're in until you want to leave. So for now Veg = safe...or as safe as you can be in the IT industry.

[AstroProdigy]

Sorry for the delayed response.

 

NBVegita: Sounds like you're safe, but your situation is completely different from that of the vast majority of Americans. Millions of people are at risk of (and at the rate things are going probably will be) foreclosing on their homes and even the prime mortgage industry is taking a hit. Not only that, but anything you can think of that people have debt on is going to bite them in the !@#$%^&*. Give everyone 600 dollars? Sounds re!@#$%^&*ed. Bush refuses to "waste taxpayer money" helping the people who need it most, but has no problem putting the US further into debt for a face saving and an almost entirely ineffectual stimulus package that the people who need the money will just end up using to pay a tiny percentage of their debt. I can't just blame Bush here, though. It seems there's no one in power who has any idea how economics works or if there are they either keep their mouths shut to play politics or are drowned out by the stupidity.

 

Also, notice while the GDP of the US has grown consistently during Bush's presidency the median income has fallen $1000. That on top of high inflation and all the problems that are just beginning to play out that affect even people who are upper middle class means that only the richest have had anything to gain from Bush while everyone else has taken a big hit.

Edited February 23, 2008 by AstroProdigy

[NBVegita]

I don't defend Bush often, but you can't blame what our economy has become solely on him.

 

First with the .com bubble burst, thousands of people lost jobs, retirement plans and generally took a ridiculous hit financially. We've had some of the biggest financial scams (Enron and the companies that followed) in the history of the world, which tore a giant hole in our economy. Then came along unsecured mortgages with flexible rates with interest only payments. Credit card companies have been giving people with horrible credit cards with steep monthly/yearly fees and high interest rates. And if they can't pay the $300 dollar max balance they have, in the next 6 months by the time the company is done hitting them with fees they owe $800-$1000 for a card that was only worth $300.

 

We can try to blame the government, but the real culprits over the last decade have been ourselves.

 

Not that the government is blameless, but they hold no more fault than we do.

[AstroProdigy]

While I agree you can't blame the sub-prime mortgage crisis on him you can blame the weak response on him and his party as well as the Democrats for being so weak as to compromise as an ineffective plan that only puts us further in the hole. The fact is Republicans are trapped here because their party ideology forces them to cut taxes or give tax rebates to solve the problem, but that's ineffective since instead of focusing on the problem they are simply giving everyone money that people not in trouble don't need and whereas people in trouble need much more.

 

Also, Bush set about creating a richer upper class rather than help all Americans. Tax cuts did little to help the people in trouble when it came to the .com bubble bursting. All those tax cuts did was make the rich richer while ignoring everyone else and letting them slide down the economic ladder. On top of this Bush piled on debt so now we have a much more limited ability to respond to crises without going bankrupt.

 

If by "we" you mean credit card companies and banks sure, but blaming the public as an excuse for poor government policy that will only exacerbate the situation is misleading. The public can mess up, but that's exactly why we have a government in the first place. Once that government fails even with such a bloated budget with such high taxes then the government is the #1 culprit to blame.

[Aileron]

I think Veg's point is: quit blaming Bush for everything. Not too long ago Bakarau volunteered me to set up some stuff on his site. I politely* declined, saying I have things to do and bills to pay. His response was 'We all have bills to pay thanks to Georgie'.

 

*okay, okay, okay, I wasn't exactly 'polite' about it - but you can't just volunteer someone to help you.

 

WTF? Did capitalism not exist before George Bush took office? I remember growing up under Bill Clinton - my parents had bills. Are we to believe that before George Bush, all expensive items such as apartments, cars, loans, and insurance, were given away for free so that no one had to pay for anything?

 

I'm tired of hearing it, so here is a list of things that George Bush has been blamed for which the blame should rest on others.

 

1) WMDs in Iraq. Whether you think they didn't exist in the first place, or weren't found after the war, both jobs are the responsibility of the CIA. The CIA is the president's eyes and ears, and the president can only be expected to make decisions based upon the information our intelligence agencies give him. If that information is inaccurate or vague, the president can only make a decision blind.

 

2) Not finding Osama Bin Laden. Again, that's the CIA's job. It's not George Bush's job to wander around Afghanistan and Pakistan looking for Bin Laden. All he can do is tell the CIA to look for him, which he did. The fact that they can't find him is another sign of the CIA's incompetence.

 

3) Hurricane Katrina. A class 5 Hurricane hit a major metropolitan area placed in a geological bowl, originally founded in a location ideal for exporting furs on to wooden sailing ships, not supporting skyscrapers. It was going to be a disaster no matter what. George Bush can't control the weather. The more popular blame is that FEMA was slow, and George Bush somehow caused them to be. Guess what? FEMA is part of the Federal Government. The Federal Government has ALWAYS been slow and inefficient since the presidency of George Washington because by its very nature it has most of an entire continent to manage and is over-centralized. That inefficiency is the ENTIRE reason State and Local governments even exist; governments who didn't step up to the plate to handle the situation. George Bush can't make the federal government efficient any more than he can control the weather. (Actually the technology to prevent hurricanes by 'seeding' them isn't that far away. I think weather control will be developed far sooner than an efficient federal government.)

 

 

4) Global Warming, !@#$%^&*uming what Al Gore says is true, which it isn't, but just for argument. I guess the argument here is that fumes from cars cause pollution, and that Bush has ties to the companies which produce the gas which fuel those cars. By the same argument I could claim "If George Bush was such a good president, why am I so fat?" (If it weren't for oil companies, we would all have to do a !@#$%^&* of a lot of walking.) The problem here is people want to avoid personal responsibility, so they blame the president. Those oil companies didn't make so much money because no one bought their product. Oil use was growing exponentially long before Bush took office. All he can do about it now is fund alternative energy and be pro-nuclear, which he is. From then on all we can do is hope a scientist figures something out. Note that during Bush's presidency many automakers started selling hybrids and even some hydrogen fuel cell cars, so Bush was clearly friendly enough to alternative energy to make it possible. I'm not saying credit Bush solely - those things were in development for decades. I'm saying don't claim that he hasn't done his part to help out.

 

 

5) No Child Left Behind. I think by this time liberals counted every proposal Bush made as a 'problem' just for the sake of doing it. It wasn't; it was an considerable improvement. The idea behind NCLB is to make a federal standard for public schools and to open up options to move students from school to school if certain public schools are failing. Before NCLB, there was nothing close to a federal program for public schools. So, NCLB is simultaneously the best, worst, and only large scale federal public school program we ever had. Sure before that there was funding programs and initiatives, but not any actual legislation. Obviously it had flaws. But heck, even the founding fathers didn't get the Cons!@#$%^&*ution right the first time around. The important thing about NCLB is that initiated a program, making improvements possible. I'm sure McCain will improve NCLB considerably right after mopping the floor with Obama.

 

6) The Patriot Act, Wiretapping, Security at Airports, Racial Profiling, etc. If you haven't noticed we are in the middle of a war. Historically, most democratic countries go completely communistic in wartime, as it is often the only way to deal with the short term situation. Now, Terrorism is clearly going to be a long term problem, so we can't use the same tactics as FDR did in WW II. Still, the government isn't going to find terrorists unless they look for them. Bush's job as the executive is to try to make the search as efficient as possible. Its the Supreme Court's job to watch out of personal freedoms. That's the Check and Balance system. Them having run-ins with each other is a sign the system is working. The sign of a failure in this case would be if they were not arguing, because if they weren't that would mean one of them wasn't doing their jobs.

 

7) Alleged cases of torture on captured terrorists. That's the case of guards not doing their jobs right. All Bush can do is discharge the offenders and press charges, which was done.

 

 

Overall, people need to remember how the US government works. It isn't a monarchy. The federal government has an Executive branch, a Congress with two houses, a Supreme Court, and bunch of Agencies. Also, the Federal Government isn't the entire government either. Each state has Executive, Legislative, Judicial, and Agencies as well, and on top of that there are local governments for cities and townships. The whole system contains checks and balances so that no one man in the government has sole power to do everything. On top of that, we live in a free society, so individuals and businesses are perfectly capable of causing problems on their own. On top of that, Acts of God can also cause problems. The President doesn't have the power to run the country all by himself, and thus isn't responsible for everything that happens outside his sphere of influence.

 

 

So, no, the president is not at fault for the recession. It is a capitalist system, not socialism or communism. Those who blame Bush are really making the argument that he should somehow convert the US government into a Socialist system so that he would have the power to prevent recessions, so that blaming the president for a bad economy would be logical. I'd rather we keep the small problems we have now rather than cause much bigger problems when the federal government tries to micromanage economics.

[Bak]

Out of the 7 things you mentioned, if we had had a different president, a good majority wouldn't have occurred.

 

1. war in iraq, probably not

2. not finding bin laden, not really the president's fault, probably woulda still happened

3. response to hurricane katrina, 50/50, with no war in iraq the national guard of Mississippi, Louisiana, and Alabama would have been at home to help

4. Global warming, 50/50, a different president may have signed the kyoto protocol

5. no child left behind, probably not, although I dunno why the people don't like this program; a universal standard for education is a GOOD thing, maybe they don't like the implementation or how it determines funding, but country-wide tests is a good idea (maybe every year is too much)

6. patriot act, probably something similar (overreaction after 9/11) woulda happened no matter who was president

7. torture, no, if the president !@#$%^&*ertively stated that there would be no waterboarding or declaration of US citizens as "enemy combatants" there wouldn't be outrage

[ESCANDAL0SA]

the issue about the collapse of the housing market, all the foreclosures, etc., it's because American's are so engulfed in this "American Dream", that they would do anything to own a house, which probably led to such high prices over time, putting Americans at more risk financially, but that never stopped them and now most people are in a huge debt and have high mortgages that they can't afford. people don't care how much they spend and if it's worth their money, as long as they get to their goal, ignoring the long term effects. houses are too overpriced in America.

[SeVeR]

Houses are over-priced in America? Should come to the UK, they're twice as high, and i'm not exagerating.

[»doc flabby]

Edited February 25, 2008 by doc flabby

[NBVegita]

The public can mess up, but that's exactly why we have a government in the first place

 

That sounds awfully like a socialistic economy.

 

No matter how you cut the pie, if the banks were creating these loans, we as a people were taking them. We as a people invested in these .com companies with no revenue, we as a people invested in enron.

 

The only way the government could have "protected us" is if we had a government controlled economy.

 

And for the most part well put ail.