Never ascribe to entire generation the actions of small factions within that generation.

However, Pat's analysis on American habits *regardless of which generation* over the last few decades is a well-put "told ya so, idiots".

My wife and I feel a pressure from what debt and obligations we have --- we're told over and over again that compared to the average American we got no debt whatsoever. In fact, we look suspicious to lenders because we have so little debt - figure that.

I could argue with points of TRL's globalization primer but to a large extent it covers the problem with Buchanan's view of things. He's a populist and tends to say what gets people fired up and cheering.

Yup. I like watching the US debt clock too.

9,667,035,196,381.36 on it so far. (which is at almost 10 trillion)

Reminds me of the United States trying to increase the minimal wage when they cannot stabilize the economy before trying to uphand it. Now what was it, $7.15 by July, 2009?

Our voices can't reach those with large pockets.

Very well put TRL. I'd cookie you if I could. :) Especially this:
Is exactly what's going on right now.

The blame game is stupid. The real problem was that people got too loose with a booming economy and took risks they shouldn't have. The regulatory bodies that were set up *specifically* because of what happened in the past did not do their job. Why it happened and how to reform those problems are questions best left to address after the immediate problems are handled.

https://www.cia.gov/library/publicat.../print/us.html

^ Numbers are a year old, but should give an idea of how huge the US economy actually is.

http://en.wikipedia.org/wiki/List_of...y_GDP_(nominal)

^ gives an idea of GDP by all countries (and the European Union) - The US and the EU trade places on the charts depending on who organized it, but both dwarf the other nations by at least triple.

As far as singular nations go (I'm not really sure how you'd classify the EU at this point), the US is by far the largest economy in the world.

This observation by Vexx sums up the trouble the US is in. Since when is it "bad" not to have debt?

Here is a different view of the same thing............

http://worldnetdaily.com/index.php?f...w&pageId=75717

interesting?

I sort of figured this was coming a few years back when China was booming and a lot of companies begun shifting their operation to China and India were labour were cheaper and lack of labor union to control them.

With jobs opportunity moving overseas and huge trade deficit between US and China, it was only a matter of time before the economy start going tits up.

Though one of my American friend told me the deppresion that was brewing long before that but was staved off when Alan Greenspan slashed interest rate in the US and let the banks go wild with their lendings.

Either way, I wish all the guys/girls here in America all the best.

(1)
From a macroeconomic perspective, debt is a viable way to spur productivity growth. On the micro level, you'd eventually see the need for debt when you're buying your first home, or when you need seed capital to start your first company.

The problem isn't debt per se, but rather how much debt any individual, organisation or country should be allowed to carry. In the case of Wall Street, the leverage ratio had grown to astronomical levels, as high as 35 times a company's available capital. In hindsight, we can now say that is insane. But when an economy is booming, and the prospects of growth are very strong, it becomes possible to bet that such debt ratios are sustainable because of future streams of income.

Meaning to say, monetary policy has never been, and will never be, an exact science.

(2)
As for mg1942's latest link on the connections between the federal push for home ownership and the mortgage crisis, I'd say it's the first time I've heard of it. I find it difficult to grasp the scale to which the United States tends to leave social programmes to private initiatives, first in health care and now in housing policy.

In Singapore, there is over 80% home ownership. This has been a very deliberate socialist policy, made possible by allowing citizens to pay for public housing with our equivalent of pension funds. I don't think this statistic could have been achieved through private mortgages.

As for the supposed benefits of home ownership, it is not a myth, at least not where Singapore is concerned. Slums and ghettos have disappeared, and the standard of living has gone up. Psychologically, it can be clearly seen that a homeowner takes greater care of his property than someone who is merely renting it, and this extends to the creation of community bonds as well.

It can be argued that public housing in Singapore is not necessarily as good as public housing elsewhere in the world, and it is certainly true that if given the chance, most Singaporeans would prefer to buy private property instead. But the fundamental tenet remains — no Singapore citizen will be left homeless so long as he has sufficient funds in his Central Provident Fund, which is essentially his own money. The government forces every citizen to deposit a part of his declared salary into the account every month. In effect, it is a nationally-mandated savings account.

(3)
With regards to Vexx's polite disagreement (:heh:) with my pro-globalisation stance, I'd say that it's certainly true that no single economy in the world is completely open to the free trade policies espoused by globalisation. Protectionist policies all exist to some extent or another, and where they do exist, it distorts the theoretical benefits of globalisation. The idea that corporations benefit more from globalisation than ordinary citizens is also valid and warrants closer investigation too.

But from a macroeconomic point of view, globalisation is sound. National economies shouldn't be wasting money propping up industries that would fare better elsewhere. Economies, as a whole, work best when they specialise in what they do best. To make up for what they "lose" as a result of specialisation, trade becomes necessary. Opponents of globalisation often ignore this trend, to the detriment of their own economies.

Yeah. I know a little debt for a short period of time is unavoided and even good. But, a large debt over extended periods of time can benefit no one, except the banks probably.

This is going to affect the ENTIRE world's economy...

Heck, even Hong Kong (half way around the world), lost a ton of money in an instant..

I don't have English this semester, hahaha, and my spelling has always been crap. :D Sorry, I'll fix the title.

EDIT: Wahhhhh, I can't fix it for some reason...

http://www.msnbc.msn.com/id/26803347

Bush asking for $700B

As if their national debt wasn't big enough...and doing that only provides a short term solution.

This is not capitalism. This is a nasty mix of corportism, debtism, and socialism.

Capitalism has been slowly being smothered to death since 1913. This fall was predicted decades ago by people schooled in the Austrian school of economics.

'Asian Banks' is far too sweeping a reference.

In china, The PRC owns the banks and the majority share of all big business.

In Japan, after the 1998 meltdown on real estate investments in the US and the 2002 home collapse, the Government became the major shareholder.

In Korea, the banking institutions are shared by both corporate and government interests.

It should also be noted that all three systems are in vicious competition with one another.. looking 'inward' is the first 'checkpoint'.. they make no moves that will leave them open to foreign funds grabbing control.

And here.. we just lost any chance of keeping the sovereign funds from snapping up broad swathes of our economic engine. We may be sitting here debating the fall of the western economies.. we'll know soon enough, I think.

Here's a link to an article from 1999 warning of the risks in bad economic times.

http://query.nytimes.com/gst/fullpag...p=1&sq=&st=nyt

Wow, someone saw the writing on the wall.

Also, the pressure from the Clinton Administration to expand mortgage loans among low and moderate income people opened up can worms...

Aye, I'll agree with harmonious on that characterization. Anyone who calls this "free market capitalism" is either lying or stupid :)
It is corporatism and with the government in-bed aspects -- it approaches fascism (corporate nation statism).

As per WK's points... we stopped investing as a major financial tool years ago because *I* like to invest in companies that show sustainable survivability practices rather than "maximized profit every quarter". The latter just gnaws a company to death from inside. A steady predictable pattern with variance -- otherwise I'd be better off at the craps table where I can determine the exact chance of any given bet. Unfortunately, the modern day market punishes companies that are doing well. It also punishes long term rationality in favor of stampeding sheep trading in which the brokers seem to be the ones making the money.


Aye, anyone who says the current situation is shocking and a surprise was smoking something, lying, or delusional. Warren Buffett was predicting this disaster years ago and back then refused to allow his firms to deal in all these vaporous pyramid scheme of toxic sidestepping.

The popping of the housing market bubble is only a ripple in what is to come.

Say goodbye to America as you know it.


http://blogs.wsj.com/economics/2008/...l-to-congress/


(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.


This is the biggest power grab in history. As it stands, the executive branch will turn the USA into a socialist economy with them in complete control.

All oversight by the courts is denied.

I can just see it now... McCain wins, and Phil Gramm, the single person most responsible for the current crisis, is given complete authority over the country's economy.


I guess corporate lobbyists like Gramm have already been running the country for the last 8 years. Letting themselves get away with every nasty thing they could do to us, and then bailing themselves out with our money.

This just makes it official.


Let's see how Republicans are doing on their checklist for the last 8 years:

1. Eliminate the middle class.... check
2. Gut the bill of rights.... check
3. Spend trillions on wars for personal reasons.... check
4. Sell out the future of the country by borrowing and spending astronomical amounts of money.... check
5. Gut the economy, then use that as an excuse to take it over.... check?

Hopefully the Democrats in congress will be able to stop that last one. If not, they are useless and we are all screwed.

This is correct.

Calling it a partisan issue, though, is very incorrect. This isn't really about the power of the executive office, but the power of corporate banking.

Republicans called for deregulation, and the Democrats opposed the same bills not on the grounds of deregulation itself, but because they didn't include some guarantees that only helped accelerate the sub-prime lending crisis (long story short is that they got what they asked for, and the bills passed with wide approval). BOTH parties sold the country out on this mess.
(Not all of the deregulation was uncalled for, mind you, but these changes were overall disastrous.)

One of the few things that makes me worry less about a McCain presidency is that he changed his mind on the deregulation issue a long while ago. He's been pointing fingers for years in the same directions he's pointing them now.

just this march he told the wsj he was all for dereg. Its only last 2 weeks that he all for more regulation.

McCain has been a gymnast this past week on the economy.