What is wrong our economy is the question? Start with gaining an understanding of the service sector and GDP. Click this link, then, sort under Serv to see which countries have the highest service sector to their GDP. You will notice all the social democracies (and one significant Federal Republic that has become a social democracy) have very high service sector numbers, and they are countries facing unsustainable hard economic realities. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition There is no real middle class anymore, besides the government jobs of high wage, massive benefits (beyond death for family members) and pensions til death which of course...is unsustainable as well, as all those same nations are also discovering.
I love the charts that are geared to make a point look good when the truth is the opposite . The proponents that use charts and percentages are fabricating the figures to advance their propaganda and nothing else . Hard numbers are the only figures that mean anything and the left won't use them. Aside from those lies that most knowledgeable people ignore one of the major reasons for the lack of economic growth is the ridiculous demands put on business by government agency's . These agency's are out of control and the government employees have taken it upon themselves to carry measures to the extreme in instituting policies on business so ,in effect, they keep the agency they work for viable and profitable so they keep employed . Much like government work programs that unions will extend into 20 year jobs when the private sector can do the same in 2-3 years . Example - OSHA ( Occupational Health and Safety Agency) . This agency is the most feared to business after the infamous IRS and labor board. These inspectors think and act like a modern day SS squad. I operated a business that had an in-house garage to maintain my fleet ( 400 garages across the country . In comes a Osha inspector for one reason only and that is to check a common bench grinder that most handy men have on their basement backbench . An incident happened in another part of the country with some unrelated business and they are checking all bench grinders across the country. My bench grinder is illegal because it doesn't meet the new eighth of an inch clearance that the new government regulators just put in effect . I'm written up with the threat of thousands in fines if I don't meet the regulation . I call my office and will order 400 new bench grinders for the garages across the country . You add up the damage in $ . Six months later OSHA is back with a new set of regulations on the just purchased bench grinders. It seems that the regulators want a plastic plexy glass guard across the bench grinder wheel for eye protection . He writes me up , I call my office and they order 400 new bench grinders to replace the 400 new bench grinders . If you think you can survive this kind of governmental control your dreaming . They do this over light bulbs ,eyewash stations and any ridiculous mandate the can dream up to get a heavy fine. We have a government that is out of control and there is no stopping it.
Our capitalistic based economy is suffering from the early signs of its inevitable implosion. Offshoring jobs that produce the income to buy goods and services from our consumption based economy, PLUS the move to more and more automation, which removes humans from the equation can only do one thing. Implode capitalism. The early signs of this will be high unemployment, which is only partly addressed by low wage part time jobs, and a rising national debt as social safety net spending rises, and keeps rising, unless the republicans try to cut it off, or cut back on it. This, if they do that will cause social unrest for the safety nets are the soup lines that were used in the great depression. The suffering, and social disorder will bring back a movement to some form of socialism, and this time, there is no FDR to save us from it. This won't happen overnight, but will be gradual, until the bubble pops, at some point. Right now, one of the political signs is musical chairs the voters are playing, as they vote first one party in, who can do nothing, short of changing our economic model drastically, and then when incomes are still shrinking, going away, they will vote the other party in.
Did we ever have them in the first place? In the mid 20th century, we had a middle class that worked on assembly lines, where one guy would screw a nut on a bolt over and over. It took no more skill than to run a Wal-mart cash register. Yet the manufacturing guy was given a good wage that he could raise a middle class family on. On a single income. The wal-mart worker is maybe one step ahead of poverty. How come? It wasn't supply and demand for labor. There were plenty of people who would have worked the auto lines for a lot less.
In 1950 the average salary was $3000. A new car was $1500. A house was $14,000. Gas was $.20/gallon. Bread was $.15. In 2014 the average salary is $35,000. A new car is $28,000. A house is $200,000. Gas is $3.50/gallon. Bread is $5. In 1950...a new car was 50% annual wages, a house was 4.5 times annual wages. In 2014, a new car is 75% annual wages, a house is 6 times annual wages. In 1950 people cooked at home, drove their cars on vacation, saved for a rainy day, lived WELL WITHIN their means. In 2014, people use credit purchases and DO NOT live within their means. Therefore, the problem is not wages, or jobs, but instead how people spend their money today. I'm sorry but people who can only earn $14/hour are not entitled to have the same things as people who earn $50K to $100K...and herein lies the problem... - - - Updated - - - In 1950 the average salary was $3000. A new car was $1500. A house was $14,000. Gas was $.20/gallon. Bread was $.15. In 2014 the average salary is $35,000. A new car is $28,000. A house is $200,000. Gas is $3.50/gallon. Bread is $5. In 1950...a new car was 50% annual wages, a house was 4.5 times annual wages. In 2014, a new car is 75% annual wages, a house is 6 times annual wages. In 1950 people cooked at home, drove their cars on vacation, saved for a rainy day, lived WELL WITHIN their means. In 2014, people use credit purchases and DO NOT live within their means. Therefore, the problem is not wages, or jobs, but instead how people spend their money today. I'm sorry but people who can only earn $14/hour are not entitled to have the same things as people who earn $50K to $100K...and herein lies the problem...
The problem is wages. You should have adjusted those cost of living to include gas, and food. Like in 1969 I made min wage, 1.65 an hour. I paid 25 cents a gallon for gas that year. Or could get a little over 6 gallons of gas for one hours work. Today with gas running 3 bucks a gallon and its down in price, I would have to earn 15 bucks an hour at a min wage to pay what I paid in 1969. This is the difference in energy costs, now use that and apply it to electrical bills. And then food. For these are things that even the non home owner has to buy. So wages are indeed a huge problem. Many people don't have enough money to manage in order to make ends meet. But what I did see happen, is that as wages remained stagnant for the middle and the working classes, and as things went up, people started to have to use credit cards in order to maintain the standard of living they had gotten used to. They were forced into it by stagnation in wages and rising costs. As wages were stagnated, any raises in wages the workers might have seen gravitated upwards to the top 5 percent, as over a few decades the top dogs snagged 60 percent of the middle class's wages. So wages do matter, and they matter quite a bit. Obviously you are a conservative who habitually blames the hard times of the non rich only on the non elites. It's their fault that 60 percent of the middle class wages went to the top.
Yup you have it right. This morning I treated myself to a $2.14 cup of coffee at Starbucks when I could have gone down the block and got a large one for 99¢ at McDonald's .The guy in front of me paid $7.43 for his special cup of coffee and drove away in his banged up 1980ish Ford . I still can't figure out what the hell is in a 14 oz cup of coffee that they can charge $7.43 for but I guess it's priorities. After all I could have saved a buck and went to McDonalds and got mine for 99.
Everyone in the workplace is for the most part an adult. This means they make 100% of their decisions in life. If a person is only capable of earning $25K, then they should be designing their life around this $25K (minus taxes and FICA). It is obvious this person cannot expect the same purchasing power as someone else earning $55K. I just read an article today suggesting that 50% of homeowners should be renting instead of owning but this won't change anyone's decision to buy more house than they need or can afford. They don't even sell cars anymore...they lease them so lower wage earners can pay $99 or $159 per month. Whether it's alcohol, or tobacco, or drugs, or sporting events, entertainment events, brand-name apparel, jewelry, gambling, or those $4 to $8 drinks at Starbucks, and using credit purchases, each person decides what to do...no gun held to anyone's head at Starbucks! IMO it's part priority and part entitlement in which too many people feel they are entitled to all the amenities that others have. Great concept but it simply does not work without the income to support it...
Oh, the problem very much is wages! If the guy's salary kept up with per capita GDP growth since 1950, his salary would be $79,000. In which case the new car would only be 35% of wages, a new house would only be 2.5x wages. Therein lies the problem. Wages have not kept up with per capita GDP. Because since the Reagan "trickle down" revolution, virtually all the gain has gone to the richest 1%. Great illustration of what has happened to our middle class wages. To be bookmarked for future reference.
You keep repeating this same thing over and over. You keep trying to blame the 90% for the reason why their share of the nation's income has dropped dramatically while the 1% has risen dramatically since the Reagan trickle down revolution. 90% of Americans didn't start becoming irresponsible and lazy in 1981. I asked you this question in another thread. I'll keep asking you it until you adress it. So tell us with your world view. Why has the middle class' share of the nation's income dropped from 65% in 1980 to just 50% (or less) today? Did the middle class collective just decide collectively to take $2.5 trillion less of the nation's income each year? Why did the 1%'s share of the nation's income increase from about 10% in 1980 to about 20% today? Did the upper 1% just collectively decide to take another $1.7 trillion chunk of the nation's income each year?
POLITICS are what's wrong with our economy. For nearly 100 years now, we have had ridiculously more expenditures than actual productivity. From the time we got into ww1, we've been inflating our dollar, and now it's nearly worthless. Back then, gold was $20 an oz, and a good meal cost 10c. Now gold costs 70x that much, and the meal costs $15.
If you are talking about the US Govt, that is not true. Please send me your worthless dollars. I like them for sentimental reasons. I'll pay postage.
We all know now that trickle down does not work. Its not the people with money that invest in new busines but the wannabees that want to become. 1% er. That is what America is really about, getting up there if you try. Not the 'up there' keeping everybody else down, which seems to be happening now. Isn't that what the 'Declaration of Independence' and the Constitution are about.
they have just 1/50th the purchassing power that they had 100 years ago.I'll send you billions of paper dollars, if you'll send me the same amount of gold that those $ would have purched just 10 years ago. since I will be making 300% profit.
We could really hurt those rich bast $rds and only let them get 200% bonuses above their base salaries the way the poor FX riggers have had to suffer. Such indignation. Why would anyone stay in this jacked up system is beyond me. "Caught Rigging FX and Gold? Your Punishment Will Be A Bonus Capped At Just 200% Of Your Base Salary Here are some more details on today's headline news: the banks' wholesale settlement to put FX-rigging in the rearview mirror. First example: if you ever saw your stops taken out from beneath your feet, thank your broker, JPM, which acted against its own clients to crush their stops. From the FCA's JPM notice: JPMorgan’s failings in this regard allowed the following behaviours to occur in its G10 spot FX trading business: 1.Attempts to manipulate the WMR and the ECB fix rates, alone or in collusion with traders at other firms, for JPMorgan’s own benefit and to the potential detriment of certain of its clients and/or other market participants; 2.Attempts to trigger clients’ stop loss orders for JPMorgan’s own benefit and to the potential detriment of those clients and/or other market participants; and 3.Inappropriate sharing of confidential information with traders at other firms, including specific client identities and, as part of (1) and (2) above, information about clients’ orders. From Reuters: Dozens of dealers have been suspended or fired for sharing confidential information about client orders and coordinating trades to make money from a foreign exchange benchmark used by asset managers and corporate treasurers to value their holdings in the latest scandal to hit the financial industry. They used code names to identify clients without naming them and created online chatrooms with pseudonyms such as "the players", “the 3 musketeers” and “1 team, 1 dream” in which to swap information. Those not involved were belittled. Here is what they did in these chat rooms: Traders in a chat room with net orders in the opposite direction to the desired movement at the fix sought before the fix to transact or “net off” their orders with third parties outside the chat room, rather than with other traders in the chat room. This maintained the volume of orders in the desired direction held by traders in the chat room and avoided orders being transacted in the opposite direction at the fix. Traders within the market have referred to this process as “leaving you with the ammo” or similar. Traders in a chat room with net orders in the same direction as the desired rate movement at the fix sought before the fix to do one or more of the following: •Net off these orders with third parties outside the chat room, thereby reducing the volume of orders held by third parties that might otherwise be transacted at the fix in the opposite direction. Traders within the market have referred to this process as “taking out the filth” or “clearing the decks” or similar; •Transfer these orders to a single trader in the chat room, thereby consolidating these orders in the hands of one trader. This potentially increased the likelihood of successfully manipulating the fix rate since that trader could exercise greater control over his trading strategy during the fix than a number of traders acting separately. Traders within the market have referred to this as “giving you the ammo” or similar; and/or •Transact with third parties outside the chat room in order to increase the volume of orders held by them in the desired direction. This potentially increased the influence of the trader(s) at the fix by allowing them to control a larger proportion of the overall volume traded at the fix than they would otherwise have and/or to adopt particular trading strategies, such as trading a large volume of a currency pair aggressively. This process was known as “building”. Traders increased the volume traded by them at the fix in the desired direction in excess of the volume necessary to manage the risk associated with firms’ net buy or sell orders at the fix. Traders within the market have referred to this process as “overbuying” or “overselling”. There are many more details and we will break them out shortly, but cutting to the chase, here is the punishment: FINMA has also instructed UBS to limit bonuses for traders of foreign exchange and precious metals to 200 percent of their base salary for two years. Which means that clearly nobody is going to jail, however the punishment is far more harsh: riggers will have a bonus of ONLY 200% their base salary for two years to look forward to! The horror, the horror. Which naturally means that base salaries across the rigging banks are about to soar to offset the temporary bonus cap to the "keep the talent" happy. After all someone has to keep on rigging markets and generate bank revenue." http://www.zerohedge.com/news/2014-...ent-will-be-bonus-capped-just-200-your-base-s
I never claimed gold was worthless. You're the one saying dollars are worthless. If you claim they are only worth 1/50th of what they used to be, then I'll double that. For every nearly worthless dollar you send me, I'll give you .04 cents. And pay postage and handling. . Though I have a feeling that you really don't think they are as worthless as you are trying to portray.
Great question. It would be wonderful for the super rich who can sit on their horded dollars and watch it increase in value. Which is why libertarians push so hard for a gold standard. For everyone elee and the economy as a whole it would be a disaster.
a billionaire's boon for a while, yes but, after the hosts (99.9% of the people) are bled dry, even the rich would lose
look, dude, if you dont know enough English to know what "nearly' means, then just eff you. You don't need billions to just sit on it. you don't know what a billion $ IS, obviously. A billion would be spending a million a year for 1000 years. since no adult is going to liven another 100 yrs, that's 10 million per year. average (clear) income in the US is 30k, so 33 years of waiting is just one million $. I aint got 30 years left, in fact, I probably aint got 15 years of life (that will be worth living). Coincidentally, neither does the US. 98% of value gone DOES ="nearly worthless." So learn some English and math.
What would happen is that imports would become cheaper, exports more expensive and US production costs, even if they declined in dollar terms, would eventually not be able to compete with imports so US producers would move operations overseas or go out of business. Millions would become permanently unemployed. Meanwhile the US speculative markets would boom as foreigners flooded money into the US to hedge against falling currency values in their home countries. The 1980s-2008 was a sort of snapshot of this scenario in action, with a few minor glitches tossed in. This house of cards will eventually collapse because the US economy would become increasingly unable to generate enough employment income for the growing population to gain the income necessary to maintain consumption growth. Without the vast increase in consumer credit and debt, all the consumption growth over the last thirty years would not have been possible and when that spigot was cut off in 2008 the US economy veered into collapse, taking the rest of the world with it. The tepid economic growth in the US is the reality of an economy that enjoyed a long time of increasing currency value. Much of the industrial and manufacturing capacity that could ramp up rapidly in an economic recovery to provide increases in employment and consumer spending was sold off during the times when increasing consumer credit and debt masked their loss. Now that the mask has been removed their loss is telling.
all you've done is show that you don't understand the principles of economics or finance that's one hypothesis, the bottom line is that it wouldn't be likely to work
