How Will America Get Economy Going Again?... this, maybe

Discussion in 'Economics' started by gnome, Oct 27, 2008.

  1. The key to get the economy going and humming along is to get money into the hands of the non-wealthy... counting upon their spending it.

    In the 40-90's (?) it was high union wages... but that ended with "outsourcing" to low labor-cost countries.

    In this last go-round, it has been "bubbles"... first stocks, then real estate.

    Whats coming next is Socialism.
    Through higher taxes on the wealthy and hand-outs of money & benefits and reduced taxes on the non-wealthy, the non-wealthy will get more money into their hands to spend.

    In addition, there will be "federal works projects"... many unemployeds will find work on the roads and electric grid much like FDR's programs after the Great Depression.

    And of course there will be larger deficits, greater inflation, and currency debasement.

    Once the wealthy have been stripped of their assets (and/or its buying power), a large percentage of us will all be about the same economically... all except the Gummint of course... they will still be the fat cats.

    I think that's where we're going. I think it will work to a degree at least for a while.

    These changes will be permanent. There will be no turning back.. for once federal spending on social programs get entrenched in the system, they are virtually impossible to remove... regardless.

    I also think we will end like the former Soviet Union before its collapse... and the future of or kids and grandkids is grim.
  2. rros


    A flattening of the income pyramid can actually work in many ways. The post 2001 recovery of Argentina was in part due to this redistribution that enabled lower and middle class to earn as much or sometimes more. Truck drivers -unionized- and line workers at Ford -also unionized- made more money than their managers. Although this sounds counter-intuitive and may piss many off it created a solid domestic market, which in turn revitalized the small-small entrepreneur with enough inventiveness to make a couple more hundred dollars per month. Unfortunately, the good years were mismanaged by the government and corruption offset many of the positives leading to a renewed crisis.

    In the US, years of gigantic leverage led to the big getting bigger and the wallgreens and the walmarts now populate every corner of America, together with their sisters and brothers of the corporate world. Although this may now change, with many unnecessary stores having to close... which in turn may also help revitalize the smaller entrepreneur here. I have seen smaller towns of not more than 20k habitants literally disappear under this new big business landscape with the Joe's market and the Mary's bookstore closing up shop in mid-late 90s and afterward. The identity of towns got lost in the mayhem of malls and plazas where the name of the game was just national expansion. When I lived in one of these towns between 1991 and 1996, Walgreens official policy was not to open stores in towns of less than 38k or so habitants. When I worked for them in the latter part of the 90s their official program called for 3000 in 2000 (that is 3000 stores in 2000) and they were opening 1 new store EVERY DAY! In my last trip a few years ago to this northern Mississippi town I spotted 2 Walgreens already, a Costco, a Walmart superstore and most local stores were gone or struggling to survive. Needless to say, the employees in these stores couldn't care less about the town, the customers shopping in there or anything remotely distant to their meager fortnight check, as opposed to the personalized attention you may have gotten in the stores run by locals.

    In addition, the burst of the credit bubble will also have another positive side effect. Tuitions in schools may likely be reduced substantially as only debt was propping them up. You may end up -all of us- making less money in the medium term but your children and grandchildren might be able to attend Schools that may have been out of reach in the past, at least for some of us. And some of your friends and family might be able to open up shop for business in the coming years as the big whales have no alternative but to back off.

    Not so grim future after all.
  3. I think you're dead wrong. There is not "economic engine" for America now. All we have is "consuming our own tail"... that is, redistribution of the wealth.. and when that's all eaten, we're nothing.

    High union wages were "phony economy".

    Asset Bubble spending was "phony economy".

    "Wealth Redistribution" is also "phony economy".

    THAT'S our kids and grandkids future.
  4. rros



    If you say so.
  5. if you believe in free trade. and free trade causes enormous deficits because foreigners produce things Americans want to buy, and the American economy doesn't produce shit that the world wants, then what is you get is a massive wealth transfer to ASIA.

    I said it and repeat it.

    you're scared of the black man getting crumbs
    The yellow man is eating your lunch right in front of you
  6. Personally, I am looking at a GENERATION curve to right the economic ship.

    I just hope that the government does not create any draconian laws to curb civil unrest, which I believe we will see in the future.:mad:
  7. I don't know for sure, and neither does anyone else. Just offering it up for consideration.
  8. You are SO FULL OF CRAP! Are you intentionally trying to sound stupid, or do you just not "get things"?

    I'm not against anybody earning anything.

    You are such an ardent NObama supporter... and now with your "black man crumbs" comment, I suspect your are black yourself and a racist. Is that right?
  9. rros


    That is fine. I maybe wrong too. As you say, noone knows.

    I came to this country in 1991 and I still believe the "american market" is not only alive and well but that is "Gnormous" -one level above gigantic- and that the american spirit and american minds will soon find ways to invent/create all sorts of stuff/gadgets/innovations to look after those now elusive dollars. That is the point I was trying to make, that if you leave people alone and give them a chance, people will innovate and that is an economic engine unto itself. When the big gets bigger there is much less space for the little guy to come up with ideas. Plus the road-to-market is usually closed.
  10. Nope.
    your main argument seems to be wealth distribution (we know who's targeted by that) when in fact what's suckig the riches out of the country is current account deficits.
    Do you have any idea how the economoy works retard ?

    If you want to generate wealth inside the country, you have to have a powerful industrial tissue and export things people want.
    GOtT IT ?

    So stop talking about "wealth distribution"
    and if you're really concerned about your kids, and start talking about EXPORTS
    #10     Oct 27, 2008