July 16, 2011

"We are living through a tremendous bust."

"It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making."

63 comments:

Calypso Facto said...

Gotta love the NYT: "The recession is caused by too much debt! The solution is for individual to be thrifty and .... raise the debt ceiling for more government debt!"

The only remaining question is, do you think they are being paid directly by the administration or are there intermediaries?

Canuck said...

You know what the trouble is, Brucey? We used to make shit in this country, build shit. Now we just put our hand in the next guy's pocket.

MarkG said...

Quit making people nervous. I'm trying to sell my house.

Chase said...

Professor Ann,

The title of the link you gave above is "We're Spent"

Bet you clicked on it because you thought it meant something else. . .

Mike said...

The NYT guy is not a moron, but he's close. You see the stimulus was the wrong kind of stimulus. And we need to have some more of it like extending unemployment benefits (aka the US version of Britain's "dole") and investing in green energy which will have tremendous returns.
And those Bush tax cuts and Medicare are expensive!

Well shuckola's Lamby Pie, what do you think Obamacare is going to cost?

And anyway all this grief happened over the preceding 25 years, so it can't be the Bamster's fault. Makes you wonder how a guy like this can breath being that his head is so far out of the normal atmosphere.

Ron said...

I wouldn't trust these headless chickens to know which bingo square to poop on, so who gives a fig what they say? Their articles tend to be of two types:

"Whatever we are right now was decades in the making and more of it is inevitable!!!"

and

"Here's my wacky contrarian thoery that in five years will either make me look like Moses With The Tablets or will disappear down the memory hole!"

their panic bores me.

Joanna said...

"The biggest flaw with the past stimulus was that it imagined that the old consumer economy might return."

So... the biggest flaw with the past stimulus was that it imagined that the plan would be successful? Help me out here. Is the NYT really saying that?

Shouting Thomas said...

Another Cover Obama's Ass Article from the Times.

Can't have anything to do with him!

Mike K said...

Trust the NY Times to put the best face on it. Who, exactly, is trying to borrow more money ? Who is trying to stop the spending ?

27183 said...

Offtopic, but Professor Althouse, when you change blogs, I encourage you to try and reduce your page loading times.

I have always enjoyed a tremendous bust, but your blog is getting a bit bloated and weighty, and it takes a long time to load up, and not a good long time to load up either.

Eddie said...

I think that the author is saying something important: when you are living beyond your means by going into debt, your proper level of spending is going to be less than the level you've become accustomed to. On the national level, that means it is unrealistic to hope for a return to our accustomed "standard of living" anytime soon. The problem belongs to the borrowers and the lenders: borrowers will have to cut back and lenders will have to accept defaults on loans that shouldn't have been made to begin with. It doesn't help that (a) the federal government is living beyond its means (which Obama has made significantly worse) and (b) the federal government is trying to get people to spend when they should be paying down debt and trying to prop up lenders who should be taking their losses.

cokaygne said...

If you are a 70-year old fiscal conservative whose income and health care benefits come entirely from government, life is about to get very interesting. Last week I met a wonderful group of high school age kids from rural PA and it was all I could do to keep from screaming at them to, above all, avoid falling into the trap that I'm in.

Being at home on Friday, I tuned into O's "press conference" (don't blame me I voted for him and probably will do so again in 2012). The reporters asked him non-questions and his line got harder and harder. He is beyond redemption. Only thing is that the opposition is losing the public.

Bye bye miss American Pie, drove my (GM) chevy to the levee but the levee was dry

Saint Croix said...

Surveying hundreds of years of crises around the world, Ms. Reinhart and Mr. Rogoff conclude that debt is the primary cause and that the aftermath is “deep and prolonged,” with “profound declines in output and employment.”

What the New York Times guy is missing, completely and utterly, is that these guys are talking about public debt. Nobody had credit cards 8 centuries ago. Credit cards did not cause the Great Depression.

Debt is not bad, in and of itself. You buy a house by going into debt, for instance. You get an education by going into debt. This will be bad for some people ("I can't afford my house!"), but for many people it will not be bad.

Public debt works the same way. Debt is often necessary. Paying for World War II, for instance. But you have to pay your debt down. If you fail to pay it down, that's bad. Really bad. If you keep adding to it like a fucking moron, that's really, really, really bad.

Here is the scare chart. Study it, you New York Times fuckwit.

http://en.wikipedia.org/wiki/History_of_the_U.S._public_debt

Our public debt--the sort of debt that brings down societies--is really bad and its escalating at a horrifying rate and people are terrified. The government is not going to make the people, or our economy, feel better by going another $2 trillion into debt this year.

The same people who say we have to go deeper into debt are the same people who sent us deeper into debt. Our debt levels are going to escalate from here because of fucking interest payments on our fucking debt. This is how debt blows up societies.

By God that was a stupid article. Page 1 is good. Page 2 is dissent into madness.

edutcher said...

I take it the fact 50 - 60% of the people are cutting back on their vacation plans was also years in the making.

I also take it they're agreeing with Arthur Laffer that there was no recovery; the first dip never ended.

Another whistling past the graveyard piece from the Gray Lady.

Or did they just throw Little Zero under the bus?

nevadabob said...

"THERE is no shortage of explanations for the economy’s maddening inability to leave behind the Great Recession and start adding large numbers of jobs ..."

The idea that large numbers of jobs are not being created is the BIG LIE here.

Huge massive numbers of jobs are being created by our economy.

They're being created in China.

Obama lets US companies hire people outside the US for less money than they are required to pay inside the US.

Why would they ever employ us when there can use slave labor elsewhere?

nevadabob said...

"If you’re looking for one overarching explanation for the still-terrible job market, it is this great consumer bust."

I'm not spending, deliberately, to protest Barack Obama's presidency.

When he's gone, I'll start spending again.

Fuck you people.

Vote.

viator said...

Still, after the sort of moderate tone, Keynesian clap-trap. The biggest problem is government fiscal and regulatory over reach. We have become a nation of NO. NO new power transmission lines, new gas wells, new oil wells, new wind farms, new industry if it's the least dirty (yes Virginia, some industry is somewhat dirty. If you want the jobs you have to accept some dirt), new rail lines, new refineries, new highways, new nuclear technology and power generation, new airports.

Even new ideas are suppressed by the advent of crony capitalism. I'll give you campaign money and support if you create regulation to suppress my competition and prevent new competition from forming.

dreams said...

Why do people still read this liberal propaganda near bankrupt and hopefully soon, piece of crap paper?

Rich B said...

We heard the same thing during the Carter presidency. Guess who the tremendous bust is this time?

Leonhardt repeats the falsehood about Hoover one more time. Pretty pathetic when the NYT's economics expert isn't familiar with Hoover's big spending interventionist record.

rhhardin said...

Is there anything about involuntary trades lowering the standard of living?

Maybe there are too many involuntary trades. Say the ones that government increasingly imposes.

Don't Tread 2012 said...

"A more promising approach could instead offer a tax cut to businesses — but only to those expanding their payrolls and, in the process, helping to solve the jobs crisis."

Sigh.

Businesses only hire more employees IF they have actual WORK for them to perform - NOT becasue it will earn them a tax cut.

It seems, sadly, that some simply do not understand basic economics.

The beat goes on.

rhhardin said...

Fire that destroyed house was decades in the making.

Just helping the NYT readers understand fire.

Robert Cook said...

The writer's premise is bogus: nobody's hiring because nobody's spending is patent nonsense and has it exactly backwards. For the last few years it had been common for big companies to shed workers by the thousands even as quarterly profits continued up and up and up. Even now, Wall Street seems to be going gangbusters, but some of the firms are talking about moving many of their jobs overseas. Why? Because they can pay people peanuts to do the same work. It's a cheap and quick way to increase already swollen profit margins without actually creating anything new.

Jobs are being filled...by cheaper labor overseas, as Nevadabob pointed out, and as we all know. Those jobs will never come back until employers have a compelling incentive to resume hiring (and manufacturing) in America.

People are not spending because they are worried about whether they will retain their jobs--(or because they've already lost their jobs or are underemployed)--and they're trying to hold on to whatever liquidity they have in anticipation of that "rainy day" we used to be encouraged to prepare for.

(Incidentally, this is one of capitalism's flaws: that it requires ceaseless and ever expanding spending by the public to remain "healthy," and excess personal saving--once considered a social virtue and which is still beneficial to each of us individually--can create stresses in the system. It does not just encourage purchasing gluttony, but requires it.)

rhhardin said...

Wait a minute, I have the solution.

More government regulation of decades in the making activity.

Let's have sustainable decades in the makings, rather than what consumers stupidly think they'd like.

I propose Thomas Friedman as economic activity czar.

Don't Tread 2012 said...

@cokaygne

"...I tuned into O's "press conference" (don't blame me I voted for him and probably will do so again in 2012). The reporters asked him non-questions and his line got harder and harder. He is beyond redemption. Only thing is that the opposition is losing the public."

Are you serious? Did you include/leave out something in this post?

I've seen some schizophrenic posts before, but this takes the cake.

If the 'public' as you say follows your thinking, the plunge to the bottom of the cliff will be deserved.

I fear for parents', knowing there may be people just like you in positions to 'advise' young people. Just what can be learned from putting faith in an ideolog like Zero?

I think it means the eventual bitter realization that life and its events should be dictated by individuality and not by belief in false gods like we have occupying the White House.

I really hope your posts was just ill-written and not what it seems to say on the face of it.

Shouting Thomas said...

Meanwhile, here' what the Times thinks we should care about... women's sports at community colleges.

rhhardin said...

If the reason that jobs go overseas is that the US regulatory or legal system is too risky, that's bad.

The loss is that we have a stupid regulatory or legal system (see Chrysler bondholders, proving that there's no actual commercial law in the US under Obama. Try selling senior debt at senior debt rates today.)

If the jobs go overseas because somebody found a way to make foreign labor competitive, that's good. We should not be doing those jobs in the US.

Michael said...

rhhardin: You have it right. To wish for "manufacturing" jobs to reappear in the US is to wish for unicorns. It is not going to happen, the good old days are over except in a few southern right to work states where the cost of labor permits the assembly of excellent autos. The rust belt will continue to rust away and the assembly workers who pulled down a hundred thousand dollars a year for manual labor are gone forever. Thankfully.

Robert Cook said...

"If the jobs go overseas because somebody found a way to make foreign labor competitive, that's good."

They did...they pay workers overseas a fraction of what Americans are paid.

"We should not be doing those jobs in the US."

Well, then, this leaves us up a creek: there are no jobs we can do here that can't be done overseas...aside from low-wage service jobs.

Pogo said...

The good doctors correctly identified the obvious: the patient was bleeding to death.

Their prescription was more leeches.


It's New Age economics.
(Paging Mr. Crack Emcee!)

Pogo said...

I wish they had put the Hoover lie in the beginning.

It 's a reliable sign the writer is a dangerous moron.

Don't Tread 2012 said...

The problem with capitalism, are capitalists.

The problem with socialism, is socialism.

Consumerism, while not perfect, provides an opportunity for all to participate and prosper while not guaranteeing success.

Socialism, while not perfect, assures participation for all (save for elites) in an exercise of compromised outcome and limited opportunity.

So pick your poison.

Do you choose free markets, unfettered by the shackles of the master, or do you choose a shackled existence, in exchange for the 'security' assured by your captors?

Pogo said...

Mr. Cook, you're proof is lacking.

Did they go overseas because of wages, regulations, or a mixture of both?

Lessening the massive regulatory taxes could save many of those jobs, such as in auto manufacturing. Likely true in other fields.

More, if they have such cheap labor (1) it won 't last for long and (2) it forces us to increase our own productivity in other ways, and increase our competitiveness.

It is not a zero sum game.

Robert Cook said...
This comment has been removed by the author.
Robert Cook said...

"...workers who pulled down a hundred thousand dollars a year for manual labor are gone forever. Thankfully."

Your $100K salary figure lacks a source, but taken simply for argument's sake, it's grimly refreshing to see such rank honesty...and it is rank. Such unapologetic contempt for manual laborers and applause for the return of American workers to serfdom is not usually so openly stated. (For good reason, given what it reveals about the speaker.)

Pogo said...

Cook, you misunderstand. Labor has to be actually worth their wages.

The unions extracted wages that were unsustainable because they exceeded their value and they became uncompetitive. The Big Three made similarly stupid management decisions thinking their dominance was a Natural Law.

If unions were right all along, why not pay each of them a million dollars year?

rhhardin said...

There's something called comparative (not competitive) advantage.

Everybody is most suited to do something.

It's an economic loss for them to do anything else.

It answers the paradox of cheap foreign labor:

1. How can we possibly compete with cheap foreign labor, which pays their workers only a fraction of what we pay.

2. How can backward countries possibly compete with modern first world nations with all their capital and automation and education?

Those foreign countries wind up with labor intensive stuff, modern countries wind up with technological jobs.

A standard clear example of comparative advantage: The head of the economics department sends the secretary to deliver papers to the dean, even though the head walks faster than then secretary. The head has a comparative advantage at the head job, and the secretary has a comparative advantage at the walking job. Even though the head would to a better job of walking than the secretary.

There's always a job for the secretary, is what comparative advantage says.

If you have a really rotten country without any talents, the value of its currency will fall until it pays for it to do something. Its standard of living will not be very high, but it will nevertheless be best suited to that job.

rhhardin said...

Unions: they send jobs overseas as a consequence of a faulty legal system in the US.

The faulty legal point is that A and B can join to enforce rights against C and D that they never had individually. In particular A and B can force C to negotiate a contract to hire them and not D, even tough A and B have no contractual relation with C. That's a legal rule that makes overseas jobs attractive by overpaying A and B for the work D would have done.

Unions can prevent competition nationally and keep the scam up for a while, but not internationally.

If you overpay, you go out of business; which unionized private sector jobs have done.

You overpay if you can get labor (D) in the market for less. That's a misallocation of resources, and always, always has a net economic cost. The US law just puts the cost on D where A and B and their press doesn't notice it, until C goes out of business anyway.

Pogo said...

I ditto rhhardin's unapologetic contempt for economic illiteracy.

viator said...

I disagree with the notion that

"the good old days are over except in a few southern right to work states where the cost of labor permits the assembly of excellent autos. The rust belt will continue to rust away and the assembly workers who pulled down a hundred thousand dollars a year for manual labor are gone forever."

Most product's cost of labor are below 10%. Labor cost is important but just one consideration in planning a profitable enterprise. Many other costs enter in the calculation as well. For instance if it takes six years to build a plant because of environmental studies, permitting and Luddite opposition then the cost of that plant or facility will almost double.

In any case labor costs are rising quickly all over the world while we are getting rapidly poorer which lowers our relative labor cost. We may turn out to be the new Bangladesh (in more ways than one).

Shouting Thomas said...

Your $100K salary figure lacks a source, but taken simply for argument's sake, it's grimly refreshing to see such rank honesty...and it is rank. Such unapologetic contempt for manual laborers and applause for the return of American workers to serfdom is not usually so openly stated. (For good reason, given what it reveals about the speaker.)

Why do you think this is "unapologetic contempt," Kookie? Why do you think anybody is rooting for the defeat of American workers.

How about realism?

How do you think this reality can be opposed? Do you really think that capital will go anywhere except to the lowest cost labor?

For example, call center workers in the Philippines make about a quarter of what it would cost to pay American workers to do the same job. Technology makes it possible to do the job in either location. Filipinos are well educated and speak great English.

What's your solution to this dilemma? Why do you think it's so easy to fix? Why do you think the dilemma exists solely because of evil American bosses? Don't you understand that this is a structural reality that cannot be wished away?

Freeman Hunt said...

More government regulation of decades in the making activity.

Let's have sustainable decades in the makings, rather than what consumers stupidly think they'd like.


Heh.

And a +1 to everything else rhhardin wrote.

Jay said...

All we need is more unemployment benefits!

unemployment benefits Create jobs faster than almost any other initiative you can name.

-Nancy Pelosi

Shouting Thomas said...

Or to put it another way, Kookie...

You seem to think that if we all got really fucking pissed off, and cursed and spit at the bosses, everything would change.

You know, I doubt this.

Tell me exactly what you would do to fix the problem.

Stopping immigration dead is about the only thing I can think of that would be effective, and that makes me a racist... right?

Mick said...

The cluelessness of this writer, as well as the purpose of this article, which is to prop up the Usurper, is exemplified in this sentence:

"History, however, has a different verdict. If governments stop spending at the same time that consumers do, the economy can enter a vicious cycle, as it did in Hoover’s day".

No amount of "government spending" will save this economy. It has reached debt saturation, where every dollar of Government spending TAKES AWAY 15 cents from the economy. It's called the diminishing return on debt. Explained here:

http://economicedge.blogspot.com/2010/03/most-important-chart-of-century.html

http://economicedge.blogspot.com/2010/05/debt-saturation-equals-diminishing.html

Curing debt w/ more debt is insanity.

Jay said...

Your $100K salary figure lacks a source, but taken simply for argument's sake, it's grimly refreshing to see such rank honesty...and it is rank. Such unapologetic contempt for manual laborers

Yes, because of course we should over pay "manual laborers" so we can all have an $8,000 refrigerator and $100,000 cars.

That would work out swell, wouldn't it?

PS, you do realize that the post WWII boom of "manual laborers" being able to live an upper middle class existence was a historical aberration, right?

Though I do love watching you "progressives" pine for the days of 1952...

traditionalguy said...

The middle class that could easily resume spending is hiding in an underground shelter.

After three years they have Obama figured out.

Obama has been hunting them down to kill them (death panels) and take their stuff ( energy price sky rocketing and redistributed dollars disappearing).

The day a Palin type is inaugurated is the day the middleclass will resume their peacetime spending habits.

Jason said...

As someone that works in the housing products industry, I will say that the housing market has never seen anything like this. At least, not in my lifetime. This is already worse than than it was under Carter, in our industry.

I echo what a previous poster wrote: we need to get back to actually making something in this country. Its funny that our president chides people who "own private jets", when an airplane maker like Boeing is probably one of the last true big manufacturers that still exist in this country and is headquartered here.

We need to get this idiot out of office. And hopefully the American people have realized the mistake that just because he can give a good speech doesnt mean he will be a good president. Results and background matter.

Mike said...

I followed Kookie and Shouting Thomas's and others comments about the cost of labor with interest. It's true that excessively high wages for unionized private sector jobs means that a company might go out business--as some have. It's also true that in some industries the cost of labor is maybe 10% of total cost.

But those things are not true about public sector jobs. Labor costs in municipal government are maybe 85% of the total budget. And cities and states don't go "out of business". They may go bankrupt as a few cities in California have. Or they wind up having to cut staff and close parks and fail to provide services.

An example from California (where I live). The average wage for all workers in the Sacramento Metropolitan Statistical Area in 2008 was $52,000. A Sacramento city fireman's base pay that year was $114,000. The firefighters who steered the back end of a ladder truck were paid $144,000. Add in the fact that a firefighter or policeman can retire at age 50 with a pension roughly equal to his or her base pay with a COLA and that's one damned expensive public union employee. And if that retired firefighter is diagnosed with cancer, it's presumed by law to be job related--which turns his pension into a totally tax free disability payment.

I admire fire fighters and police--they have tough and dangerous jobs. But when a commercial truck driver earns maybe $30.000 a year with no pension benefits--and the guy who steers the rear of a ladder truck gets base pay of nearly 5 times as much--with an exceedingly expensive pension benefit tacked on, then the public employee unions have been too successful for their own--and our--good.

Simon Kenton said...

rhhardin wrote (among a series of excellent posts):

...see Chrysler bondholders, proving that there's no actual commercial law in the US under Obama. Try selling senior debt at senior debt rates today.
<<<<<<<<<<<<<<
Just want to underscore this. In a very small way, I am one of the hated bond vigilantes. The takeaway from that episode is obvious: buy no bonds from unionized industries. Now I don't, and I will not. And as Saint Lennon assures me, I'm not the only one.

Sometimes I imagine the following monologue from the administration:

"This (points) ... is not really a foot."

"This (brandishes) ... is not really a .45."

"I'm not really aiming this .45 (cocks and unlocks) at my foot."

"And even if I was, and even if I shot it, it wouldn't really hurt."

Stephen A. Meigs said...

As long as (1) most money is created by banks and (2) the money created by banks is someone else's debt, the amount of money people have will always be only slightly larger than the amount of debt that people have, which will make people on average poor and thus hesitant to spend. This has been for some time a permanent drain on the economy, of greatly underestimated signifance. The correct solution is to increase the amount of money (in the broad sense) that is not backed by private debt and increase the amount of (more real) money that is backed by federal debt or created by fiat. (There is no real difference between money backed by federal debt sitting at the federal reserve in the government's account and fiat money, since the government gets the interest on said debt). The way to do this is to truly discipline the banks (instead of pretending they need to loan more), requiring of them large reserves (eventually about 50% of deposits is about right, I'd say), and for the government to quickly run much higher deficits (via lower taxes or increased government spending or rebates) until the money supply is balanced. To finance deficits and put the more real money out there, the government must print or coin more money, by depositing (new) bonds or coins with the Federal Reserve. A guess is that ideally, there should be an amount of deficit spending so that a reasonable FED would choose eventually to put interest rates back up to about 5 or 6% or so, which historically seems to work best.

Since the hole in the bank bubble has decreased the amount of money banks create (despite futile major blowing into the leaky bubble by all the governments' men in a futile attempt to recreate the exact conditions at the time of the bursting), there is at this time a shortage of money overall, with concomitant deflationary and recessionary effects (the deflationary effects being somewhat masked by interest rate policies making interest rates so low at to encourage hoarding of commodities and investments). It is at the point where the government will have to overshoot with deficit spending because it has proved itself so inept most people rationally will have an expectation of continued economic misery that will be difficult to overcome. No matter, when the economy finally overheats, tending to produce inflation, do a final round of severe bank disciplining, temporary interest increasing, tax raising back to and even beyond natural permanent levels, and (depending on how inept government is) government decreasing, and try for a glide landing into ideal normalcy from there.

I don't buy that we can solve the problem with exports. The money going into a country tends to equal the money going out, unless the country is hoarding the other country's financial assets. The only way to create a trade balance with China, for example, is to encourage the Chinese government to stop hoarding foreign government securities, something they don't want to do inasmuch as they have an export economy and don't mind their workers having low wages, or for us to hoard Chinese securities. And much investment is just putting other only slightly less efficient companies out of business. E.g., building a shopping center one place slightly better than a shopping center somewhere else is not efficient utilization of resources because it makes the slightly less good shopping center useless. Companies wouldn't modernize excessively if the consequence is their own slightly less useful machinery and buildings being scrapped, but when the consequence is their competititors' machinery being scrapped while their old stuff is only slightly made less useful, as is more generally the case, well, yes, they are perfectly willing to go beyond what is reasonable. Anyway, arguably there is already too much investment in modernization.

David said...

Government social engineering does work.

Government engineered the housing bust. (I include the Federal Reserve in "government" here.)

Government has helped prolong the housing bust by "helping" borrowers and thus prolonging the shakeout.

Government helped create two bubbles in the last 11 years.

Government ran up the public debt.

Government wasted nearly a trillion dollars in "stimulus."

Government policies are making unemployment worse.

Gold. Buy gold. Lots of gold.

Dust Bunny Queen said...

Another Government engineering project is the forced planned obsolescence of consumer goods.

The freon in refrigerators was changed from R-12 to a less efficient and more caustic formula that forces the appliance to die in 7 to 8 years. The old formula is in those reliable appliances from years ago and those freezers that just keep running.

The government doesn't WANT you to keep your old refrigerator, washing machine, car, computer because that means you can keep your money for something else or....gasp....save it.

Instead, they purposely make regulations that cause obsolescence and even cause planned failure so that you MUST buy a new car, new refrigerator, new washer.

Just wait until all of your lawnmowers, old vehicles, boat motors are eaten up faster and completely destroyed by the "new improved" higher ethanol standards.

The government doesn't WANT you to be able to drive a paid for, useful and serviceable vehicle. NO! They plan to destroy the ones we have now and FORCE us to purchase ridiculous and non functional 'green' technology vehicles.

It is all about keeping us from being independent of the government and unable to control our own economic decisions.

LarsPorsena said...

"...Gold. Buy gold. Lots of gold. "

I'm afraid so. The only way to allay the massive amount of accumulated government debt is to print money an inflate the way out.

This will punish savers and trash the value of government securities.

See yesterday's WAPO article re how the BO administration is strong-arming SP, Moodys, et al,. They have been signaling that they will downgrade US creditworthiness and the administration is frantic to keep up the facade that accumulating debt is without risk.

An Edjamikated Redneck said...

Saying we are screwed doesn't cover the half of it.

This crash should have happened in the 1960's, but was avoided by the Federal Government borrowing money and giving it away, as well as military and space race spending. That money went not just to Federal spending, but state, county and municipal grants to allow those entities, which, in most cases by law must have balanced budgets, to spend with a reckless abandon as well.

When it comes to employment in this country have you ever wonder where all of the jobs are? Right now we are looking at between 9% and 20% unemployment, based on whose figures you quote.

But between 1975 and 2005 how many women entered the workforce? The creation of the two income family also meant the creation of 25% more jobs than were available in the 1960's.

Where were almost all of these jobs created? Government. In 1975 1 person in 10 worked for the government at some level. Today it is closer to 1 in 4.

And the governments are paying for these jobs with taxes and borrowed money.

In one way I feel sorry for Obama. This crisis has been in the making for 70 years. The standard of living we have enjoyed has, for at least the last 50 years, been a product of government borrowing. And the hot potato that has been passed from administration to administration has now burned Obama's hands.

Well, I'd like to say tough S*%#.

But Obama isn't going to suffer; we are.

More thoughts here: http://anedjamikatedredneck.blogspot.com/2011/07/what-does-future-hold.html

Phil 3:14 said...

I'm tired of the narrative that the "BIG" entity MUST help us
-government must create a program to help (with my mortgage, my car ...)
-corporations must take their profits and create jobs
-wealthy Americans must pay more in taxes to preserve our entitlement programs

Where is the American sense of self-reliance?

Phil 3:14 said...

I hate being the last commenter on a thread

Chip S. said...

Before I read further, I thought this was going to be about Christina Hendricks and her husband.

Happy now, Phil?

Mr. Forward said...

Self reliance is ok but in this case you need help.

Trooper York said...

Tremendous bust.

Mike K said...

See yesterday's WAPO article re how the BO administration is strong-arming SP, Moodys, et al,. They have been signaling that they will downgrade US creditworthiness and the administration is frantic to keep up the facade that accumulating debt is without risk.

Moody's and the rest played a large role in the real estate bust. They rented their reputations and once you do that, it can't go back to the beginning. They are now totally political. The ratings mean nothing.

They are trying to convince people that adding more debt will protect you credit rating.

Methadras said...

If government raises the debt ceiling again the money in your pocket right now, in your bank account, your 401k, any retirement you have, will dwindle in value another 20%. So conversly not raised the debt ceiling will force congress to really deal with the issue of lowering spending and curtailing entitlements. Yes, I'm living in a fantasy land were republicans in congress actually have a fucking spine and can tell Urkel to go fuck himself and his pea eating gibberish.

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