The Recession Ends... in June... of Last Year.

[MrJim]

Recession Ended in June 2009: NBER (http://news.yahoo.com/s/nm/us_usa_economy_nber;_ylt=Apd7rpj0NZlaad7WjE0ouWys0 NUE;_ylu=X3oDMTNqN3NnY2dwBGFzc2V0A25tLzIwMTAwOTIwL 3VzX3VzYV9lY29ub215X25iZXIEY2NvZGUDbW9zdHBvcHVsYXI EY3BvcwMxBHBvcwMyBHB0A2hvbWVfY29rZQRzZWMDeW5fdG9wX 3N0b3J5BHNsawNyZWNlc3Npb25lbmQ-)

WASHINGTON (Reuters) – The recession ended in June 2009, making it the longest downturn since the Great Depression of the 1930s, the National Bureau of Economic Research said on Monday.

The NBER, considered the arbiter of U.S. recessions, said it chose that month based on examination of data including gross domestic product, employment and personal income.

The group's business cycle dating committee, composed of academic economists, is notorious for taking its time in declaring the start and end of recessions.

The committee said it waited to make its decision this time because it wanted to review revised data on national income, released August 27, to get a clearer reading on the path of economic output in 2009.

In April, the NBER declined to call the end of the recession, and some of its members said at the time they were concerned the economy could dip back into negative territory. In Monday's announcement, the NBER said any fresh downturn would mark a new recession, not a continuation of the one that began in December 2007.

"The basis for this decision was the length and strength of the recovery to date," the NBER said.

U.S. officials have been struggling to find a way to speed up a sluggish recovery that has left unemployment at a painfully high 9.6 percent. The U.S. Federal Reserve's policy-setting committee meets on Tuesday, and is widely expect to discuss whether additional measures are warranted to bolster the economy.

[Patt]

LMAO - based on the number's we've seen since their so called 'end', seems to me they may well indeed give Obama a recession of his own.

Won't that be fun fodder to use in the run up to the 2012's what with the Stimulus that Wasn't?

[Rise Up]

Bullshit it ended last year. I'm still not able to find a fucking job anywhere.

[LedZap]

Bullshit it ended last year. I'm still not able to find a fucking job anywhere.

You got that right , Rise. It's horrible here as well.

[Rise Up]

During the summer here in Northern Kentucky the rate of teenagers able to get summer jobs was 10%. I personally called three different McDonald's, two Wendy's, an Arby's and a whole shit load of other stores. All at least 5 times each. None are hiring. Gotta love them Demorats and Republicons.

[LedZap]

The Dems are in complete control...hows it working for you ?

[seestraight]

It doesn't. That is why we must remove as many leftists as possible in November. Make sure that you take the time to vote. It is sooooooooooooo important.

[Agent Provocateur]

During the summer here in Northern Kentucky the rate of teenagers able to get summer jobs was 10%. I personally called three different McDonald's, two Wendy's, an Arby's and a whole shit load of other stores. All at least 5 times each. None are hiring. Gotta love them Demorats and Republicons.

Have you considered moving to the land down under?? http://i460.photobucket.com/albums/qq328/AgentProvocateur_2008/upsidedownsmiley.gif
We have lots of jobs, a booming economy and no recession....
Life couldn't be better down here in the lucky country....

http://i460.photobucket.com/albums/qq328/AgentProvocateur_2008/thsmiley_iloveaustralia-1.gif

[Rise Up]

The Dems are in complete control...hows it working for you ?

I dislike party politicians of any sort but right now I dislike the Demorats more.

[Rise Up]

Have you considered moving to the land down under?? http://i460.photobucket.com/albums/qq328/AgentProvocateur_2008/upsidedownsmiley.gif
We have lots of jobs, a booming economy and no recession....
Life couldn't be better down here in the lucky country....

http://i460.photobucket.com/albums/qq328/AgentProvocateur_2008/thsmiley_iloveaustralia-1.gif

I don't want to change my accent, unfortunately. And....I like it here in America too much. Plus, isn't it almost impossible to own a gun in Australia?

[hitekredneck]

I don't want to change my accent, unfortunately. And....I like it here in America too much. Plus, isn't it almost impossible to own a gun in Australia?

the ONLY reason i'm not downing a beer with paul hogan...lol...and ap, of course

[Rec]

And another one of the Obama team exits, one of the economic teams hmmmmmmmmm what with unemployment in double digits, recovery at a drag, is anyone besides me surprised!!!!! lol

[Patt]

Romer, Orzag and now Summers --- I am quite happy in fact.

Let's add Rahm, Timmy and Gibbs and I'll be wetting myself with joy! :D

[peepers]

The sad thing is, I lived in a tourist town before I moved off to college, and there wasn't many jobs there either for a teenager. All were takin up by people who couldn't find work after being let off by the construction company that had to down size after loseing their state contract, and the state taking care of their own roads....The out come is a lot of broke teens and pot holes galore

[MrJim]

The sad thing is, I lived in a tourist town before I moved off to college, and there wasn't many jobs there either for a teenager. All were takin up by people who couldn't find work after being let off by the construction company that had to down size after loseing their state contract, and the state taking care of their own roads....The out come is a lot of broke teens and pot holes galore

You notice a lot more of that these days. Dum-dum jobs like Taco Bell, Wal-Mart, the post office, etc. holding 3 interviews for jobs high school kids traditionally performed. A hundred or more applicants per opening. It's very, very sad and it's not improving yet, recession or not.

Part of this can also be blamed on the minimum wage increases.

[peepers]

You notice a lot more of that these days. Dum-dum jobs like Taco Bell, Wal-Mart, the post office, etc. holding 3 interviews for jobs high school kids traditionally performed. A hundred or more applicants per opening. It's very, very sad and it's not improving yet, recession or not.

Part of this can also be blamed on the minimum wage increases.

Yes the minum wage increase is destroying the job market, just like it did in the American Samoa's. The sad thing is that even though you get more gross pay, technically you get paid less after taxes. It's all about getting more income taxe out of your pay check not like they want you to believe, Giveing you more money.

[Agent Provocateur]

I don't want to change my accent, unfortunately.

Nooooooooooooo!!!....Keep the accent....You'll find it so easy to get laid down here if you do......


And....I like it here in America too much.

Oh please...Every forum I go to I've listened to Americans say how fucked the country is......
Stopped briefly when Obama took over but now it's same as when Bush was President....


Plus, isn't it almost impossible to own a gun in Australia?

Not true...I buy my smokes in a gun store....But you don't need a gun here...LOL...Why do you think the gun store has to sell cut price smokes????:D

[MrJim]

^ Most of us are probably too poor to relocate to Australia.

[MrJim]

Unfortunately, absence of a recession does not mean the economy has repaired, employment is improving, or anything of the sort. Even absolute zero growth is non-recessionary, technically. Only when growth is actually declining is it considered a recession. This is consistent with basic economics:


"The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date."

- straight from the horse's mouth.

[MrJim]

Techinically correct, but not very satisfying is it? We could have actually become a starving third-world country, and stayed that way for decades, and not be considerd 'in recession' so long as GDP wasn't actually dropping any further.

[peepers]

Oh please...Every forum I go to I've listened to Americans say how fucked the country is......
Stopped briefly when Obama took over but now it's same as when Bush was President....

Your also listening to probably to 17 year old liberals who's parents have them sucking on nancy palosi's tit too.

The true facts are that the United States is on of the happiest countries in world. Not that I'm saying we're the happiest, but when you have an idiot from president you really couldn't blame us. And actually I would be much happier with a smaller government. What your hear is twisted news from some of our media out sources as well. Pretty much 99% of the people I've met in the world ( which includes but does not limit to puerto ricans, costa ricans, Czec's, mexicans, africans not african americans, french, and canadians as well) love it here, and wouldn't have it any other way, ther other 1% no joke wants to take over the world. You get what I'm trying to say now.

[Limbo]

Some Democrats get it. Warren Buffet has some great advice for the Prez, namely get the hell out of the way and let the private sector dig us out of the hole we're in.

From this interview: Warren Buffett to CNBC: U.S. Capitalism's 'Regenerative Capacity' More Important Than Government Stimulus (http://www.cnbc.com/id/39321372/)


Warren Buffett tells CNBC that the "normal regenerative capacity of American capitalism" will play a much bigger role in the country's emergence from recession than the government's stimulus of the economy.

I just don't know if any such reasonable thinking can penetrate the thick skulls of Obama and his inner circle of idealogues. Doubt it. They just need to be swept out of the way in November.

Oh yeah, well said peepers. This Canadian transplant to the U.S. knows how great this country can be. That's what makes the election of someone like Obama all the more painful.

[Montanarchist]

The private sector debt is running up to 350% of GDP, I would like to see American capitalism "regenerate" that.

[MrJim]

Some Democrats get it. Warren Buffet has some great advice for the Prez, namely get the hell out of the way and let the private sector dig us out of the hole we're in.

An odd gesture since, for the most part, Mr. Buffet has given him very vocal support recently.

[Montanarchist]

And of course Buffet of all people will prove to be an economic illiterate when interviewed in the mainstream media:
And, of course, World War II, we had a huge stimulus and it, it took us out of, a depression. But we are, it doesn't depend on calling it the 'Stimulus Bill' to be stimulating. I mean, if the government is spending $3 for every $2 it takes in, that is, that is fiscal stimulus. And it isn't kick-starting things as much as the American public would like. I'm sure as much as the Administration or Congress would like. It's probably had some effect, probably less than the economists thought it would have going into this.

[MrJim]

All of the parallels to the Great Depression are growing tiresome, including his. We haven't had anything that even resembles a 'depression' - a period of rapidly falling prices. There just isn't a special word for a really long period of flat growth following a recession. Maybe we should call it the Great Nothing Happening or something.

[Limbo]

The private sector debt is running up to 350% of GDP, I would like to see American capitalism "regenerate" that.

You underestimate this country Monty. It will happen once the Dems are toast.

[Agent Provocateur]

Your also listening to probably to 17 year old liberals who's parents have them sucking on nancy palosi's tit too.

The true facts are that the United States is on of the happiest countries in world. Not that I'm saying we're the happiest, but when you have an idiot from president you really couldn't blame us. And actually I would be much happier with a smaller government. What your hear is twisted news from some of our media out sources as well. Pretty much 99% of the people I've met in the world ( which includes but does not limit to puerto ricans, costa ricans, Czec's, mexicans, africans not african americans, french, and canadians as well) love it here, and wouldn't have it any other way, ther other 1% no joke wants to take over the world. You get what I'm trying to say now.

You right...Everything in America is just fine....

You got a national debt that your great, great, great grandchildren still won't be able to repay...
You got millions unemployed....
You got half a million homes that you can't give away...
And you got about 30million Americans living in their cars or on the streets....

Yep...Everything is just fine!!!!!!!!

[Montanarchist]

You underestimate this country Monty. It will happen once the Dems are toast.When the Dems are in the toast the private sector is going to pay of debt with wealth that doesn't exist? The only realistic expectation is to allow lots and lots of bankruptcies and witness the collapse of american state.

[Montanarchist]

You right...Everything in America is just fine....

You got a national debt that your great, great, great grandchildren still won't be able to repay...
You got millions unemployed....
You got half a million homes that you can't give away...
And you got about 30million Americans living in their cars or on the streets....

Yep...Everything is just fine!!!!!!!!I've actually been seriously considering moving "down there". But we'll see. It's sort of my plan B if my current strategy won't work out.

[Limbo]

When the Dems are in the toast the private sector is going to pay of debt with wealth that doesn't exist?

They will start to create wealth again once the constraints are removed and people get more optimistic about things. It will be a good kind of snowball effect.




the collapse of american state.

I think in his heart of hearts, that's what Obama wants, to smash down the American capitalist state and replace it with a socialist one. Ain't gonna happen. Even most Democrats are closet capitalists. I just saw a poll yesterday from CNN that showed Obama's approval rating at 42%! Democratic politicians should be very worried.

[Montanarchist]

They will start to create wealth again once the constraints are removed and people get more optimistic about things. It will be a good kind of snowball effect.Again, 350% of GDP, and again, capital is not homogenous, it can't simply be switched over when the conditions change. If there's a change in economic patterns the capital structure is necessarily going to have to collapse. All the malinvestment (which is 350% of GDP and virtually the entire structure of the banking sector) is cleansed out and everything that was created dependent on the malinvested capital will have to collapse as well (that is everything dependent on the banking sector - which is everything that operates in an economy of scale) and the growth can come when there's only sustainable patterns left.

The recession is progress, just like symptoms of withdraw is progress from heroin addiction. But if the capital structure adapted for 300 million people collapses we run into a dog-eat-dog scenario.
I think in his heart of hearts, that's what Obama wants, to smash down the American capitalist state and replace it with a socialist one. Ain't gonna happen. Even most Democrats are closet capitalists. I just saw a poll yesterday from CNN that showed Obama's approval rating at 42%! Democratic politicians should be very worried.That's not what I meant. With "collapse of the american state" I meant the collapse of the government and the political system. Order isn't going to rise from that.

[Limbo]

Again, 350% of GDP, and again, capital is not homogenous, it can't simply be switched over when the conditions change. If there's a change in economic patterns the capital structure is necessarily going to have to collapse. All the malinvestment (which is 350% of GDP and virtually the entire structure of the banking sector) is cleansed out and everything that was created dependent on the malinvested capital will have to collapse as well (that is everything dependent on the banking sector - which is everything that operates in an economy of scale) and the growth can come when there's only sustainable patterns left.


The system is more dynamic than that. A lot of the debt exists on paper because of the collapse of the housing market. Once the economy improves and people get back to work, house prices will rebound and a lot of that paper debt will disappear.

There are other favorable conditions right now that will spark a recovery, labor and material goods are inexpensive. It is the uncertainty caused by Obama's activist agenda and massive spending (with the inevitable taxation that will have to follow to pay for it all) that has businesses spooked. That will soon be changing.

These cycles of boom and bust in a Capitalist system repeat themselves and likely always will. It was just bad luck to get people in power who made things drastically worse just at the worst possible time.

[yee-haw]

The system is more dynamic than that. A lot of the debt exists on paper because of the collapse of the housing market. Once the economy improves and people get back to work, house prices will rebound and a lot of that paper debt will disappear.

There are other favorable conditions right now that will spark a recovery, labor and material goods are inexpensive. It is the uncertainty caused by Obama's activist agenda and massive spending (with the inevitable taxation that will have to follow to pay for it all) that has businesses spooked. That will soon be changing.

These cycles of boom and bust in a Capitalist system repeat themselves and likely always will. It was just bad luck to get people in power who made things drastically worse just at the worst possible time.


If everyone is still in recovery stage, How long before the actual results are felt... what kinda time line are we talking about limbo?
If the paper debt was to disapear are we talking decades or mere months?

[Limbo]

If everyone is still in recovery stage, How long before the actual results are felt... what kinda time line are we talking about limbo?
If the paper debt was to disapear are we talking decades or mere months?

Probably a year or two for house prices and employment to recover to acceptable levels. I'm old enough to know that people get too down in the bad times and too up in the good times. Just human nature I guess.

[Rec]

Too right Limbo,,,,now if this ole ship can manage to dodge anymore Socialist giveaway holes in her bow and the bilge pumps can keep her afloat until we can fix the torbama holes while still at the water line, maybe just maybe the ole girl will not sink to the bottom! LOL:p:cool:

[yee-haw]

Probably a year or two for house prices and employment to recover to acceptable levels. I'm old enough to know that people get too down in the bad times and too up in the good times. Just human nature I guess.

Makes sense to me, I've always been one who tries to put money back, If things are good i go out there and spend in my community though.

[Montanarchist]

The system is more dynamic than that.If you want to do some logging, you need a saw. If you want to dig for gold, you need a pick axe. Capital exists for a specific purpose. One does not simply switch usage if the patterns are changing. investments will prove unprofitable and jbs will be lost.
A lot of the debt exists on paper because of the collapse of the housing market. Once the economy improves and people get back to work, house prices will rebound and a lot of that paper debt will disappear.This chart circulates on the internet: http://www.cleanmpg.com/photos/data/500/total-credit-debt-percentage-gdp.jpg

This has been building up steadily, and regardless, you don't simply pay off a debt matching three and a half times of what the entire nation produces (not really, but for now) in one year.


There are other favorable conditions right now that will spark a recovery, labor and material goods are inexpensive. It is the uncertainty caused by Obama's activist agenda and massive spending (with the inevitable taxation that will have to follow to pay for it all) that has businesses spooked. That will soon be changing.The crisis started before Obama and Obama is not the problem.
These cycles of boom and bust in a Capitalist system repeat themselves and likely always will.The exact causes of busts differ, but the process is the same. When trade routes are shut down people are forced to recalculate their efforts. The more malinvested resurces, the more severe will the recalculation be. It is not at all impossible to imagine - even in a helathy economy - how this recalculation could be severe enough to take the entire monetary system and the state to a complete collapse.
It was just bad luck to get people in power who made things drastically worse just at the worst possible time.Not at all. The debt is structural.

[Limbo]

If you want to do some logging, you need a saw. If you want to dig for gold, you need a pick axe. Capital exists for a specific purpose. One does not simply switch usage if the patterns are changing. investments will prove unprofitable and jbs will be lost. This chart circulates on the internet: http://www.cleanmpg.com/photos/data/500/total-credit-debt-percentage-gdp.jpg


That chart looks doctored and exaggerated. Compare to this one:

http://paul.kedrosky.com/WindowsLiveWriter/U.S.TotalCreditMarketDebtbySector1929200_93C7/debt-trend-breakdown_thumb.jpg



This has been building up steadily, and regardless, you don't simply pay off a debt matching three and a half times of what the entire nation produces (not really, but for now) in one year.

There are different kinds of debt. Some needs to be paid off, some exists on paper as the difference between what you paid for something and what it is worth. A lot of the recent debt is of the latter kind. As assets become worth more, a lot of this debt will shrink or even disappear.

Debt alone is not an absolute measure of economic health. If someone goes to medical school and racks up $100,000 in debt, they look to be in rough shape when they graduate. If they can earn $300,000/year because of that debt, then they are in good shape.

If someone racks up $100,000 in debt gambling, it is a dead loss because the money they spent has no potential for return on investment.

In other words, making sweeping statements that lump all debt together doesn't tell us much about anything.

[peepers]

You right...Everything in America is just fine....

You got a national debt that your great, great, great grandchildren still won't be able to repay...
You got millions unemployed....
You got half a million homes that you can't give away...
And you got about 30million Americans living in their cars or on the streets....

Yep...Everything is just fine!!!!!!!!

Well let's check into this, the U.S. has been in debt since it's creation, and fighting two world wars, a korean war, a vietnam war, and not to mention the cold war, not to mention the war in Iraq in the name of freedom does that too you. I'm sorry that the U.S. has a pair of balls. Maybe we shouldn't of helped the rest of the world and let Japan take over Autraila in ww2, Russia take over europe, and korea be one communist country.

[MrJim]

You got half a million homes that you can't give away...

If they DO start giving them away, I want one!

[Montanarchist]

That chart looks doctored and exaggerated. Compare to this one:The charts are identical, yours is simply more detailed.


There are different kinds of debt. Some needs to be paid off, some exists on paper as the difference between what you paid for something and what it is worth. A lot of the recent debt is of the latter kind. As assets become worth more, a lot of this debt will shrink or even disappear.Debt is structural in the system because there's perceived growth of the M1 if demand is pulled forward. The entire monetary order is based upon this as our currency is completely detached from reality without any sensible checks and balances. Money is debt only as long as debt can produce growth.

http://en.wikipedia.org/wiki/Fiscal_multiplier

But we're past that point. See chart: http://4.bp.blogspot.com/_pCDyiFUv9XU/S6UGAnsGArI/AAAAAAAAI8s/1wHV7ehjQdo/s1600-h/Diminishing+Productivity+of+DEBT+(2).jpg

Debt saturation. All money is sucked up in interest payments and for every dollar in the system we get less than a dollar back. M1 is in regression and gianormous deflation will follow. What has been perceived as growth in the western world is actually just money being created by debt. It's a systemic flaw, but it is the system. There's no sound banking and no capital accordingly, it is a system that has to collapse. As the chart shows this was expected to happen in 2015 but the current recession caused the numbers to plumet.

Another chart that perhaps can demonstrate exactly how unstable the banking sector is: http://consumerist.com/images/31/2008/08/holyshit.jpg

You're making the same misstake as almost everyone else when analyzing the situation: Everything was fine until it started to god bad for us. The sad reality is that it is the boom that is the unstable deployment and misallocation of resources and the bust is the recalculation process. The capital structure is dead as the western world (with few excepetions such as Germany) have scraped their manufacturing industry and placed all their eggs in the finance-basket. Debt based finance I might add.

If we had a sound banking system with a real currency to begin with you'd be correct, but we don't. The debt can't be paid of because the debt makes up the financial system's assets.

[MrJim]

Without breaking down all of that (it would be easier to have the board take a college-level macroenomics class like I did), there is still more to the story:

http://www.metlin.org/blog/wp-content/uploads/2009/09/debt-as-percent-gdp.png

You see, it's not really necessary to apply the national debt to the state of the economy because the only effect it really has on the general state of the economy is how monetary policy affects tax rates, in which the situation is far from disasterous historically:

http://www.americanthinker.com/blog/Tax%20Rates%20and%20Revenue.jpg

In terms of the general state of the U.S. economy, we are still stuck at 'times are tough, people don't spend' vs. 'times are good, party down'. My general take on the NBER statement that the recession is over is that it could have some positive effect on sentiment and spending, but we won't know for at least a month or two.

[MrJim]

Oh, and, my apologies for the size of that last chart. Someone else built it.

[Montanarchist]

You see, it's not really necessary to apply the national debt to the state of the economy because the only effect it really has on the general state of the economy is how monetary policy affects tax rates, in which the situation is far from disasterous historically.I'm not talking about national debt.
http://2.bp.blogspot.com/_AsUtSQoawNs/S-tim8fVTaI/AAAAAAAAAC0/iyVZztoqDXo/s1600/cumulative-debt.png
The national debt is a relatively small part of the problem.

[MrJim]

I don't quite get it.

'Rest of the world' - is that an average of developed/developing countries or competitive countries vs. U.S.?? We are worried about ________??

'Financial instrament' eg. the Fed?? Means...??

Household debt can be cancelled by bankruptcy, which means that $10,000 means jack -- most people don't file bankruptcy before at least $50,000, usually $80,000.

I need some clarification as to the significance of the figures.

[Limbo]

I never said that I thought everything was OK before the crash. Obviously it wasn't. Many Americans were living high on the hog with borrowed money and this was enabled by the lax lending standards that pushed housing demand and prices through the roof.

Some correction was necessary, but the recovery is being staggered by Obama's tried-and-failed-before policies. Not much to add beyond that.

[MrJim]

I never said that I thought everything was OK before the crash. Obviously it wasn't. Many Americans were living high on the hog with borrowed money and this was enabled by the lax lending standards that pushed housing demand and prices through the roof.

Some correction was necessary, but the recovery is being staggered by Obama's tried-and-failed-before policies. Not much to add beyond that.

I am over $80,000 in credit card + medical debt and waiting to file bankruptcy. My debt was only FUBAR after the credit card co's cut credit lines 2 years ago.

However, I am not representative of most Americans. Many of my neighbors and friends only started cutting their spending as a protective measure against the tough times that the media has given them as the norm. As the shock factor fades, most of the people I know have returned to normal in terms of spending unless emergency factors dictated otherwise. I believe that most people are just in anticipation of 'better times' which are socially ambigous.

[Montanarchist]

I never said that I thought everything was OK before the crash. Obviously it wasn't. Many Americans were living high on the hog with borrowed money and this was enabled by the lax lending standards that pushed housing demand and prices through the roof.

Some correction was necessary, but the recovery is being staggered by Obama's tried-and-failed-before policies. Not much to add beyond that.But your argument presupposes a stable ground somewhere in the financial system.

MJ: I'll get back to you later, I'm kinda busy atm.

[Agent Provocateur]

Interesting spin being put on the USA debt here....Personally I think this page about says it all :rolleyes:

http://www.usdebtclock.org/

[LedZap]

Debt as to % GDP , Australia is worse off than the USA . I think that about says it.

[peepers]

Interesting spin being put on the USA debt here....Personally I think this page about says it all :rolleyes:

http://www.usdebtclock.org/

I think it explains that we're bad off, but dang Japan needs to get their shit together.

[MrJim]

15 countries with debt above 100% of GDP - and none of them are on the endangered species list (as of the date of the bar graph). Clearly the debt clock, while concerning, is not the chief economic driver.

[akeohane]

get an education. (directed at no one in particular)

[Rec]

get an education. (directed at no one in particular)


Sure enough, the diploma gives one something to hold while in the unemployment line!! HAAAA (sarcasm)

[Agent Provocateur]

Debt as to % GDP , Australia is worse off than the USA . I think that about says it.

Yea...Says you got no idea what you talking about....

Australia's debt is more than manageble and is mostly caused due to the enormous ammount of cash being spent on infilstructure rather than on aiding other countries and wars...
Also worth noting that the talk is of us being in surplus by 2013....Can USA say the same????....I think not...

[LedZap]

Yea...Says you got no idea what you talking about....

Australia's debt is more than manageble and is mostly caused due to the enormous ammount of cash being spent on infilstructure rather than on aiding other countries and wars...
Also worth noting that the talk is of us being in surplus by 2013....Can USA say the same????....I think not...

I don't know what I'm talking about ? 10 % WORSE than good old USA.

http://www.metlin.org/blog/wp-content/uploads/2009/09/debt-as-percent-gdp.png

Don't start sobbing now , I'm just going off that graph.

[Agent Provocateur]

I don't know what I'm talking about ? 10 % WORSE than good old USA.

Don't start sobbing now , I'm just going off that graph.

Any twit can read numbers on the s c r e e n but understanding what the numbers are and the relevance of them is another story....

[LedZap]

Yes...Any twit can read numbers on the s c r e e n .So what part do YOU not understand ? And EVERYONE can SEE that Australia is worse off than the USA. Australia's debt is more than manageable , my ass.You guy's are in DEEP shit over there...

[MrJim]

Well actually, a country's debt doesn't just outright state how 'bad it is' as other members have been trying to argue - it is just one component of a country's problems, one that can predict tax hikes or cuts in government spending. Strictly in terms of debt-to-GDP, Australia is actually worse than the US by about ten percentage points, but you'll also notice countries like Britain and Ireland are up to their eyelids in debt and haven't collapsed or been taken over by creditor nations or anything like that.

The problem that the feds are dealing with here in the US is that new businesses and people on the payrolls have been in decline, and the government felt it had to ramp up spending to keep a bad situation from becoming worse. The results, however, have not been favorable to either increasing taxes or waiting for the job market to return to 'normal' at its own pace. At least institutions have been in the process of repaying their stimulus money (http://news.yahoo.com/s/ap/20100930/ap_on_bi_ge/us_aig_bailout) and job losses are on the mend, (http://news.yahoo.com/s/ap/20100930/ap_on_bi_go_ec_fi/us_economy) but the general state of the economy, including debt-to-GDP, is not going to improve any time soon.

[Montanarchist]

As I said, the problem is not debt in the public sector, the problem is debt in the finacial sector.

Basic monetary economics conatins this equation:

MV = PQ

Money times the velocity equals prices times the quantity. All money and it's circulation represents in equal numbers all the prices of all goods and services being traded in the economy. Seen from this perspective the analysis would have to show that there's no real problem with debt.

But the problem is, that in the modern economy, 'M' does not exist.

Why do I make this outrageous statement? Because credit can pay for a beer just as well as cash can. It really is that simple.

Of course, this isn't really problem. Credit is used as a promise of delivery instead of direct delivery, If pay for a beer with my credit card it simply means that I'll have to pay with real money some time in the future.

But this system collapses if I don't pay in the future. But the mechanisms of a free market takes care of this, an individual or an institution that cannot guarantee it's promises will lose business. No one will go to a bank that doesn't actually save your money, credit rating can be lowered.

Sadly though this isn't a free enterprise system by a long shot and the most crucial fact attesting to this is the monetary policy. Banks can display economic activity based entirely of debt creation and debt trading.

http://en.wikipedia.org/wiki/Fiscal_multiplier

An increase in GDP, in fact, ten percent of GDP growth since the 80s is this debt.

But debt is still a promise of future delivery, if the money isn't being delivered the channel is naturally shut down. It would cease naturally without causing any trouble in a free market order, but since the reppeal of Glass-Steagall the proto-public banking sector is not accountable for this. With debt representing more and more of GDP the higher the interest payments will be and less is going to be used for consumption And you end up in a situation like this:
http://4.bp.blogspot.com/_pCDyiFUv9XU/S6UGAnsGArI/AAAAAAAAI8s/1wHV7ehjQdo/s1600-h/Diminishing+Productivity+of+DEBT+(2).jpg

http://4.bp.blogspot.com/_pCDyiFUv9XU/S6UGAnsGArI/AAAAAAAAI8s/1wHV7ehjQdo/s1600-h/Diminishing+Productivity+of+DEBT+(2).jpg

Money isn't worth anything since the promised deliveries will never show up. The promised deliveries make up 350% of GDP by now and they were never expected to be repayed. Pulling forward demand has been driving the economy. An extremely unsustainable and involuntary shift in time-preference.

[MrJim]

Full agreement about the financial sector debt - but the fear of collapse based on such is still overblown, relative to world currency. Most of us never touch legal tender anymore; we receive a guarantee of payment from our employers bank - which they will borrow from another bank, and another, and another, back to the reserve banks. All of our wealth (outside of paid-in-full property) is an illusion built upon a myriad of numbers which are supposedly backed by the Federal Reserve, which is probably backed by nothing in reality. Just a number that is protected by the FDIC. In the extremely unlikely scenario that everyone with an American bank account walked into the bank and demanded legal tender for all of their checking/savings accounts, IRAs, CDs, 410k plans, bonds, stocks ........ then the banking system would be screwed - that is, until the government borrows another big chunk of money out of thin air and bails them out again. Other world governments are actually at greater risk of this happening, which explains away the lack of rapid dollar depreciation - and actually, no one would be happier about dollar depreciation than American businesses - just look at how the IMF is pressuring China to raise their currency's value by >40%.

Basically, the largest risk - and a long shot at that - is the federal government's - and if so, good riddance. Businesses just need a medium of exchange. We could trade marbles for televisions if they became the new medium - with tax-free income.