The US Economy

[chris the cynic]

I challenge Jonas to Thunderdome!!! Two go in! One comes out! (My state was actually where Mad Max was shot and also where Mel Gibson comes from sorry about that btw! )

Two men enter, one man leaves.

Also I think you guys are on to something, EER and Chris. You can understand why the recession is going to happen. This is having a negative effect on growth since the banks keep loosing money all the time.

Confidance is actually more important than anything else. The banks could probably turn around these problems if they had time, but because people lack confidance the banks don't have time.* That's why there's a chance the 700 billion dollar plan will break even, or possibly even turn a profit, we can take the time that the banks can't.

The entire economy depends on the idea that everyone won't want their money at once. When people are afraid their money might go away they all want it at once.

*I don't think they'd come out on top, but there's a difference between doing badly and failing. They can recover from the first, the second not so much.

[Mr_Cyberpunk]

Though the United Kingdom and its empire emerged victorious from World War II, the effects of the conflict were profound, both at home and abroad. Much of Europe, a continent that had dominated the world for four hundred years, was now literally in ruins, and host to the armies of the United States and the Soviet Union, to whom the balance of global power had now shifted.[49] Britain itself was left virtually bankrupt, with insolvency only averted in 1946 after the negotiation of a $3.5 billion loan from the United States,[50] the last installment of which was repaid in 2006.[51]

@ Jonas. Source http://en.wikipedia.org/wiki/British_Empire

Not so much scammed but its funny when you think the reverse could happen.

[Jonas]

Ah, yeah I guess. It depends on your point of view, I suppose. If you see it one way, it was just a really great thing the US did there, but from another perspective, it was economic imperialism.

[Jetsetlemming]

I challenge Jonas to Thunderdome!!! Two go in! One comes out! (My state was actually where Mad Max was shot and also where Mel Gibson comes from sorry about that btw! )

Apology rejected. Jerk. You can pass that on to the rest of your state.

Also don't dodge my question, what on Earth do you mean the US scammed the UK after WW2? From what I know they basically poured a huge amount of cash into the UK economy to get things up and running again (whether or not this was part of some devious plan to gain an economic imperialist foothold in Europe, we'll leave for another discussion).

UK, and most of the rest of Europe including West Germany, and Japan (and I think some other places in Asia like Singapore? My history's rusty ). It was a worthwhile investment, IMO. Trading with a prosperous continent is better than a mostly dead one, and the Marshall Plan also was intended to halt the spread of communism by buffering it on either side with prosperous capitalist nations.

[Jonas]

Yes, heh, that evil communist virus

[Solid_Choke]

Actually banks with security affiliates are the ones that are still sound for the most part. In other words, Glass Steagall would have made this meltdown even worse than it is.

Here: http://www.marginalrevolution.com/margi ... agall.html is a blog post that links to some of the academic writing about why this is the case.

At least nobody else has anywhere near the amount of debt the US of A has established. Way to run a whole country on massive, massive credit

It's interesting that you should say that because Japan and many other European countries are in worse debt than the U.S. is. If you simply look at absolute numbers the U.S. is probably the biggest but looking at absolute numbers doesn't tell you how hard it is to pay back. For instance, if I owed $20,000 on my credit card I would be screwed, but if Bill Gates owed $20,000 on his he wouldn't have any trouble at all. It makes more sense to look at the ratio of debt-to-GDP. This basically tells you how much you owe in comparison to how much you make.

Wikipedia has a list of countries by Debt-to-GDP that can be found here:
http://en.wikipedia.org/wiki/List_of_co ... ublic_debt

The U.S. is number 27th on the list. Japan, Italy, Singapore, Greece, Belgium, Norway, Canada, France, and Germany are all in worse shape debt-wise than the United States.

[Jonas]

If you simply look at absolute numbers the U.S. is probably the biggest but looking at absolute numbers doesn't tell you how hard it is to pay back.

Indeed. That's why I said amount. You notice that? It's right up there: "amount". That's an absolute.

It was also hyperbole. I didn't actually look it up. Wouldn't be surprised if it were accurate, but couldn't say for sure. I mean Christ, the USA is alledgedly $9.7 trillion in debt. Even considering that it's "only" 60% of the US GDA, that's still a fucking mad amount of money.

[chris the cynic]

It's worse than you know. If everyone called in what we had promised to pay you'd see a debt closer to 50 trillion. Fortunately a lot of that is in insurance type things, so it is unlikely it will all be called in at once and hopefully most of it will never be called in at all.

[Jonas]

Seeing how the whole world is currently tied up on the American economy, it's pretty unlikely to be called in indeed.

[fox]

Say hello to the apocalypse...

[Jonas]

Rubbish.

[Mr_Cyberpunk]

More like some anarchy breaking out in a few states where everyone looses their jobs.

[chris the cynic]

I say we all gather at Megiddo with an array of interesting weapons. Especially if someone else can pay for the trip, I'm broke.

[Smike]

Kids...

Times like these remind me of the mid 90s, when everyone was a movie critic. Now everyone's an armchair politician and economist, while no one actually knows a damned thing about any of the subjects. The best is reading a "discussion" on NYT or WPost for politics or MarketWatch for the economy. Everyone is so interested in writing their views that they forget to listen, and nothing is ever learned. Reading a comment on MarketWatch is like listening to the thoughts of a Polar Bear during a tornado - it's obvious, dramatic, and downright confusing.

"RRRAAAWWRR!!! WIND!!! FAST BLOWING!!!"

And these guys are supposed to be the elite, these are the guys who drop 200k on stocks and socks and commodities and lean hogs three times a week, and even THEY don't have any clue about what's happening with the US economy. When the boards of the finance firms don't know, when the traders don't know, and when the entire congress and executive branch of government doesn't know, it's unlikely some shower-ring-selling, 30-year-old South Carolina bastard knows either.

God damn it.

Noam Chomsky. Noam Chomsky might know. And if he doesn't know, you don't know. So there. These antlers rock.

http://www.chomsky.info/articles/20080919.htm

[Mr_Cyberpunk]

Chomsky is just pointing out though what we all know has been the problem all along. Capitalists only care about themselves and never on the economy as a whole. Doesn't take an academic or ELITE AUTHORITY to figure that one out.