The Future of the United States of America

[Vigormortis]

The depression(yes we are in a depression) is affecting the rest of the world too and America has risen from depressions before. It all goes in cycle we have a depression, the government screws around, a figure like FDR or Ronald Reagan emerges and rallies the nation, we reassert ourselves and eventually recover. Many economists and political annalists say otherwise but they also thought that the Soviet Union would survive.

Um....what the hell are you talking about? We are NOT in a depression. Not even close. I don't expect many of you to really understand what a classifies as a depression in America as most of you are either too young, not American, or haven't read up on history AT ALL. Hell, the depression of '82 was about 3 times worse than our current recession, and it barely met the requirements to be considered a depression. This countries been in far, far worse economic situations than this throughout it's history. We pulled through them with flying colors. The same will happen now. As for China and Mexico, the future does not bode well.

 

[Sewblon]

The depression(yes we are in a depression) is affecting the rest of the world too and America has risen from depressions before. It all goes in cycle we have a depression, the government screws around, a figure like FDR or Ronald Reagan emerges and rallies the nation, we reassert ourselves and eventually recover. Many economists and political annalists say otherwise but they also thought that the Soviet Union would survive.

Um....what the hell are you talking about? We are NOT in a depression. Not even close. I don't expect many of you to really understand what a classifies as a depression in America as most of you are either too young, not American, or haven't read up on history AT ALL. Hell, the depression of '82 was about 3 times worse than our current recession, and it barely met the requirements to be considered a depression. This countries been in far, far worse economic situations than this throughout it's history. We pulled through them with flying colors. The same will happen now. As for China and Mexico, the future does not bode well.

An economic slowdown with a simultaneous credit crunch is a depression. You kind of made my point for me.

 

[walker.au]

the common opinion is the nation is stuffed, I am learning chinese & practicing my looting skills... back to fallout 3.

 

[McClaud]

Wow, this thread like disappeared off the main page yesterday, and already it's back?

GG whoever resurrected it. You just re-ignited a pointless argument among gamers who don't know anything about economics.

 

[Dele]

Wow, this thread like disappeared off the main page yesterday, and already it's back?

GG whoever resurrected it. You just re-ignited a pointless argument among gamers who don't know anything about economics.

/thread

 

[Rolling Thunder]

I'm fairly sure we're doomed.
Hell, most of the world is doomed.
People want to continue doing the same old Reaganesque bullshit of "Just Say No!" and "Reagnomics works!" without really considering what might REALLY help them out. It's like these people have some sort of death wish towards their countries or something.

Are you kidding? Reagonomics have been the best thing since sliced bread and death of Keynes.

1.I just lost all respect for you for that last crack. Pray consider yourself un-friended.

2. The irony of that statement is overwhelming. Reagenomics WAS the systematic usuage of deficet finance by the state to increase supply-side economics.



As for the rest......*picks up copy of Keynes' General Theory and throws it at the White House*.

And I want it back in September!

 

[Acid Armageddon]

I just find it entertaining how some analysts have said the economy will possibly get better by the end of 2009 while others say not until 2011 or 2012

 

[McClaud]

It's back. And I have no way of killing it with fire. Someone kill this thread with fire.

 

[Sane Man]

I'm fairly sure we're doomed.
Hell, most of the world is doomed.
People want to continue doing the same old Reaganesque bullshit of "Just Say No!" and "Reagnomics works!" without really considering what might REALLY help them out. It's like these people have some sort of death wish towards their countries or something.

Are you kidding? Reagonomics have been the best thing since sliced bread and death of Keynes.

Wow. Amidst all the garbage that is posted on this website with unabashed worshiping and treatment of Obama as an idol, it is good to see not all hope is lost.

This country only has a chance if Senate Republicans can try to curb as much spending as Obama is going to do. Spending is the absolute worst thing to do in this time, as Keynesians cannot grasp the concept of capital accumulation or what the difference between saving and hoarding is (as Keynesians see all saving as money not within circulation, fatal mistake).

Consumption spending only removes actual capital for artificial "capital"! Stop spending our money Obama!

 

[Acid Armageddon]

It's back. And I have no way of killing it with fire. Someone kill this thread with fire.

LOL Calm down there, man! That's why I made this in off topic forum! Its not about games so it's fine here!

 

[Dele]

2. The irony of that statement is overwhelming. Reagenomics WAS the systematic usuage of deficet finance by the state to increase supply-side economics.

As for the rest......*picks up copy of Keynes' General Theory and throws it at the White House*.
And I want it back in September!

Actually it was the the core of Reaganomics to cut government spending thus less decifit while boosting the private sector.

As for Keynes I am sure Obama has already read the part about wasting spending government money since there is a sentence in the page 129 of General Theory stating: "Pyramid building, earthquakes, even wars may serve to increase wealth."

I agree, Obama should spend 5 trillion to build himself a magnificent pyramid being the great statesman he is and after that he could gather all Keynesian economists to Wall Street, nuke New York and then rebuild it to stimulate the economy. In fact since Keynes also said that "Two pyramids are twice as good as one" Obama should build another 3 trillion pyramid for his wife.

 

[Rolling Thunder]

Dele, while I see you retain your excellent capability for hyperbole and an excellent grasp of persuasive reasoning, I fail to see how you can argue that the quote you have just presented is true.


WW2- digs America out of the Great Depression.

WW1- Digs America out of the long Depression.

1860-65 Civil War- Major stimulus to American economy, massive industrial expansion blah blah blah.

1789-1815- Franco/Republican/Napoleonic Wars (Britain vs France): Digs Great Britain out of Depression, though due to curtailment of Free Trade with europe it also results in higher costs of living (a factor seperate to the economic stimulus).



Government intervention in the economy works. Get the fuck over it. Yes, it dosen't work in the long run, but within short-term crisies such as a state of war, or a major economic collapse, or anything it works. Most of you seem to have the idea that the government is some sort of grotesquely bloated, horrendously corrupt system. It is not. I live in a nation where it is hideously corrupt and inefficent, and it still manages basic service delivery to millions of people who are otherwise destitute.

Funnily enough, with it's high levels of civil service spending and government/economy intervention, South Africa is not doing all that badly during the current climate.

I've seen the best and worst of the private and public sectors, and I will tell you this- the worst of the private sector is incomparably inefficent compared to the worst of the public.

 

[Sane Man]

Dele, while I see you retain your excellent capability for hyperbole and an excellent grasp of persuasive reasoning, I fail to see how you can argue that the quote you have just presented is true.


WW2- digs America out of the Great Depression.

WW1- Digs America out of the long Depression.

1860-65 Civil War- Major stimulus to American economy, massive industrial expansion blah blah blah.

1789-1815- Franco/Republican/Napoleonic Wars (Britain vs France): Digs Great Britain out of Depression, though due to curtailment of Free Trade with europe it also results in higher costs of living (a factor seperate to the economic stimulus).



Government intervention in the economy works. Get the fuck over it. Yes, it dosen't work in the long run, but within short-term crisies such as a state of war, or a major economic collapse, or anything it works. Most of you seem to have the idea that the government is some sort of grotesquely bloated, horrendously corrupt system. It is not. I live in a nation where it is hideously corrupt and inefficent, and it still manages basic service delivery to millions of people who are otherwise destitute.

Funnily enough, with it's high levels of civil service spending and government/economy intervention, South Africa is not doing all that badly during the current climate.

I've seen the best and worst of the private and public sectors, and I will tell you this- the worst of the private sector is incomparably inefficent compared to the worst of the public.

Just because you say it does not make it true. You gave absolutely no evidence nor did you even try to persuade anyone other than putting words in other's mouths and then saying they are wrong.

The only way recently the government has gotten involved is through spending. As a devout Keynesian I'm sure you believe (as most Keynesians do, but correct me if you do not believe in this) that creating any job, and any spent money in any part of the system is good, as products will need to be replaced and new workers will now have money to spend on other goods and services and so on and so on. On the surface that seems to be a safe assumption and anyone can follow that logic.

The problem is that the "stimulus" the government infuses the economy with is artificial capital. Now what is capital? Capital is the accumulated wealth that is owned by business enterprises or individuals and that is used for the purpose of earning profit or interest.

The problem with the artificial capital is a problem of scarcity. Mr. Johnson has not participated in the market because he has no job. However, the stimulus infuses Mr. Johnson with some artificial capital, capital that was created out of thin air by the government to get people spending. Mr. Johnson then goes and buys a brand new PlayStation 3. The store then orders a PlayStation 3 from their wholesaler, who orders another from their manufacturer. However, the PlayStation 3 is real capital, it took physical resources and components as well as actual labor to craft. Then it had to have been transported to said retailer. The artificial capital that was created out of thin air has purchased REAL capital, and therefore REAL capital is being diminished and made less of by this fake capital.

Eventually parties will come to a halt when they realize they have overextended because they believed they had more assets than they actually do, because the artificial capital has given them a stronger sense of how much their company is worth. They have either hired too many workers, made investments they would not have if they knew their actual worth, or have larger inventories than is sustainable. We will be in the same position we are now but worse because it will be compounded with the current situation we have arrived at (also thanks to government intervention with backed loans to Fannie Mae and Freddie Mac).

The government does not run of efficiency. It is actually the opposite. In the private sector your boss wants you to accomplish the most you can in the least amount of time. The public sector that is not the case. You have budgets that if you go under, you will receive less money in the following year.

And anyways, if you believe in Keynes who believes in spending, the government is bloated as they see any spending in any part of the economy as good, regardless of how efficient it is. So your last point I do not get how you arrived there at all.

The free market is the supreme punisher of inefficiency. If you make bad investments, you go under. However, that is in a laissez-faire capitalist market. In this mixed economy we have, companies are not punished for their inefficiencies because they can be bailed out, or subsidized. So your last point really strikes me as ignorant, or deceitful, I hope the former. The government can be as inefficient as it wants with our money, as it has proved time and time again. Companies and corporations do not have that luxury if left for the indiscriminate market to decide.

 

[Elim Garak]

Depends on how far in the future. Within 50 years I think it will be something like Dark Angel type thing. Show was only OK, but it had a decaying third-world US - a giant banana republic. Probably not that bad, but who knows - depends on the economy and stuff.

 

[Addendum_Forthcoming]

Yeah, but the US has been living on borrowed time since Korea o.o You can't keep on borrowing money from the World Bank just to pay off your military every year ... regardless of this stimulus package going through or not .. America would have spent a trillion dollars on it's armed forces in 2-3 years time anyways.

Good Healthcare and Education and hiking up interest rates are the only things that can save the US ... atm the US spends a larger percentage of it's GDP on medical care than Britain, yet it still cannot cater for everybody .. and education? Well your past government proposed that the schools with the lowest scores get funding cuts ... essentially writing off on entire legions of High School students.

The US has a .25% interest rate on loans ... which means the government's cashflow rates are LESS than that ....

There's no quick solution .. and I feel sorry for Obama because everybody on tv eems to have pinned their hopes on him ... but even if he were the saviest fiscal manager on the planet, the repairs needed to be done are so huge and time consuming it will seem as if he is doing nothing at all ... and I fear many Americans will turn on him in 2-3 years time.

I livei n Australia and consider myself very lucky that our economy escaped only being singed .. but not burnt. But that was because we had a half a trillion or so surplus two years ago and had interest rates at 5% allowing for aggressive cuts whilst still maintaining a huge official cashflow rate and managing a Triple-A credit rating.

There's no secret in evading a global recession .. have bucket loads of cash in surplus, have high interest rates to begin with, and make sure your banking sector doesn't hand out loans nobody could pay back ....

 

[Dele]

WW2- digs America out of the Great Depression.

WW1- Digs America out of the long Depression. (??? Long depression ended 20 years before WWI)

1860-65 Civil War- Major stimulus to American economy, massive industrial expansion blah blah blah.

1789-1815- Franco/Republican/Napoleonic Wars (Britain vs France): Digs Great Britain out of Depression, though due to curtailment of Free Trade with europe it also results in higher costs of living (a factor seperate to the economic stimulus).



Government intervention in the economy works. Get the fuck over it. Yes, it dosen't work in the long run, but within short-term crisies such as a state of war, or a major economic collapse, or anything it works. Most of you seem to have the idea that the government is some sort of grotesquely bloated, horrendously corrupt system. It is not. I live in a nation where it is hideously corrupt and inefficent (Exactly my thoughts :]), and it still manages basic service delivery to millions of people who are otherwise destitute.

Funnily enough, with it's high levels of civil service spending and government/economy intervention, South Africa is not doing all that badly during the current climate.

I've seen the best and worst of the private and public sectors, and I will tell you this- the worst of the private sector is incomparably inefficent compared to the worst of the public.

That is a common fallacy that we cant get rid of for some reason. Okay suppose you have an earthquake destroying the United States. Government then comes and rebuilds it (with debt) employing unemployed people. Has the wealth increased? No in fact it has decreased as now we are in a situation before the earthquake + we have massive amount of debt left.
Lets imagine that in an alternative universe this devastating earthquake does not happen and government decides to spend the same amount of money by donating everyone a state build Rolls-Royce employing the same amount of unemployed people. At this scenario we have the same amount of massive debt but we still have houses intact and everybody has a Rolls-Royce. Due to these hidden costs, it is only logical to conclude that Wars, Earthquakes and Pyramids only destroy wealth.
Suppose that Government would have decided to abolish itself and allowed people to take the same amount of debt. Since private consumption is inheritly more efficient than state consumption, people are left with their houses intact, a Rolls-Royce and a summer cottage in California, while employing at minimum the same amount of unemployed people, most likely more as there are less taxes to pay and more money to use with the same amount of debt. Would you go ahead and tell me which one of these scenarios creates the most wealth and which ones destroy it?

South Africa doing well due state intervention? I thought you guys just had massive blackouts because state electricity company underinvested in infrastructure and power capacity, something private companies never do. Take it from somebody living in a socialist wellfare state where assistant of assistants assistant (I am serious) is needed for state to function. Government intervention is 70% bad and 30% inefficient.

 

[Cowabungaa]

I'm fairly sure we're doomed.
Hell, most of the world is doomed.
People want to continue doing the same old Reaganesque bullshit of "Just Say No!" and "Reagnomics works!" without really considering what might REALLY help them out. It's like these people have some sort of death wish towards their countries or something.

Are you kidding? Reagonomics have been the best thing since sliced bread and death of Keynes.

Wow. Amidst all the garbage that is posted on this website with unabashed worshiping and treatment of Obama as an idol, it is good to see not all hope is lost.

This country only has a chance if Senate Republicans can try to curb as much spending as Obama is going to do. Spending is the absolute worst thing to do in this time, as Keynesians cannot grasp the concept of capital accumulation or what the difference between saving and hoarding is (as Keynesians see all saving as money not within circulation, fatal mistake).

Consumption spending only removes actual capital for artificial "capital"! Stop spending our money Obama!

I think it that it boils down to where you invest the money in. I don't think that spending is bad per definition, economics is way too messy to say such a thing. For example infrastructure, spending money to improve it only ends up being better for businesses. Better infrastructure is lower costs is a better export is more profit. Ofcourse I doubt that all the money Obama is going to spend will go to things like that, but I don't know the details. State intervention cán be a good thing, but if it's done poorly the result will be poor as well, like with South Africa's example. The question is then ofcourse: is Obama managing state intervention poorly, or properly?

 

[Addendum_Forthcoming]

South Africa doing well due state intervention? I thought you guys just had massive blackouts because state electricity company underinvested in infrastructure and power capacity, something private companies never do. Take it from somebody living in a socialist wellfare state where assistant of assistants assistant (I am serious) is needed for state to function. Government intervention is 70% bad and 30% inefficient.

Ha!! O.O Enron FTW ... improper/nonexistent government regulations = all that you said .. and worse.

What did Enron do to california once deregulation of government mandates? Raped her for all that she was worth!

Government control = democratic control of services ... corporate control of services = make as much money, as quickly as possible and tell people that elected governments are evil.

 

[Sane Man]

I'm fairly sure we're doomed.
Hell, most of the world is doomed.
People want to continue doing the same old Reaganesque bullshit of "Just Say No!" and "Reagnomics works!" without really considering what might REALLY help them out. It's like these people have some sort of death wish towards their countries or something.

Are you kidding? Reagonomics have been the best thing since sliced bread and death of Keynes.

Wow. Amidst all the garbage that is posted on this website with unabashed worshiping and treatment of Obama as an idol, it is good to see not all hope is lost.

This country only has a chance if Senate Republicans can try to curb as much spending as Obama is going to do. Spending is the absolute worst thing to do in this time, as Keynesians cannot grasp the concept of capital accumulation or what the difference between saving and hoarding is (as Keynesians see all saving as money not within circulation, fatal mistake).

Consumption spending only removes actual capital for artificial "capital"! Stop spending our money Obama!

I think it that it boils down to where you invest the money in. I don't think that spending is bad per definition, economics is way too messy to say such a thing. For example infrastructure, spending money to improve it only ends up being better for businesses. Better infrastructure is lower costs is a better export is more profit. Ofcourse I doubt that all the money Obama is going to spend will go to things like that, but I don't know the details. State intervention cán be a good thing, but if it's done poorly the result will be poor as well, like with South Africa's example. The question is then ofcourse: is Obama managing state intervention poorly, or properly?

This all depends on how you define "spending". I define spending as consumption of goods or services (demand). As I have already pointed out above of spending and its mistakes, I won't say it again.

The other is capital accumulation, or saving. Saving does not mean that you store it away under your mattress or hide it away in a piggy bank, although you can and it does not matter. Saving is the avoidance of consuming so you can then spend that on production (supply). When you have savings, you are in a position to purchase larger goods (can anyone here buy a house in one paycheck? No? Then you are accumulating capital, and that capital is not "lost" as Keynesians will tell you). Or with that accumulated capital you can pay workers, or lend money to others.

The government only spends money on consumption in these stimulus bills, which artificially creates new jobs and products. However those new products and employees in truth are just even more consumption upon the market as they were created through artificial capital. So as I have already stated eventually it will collapse again as the realization of a disparage between real capital and artificial capital becomes apparent as these individuals or corporations have overreached.

So, "spending in the right areas" as you said means nothing. If you are infusing artificial capital in those areas it is only hurting the economy by consuming real goods and services with fake capital. Capitalism is nothing more than moving capital from low-yield investments to high-yield investments. Government spending only distorts the market and interferes with the natural course of that market.

 

[Horticulture]

The problem is that the "stimulus" the government infuses the economy with is artificial capital. Now what is capital? Capital is the accumulated wealth that is owned by business enterprises or individuals and that is used for the purpose of earning profit or interest.

The problem with the artificial capital is a problem of scarcity. Mr. Johnson has not participated in the market because he has no job. However, the stimulus infuses Mr. Johnson with some artificial capital, capital that was created out of thin air by the government to get people spending. Mr. Johnson then goes and buys a brand new PlayStation 3. The store then orders a PlayStation 3 from their wholesaler, who orders another from their manufacturer. However, the PlayStation 3 is real capital, it took physical resources and components as well as actual labor to craft. Then it had to have been transported to said retailer. The artificial capital that was created out of thin air has purchased REAL capital, and therefore REAL capital is being diminished and made less of by this fake capital.

The 'fake capital' in this example is actually a reference to expansionary fiscal policy (that is to say, printing money and buying up bonds to increase the money supply). Your example of Mr. Johnson's purchase is accurate to a point, but fails to completely describes the effect of the sale. Because the problem of a recession is a reduction in demand leading to a backlog of unsold inventory, the short-term response of suppliers/firms is to reduce production (firing workers or reducing hours, typically) to reduce the buildup of capital in the face of lower demand. This, of course, reduces the domestic consumer base, as unemployed workers, especially when faced with tight credit, reduce current consumption in anticipation of lean times ahead. It's not hard to see how this leads to a cycle of further reductions in supply and demand.

Because Mr. Johnson, who we'll say was un- or underemployed, has bought himself a shiny new PS3 with which to whittle away his newly discovered free time, the retailer, as you observed, will order another to maintain stock levels. This is duly shipped from the supplier, who will then want to produce another PS3 to maintain their internal supply level. This, of course, means producing another (real and physical) PS3.

They have a problem, however. They don't have enough labor to produce more PS3s quickly enough to keep up with demand (from orders like Mr. Js), so they need to hire additional labor. The boss calls up Mr. Johnson to offer him additional hours. Accordingly, Mr. Johnson comes in the next day and in due course is paid. His expectations of lean times ahead diminished, as he is now fully employed, and so he decides to spring for another controller. This, of course requires the retailer to order another, the shipper to send it out, and the factory again sees a rise in demand. They raise production again, to keep up with demand, and now want Mr. Johnson's friend to work part-time as well. They also need new parts to repair the factory machine which had fallen into disrepair when it was offline, which requires a purchase from the distributor...

Can you see this spiraling on indefinitely, in the same way as the downward recessionary spiral(albeit in the opposite direction)? This is referred to as the multiplier effect, and it's part of the logic on which "fake" economic stimulus relies. The original stimulus may be fake, but the consequences are quite real.