Change in the Economy

Discussion in 'Off-Topic Chat' started by Texas1911, Mar 13, 2008.

  1. Texas1911

    Texas1911 TGT Addict

    May 29, 2017
    Austin, TX
    What's your take on the economy?

    I'm 23 years old, so naturally I know everything :p Pardon if I am spouting a bunch of hogwash, and I would not base any investment advice off of this. It's simply the radio station my foil hat happens to be tuned into at the moment.

    I believe we are simply seeing a corrective measure from the past 5 years of hard growth in many sectors, especially those constructed on shoddy foundations such as some of the lending practices in the financial industry.

    With the devaluation of the dollar we are seeing inflation in our current necessities such as oil, natural gas, and any other import based products. However, this only opens the game to larger amounts of domestic production, something we have been lacking since the 1970s, and an increase in US based jobs. The problem is, the EU, and other nations have setup horrific tariffs and other taxation to prevent the big US blue chips from squeezing out their own companies. Hints of this come as the EU's latest decision to slap Microsoft in the danglies over it's practices in Europe. Quite simply the US foreign policy and it's past commercial gains have managed to leave some countries bitter, and I would argue, jealous.

    US government spending is at an all time high. It is ridiculous to think this all came from so-called conservatives. I realize that we have had a number of major events in our country since the Republicans took over that have lead to expensive endeavors, namely Katrina, and 9-11, but where is the rest of our money going? How much longer will Congress allow massive amounts of pork to be passed along the bandwagon and sent out on a golden check of air? We waste so much of our tax income on the national debt that could be going to repairing aging problems in this country. If the US wants to revalue the dollar it should look into the supporting structure behind it! We got rid of the Gold and Silver standard that was backing the US Dollar, and it has declined ever since. Had we of stuck to the program I believe we would still have a strong currency, especially given the value of Gold (which has adjusted mainly as a result of USD currency fears). Dollar in the gutter, commodities are high... tis the mark of inflation and inflation is the forbearer of recession. It's not the days of Jimmy Carter levels of inflation, but we don't have Ronald Reagan coming in to the White House either. I believe we have the next Jimmy Carter coming in. :(

    Rocky describes not only a mountain range but our stock exchange for the past 4 months. This instability in the market is another reason why foreign investment isn't coming in. With the US devaluing every day it's hard to keep the value in our product.

    Reliance upon China has been a bad turn of events for us. I say this for a few reasons. The first is that the Chinese government requires that all equipment that enters it's factories is to be left in China. This means they are receiving our manufacturing technologies for free, as well as our equipment. It becomes state property. This property is then used to replicate US goods, as seen with their car manufacturers blatantly ripping off models of GM, BMW, and Japanese cars. The second is that we are funneling large amounts of money into China and allowing them to become a global economic power with very little self investment. We are building our future competition, for the sake of increasing the profit margin of US goods. This is not a solid long term solution, and it will begin to bite us hard in the next decade. The last is the increase in foreign commodity rarity. Everyone can name something that has increased in price in the last few years. The primary one would be oil, and many others would name off copper, steel, and other metals. Well this is simply because of the increase in global demand for these goods by China and other emerging markets. Someone commented to me that oil would go down if the US lowered demand, and I simply told him that any shortage in US demand would be picked up by the Chinese. This is evident in their current energy crisis, and what's sad is that the country hasn't even really began to modernize in most of it's population. Demand will sky rocket in the coming years, and OPEC will just shift their attention from the Americans to the Chinese.

    So what does the US need to do in my opinion?

    The first thing we need to do is check our spending at the Government level. It's hard to sail around the world if you have to stop every 5 minutes to scoop the water out of the boat.

    Next we need to reduce the corporate tax rate. It is RIDICULOUSLY high in relation to the global market. I am a large supporter of the Fair Tax plan, which would absolve this tax. It would be the single, largest, over-night success we could provide for our economy.

    Secondly we need to strengthen our US born manufacturing. Use tariffs on foreign goods that compete against American companies. Offer tax incentives for the purchase of American designed, American built, and American sourced goods.

    Lastly we need to secure our future. We should abolish the Teachers union and force teachers to be responsible for their students. On the same note we should empower teachers to have an actual voice to improve their effectiveness. Students that achieve and excel in school should be given a grant reward on a yearly basis towards college education. It should be rewarded based upon exceptional strength in science or mathematics. Schools should be broken up into two types to reflect the European method. We should have an accelerated school for higher level students, and a normal / vocational school for other students. This ensures we are not holding back those that wish to achieve. Our current system absolutely fails those that want to achieve, and passes too many idiots into the workforce. We should remove upper level English and replace it with a series of Common Sense classes such as job skills, life skills, and other classes. Kids should be required to pass these classes or they are not to graduate. We should stop the idiocy of passing children along that don't have the skills, if they don't, they repeat it until they do. That simple. Our colleges should have more government and commercial grants to develop future technologies for our industry. Sure it's great you can create vacuums of nothingness using a laser shot off into some gas, but does that solve our current problems? No.

    It's time for Responsibility in the Economy, and frankly we aren't going to get it.
     


  2. mac79912

    mac79912 Well-Known

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    Flush!down the toilet we go.Pretty weird that the IRS wants to send more money to us in May.That just tells me that we are expecting 4 dollar gas and this is a payoff so we do not riot nationwide.;)
     
  3. idleprocess

    idleprocess Active Member

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    DFW.com
    Hey, I've got a swivel armchair here too!

    The American economy seems to be busy cannibalizing itself and no one seems to have noticed. It's not just manufacturing that's going overseas. With the obvious exception of the defense industry, all job categories - including the previously-untouchable "knowledge workers" such as engineers and programmers - are all at risk of offshoring.

    I agree that drastic changes need to be made to our educational system. It is absurd that a high school graduate is qualified to do little more than flip burgers. What most employers are looking for is overall competency, problem-solving skills, and a work ethic. While you can certainly enhance those in college, a bachelors' degree is not essential for the average career. It's tragic that our primary educational system has gotten so dumbed down to the point that those exiting it must immediately spend several more years in secondary education in order to be assumed competent enough to hold down a job. What a drag on the economy.

    I find it amusing that the deep pockets that made such tragically bad calls on the sub-prime mortgage racket are getting generous bailouts from the US taxpayer. While this benefits some homeowners, I feel that most of those chumps that bought way more house than they could afford should also be taking it in the shorts. The real estate market needs a severe correction anyway. There should not be $1.4 million tract homes being built in Huntington Beach, CA being sold to middle-class buyers. Real estate inflation has far outstripped actual inflation in most places and made the "mortgage crisis" worse as homeowners borrowed against the (largely-imaginary) equity in their home to buy additional homes or as a line of cheap credit. California was on the verge of pricing itself out of existence anyway - the working class could scarcely afford to live close enough to work and their wage inflation wasn't keeping pace with real estate.

    I would like to see the tax code done away with. At present, it creates all sorts of interesting distortions in the marketplace and encourages too many otherwise-bright people to get into the accounting and tax attorney businesses - which is not overly useful to the economy at large. Imagine if corporate America started making business decisions based on ... profit and loss ... instead of tax liability or subsidy like they do now. A simple formula based on actual income and some straightforward rules on profit and loss (unlike some of the rather dishonest standards under GAP these days) would help get corporate America back to producing and innovating.
     
  4. JKTex

    JKTex Well-Known

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    Mar 11, 2008
    DFW, North Texas
    I'm tired of thinking and talking about it, especially after doing an update this morning and seeing this weeks losses. Been through enough that I know, in the long run it still works itself out.

    However, my one comment is that I think a huge part of our economy is a bubble created to bolster the same economy. Panic moving of money from one place to another, and there are plenty of hands in that movement benefiting on the chaos. If there were a truly catastrophic event, the bubble will pop. Right now, enough people are invested in the "bubble" that it's hard to pop.

    We need a real correction, then let the economy be a real economy and maintain itself.

    This little "stimulus package" that will put a little extra in our hands, is nothing more than throwing money into the hands of who "they" think will run out and spend it. The majority of people without real buying power don't have debt to pay down, won't save it, so they'll run out and buy stuff. Why do you think the people they consider "rich" won't get any/much? Because the money will go into the pile with the rest, or pay down debt. All the money that does get spent quickly is the "boost" or what they hope will "stimulate" the economy. How long will that do anything for the country? Not long, but long enough to get through an election. The the next administration has a little hangover to deal with.

    Er, sumthin like dat. :banger:
     
  5. zembonez

    zembonez TGT Addict

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    Republic of Texas
    Well… many of your opinions are quite correct.

    I think to some degree what you are seeing in the current economy's direction is a correction to some of the greedy practices of the last 5 years. Our own financial institutions have been a driving force in the push over the cliff. Artificial housing appreciation has been another big contributor. It was bound to happen. Pour a bucket of water in the boat every few minutes and sooner or later it will either sink or somebody will start bailing. We are in the process of bailing now.

    The fat, lazy, and uneducated American population won’t get off of their respective asses and do anything about any of this until it is too late. Education is provided in every school system in this country (albeit not always the greatest education) but most simply “pass” on the opportunity to take advantage of it. Teacher’s unions dilute the process further by making no teacher responsible for anything and the problem worsens with each new batch of students.

    As far as imposing tariffs on imported goods goes, I think it is a good idea but not without some downsides. If you increase the cost of imported goods, locally produced goods will follow suit and we will all be paying more for our products. This might level out over time but the immediate market reaction would be inflationary. Result? Any government intervention will just make things worse.

    Price alone is not the way to compete.

    Americans buy boatloads of cheap Chinese made junk that doesn’t last based on price alone. Quantity over quality is the basic rule of survival for this vast sea of idiots. High quality American made goods that cost 25% - 50% more, but last 3 times as long make no sense to them. HELLO? Is anybody there? Seems like that education might have come in handy, eh?

    I say “always buy the best quality you can afford” You’ll never be disappointed in the long run.

    Taxes in this country are so complex and interwoven with every other part of life that it simply is not possible to stop and take a totally new direction. To do so would cause total chaos and instability in the economy not unlike the stock market crash did back in '29. The best we can hope for now is incremental change from Washington (yeah, I know... don't laugh). Sadly those changes have not been going in the right direction and show no signs of reversing.

    Unless we get off of our collective asses, this is just going to continue.

    Unions continue to be a cancer that is destroying American productivity. They were great in their original configuration but have evolved into non-productive big business terrorist groups that are totally self serving and willing to see us go down in flames rather than adapt. I won’t beat this poor old dead horse any more on that subject.

    START BAILING!

    Not that I have an opinion…
     
  6. brainiac

    brainiac Member

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    Mar 7, 2008
    Parker County
    Yes, and the Federal Reserve is doing it to us. Every time they drop the interest rate, the dollar goes down even more (because so many foreigners hold our debt and it kills their rate of return on those notes). And oil is still traded in dollars, so the price of oil skyrockets because the devalued dollar buys less and less of it. It boggles the mind that anyone in Washington or elsewhere could think that holding interest rates artificially low is a good idea right now.

    To certain extent this is true (and very good for my own business) but there is not and never will be enough domestic production to meet our needs. As a nation we are addicted to cheap oil and lots of it. The reserve targets to meet our national consumption just do not exist any more in this country.


    This is exactly correct in my opinion.

    I agree with most of what you propose, but on the top of my list would be to stop lowering the prime interest rate just so people can buy more stuff that they can't afford on credit. Debt of all kinds is killing us already and lower interest rates just weaken the Dollar further and causes hideous inflation in oil prices, besides encouraging more debt.
     
  7. drj3828

    drj3828 Active Member

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    Grimes County, TX
    I think one thing that needs to happen is that people just need to live with in there means. Just go back to basics the American way and quit trying to out do the neighbors with new trucks and cars the fancy boat or motorcycle. What I am trying to say is that I have friends that drive trucks that cost more than my house and seven acres. My house is a wood frame two bedroom one bath, it is just right for myself and my wife and are 11 year old daughter. It keeps us warm in the winter and cool during the summer. keeps the rain off us and it provides every thing that we could need.
    My vehicles are over 10 years old but they still go down the road and they all work like the are suppose too! Plus they are all paid for no notes!
    We raise chickens and pigs plus there is a local slaughter house that we are able to buy beef at.
    I don't have a job that pays 100,000 ayear but we make it and still have some to save. My wife also works and make a good living plus both of are jobs have insurance and retirement.
    We just need too good back to the way it was in the 60's and 70's and not try to keep up with the Jone's. This is just my opinion!
     
  8. zembonez

    zembonez TGT Addict

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    Republic of Texas
    I'm with DRJ for the most part here. I agree that we are living WAY outside of our ability to pay up. The average household has over $7500 in credit card debt. Many have mush mush more.

    That's insane!!!

    About 5 years or so ago I cut up my credit cards and never looked back. It sure is a better way to live. My debit card requires me to have the money to buy whatever I want to buy. When I want something, I pay for it up front. If I can't afford it, I probably don't really NEED it anyway.

    Pretty cool if you ask me.
     

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