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Zeno
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04 Jan 2011, 10:07 am

The last thread was unjustly censored and deleted after the predictions came true that the Western world faced social unrest as a result of America’s and Europe’s financial crisis. Following the riots in Greece, the moderators decided that topic was too hot to handle. It is time to begin anew.

The press is now cautiously optimistic about America’s economy (aren’t they always?!), but even if a recovery does get underway, the ingredients for widespread social dislocation in the United States are coming to fruition. A bad winter during which millions saw the final payments of their extended unemployment benefits and looming massive cuts in state budgets this spring that will take away what many regard as birthright entitlements is now likely to be followed by a summer of discontent. It is going to get bad before it gets ugly and you want to be prepared.



MasterJedi
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04 Jan 2011, 10:15 am

you live where?


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phil777
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04 Jan 2011, 10:33 am

Thank you for your coverage of events Zeno. It's interesting how you always come back during those times. You seem like quite the reporter, since i haven't seen you indulge in other social activities on our little forum (Although if i may, using the same title over and over again kind of gives you away). =/



ruveyn
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04 Jan 2011, 10:42 am

Zeno wrote:
The last thread was unjustly censored and deleted after the predictions came true that the Western world faced social unrest as a result of America’s and Europe’s financial crisis. Following the riots in Greece, the moderators decided that topic was too hot to handle. It is time to begin anew.

The press is now cautiously optimistic about America’s economy (aren’t they always?!), but even if a recovery does get underway, the ingredients for widespread social dislocation in the United States are coming to fruition. A bad winter during which millions saw the final payments of their extended unemployment benefits and looming massive cuts in state budgets this spring that will take away what many regard as birthright entitlements is now likely to be followed by a summer of discontent. It is going to get bad before it gets ugly and you want to be prepared.


Part of our Illness, and this has yet to be addressed, is the policy of The Forever War which goes back to Korea and our decades long confrontation with the Soviet Union and Red China. Until we find some way to end the Forever War two thirds of our budget will go to the military and not nearly enough to cover our infrastructure and social needs. The best thing we can do is to give the American people back 60 cents on every tax dollar. After all, it is their money that the government is taking.

Until then any recovery is likely to be feeble and un-robust. Every half tick downward in the unemployment figures will be celebrated as the coming of the milenium. It is rather sad.

ruveyn



Zeno
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04 Jan 2011, 6:25 pm

The American military is perhaps the only reason why the rest of the world is still willing to lend money to an obviously bankrupt America. Under present patterns of production and consumption, there is no way for the United States to ever make good on its obligations to foreign creditors and they know it. But no one wants to go to war with the world’s remaining superpower and so everyone pretends that everything is okay.

That said the starkest contrast between America and China is Chinese willingness to invest in premium infrastructure versus American neglect of its own vital ligaments and arteries to focus on social welfare. When the Chinese come to America, they are often shocked by how old and run down the facilities are. These are people who have gotten used to high speed maglev trains and spanking new superhighways that are as smooth as cream.

Chinese people expect to ride in new subways that are kept scrupulously clean but would practically revolt at the idea of paying out unemployment benefits. America on the other hand cannot accept that America is not perfect and that some Americans will just have to make do with less – perhaps even a lot less – and so insane transfer payments are initiated that takes from the working to give to the idle and forces the young to carry the burdens of the old. There are good reasons for China’s ascendance and America’s decline.

If working infrastructure is important to America’s competitiveness then it needs to be paid for. A country can only raise revenue from taxes or borrowings. And so to want the good life and not pay for it with higher taxes, or to go further and insist on tax cuts, only asks future tax payers to carry the mistakes of this generation. When the time for reckoning comes, I wonder if America’s military advantage will still be what it is today.



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05 Jan 2011, 2:08 am

Will there be riots in America? Oh, yeah and soon.
They are already rioting big time in Europe but the American main stream media tries to ignore this.

The Federal government is broke. The State governments are broke. The Cities are broke.

Tens of thousands of people a week are now running out of unemployment insurance.
Tent cities are springing up all around America because the people who have been evicted from their homes have nowhere to live.

The price of food is rapidly climbing but will they give poor people more food stamps to make up for it?

Yes indeed, there will be riots just when so many cities are laying off police because they can't afford to pay them.



Sand
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05 Jan 2011, 3:41 am

Zeno wrote:
The American military is perhaps the only reason why the rest of the world is still willing to lend money to an obviously bankrupt America. Under present patterns of production and consumption, there is no way for the United States to ever make good on its obligations to foreign creditors and they know it. But no one wants to go to war with the world’s remaining superpower and so everyone pretends that everything is okay.

That said the starkest contrast between America and China is Chinese willingness to invest in premium infrastructure versus American neglect of its own vital ligaments and arteries to focus on social welfare. When the Chinese come to America, they are often shocked by how old and run down the facilities are. These are people who have gotten used to high speed maglev trains and spanking new superhighways that are as smooth as cream.

Chinese people expect to ride in new subways that are kept scrupulously clean but would practically revolt at the idea of paying out unemployment benefits. America on the other hand cannot accept that America is not perfect and that some Americans will just have to make do with less – perhaps even a lot less – and so insane transfer payments are initiated that takes from the working to give to the idle and forces the young to carry the burdens of the old. There are good reasons for China’s ascendance and America’s decline.

If working infrastructure is important to America’s competitiveness then it needs to be paid for. A country can only raise revenue from taxes or borrowings. And so to want the good life and not pay for it with higher taxes, or to go further and insist on tax cuts, only asks future tax payers to carry the mistakes of this generation. When the time for reckoning comes, I wonder if America’s military advantage will still be what it is today.


Obviously people who cannot find work or are disabled or too old to work should be chopped up to make chow mein. China knows how to handle the idle.



Zeno
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05 Jan 2011, 6:56 am

They are not rioting big time in Europe yet, but it will come though it will be nothing compared to what will happen in America. I have been bitterly disappointed with some of the decisions that America has made in the past year or so. For me, the crossbeam that broke the camel’s back was Obama’s decision to allow the Bush tax cuts to ride for another two years. At this point, the only way to counter the China threat and break free from cheap Chinese imports is to get America’s fiscal house in order and that will mean higher taxes for every American. America’s political elites have instead chosen to embrace impending doom by widening the fiscal deficit. By opting for the pleasurably expedient, America basically ensures that China wins; and that is an outcome that few would welcome.

I ask the same question that Saddam Hussein asked when he was pulled out of the hole with his bushy beard and disheveled hair: Why? America!? Why?



Sand
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05 Jan 2011, 7:34 am

Zeno wrote:
They are not rioting big time in Europe yet, but it will come though it will be nothing compared to what will happen in America. I have been bitterly disappointed with some of the decisions that America has made in the past year or so. For me, the crossbeam that broke the camel’s back was Obama’s decision to allow the Bush tax cuts to ride for another two years. At this point, the only way to counter the China threat and break free from cheap Chinese imports is to get America’s fiscal house in order and that will mean higher taxes for every American. America’s political elites have instead chosen to embrace impending doom by widening the fiscal deficit. By opting for the pleasurably expedient, America basically ensures that China wins; and that is an outcome that few would welcome.

I ask the same question that Saddam Hussein asked when he was pulled out of the hole with his bushy beard and disheveled hair: Why? America!? Why?


The problem with the US economy is not the deficit. It is that that the gains in production efficiency and general industrial growth have not reached the workers whose wages have remained more or less flat for decades. For a while the workers (who are also the consumers) compensated by borrowing against their houses but finally that method collapsed and they are still losing their houses massively. Business will not invest in expansion if there is no market and the workers/consumers don't have the income to provide a market. Raising taxes and cutting back on services only makes the situation worse. The NY Times today indicated that legislation is now being designed to destroy what little labor organization remains and that means more wage cutting and more destruction of current wages and loss of more market. It is a death spiral.



ruveyn
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05 Jan 2011, 8:44 am

Sand wrote:
Zeno wrote:
They are not rioting big time in Europe yet, but it will come though it will be nothing compared to what will happen in America. I have been bitterly disappointed with some of the decisions that America has made in the past year or so. For me, the crossbeam that broke the camel’s back was Obama’s decision to allow the Bush tax cuts to ride for another two years. At this point, the only way to counter the China threat and break free from cheap Chinese imports is to get America’s fiscal house in order and that will mean higher taxes for every American. America’s political elites have instead chosen to embrace impending doom by widening the fiscal deficit. By opting for the pleasurably expedient, America basically ensures that China wins; and that is an outcome that few would welcome.

I ask the same question that Saddam Hussein asked when he was pulled out of the hole with his bushy beard and disheveled hair: Why? America!? Why?


The problem with the US economy is not the deficit. It is that that the gains in production efficiency and general industrial growth have not reached the workers whose wages have remained more or less flat for decades. For a while the workers (who are also the consumers) compensated by borrowing against their houses but finally that method collapsed and they are still losing their houses massively. Business will not invest in expansion if there is no market and the workers/consumers don't have the income to provide a market. Raising taxes and cutting back on services only makes the situation worse. The NY Times today indicated that legislation is now being designed to destroy what little labor organization remains and that means more wage cutting and more destruction of current wages and loss of more market. It is a death spiral.


That is the genetic problem of capitalism. Capitalist systems always produce more of whatever they produce than is needed. Why? Because profit is the primary motivation for production, not use or utility. So the question is how do we deal with the surplus? The basic premise of economics is that everything is scarce. That is only true of somethings, but not all. When we treat our surplus as though it were scarce then we run into policy problems and contradictions.

I am glad we overproduce. I would rather have the "problem" of distributing (or redistributing) plenty than ration out misery and want. Unfortunately we have not learned to deal with plenty and find a way to bet our overage to those who could use it without creating a moral hazard in so doing.

ruveyn



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06 Jan 2011, 1:25 am

They need to stop trying to justify the funneling of funds to arms manufacturers. I don't think any of the political parties will solve the issue., the Dems or Republicans, including the Libertarians. They might stop the war, but they're too ideological and will repeal minimum wage laws, public schools, sexually segregated bathrooms, etc. We have apolitical system completely dominated by big business interests.



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06 Jan 2011, 2:38 am

Yup, America, land of the robber barons. 'Tis the conclusion i've come to after a few years of observation. =/



Sand
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06 Jan 2011, 3:02 am

ruveyn wrote:
Sand wrote:
Zeno wrote:
They are not rioting big time in Europe yet, but it will come though it will be nothing compared to what will happen in America. I have been bitterly disappointed with some of the decisions that America has made in the past year or so. For me, the crossbeam that broke the camel’s back was Obama’s decision to allow the Bush tax cuts to ride for another two years. At this point, the only way to counter the China threat and break free from cheap Chinese imports is to get America’s fiscal house in order and that will mean higher taxes for every American. America’s political elites have instead chosen to embrace impending doom by widening the fiscal deficit. By opting for the pleasurably expedient, America basically ensures that China wins; and that is an outcome that few would welcome.

I ask the same question that Saddam Hussein asked when he was pulled out of the hole with his bushy beard and disheveled hair: Why? America!? Why?


The problem with the US economy is not the deficit. It is that that the gains in production efficiency and general industrial growth have not reached the workers whose wages have remained more or less flat for decades. For a while the workers (who are also the consumers) compensated by borrowing against their houses but finally that method collapsed and they are still losing their houses massively. Business will not invest in expansion if there is no market and the workers/consumers don't have the income to provide a market. Raising taxes and cutting back on services only makes the situation worse. The NY Times today indicated that legislation is now being designed to destroy what little labor organization remains and that means more wage cutting and more destruction of current wages and loss of more market. It is a death spiral.


That is the genetic problem of capitalism. Capitalist systems always produce more of whatever they produce than is needed. Why? Because profit is the primary motivation for production, not use or utility. So the question is how do we deal with the surplus? The basic premise of economics is that everything is scarce. That is only true of somethings, but not all. When we treat our surplus as though it were scarce then we run into policy problems and contradictions.

I am glad we overproduce. I would rather have the "problem" of distributing (or redistributing) plenty than ration out misery and want. Unfortunately we have not learned to deal with plenty and find a way to bet our overage to those who could use it without creating a moral hazard in so doing.

ruveyn


I wonder how many of those people now living in cars and tents and out of work appreciate all that useless glut that no one wants.



Zeno
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06 Jan 2011, 6:43 am

America’s does NOT overproduce. The problem is that it produces too little and consumes too much. By definition, this is what happens when you run a trade deficit. The basic mechanism that allows this imbalance to occur is out of control wage growth. Again, to get a net trade deficit, national income has to exceed national production. In other words, income, which tells Americans what they can spend, is grossly out of alignment with productivity.



Sand
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06 Jan 2011, 7:34 am

Zeno wrote:
America’s does NOT overproduce. The problem is that it produces too little and consumes too much. By definition, this is what happens when you run a trade deficit. The basic mechanism that allows this imbalance to occur is out of control wage growth. Again, to get a net trade deficit, national income has to exceed national production. In other words, income, which tells Americans what they can spend, is grossly out of alignment with productivity.


Since wages have remained flat for a decade (see http://www.marketwatch.com/story/men-lo ... 2010-09-01 ) you seem to not be aware of reality.