Actually, that’s a pretty good idea. What if we loaned out the southwestern part of the US to Mexico? Hell, half their original population is already there, I’m sure the drug cartels will be happy to have some of their mules back.
rule 14
I watched 60 Minutes last week, which had a story about the huge rise in nearly destitute families living in motels in Florida. One family had both parents lose their jobs, so a 17 year old boy dropped out of high school to help his parents pay bills.
That’s the kind of choice that our society and our government shouldnt be forced to make. You might think it is admirable that this kid is pitching in to help his family pay bills; I am aghast because the odds of him going back to finish high school (forget going to college) are low, and for the rest of his life he is likely to wear the albatross of “high school dropout” around his neck. His lifetime income is in serious jeopardy, and worse yet, he probably will never know the meaning of “albatross around one’s neck.”
We shouldn’t hold up American families as the paragons of fiscal virtue. American families in general don’t save enough, have too much credit card debt, are poor retirement planners, were suckered into exotic mortgages, and have a hard time understanding the value of education. I think there’s a good argument to be made that the US government is a far better steward of its responsibilities than the average American family, once you acknowledge that the US government doesn’t really have frivolous spending items like vacations or deluxe cable packages that can be eliminated with virtually no effect on anything else. When the government cuts, something always gets hurt. When a family cuts, there are multitudes of options to target needless spending before impacting im
-portent expenditures. (oops)
A lot of education problems have money thrown at them, which is ridiculous. At some point, you have to look at the kids. Stop assuming that 100% of the student body in any given high school actually wants to be there. a lot of the kids that don’t want to be there are kids from broken homes and families on welfare and come from Section 8 housing. Thanks to their parents, they have been shown how to get something from nothing, and drop out, so that they can get the money that they deserve from the government.
The 1980s just called. They want their conservative rhetoric back.
We have such a high debt load in part because the American people (including me) want a government that provides a high level of services but we don’t want to pay taxes for it. So politicians pander by promising tax cuts & equal or better services. So you have to factor that in too when using the family unit as a beacon of responsibility for the government. If families were responsible with political economics we wouldn’t have such a high debt. A politician running on tax hikes and fewer services won’t win.
That’s what has always confused me. People are shocked…SHOCKED…that a country of people who live so far beyond their means elect such fiscally irresponsible people to lead them!!!
I messed up that link. It should be:
Not disagreeing, but I’ve heard some people assert that the economy immediately before the crash was a bubble caused by reckless lending and borrowing. Perhaps the current economy is at its normal level, whatever that might mean. It would still be a ‘recession’, but without the implication that it’s temporary or unnatural.
This is maybe just playing with words, since the action to improve the economy might be the same either way, but we should not assume that the recession will just naturally end and everything will be back to ‘normal’. Consuming far more than is produced is not sustainable, however you describe the situation.
The recession was not caused by overconsumption, bad spending habits, etc. on the part of ordinary Americans. IT WAS AND IS STRICTLY A PRODUCT OF WALL STREET. We could have handled the bad loans made by the real estate and banking industries, it would have put a major ding in those industries but probably wouldn’t have done in the entire economy. But the economic harm done by the bad loans was increased by orders of magnitude by credit default swaps, a kind of derivative. The credit default swaps amplified the financial crisis into the trillions of dollars. That’s what crashed the economy.
Here’s a good explanation of the problem.
So all this bitching and moaning about what bad people “we” are is out of place. There’s a 'they" who caused the crisis, but we can’t do anything about it because THEY own our government, lock stock and barrel, both parties. It’s as simple as that.
Evil, that is overly simplistic. If American consumers had a healthy savings rate and were not over stretched, then the Great Reset would not have happened. Ditto if Glass Stegal had still been in place or if the Fed and regulators had done their job. Wall Street and the global finance community poured gasoline on the fire to be sure. But to claim it is all Wall Street is simply not accurate.
BTW, I was a derivatives guy in Tokyo and Hong Kong in the 1990’s.
How do you reconcile the draconion cuts in public education?
No, it’s not, China Guy. It was the financial community that pressured the politicians to repeal Glass Steagal. They didn’t come up with it on their own. And it was Glass-Steagal’s repeal that made it possible for the derivatives guys to use mortgage backed securities issued by banks to play their gambling game. You know that. I suppose I could quibble a bit and say it was ALMOST all Wall Street, but damn, it WAS Wall Street.
BTW, back in the 80s I was an editor for a banking publication.
You can call it 1980’s conservative rhetoric all you want, but believe me when I say, that a lot of these kids I talked about in my last reply, would much rather listen to hip-hop and sit on their asses playing CoD all day. A few of them also like to think they’re “gangster and black” and walk around with their pants hanging down around their ankles, while knocking up as many girls as they can find. They look at a biology textbook and say, “What the fuck do I need this for?”. They go to chemistry class so they can find out what they need to make meth, and on and on it goes. Some kids just don’t give a fuck.
Then again, so do a lot of prominent Republican politicians.
That could be, which would be pretty shitty if 10% U3 and trillion dollar deficits are what we would normally be at if we didn’t have a lending bubble propping up the economy.
However at the same time the budgets were pretty balanced in the 1990s, and many of the deregulations that led to this bubble happened in the late 90 and the aughts. So can an economy go from relative stability to severely insolvent in just 10 years? That would require a large number of new spending programs, which I don’t think we have.
The CBO predicts the deficit will drop back to 1-4% of GDP around 2012. But it is 2011 and I haven’t seen anything that would imply that. Unemployment is stll sky high and nothing is changing on that front.
http://forum.belmont.edu/business/CBO%20Deficit%20Chart%20(2).jpg