The Debt Crisis . . . Whose fault? And how do we fix it? (PT, PF)

[indianasmith]

Actually, America's "Open Door" policy helped keep China from being carved up into multiple colonies the way Africa was.  That being said, I doubt China would ever have fragmented the way Africa did as a result of imperialism - Chinese culture was too homogenous, and the Chinese have a wonderful gift for simply assimilating all foreign influences that invade them.  But, America and China have a past that isn't entirely negative . . . except for that mess in Korea.  The world would be a better place if China had stayed out of that one!

[dean]

No country is perfect.  But American democracy has its roots in England.  Every race and nationality on this planet has been oppressed, and has been the oppressor, at one time or another in their history.

But here's a question:  Would India be a democracy at all if they had NOT been a British colony for 200 years?

Well its all completely off topic, so doesn't really help this thread.  That and England's democracy has its roots in Ancient Greece and so on and so forth.  Quite alot of that democracy through history went hand in hand with violent take overs of other's territories.  But I do digress.

What I find more fascinating is the subject of India, which whilst it was effectively a British Colony it was essentially under control of the East India Trading Company for a long time [before the whole mutiny and the EITC getting assimilated into government.  Kind of like if Mcdonalds decided to run a country.     No surprises there that it went downhill for the Brits.

Now to link that back to topic, India is one of the fastest growing economies in the world.  Again, I'm no economist but considering that India is a fairly newly industrialised country, I find it interesting to draw parralells to the US market. 

Correct me if I'm wrong but I get the impression that a large part of America's once proud manufacturing secotors are more and more being exported out to countries like China, Mexico and India.  We design it you build it type of deal.  That or just shutting up shop [the trouble with GM for example]

Now these economies are by no means going gangbusters, but in the case of India and China at least [I don't know enough about Mexico] they are certainly growing at a large rate, slightly in part due to their increased manufacturing sector, yet in the US it seems like your manufacturing sector is under increasing threat from offshore, and is in decline.

Like I said, I'm no economist and have no idea as to the impact of any of this, but just an interesting thought I had in drawing parralells between different countries.

[RCMerchant]

A ancient Chinese saying-
"Tall trees beg to be cut down".
We are the tall tree.
We have interf**ked our own econemy for sooo long-it will come to roost. It's f**ked because we feel like we should be an international policeman.
Notice how  we have taken on the attributes of the old British Empire?
This isnt Capitalism-it's Imperialism.
We are hated. Rightly so. This aint 1942. ITS NOW.
We need to back off.

[bob]

A ancient Chinese saying-
"Tall trees beg to be cut down".
We are the tall tree.
We have interf**ked our own econemy for sooo long-it will come to roost. It's f**ked because we feel like we should be an international policeman.
Notice how  we have taken on the attributes of the old British Empire?
This isnt Capitalism-it's Imperialism.
We are hated. Rightly so. This aint 1942. ITS NOW.
We need to back off.

I'll drink to that.

 

[indianasmith]

The military, overall, and foreign aid combined account for about 20% of Federal spending.  Whether you agree or disagree with our foreign policy, we could cut ALL of it and entitlements would still bankrupt us - just a little less slowly.

Entitlement spending is 70% of our government's spending.  And it is politically almost impossible to EVER cut entitlement spending, while politicians can keep on get elected every time by promising to INCREASE entitlements, either by raising the benefits or extending them to more people.  And, if we did ever cut that 20% significantly, do you think politicians would use that money to pay down our debt?  Doubtful.  They would promise more stuff to more voters so they could go on getting re-elected.

And before we blame big business for outsourcing, consider this: America has the second highest corporate tax rate in the WORLD.  And our labor force is among the world's most expensive.  The whole objective of business is to make a product and then sell it for profit.  Where would you locate your factory?  America, or China?  If profit is your guide, America is not a very good place to manufacture your stuff.

Not trying to flame anyone here, but our alleged imperialism is NOT the root of the problem.

[Flick James]

A ancient Chinese saying-
"Tall trees beg to be cut down".
We are the tall tree.
We have interf**ked our own econemy for sooo long-it will come to roost. It's f**ked because we feel like we should be an international policeman.
Notice how  we have taken on the attributes of the old British Empire?
This isnt Capitalism-it's Imperialism.
We are hated. Rightly so. This aint 1942. ITS NOW.
We need to back off.

It's a valid point, RC. I love America, but the damned flag-wavers who keep chanting "We're number one," while waving their flag made in Indonesia, refuse to acknowledge that we have little to offer but military muscle anymore. We are far more dependent than those same flag-wavers would like to believe. Being the military muscle of the UN is essentially our job in the world now.

[Flick James]

The military, overall, and foreign aid combined account for about 20% of Federal spending.  Whether you agree or disagree with our foreign policy, we could cut ALL of it and entitlements would still bankrupt us - just a little less slowly.

Entitlement spending is 70% of our government's spending.  And it is politically almost impossible to EVER cut entitlement spending, while politicians can keep on get elected every time by promising to INCREASE entitlements, either by raising the benefits or extending them to more people.  And, if we did ever cut that 20% significantly, do you think politicians would use that money to pay down our debt?  Doubtful.  They would promise more stuff to more voters so they could go on getting re-elected.

And before we blame big business for outsourcing, consider this: America has the second highest corporate tax rate in the WORLD.  And our labor force is among the world's most expensive.  The whole objective of business is to make a product and then sell it for profit.  Where would you locate your factory?  America, or China?  If profit is your guide, America is not a very good place to manufacture your stuff.

Not trying to flame anyone here, but our alleged imperialism is NOT the root of the problem.

I don't disagree with you on entitlement spending, Indy. However, assuming that your numbers are right, 20% is a pretty big chunk. That's a lot of dough. I'm with Ron Paul, it ALL needs to be scaled back, and in a big f**king way.

[ulthar]

We are far more dependent than those same flag-wavers would like to believe. Being the military muscle of the UN is essentially our job in the world now.

And I think it is fair to ask the question, "how long will THAT last?"  I mean, our military is becoming more and more technology based and more and more of that technology capability is moving overseas.

The first half of the 20th century saw our buildup of American manufacturing and it could be argued that that was strategic.  WW II solidified how weakness in that regard could be catastrophic, and the post war era was essentially about keeping all of that in place.  As we outsource manufacturing capability, we weaken the military.

It's only a matter of time, I think, before our job at the UN's strong arm will be to exercise our might against a nation that manufactures the technology that drives our military.  Um, well, either they were REALLY smart about it and built in their own failsafes and back doors or at least they dry up our supplies.

We are NOTHING without a strong manufacturing and industrial base.  The War of Northern Aggression (ha, Indy!), the Germans in WW II and a whole host of other historical examples should be screaming that at us.

Ross Perot showed before the 1992 Presidential Election that Government jobs, even back then, exceeded manufacturing jobs.  This is an example of an economic system that cannot sustain itself and MUST resort to huge deficits and ever growing debt.  The engine of economic growth is profit; without industry making stuff to buy or sell, where is the profit?

Trade deficits are part and parcel to this as well. Our profits are going overseas and fueling THEIR economic growth.  I rant about this all the time on the local level..."buy LOCAL, it keeps the money HERE; we all benefit in the long run."

Shopping at Walmart or any other 'chain' establishment, unless their corporate headquarters happen to be in town, siphons money out of the local economy.  My order of priority spending:  local, state, country, world.  I want to keep as much of the money in the town or county in which I live as I can.  That way, MY community prospers.

But, too many of my acquaintances cannot see past saving 30 cents or whatever, so they run to Walmart.

And it is the same for our country.  Buying American goods in general helps the American economy.  That said, though, I have serious doubts whether I will buy another American made automobile.  Also entering into the equation are thoughts of quality, longevity and other considerations of real (vs perceived) "value" that have nothing to do with price tag.

[RCMerchant]

The military, overall, and foreign aid combined account for about 20% of Federal spending.  Whether you agree or disagree with our foreign policy, we could cut ALL of it and entitlements would still bankrupt us - just a little less slowly.

Entitlement spending is 70% of our government's spending.  And it is politically almost impossible to EVER cut entitlement spending, while politicians can keep on get elected every time by promising to INCREASE entitlements, either by raising the benefits or extending them to more people.  And, if we did ever cut that 20% significantly, do you think politicians would use that money to pay down our debt?  Doubtful.  They would promise more stuff to more voters so they could go on getting re-elected.

And before we blame big business for outsourcing, consider this: America has the second highest corporate tax rate in the WORLD.  And our labor force is among the world's most expensive.  The whole objective of business is to make a product and then sell it for profit.  Where would you locate your factory?  America, or China?  If profit is your guide, America is not a very good place to manufacture your stuff.

Not trying to flame anyone here, but our alleged imperialism is NOT the root of the problem.

Not the root of the problem? When corporations-outsource in forgeign countries-when US citizens are losing jobs to Mexico-Tawin-India? Who calls you on the phone asking you to pay your bills? They're Indian (not American Indian)-"Hello-hello-hello-" they even are making there commericials propaganda for you to accept forgieners as an  alternative. I  am NOT racist. I Am against big corporaions taking jobs we need and USING less fortunate counties for their personal gain.
I aint mad  At Mexico,or China,or Japan.I'm mad at milkers who jump away from us and decide that personal gain is more important than the future of there country. Cocksuckers like the Govener of my state. We Should worry about us FIRST. The American people should take front stage-dam-we elected these f**kers to take care of us-not oil intrests. I dont remember us bombing Bosnia. No oil intrest there.
I feel for the Libyans.
But Im real dissalusioned by our bulls**t with Reagans covert wars,Iraq,our ignoring of Bosnia and Rawanda-(they needed our help-no oil there!!!)
I agree that the Libayns need help-but why do I feel if it was in Buttf**k No where we would ignore it? Its IMPERILISM. WE WANT IT.
t

[RCMerchant]

Yeah-we help. Seems like we are very selective latley who we help. Mass murder has been going on in Rwanda for DECADES. Bosnia was getting f**ked long before we said anything.
But we had no finacial interest . We let them die.
A very selective world police.   This aint your grandpa's ww 2 america.
THIS IS NOW.

[Flick James]

The military, overall, and foreign aid combined account for about 20% of Federal spending.  Whether you agree or disagree with our foreign policy, we could cut ALL of it and entitlements would still bankrupt us - just a little less slowly.

Entitlement spending is 70% of our government's spending.  And it is politically almost impossible to EVER cut entitlement spending, while politicians can keep on get elected every time by promising to INCREASE entitlements, either by raising the benefits or extending them to more people.  And, if we did ever cut that 20% significantly, do you think politicians would use that money to pay down our debt?  Doubtful.  They would promise more stuff to more voters so they could go on getting re-elected.

And before we blame big business for outsourcing, consider this: America has the second highest corporate tax rate in the WORLD.  And our labor force is among the world's most expensive.  The whole objective of business is to make a product and then sell it for profit.  Where would you locate your factory?  America, or China?  If profit is your guide, America is not a very good place to manufacture your stuff.

Not trying to flame anyone here, but our alleged imperialism is NOT the root of the problem.

Not the root of the problem? When corporations-outsource in forgeign countries-when US citizens are losing jobs to Mexico-Tawin-India? Who calls you on the phone asking you to pay your bills? They're Indian (not American Indian)-"Hello-hello-hello-" they even are making there commericials propaganda for you to accept forgieners as an  alternative. I  am NOT racist. I Am against big corporaions taking jobs we need and USING less fortunate counties for their personal gain.
I aint mad  At Mexico,or China,or Japan.I'm mad at milkers who jump away from us and decide that personal gain is more important than the future of there country. Cocksuckers like the Govener of my state. We Should worry about us FIRST. The American people should take front stage-dam-we elected these f**kers to take care of us-not oil intrests. I dont remember us bombing Bosnia. No oil intrest there.
I feel for the Libyans.
But Im real dissalusioned by our bulls**t with Reagans covert wars,Iraq,our ignoring of Bosnia and Rawanda-(they needed our help-no oil there!!!)
I agree that the Libayns need help-but why do I feel if it was in Buttf**k No where we would ignore it? Its IMPERILISM. WE WANT IT.
t

Thank you.

There is a basic premise nobody is talking about here. And if you want to get to the ROOT of the problem, this is it.

We are not a capitalist country. No country has every been truly capitalist, but the USA was very close once, and it wasn't during any of OUR lifetimes. We are a corporatist country. Look up corporatism and you will see a virtual mirror image of America. These are very far from the same thing.

To paraphrase Ayn Rand, capitalism requires a separation of business and state, akin to a separation of church and state. The market controls itself, including interest rates, the value of money, etc. It is a very organic system that doesn't tolerate waste. The money goes where it is most productive. During economic downturns, in a capitalist economy, the interest rates naturally go up, encouraging saving and banks to be more selective in their lending, the money going to the investments most likely to return a gain, and avoiding shaky or risky investments. This is a good thing, as it strengthens the economy, and the quality of our production base. Only during economic booms should the interest rates be low. Capitalism cannot exist with a Federal Reserve producing fiat money and artificially manipulating the interest rates to do things they're not supposed to do in order to keep pumping up that bubble of credit expansion until it bursts. Why do they do this? To make their party or their administration look as if they are good for the economy.

Corporatism is nearly an opposite of capitalism. Central government and corporations are very much in bed together. One profits from the other. A corporatist country does not respond to the people, it does not serve the people, because it is not in the control of the people. Further, it creates a whole new set of accountabilities, or lack thereof, of the role of government. The government, instead of protecting the rights of it's citizens as it is in place to do, instead protects the interests of corporations, and in turn the corporations work for the government (can anybody say Halliburton?). In a corporatist economy, the government and government controlled corporations are the primary employer of the people.

I have a friend who got out of the Navy, a very talented IT guy, who went to work for a government contractor because he couldn't get the same kind of salary from the private sector. There's something fundamentally wrong with that. He doesn't work for the government because it's a so-called "private" company, but who does the company work for? Bingo. Computer forensics for the government. In a corporatist economy, most people are, in some form or another, working for the government and for the government's interventionist interests, simply because of that relationship between government and corporations. And where do the people's interests, and rights, play in this equation? I'll leave that up to you to determine.

[ulthar]

Well, said, Flick.

I think the biggest danger we face right now, and perhaps a little bit of what Indy rankles against, is throwing the baby out with the bath water.

There is a LOT wrong with the United States right.  I could give a few horror stories from my own experience over the last two weeks.  Things are not peachy by a long shot.

But we cannot lose sight of the fact that there still remains a lot RIGHT with the United States.  The polarization we find ourselves dealing with is it's own problem...we tend not to look at each "plank" but the whole platform of the two sides.

As has been said before, and better than I could, we are suffering under the two party system.  I think we need a bit more political fragmentation.  But that's tricky, too, because too much is not good, either.

What is interesting to me is that pretty much everyone agrees SPENDING in the fundamental problem with our current debt crises.  That's a start.  Rather than working with that, we lose the fight (against the debt, not against each other) nitpicking the value of the individual spending line items.

[Flick James]

Well, said, Flick.

I think the biggest danger we face right now, and perhaps a little bit of what Indy rankles against, is throwing the baby out with the bath water.

There is a LOT wrong with the United States right.  I could give a few horror stories from my own experience over the last two weeks.  Things are not peachy by a long shot.

But we cannot lose sight of the fact that there still remains a lot RIGHT with the United States.  The polarization we find ourselves dealing with is it's own problem...we tend not to look at each "plank" but the whole platform of the two sides.

As has been said before, and better than I could, we are suffering under the two party system.  I think we need a bit more political fragmentation.  But that's tricky, too, because too much is not good, either.

What is interesting to me is that pretty much everyone agrees SPENDING in the fundamental problem with our current debt crises.  That's a start.  Rather than working with that, we lose the fight (against the debt, not against each other) nitpicking the value of the individual spending line items.

You won't find me disagreeing with that at all. Keep in mind I am a black hat thinker. I am most productive when pointing out what is wrong. I don't worry about pointing out the silver lining because I know Indy will be there to do that for me.

 

[Hammock Rider]

   



  Secondly, Medicare and Medicaid.  I am not against there being a safety net, but it should be exactly that - a safety net, not a hammock. 

 HEY, what have you got against Hammocks, buddy? 


  Thanks for the interesting post Indy. This is a subject that I'm sure is on many people's minds. Unfortunately I am not as optimistic about it as some people. I work at a conference call center. We provide the technology for, and execute conferences for our clients both over the phone and over the web. Many of our clients are companies involved in the economic meltdown which admittedly has been brewing for years. Before these conferences start, all the big wigs are placed into a sort if electrinic green room where they discuss how their conference is going to play out. If I'm executing this call then I am obliged to speak to these people and then standby, listening in, until it's time to start the call. While I'm listening in I am a fly on the wall. And in general i don't like what i've heard.
 
  To sum it all up as neatly as possible, companies only care about companies and the government only cares about the government and there is nobody really looking out for the little guy. So we had all better get alot better at looking out for our family and friends. And when I say companies and governments I'm talking about the people at the top, who use their organizations as a tool to acquire as much wealth and power as they can. I know this sounds like a rant, and maybe it is, but I've heard too much to have much faith in the Government or Big Business.

   During the height of the Meltdown I've heard big shots in huge investment firms talking in the green room about finding loop holes so they can convert most of their fortunes to yen or Euros. Then these same guys get on a conference and tell all the investors that all is well and they should be investing more rather than less.

  I've heard real estate firms sell land in places they know will be running out of water in a few years.

   I've heard corporate trainers for banks discuss the cosmetic changes to their policies so they can continue selling bad mortgages

I've heard pharmaceurtical companies discuss how its' not until they release a drug on the general public that they find out "the real intersting stuff".

  Schools? Forget them. We do work for various state school boards and thes people couldn't hit water if they fell out of a boat. Most of the time a large portion of their conference revolves around power squabbles and what to have for lunch. The welfare of the kids takes up a small percentage of their call time.

  These are just a few examples of what I'm talking about.  I have worked as a bouncer and bartender and I've never had as dim a view of humanity as I have since I became a fly on the wall for all these corporate and government clients.

  I guess my point then is that the old adage about the Golden Rule being "He who has the gold sets the rules" is plenty valid.  The idea of voting is great, but does it really mean much when there is no one worth voting for?
 
   I don't think there is any great conspiracy going on. I think what happened is that we are caught in a "Perfect Storm" of greed and apathy that has led to present day conditions. I could go on and on about this to no good end so I'll finish by repeating that we should all get better at taking care of our family and friends because  no one else is really interested in helping you.

  Sorry if that was too grim. Herre's a little random levity to lighten the mood.

HULK HAPPY NOW

[Flick James]

Thanks for that, Hammock.

It may be grim, but too many Americans still hold onto this rosy delusion of America. I'm the first to admit that it is better to accompany pointint out the negative with potential solutions, but that doesn't mean that it's not perfectly okay to point out what's wrong without providing a solution. We're not all capable of solving our country's woes, but we're all perfectly capable of pointing out what's wrong, and hell, we're supposed to be the people, right? Well, then, bring it on.

In any case, I AM proposing a solution, but one that will probably never happen: a return to capitalism.