@TraderBase, Indirectly it would have kicked a ton of people in the shorts financially since there are still a lot of people on Union layoff’s, those living off retirement and people who work domestically, in addition to the dealer network failing, the logistic systems that support them, the many suppliers, and considering Ford didn’t take the bailouts (initially) the banks were holding ALL of Ford’s assets against loans totaling over $23Billion. Going tits up and not paying that back would have kicked a few banks in the sack for sure. So with so many people out of work, having their pensions, retirements, and incomes pulled out from under them, more so than actually occurred requiring government assistance the multiple failed suppliers, as well as all the banks involved who profit from new car sales, as well as the ones who stuck their necks out financially to Ford primarily, it could have been much much worse. And believe me, FUCK the big three, I wish the fggts would have gone broke, but it would have hurt us all much more short term. I know as a whole we could have recovered, but it would have been a much much bigger hit overall.
My take on it is that it’s fucked up, but it’s so pervasive now that actually being honest puts you at a disadvantage to your competitors…like telling nothing but the truth on your resume. Our corporate and personal tax systems at this point are built to look progressive but function regressively. “Tax the middle class and poor” is a politically losing argument, so they run on “tax the rich” and then sell exemptions so the truly rich people and corps don’t have to actually pay said taxes. Citizens United made things way worse because big business now has the power to basically legally buy elections. Before they had to at least do some work shifting money around, bundling donations, etc.
As for the debt, as long as everyone in the world is willing to lend the USG however much money it wants at sub-1% interest, there is no urgency to address it other than election rhetoric. The absolute dollar amount on said interest is huge, but it’s nothing compared to what they’re actually borrowing. I figure if you can’t beat 'em, join 'em. I just took out a $30,000 home equity that I don’t need, because I got it at 1.9% and it’s tax deductible…basically free money. I had paid off every bit of debt I had with interest above 3%, but we are in an economic environment where spending is rewarded, so I will. I’m gonna finish redoing my house with some of it, buy some stupid shit, and use the rest as a down payment on a rental property which I will finance the rest of at 3% or lower. Saving in a spender’s environment is just as inefficient as borrowing when interest is high. If you have the means, buy your big-ticket shit now. By the time enough people do and we get inflation and send interest rates back up, you’ll already own the stuff at a better price/rate. Then you can invest when you’ll actually get something for your money.
Buy when they cry, sell when they yell.
Look up the Double Irish Dutch Sandwhich that Apple designed… You’ll love that one.
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Slowtalon, how would small companies hiring the essentially unemployable afford to pay $15 to highschoolers to wash dishes, or pour coffee?
Because they’d get higher prices for their products. When it was just the US market we had equilibrium with high wages and high prices. Global competition drove prices down which drove wages down.
I just saw a commercial for Fucillo where the fat guy talks about how he can save your tax payment by routing the money through a bunch of Asain countries and says “Its so complicated that im the only one that knows how to do it.” Has it come to the point we can actually advertise tax evasion and people think “hey thats a great idea,” im sure i cant be the only one who saw this commercial.
Apples response http://www.nytimes.com/2012/04/29/business/apples-response-on-its-tax-practices.html?_r=1
Cliff notes: We hired a shit ton of people and havnt outsourced everything yet so we should be allowed to skip out on taxes owed by hiring some excellent tax lawyers. We have payed 5 billion in taxes already so it shouldn’t matter that we owed 15 billion.
Well said. We were operating in a vacuum essentially, insulated from the abundant cheap overseas products & labor. Essentially inflation was spread more equitably back then, working class wages reflected this. But that’s a slippery slope to be on because we saw how quick the US workers were ditched when outsourcing became a viable option. Partially driven by greed, partially driven by workers honestly making too much from a fundamental standpoint.
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Thanks for the reply. I mostly agree…bigger hit in the mid term for sure. But in the long term what was done will prove to be far more damning IMO. Inflation feeds into the wealth disparity and the wealthy folks ability to bribe our politicians and control us. The rich own everything, the rest own the debt and pretend to “own” everything. It’s clear working class people (the majority) have this “eat the rich” mentality based on all the hype around the “Buffett rule”. If we really want to eat the rich we need to say fuck that which we don’t own…take my house, fancy car and the loans as well. In turn through defaulting on loans asset values would plummet hurting the rich & their net worth. Inflation is hardly a blip on the wealthy radar, but if you attack their asset value it’s a big blow. At some point their money would be forced to come out and support the economy to shore up their asset values. My thoughts on getting the rich to support our economy anyhow.
Trust me I’m far from any authority on the topic, punch my ideas full of holes by all means… I’m just a 1st year student taking 2-300 economics classes right now, lolz, why start easy, go big or go home. Wrote a paper recently on the Automotive industry and how much of a chunk they are as a whole, and their sales in relation to real GDP. We’re balls deep in/with them unfortunately… and after the recent crunch, even deeper.
The big 3 in the US were a prime example of too big to fail. Sure, some would argue that over the long term the efficient thing was for them to go bankrupt, but that was a case where it would have simply stressed the system in the short term so much, between reduction in GDP and increase in cash outflows from public assistance, that it would have killed it.
Couple other things China will fuck its self in the long run look at their oil consumption standards of living are raising and their environment is going to shit look back how bad it was there during the Olympics.
Public assistance is far from ideal but it puts money in the hands of people who actually need help retaining their leveraged assets and those that stimulate an economy. I would think stimulus to people directly would likely be more efficient & produce far less future volatility over stimulus to poorly run corporations/entities that require never ending consumer debt to thrive. Most importantly I feel we should have tried to simply survive instead of trying to “thrive” immediately after the crash. They blew their wad quick with cash 4 clunkers & first time home buying credit backed up with long standing, dirt cheap interest rates, too quick IMO. I have to wonder if they saturated the market with their panicked frenzy, to me it felt like a last gasp in some ways.
I also would have preferred to see more money spent on educational assistance for those that need re-tooling. Handouts are non productive and they reduce motivation so I would like to see those getting assistance required to work on projects that help their community or to go back to school with some form of a subsidy. I don’t agree with the free rides, especially for years on end. Our nation has alot of busy work that needs done, make people earn their keep.
Of course none of the above would cause the inflation needed to “thrive” like they were after, only the banks can fractionally lend money out. And The Bernanke stated long ago he’d take this road to avoid deflation, I guess it shouldn’t have been a shock at all. I agree a full collapse would have been horrible and they had no choice but to do some easing along the way. I just wish they would have focused on enabling people to retain leveraged assets and help stabilize asset values while stimulating the economy at a reasonable, sustainable rate.
Spam…I don’t think any one person is a real authority on something as big as the economy. It takes millions and millions of participants to make up an economy, can any equation or individual honestly be expected to control a cycle or predict what interest rate adjustments will do precisely? Hell no. I don’t worry about people that speak in un-certain terms, I worry about those that act like they have it all figured out.
Speaking of thrive… http://www.youtube.com/watch?v=lEV5AFFcZ-s
I am waiting for that Tony Robbins video to be proven inaccurate like the Kony2012 video everyone jumped on. lol I just can’t believe the debt.
Nobody in their right mind will bother trying to prove it inaccurate because it’s based on hard facts. Could you picture the difference in acceptance if Warren Buffett made the video? It’s funny how because a self help type guy was in the video people consider it tin foil worthy. I’m curious WHERE the hundreds of trillions have gone? I want somebody to show me a heat map or visualization on where all that money has ended up. Money isn’t destroyed it’s re-distributed, so it exists somewhere.
well take the population of the US and multiply it by the per capita income…that is like 12 trillion dollars right there…a fairly large chunk of that is money that is borrowed at some point
We probably shouldn’t focus on the numbers the media rambles about and feeds us. They don’t report the news, they WRITE it these days. Seems you’re only considering the $16T of traditional “national deficit”? What about the $120T in unfunded liabilities, or the cherry on top…the credit & currency derivatives which aren’t even fully accounted for but they are suspected to account for between $800T and $1.25 QUADRILLION in debt! Rest assured $16T is a mere drop in the bucket.
I’m also not fond of your calculation method because it really doesn’t account for the stagnant money nor the overseas investments which is a core issue I’ve been trying to get at. Some “capitalists” in the US are are hoarding and many others are failing to invest in their own economy. Without the ability to bribe our willing politicians they would have been shooting themselves in the foot and they wouldn’t have gone down this path I suspect.
well if all of these now quadrillions of dollars are hiding somewhere…what are they being used for?
I’m the one asking that question here mister! LOL
Just playin, I have no idea who exactly has the money which is why I asked for others opinions and directly asked the question.
Overseas development maybe? Apple Computer’s bank account? How much $ did Steve Jobs take with him? LOL
Given your wording I kinda sense you think I’m full of shit with my numbers? Have you ever traded futures contracts or followed any derivatives for that matter? Do you understand the concept and financial impact derivatives can have? Derivatives are a multiplier of an underlying asset, a purely leveraged fabrication that is best described as sum 0. To profit with derivatives you must hand someone else a direct loss, unlike stocks where you can potentially profit through fundamental growth. You have CDS (credit default swaps) and all these hedge offerings which again are massive leverage aka derivatives.
“By the end of 2007, the outstanding CDS amount was $62.2 trillion, falling to $26.3 trillion by mid-year 2010 but reportedly $25.5 trillion in early 2012.” Per Wikipedia
Derivatives are basically make believe wealth and they are inflationary. There is no other possibility since they aren’t backed by anything fundamental and they multipliers of already existing wealth.
The below link is interesting and concerning at the same time…
http://www.usdebtclock.org/