The Economic Death Spiral Has Been Triggered

[milwaukee mike]

http://www.gordontlong.com/articles/art-2011-05-vc.pdf

long, painfully true article to read, the points that i try to continually make about where the u.s. went wrong:
1) transferred 46,000 factories to asia
2) kept interest rates artificially low and opened mexican border to create housing boom/bust
3) created forever wars to expand the money supply, even though we're not producing nearly as much "stuff" (other than weapons) we're spending more money than ever and issuing more debt than ever

these problems can be fixed but we have to abolish the federal reserve and nafta/cafta pretty quickly to do so. get back to issuing our own currency (look at your dollar bills, they don't say u.s. treasury), good paying blue collar jobs for real americans (not illegal immigrants), and staying out of foreign countries we have no reason to meddle in.

of course none of this will get done so we will continue down the death spiral of $1 trillion+ annual deficits.

protect your wealth with gold, silver, and other hard assets.

[No coincidences]

It was a good run.

Can't unring the bell, though. Well, you can, but we won't.

[wtf]

transfer of technology to foreign entities is the biggest crime of all

[Mammon]

Mexico will rise up

[jbrent95]

I proposes the following:

1. Increase the fuel tax by 1 cent
2. Raise social security benefits age from 65 to 67 for everyone over 50 years old.
3. Keep capital gains taxes low
4. Lower government spending across the board for every program.

[HilltopTony]

I proposes the following:

1. Increase the fuel tax by 1 cent
2. Raise social security benefits age from 65 to 67 for everyone over 50 years old.
3. Keep capital gains taxes low
4. Lower government spending across the board for every program.

Number 4 is right on the money. Shrink government and you will see the deficit begin to shrink also.

We need to vote this idiot out of office and get someone in there that has business and economic sense. Lower the Marginal Tax Rate for all corporations and watch the US grow. JFK did it and it worked great, Reagan did it and it worked great. You can't tax and spend your way out of a recession!!! You have to create jobs by limiting what corporations pay in taxes so that they have the money to hire Joe Public. Otherwise, you have these coporations going overseas to find someone who will work cheaper so they they can continue to make a profit worth keeping their business running.

It really is just simple economics. I don't know why most people don't grasp it?

[cant call it]

mike you are so anti american for posting problems that america has. you should be chanting 'usa, usa, usa' and wear american flag tshirts made in china.

[No coincidences]

We need to vote this idiot out of office and get someone in there that has business and economic sense.

Good luck with that.

Corporate America is in bed with big government. As long as that is the case, the idea of fiscal responsibility will not exist.

[milwaukee mike]

mike you are so anti american for posting problems that america has. you should be chanting 'usa, usa, usa' and wear american flag tshirts made in china.

my solutions would fix the problem immediately. the irs takes in $1.2 trillion or so in individual/corporate taxes, spends $2.4 trillion including over $1 trillion on military/weapons. eliminate that military spending and we're roughly at breakeven instead of running deficits.

i can assure you that as a nation protected by thousands of miles of oceans, if we quit meddling in other countries' affairs, nobody would hate us or want to attack us so i'm not buying the "we need to keep blowing up sand to keep us safe" argument. when's the last time someone wanted to attack switzerland or new zealand?

[spankie]

they should just go all in on a game of roulette, they are so dumb.

[Bluehorseshoe]

I think the government should fix NFL football games and bet them offshore.

Deficit solved.

[jjgold]

People crying wolf but big companies keep getting richer
Poor getting poorer

[milwaukee mike]

I think the government should fix NFL football games and bet them offshore.

Deficit solved.

they can just keep seizing accounts, then they don't even need to fix the games

[ChileCheese]

Mike,
Interesting article and very true.
Problem is, all of which that is talked about was not some 'organic' evolution of American policy, globalization and expansion. Everything cited and that continues to go on today, is a well thought out and strategic attack on the state and the middle and working class by the Elite. For a long time (mostly based on its history of origin and separation from Britain), America and its citizenry has refused to believe they live in a class system. The idea that there is a Rich and Noble Elite followed by a large mass of peasantry is something Americans refuse to accept within their own borders. And I understand why... for every 1 poster like you, there is an Opie or some other blind patriot telling you that if you work hard and take care of your own, you can have the American Dream. Your own people are selling you guys out, and the elite and corporations are going to rape America until there is nothing left.

[philliesfinest]

Good luck with that. Corporate America is in bed with big government. As long as that is the case, the idea of fiscal responsibility will not exist.

great observation,for you people that think the president has a say wake up,big business runs the country and in this system it always will,so go waste your time voting you do not and never will have a say in this country!!!!!!!!!!!!!!!!!!

[darkghost]

transfer of technology to foreign entities is the biggest crime of all

and theft.

[BigdaddyQH]

There are several flaws in an otherwise good idea. First, Blue collar jobs are a thing of the past. America is no longer a Blue collar nation, despite what the unions want you to believe. More and more factories are depending on technology to do what blue collar workers use to do. This is an irreversable trend.

Next, you will never abolish the Federal Reserve. They are simply too powerful. To do so would destroy the economy, as it is built today. It is foollish to even think that we would go there.

Eliminating Military spending is so idiotic that it does not even deserve a mention. If you eliminate the military spending, you eliminate thousands of jobs. I guess you never thought about that, did you?

I totally agree on NAFTA, and will never understand how the Unions allowed a Democratic President to pass such a bill. This just shows the utter stupidity of unions in general. NAFTA was the beginning of the end of manufacturing in the U.S.

I suggest that you look at all of the ramifications of your idea. Think it out next time before you post it. You have some good ideas, but some that are nothing but dreams and would have absolutely no chance of happening. Try a more realistic approach.

[Marigold HD]

Good luck with that.

Corporate America is in bed with big government. As long as that is the case, the idea of fiscal responsibility will not exist.

This sums it up here !!!!

[jgray]

There are several flaws in an otherwise good idea. First, Blue collar jobs are a thing of the past. America is no longer a Blue collar nation, despite what the unions want you to believe. More and more factories are depending on technology to do what blue collar workers use to do. This is an irreversable trend. Next, you will never abolish the Federal Reserve. They are simply too powerful. To do so would destroy the economy, as it is built today. It is foollish to even think that we would go there. Eliminating Military spending is so idiotic that it does not even deserve a mention. If you eliminate the military spending, you eliminate thousands of jobs. I guess you never thought about that, did you? I totally agree on NAFTA, and will never understand how the Unions allowed a Democratic President to pass such a bill. This just shows the utter stupidity of unions in general. NAFTA was the beginning of the end of manufacturing in the U.S. I suggest that you look at all of the ramifications of your idea. Think it out next time before you post it. You have some good ideas, but some that are nothing but dreams and would have absolutely no chance of happening. Try a more realistic approach.

This a huge consideration that gets ignored all the time. The cost huge and nobody likes a war, but the military complex is a major employer of Americans and this is ignoring the folks that serve.

[ChileCheese]

This a huge consideration that gets ignored all the time. The cost huge and nobody likes a war, but the military complex is a major employer of Americans and this is ignoring the folks that serve.

Take all that PUBLIC money, dump it into health care, and employ people there.

[BigdaddyQH]

This a huge consideration that gets ignored all the time. The cost huge and nobody likes a war, but the military complex is a major employer of Americans and this is ignoring the folks that serve.

It is not just the people that serve. What about the thousands of civilians that work in the defense industry?

[HilltopTony]

People crying wolf but big companies keep getting richer
Poor getting poorer

You don't understand economics I guess. The poor have a chance to work. a good way they have a chance to work is if you lower the Marginal Tax Rate on corporations so they can afford to employ the so-called poor. If you are going to make it hard for companies to make a decent profit then they aren't going to hire any of these so-called poor people. You have to give corporations incentive to hire or else they will go overseas with jobs.

And, who are the poor and why are they poor? Is it because they sponge off welfare and let the govenment support them? Is it because they are lazy? Is it because they are addicts? Really, who are these people?? America is the land of opportunity and ANYONE can make a good living if you work hard enough and have motivation and quit showing up with your hands stretched out waiting for someone to feed you a bottle!

How is it that people have come from numerous countries and start a business with nothing and make millions? It all comes down to work ethic! So don't give me your crap about the poor getting poorer. Fight for what you want and go take it!! Just do it within the legalities of our great FREE land!

[jgray]

It is not just the people that serve. What about the thousands of civilians that work in the defense industry?

Ha. That was exactly what I was trying to say but I see how that didn't come through with the phrasing I used.

[freeVICK]

Turning all my dollars into Chinese currency

[milwaukee mike]

bigdaddy good point about employment. but the sad fact is we can't keep spending more than our entire gdp on war and interest. no society has ever succeeded for long in doing that, the money just isn't there.

whether you lower or raise taxes really doesn't make much difference, if you take in around $1 trillion/year in personal and corporate income taxes you can't keep spending $1 trillion/year on military spending. but the other really big problem is unfunded social security and medicare when all the baby boomers keep retiring and there's no easy way to fix it with current demographics in the u.s.

[minet123]

I proposes the following:

1. Increase the fuel tax by 1 cent
2. Raise social security benefits age from 65 to 67 for everyone over 50 years old.
3. Keep capital gains taxes low
4. Lower government spending across the board for every program.

All but 2
It is not my responsibility to pay for your retirement
It is your responsibility to plan it your self

[jarvol]

my solutions would fix the problem immediately

No they wouldn't at first. They would trigger massive inflation immediately though.

Your "good paying blue collar jobs" is code for paying inflated wages for unskilled workers to sit on a chair and push a button every few minutes. Many of our fellow Americans won't work manual labor jobs anymore. They sure ain't in the tomato fields or the peach orchards or landscaping lawns or meat processing plants or cut and sew factories.

The ONLY thing that is gonna fix America are drastic cuts in SS, Medicare and abolishment of Medicaid, Section8, EBT, and all the welfare and a drastic increase in personal responsibility. Yes some old people will die if their family and friends don't take care of them. Yes some children will die if their family and friends don't take care of them. Yes there will be a crime outbreak for awhile until Americans take responsibility for themselves and kill off these lazy, undeducated, criminals. If the people who can't take care of themselves don't have family or friends willing to take care of them then why should the governement rob me in order to give to them.

If America doesn't begin to accept the fact these government programs are unsustainable ponzi schemes and adopt some tougher stances then eventually our debt holders will impose social Darwinism upon us.

[Cap dat 4ss]

No they wouldn't at first. They would trigger massive inflation immediately though. Your "good paying blue collar jobs" is code for paying inflated wages for unskilled workers to sit on a chair and push a button every few minutes. Many of our fellow Americans won't work manual labor jobs anymore. They sure ain't in the tomato fields or the peach orchards or landscaping lawns or meat processing plants or cut and sew factories. The ONLY thing that is gonna fix America are drastic cuts in SS, Medicare and abolishment of Medicaid, Section8, EBT, and all the welfare and a drastic increase in personal responsibility. Yes some old people will die if their family and friends don't take care of them. Yes some children will die if their family and friends don't take care of them. Yes there will be a crime outbreak for awhile until Americans take responsibility for themselves and kill off these lazy, undeducated, criminals. If the people who can't take care of themselves don't have family or friends willing to take care of them then why should the governement rob me in order to give to them. If America doesn't begin to accept the fact these government programs are unsustainable ponzi schemes and adopt some tougher stances then eventually our debt holders will impose social Darwinism upon us.

You hit the nail on the head friend. SS and medicare are unsustainable. In fact, 20% of our annual budget goes towards defense while 40% goes towards healthcare. 40 fukking % towards the gov't assisting with healthcare. Unreal. Burying us all here.

[csm506]

Do you think getting Obama out of office is the issue, the US President is a figure head, the Senate runs the country and they are the ones who are bought and sold by special interest groups and lobbyists, what does JFK or Regan have to do with anything? Giving tax incentives to corporate america is the cure all? Give me a break, You have to have products and services in a free market to manufacture, all we have is inflated crap on paper through Wall Street, If you want to create jobs via corporate tax breaks, sign it into law that X amount of jobs need to created for your tax dollars, if not you will pay massive fines, that will never fly. Let's not bitch about problems how about real solutions, that will work for Joe and Jame Public.

[nasaki]

When you've got some one like Boehner saying we need to cut spending, while fighting to keep an expensive weapons program that no one in the military actually wanted in the first place (because it's in his district) then how can you possibly take him seriously? How can you possibly take ANYONE seriously unless they're voting against all spending increases and all tax cuts?

[csm506]

nasaki thank you for stating a real fact, our government is in bed with corporate america and will be for sometime.

[LostBankroll]

America is so ******, that we dont even know where to begin. All I know is this... I plan on making my living here in the US, investing in other currencies and gold/silver. The $ will only lose more value over time.

[sneak-a-peak]

the working is suffering

we have lost all leverage against employers

i am making significantly less money than i made 10 years ago and yet everything on the shelves keeps getting higher

i want to go postal......

[QuantumLeap]

Good luck with that.

Corporate America is in bed with big government. As long as that is the case, the idea of fiscal responsibility will not exist.

Correct. Until this is fixed the US will continue to spiral downward until one of two things happens. We turn into a 3rd world country or else we have a revolution.

[dmtrader]

A lot of people here would benefit from reading a good book on macroeconomics.