NationStates Jolt Archive

NOTE: Although I'm no rabid fan of President Bush, I have a real problem with those on here who blame the President for everything up to and including global warming and tectonic plate movement! Recently, several of you ( and you know who you are ... and so do I! Mwahahaha! ) have been preaching doom and gloom about the US economy, saying that the President has caused higher unemployment, etc. I probably shouldn't try to confuse you with the facts, but here they are for April, 2005:


Creation of Jobs Surged in April, and Income Rose (http://www.nytimes.com/2005/05/07/business/07econ.html?th&emc=th)

By LOUIS UCHITELLE
Published: May 7, 2005

Overriding earlier evidence that suggested the economy was slowing significantly, job creation and income growth appear to be holding up their end of the recovery.

Page One: Saturday, May 7, 2005

Text: Unemployment Report The government reported yesterday that the nation's employers generated an unexpectedly large number of jobs in April - 274,000 - even as they gave their existing employees additional hours of work.

The employment report was the most positive news about the economy in weeks. It dented the gloom that had accumulated after a number of recent measures provided evidence that last year's robust growth might be fading.

"The main thing I think these employment numbers tell you is that all this worry about the economy experiencing a significant soft patch has been exaggerated," said Richard D. Rippe, chief economist at the Prudential Equity Group.

Employment rose across all sectors except manufacturing. The Bureau of Labor Statistics also revised its estimates for February and March, adding 93,000 jobs - enough to erase the impression that job growth had faltered, particularly in March.

The unemployment rate last month was 5.2 percent, unchanged from March but well below the 6.3 percent rate of nearly two years ago.

The Bush administration greeted the April jobs report as a sign of better times ahead. Treasury Secretary John W. Snow said in a statement that the surge in job creation showed that "President Bush's jobs and growth agenda has again produced results for Americans."

Deficits cannot simply be ignored
Published: May 6 2005 03:00 | Last updated: May 6 2005 03:00

During the 2004 US presidential campaign, it was not uncommon to see headlines such as "White House predicts 2004 deficit of $445bn - the biggest ever", alongside others proclaiming: "Major fiscal worries not on anyone's agenda."


Americans - including their politicians - did not seem to care about the reckless fiscal course they were on. And they did not seem particularly bothered by the fact that, during President George W. Bush's first term, the US turned record surpluses into record deficits. They remain largely blasé about the deficit, despite bleak reports suggesting last year's budget deficit of $412bn (€318bn) will be eclipsed by this year's projected $427bn deficit.

Even though Alan Greenspan, US Federal Reserve chairman, recently cautioned the Senate's budget committee that continued deficits would cause economic stagnation or worse, his comments barely ruffled Wall Street, much less the American citizenry. A recent Harris poll asked people to identify the two most important issues for the government. Only 10 per cent chose "federal budget surplus/deficit".

Any economist will tell you that the dangers posed by swelling and sustained deficits are significant. So why do Americans not care more? The easy explanation is that, after the September 11 2001 terrorist attacks and wars in Afghanistan and Iraq, they have simply shifted their priorities. But there are other, less obvious, reasons. One is that many people do not understand the workings of the federal budget and its ripple effects. Most Americans probably could not explain how large deficits result in higher interest rates, indebtedness to foreigners, passing the bill to future generations, lower growth, reduced government spending and more taxes.

Even more difficult for the public to grasp - and for politicians to convey - is how swelling federal deficits affect them personally. If the economy is going well, polls have consistently shown that voters care about few, if any, economic measures. Until citizens see the tangible and negative effects of federal deficits, such as spiralling interest rates or a plunging dollar, they will be reluctant to demand action from Washington. Consider recent American outrage over issues such as fuel prices, stagnant wages and escalating health care costs. These affect everyday life for most Americans, hence the immediate controversy.

In addition, voters have seen deficits come and go before, so why should they care this time round? In the past 20 years, Americans have seen enormous federal deficits amassed during Ronald Reagan's administration disappear in the Bill Clinton years. If it was done once, some believe, America can do it again. Many voters - and most economists - believe that, during times of trouble, deficits can be a force for good. In economic recessions and depressions, for example, it is sound economic policy for the federal government either to cut taxes or increase spending, or both, to boost the economy. This further confuses the voter on the dangers of federal deficits: how do you convince them that one kind of deficit (that is, cyclical or short-term) is fine at one point, while another (structural or long-term) is not. The fault lies partly with politicians, who seldom make the case for curbing federal spending - consider the remark attributed to Dick Cheney, US vice-president, that "Reagan proved deficits don't matter".

For governments, one problem of deficit reduction is that it is nearly impossible to create a bipartisan consensus, partly because serious fiscal restraint involves tough decisions and politically painful choices. Usually, the only politicians interested in reining in the federal budget are the ones out of power, who can use it as a rallying cry against the majority party. And although all politicians may claim they are for balanced budgets, they want to balance them only by reducing the other party's priorities: Republicans want to reduce social spending, Democrats want to reduce military spending, for instance. Very few care to reduce both.

Of course, Americans' lack of interest in federal deficits may simply come down to plain ignorance. Larry Bartels, the Princeton university professor, recently produced evidence suggesting that Americans often support policies that negatively affect them. His best example lay with the estate, or "death" tax. Even though most Americans agree that economic inequality has increased in the US, they still supported the repeal of the estate tax, despite the fact it would only fuel economic inequality.

Recall the popular phrase: be careful what you wish for, you may just get it. Americans - and their elected officials in particular - are clamouring for more and more from their government: more benefits, more services, more military power . . . while wanting to give less and less in the form of taxes. In this case, continued wishing could mean they will get exactly what they ask for: fiscal disaster.

The writer is a Washington-based commentator on US affairs

(Source: Financial Times, Home UK Section)

Why is everyone making such a big deal about the Us budget deficit? Its the largest in history, yes thats true. But its the largest in history in NOMINAL dollar terms. It is certainly not the largest deficit in terms of GDP or as a % of govt spending. To put this in perspective, gasoline in the US is the most expensive(in nominal dollars) that its ever been. Yet it doesnt approach the level of the late 70s prices if you adjust for 1)purchasing power parity and 2) Time value of money.

And as far as foreigners owning American debt.. so what? The greenback or rather US treasury obligations are the most liquid and secure form of holding for foreign reserve banks. Do you think a foreign central bank is going to keep its money in rubles? Its not like they have much of a choice except to invest in US debt.

Keep in mind that the largest obligation of the Federal govt is to the notes they owe to US citizens in terms of the social security fund that both partys have pilfered since its inception. What brainiac thought it was a good idea to give the govt access to these funds(stealth taxes like your average joe monkey has no clue about). Politicians and cheap money is like letting a fat kid loose in a candy store with a stolen credit card.

Great society my ass. Free ride for political hacks more like it.

Why is everyone making such a big deal about the Us budget deficit? Its the largest in history, yes thats true. But its the largest in history in NOMINAL dollar terms. It is certainly not the largest deficit in terms of GDP or as a % of govt spending. To put this in perspective, gasoline in the US is the most expensive(in nominal dollars) that its ever been. Yet it doesnt approach the level of the late 70s prices if you adjust for 1)purchasing power parity and 2) Time value of money.

And as far as foreigners owning American debt.. so what? The greenback or rather US treasury obligations are the most liquid and secure form of holding for foreign reserve banks. Do you think a foreign central bank is going to keep its money in rubles? Its not like they have much of a choice except to invest in US debt.

Keep in mind that the largest obligation of the Federal govt is to the notes they owe to US citizens in terms of the social security fund that both partys have pilfered since its inception. What brainiac thought it was a good idea to give the govt access to these funds(stealth taxes like your average joe monkey has no clue about). Politicians and cheap money is like letting a fat kid loose in a candy store with a stolen credit card.

Great society my ass. Free ride for political hacks more like it.
Excellent points. I am concerned about the deficit, but not nearly as concerned about it as I am about job creation and continued income increase. I suspect that many who express "great concern" about the deficit are siezing on it as another way to beat this Administration over the head for hope of political gain.

Excellent points. I am concerned about the deficit, but not nearly as concerned about it as I am about job creation and continued income increase. I suspect that many who express "great concern" about the deficit are siezing on it as another way to beat this Administration over the head for hope of political gain.

Like Alan Greenspan? Isn't he a bit old for political office...And a bit non-partisan... And isn't he your top economic expert on such things?

Excellent points. I am concerned about the deficit, but not nearly as concerned about it as I am about job creation and continued income increase. I suspect that many who express "great concern" about the deficit are siezing on it as another way to beat this Administration over the head for hope of political gain.

While it IS being used for political reasons, one look at what the economists are all talking about shows that its not ONLY being used for political gain. From what I have seen the Economists of the world are divided into two main camps over this issue.

"The New Bretton-Woods" (official term) camp suggest that, as Isanyonehome suggests, that foriegn governments HAVE to buy our debt, and thus this system can go on indefinately (or more precisely, for about 20-30 years by most estimates).

The "Oh f*ck, we're screwed" (My own name for them) group suggests that as Bretton-Woods failed before, the new Bretton-Woods system won't fare much better. The debt will eventually (and eventually varies from economist to economist, generally within the 5-20 year mark) be too great to bear and whole system will collapse.

The numbers could support either theory really, but in both cases we're talking about how many decades this will last before it blows up, not wether or not it "matters." I've seen no economists at all support the idea that this can be ignored for longer than a few presidential terms.

Like Alan Greenspan? Isn't he a bit old for political office...And a bit non-partisan... And isn't he your top economic expert on such things?
Strange you should mention that at the same time I'm listening to a discussion about the honorable Mr. Greenspan on TV. One of the discussion group asserted that "Alan Greenspan will go down in history as one of the worst central bankers ever. He's never been right about anything!" Heh!

While it IS being used for political reasons, one look at what the economists are all talking about shows that its not ONLY being used for political gain. From what I have seen the Economists of the world are divided into two main camps over this issue.

"The New Bretton-Woods" (official term) camp suggest that, as Isanyonehome suggests, that foriegn governments HAVE to buy our debt, and thus this system can go on indefinately (or more precisely, for about 20-30 years by most estimates).

The "Oh f*ck, we're screwed" (My own name for them) group suggests that as Bretton-Woods failed before, the new Bretton-Woods system won't fare much better. The debt will eventually (and eventually varies from economist to economist, generally within the 5-20 year mark) be too great to bear and whole system will collapse.

The numbers could support either theory really, but in both cases we're talking about how many decades this will last before it blows up, not wether or not it "matters." I've seen no economists at all support the idea that this can be ignored for longer than a few presidential terms.
I suspect that long before they allow the entire economic system to "collapse," the government would try everything they could think of, including devaluing the dollar, etc. The final step would be to simply abrogate the debt and refuse either to pay any of it, or simply declare that they would pay fifty cents on each dollar of the debt ( or something similar ). Politicians do not like economic turmoil!

Strange you should mention that at the same time I'm listening to a discussion about the honorable Mr. Greenspan on TV. One of the discussion group asserted that "Alan Greenspan will go down in history as one of the worst central bankers ever. He's never been right about anything!" Heh!

Errr......so why have you appointed him 5 times as Chairman of the Board of Governors of the Federal Reserve System? These appointments have been made after designations by Reagan, Bush (Snr), Clinton and Bush (Jr). If he's so bad why appoint him as your top economic expert? Seems a bit silly....

.... It is certainly not the largest deficit in terms of GDP or as a % of govt spending..... in % of Gov spending??? ...WTF???

that is Because this Gov is a Big Governement a BIG GOVernement...dont you all love it :D

yes indeed its the largest Gov DEficit...coupled with the BIGest Governement Spending ever...

of course their % is tied.

Errr......so why have you appointed him 5 times as Chairman of the Board of Governors of the Federal Reserve System? These appointments have been made after designations by Reagan, Bush (Snr), Clinton and Bush (Jr). If he's so bad why appoint him as your top economic expert? Seems a bit silly....
Um ... how about "I have no idea" as an answer? :D

I suspect that long before they allow the entire economic system to "collapse," the government would try everything they could think of, including devaluing the dollar, etc. The final step would be to simply abrogate the debt and refuse either to pay any of it, or simply declare that they would pay fifty cents on each dollar of the debt ( or something similar ). Politicians do not like economic turmoil!

Well, yeah, but all of those things you mention would cause significant economic turmoil! Even the current devaluing of the dollar is decried, and it more closely resembles a small adjustment.

Perhaps one thing that seriously need to be done is one thing that no one wants to talk about; we need to have a major market correction on a number of sectors in our economy; chiefly the financial sector, which is growing increasinly bloated and corrupt.

Simply put; our markets have a lot of dirty laundry to attend to, ignored problems in the economy itself makes any "recovery" hard to sustain, and all growth rather temporary or illusory. We're swimming against a tide.

Look at Japan, they ignored problems for too long, not they have a stalled economy that grows only occasionally, and is hampared by conitnued problems in its banking industry. While they did have a more traditional "collapse" before the Asian currency crisis, they simply fixed problems just enough to get by any given quarter and no more. That continued for 10 years or so; the political will to affect major changes was hard to come by, no politician wanted to kill their career by doing what was needed.

Sure, new jobs have been created. But I would like more info as to how much these new jobs are paying. I'm willing to bet the majority of them are minimum wage or very close to it. And the number of unemployed can be misleading too. It may be that many people simply aren't eligible for benefits anymore, not that they found a job.

Sure, new jobs have been created. But I would like more info as to how much these new jobs are paying. I'm willing to bet the majority of them are minimum wage or very close to it. And the number of unemployed can be misleading too. It may be that many people simply aren't eligible for benefits anymore, not that they found a job.
I presented the article because it was based on facts, not supposition.

Oh i would be worried about that debt if i were you...i would also be worried about the rise of the EURO...aand i personally would shit myself if i were American if the Brits ever join.

President Vladimir Putin said Thursday Russia could switch its trade in oil from dollars to euros, a move that could have far-reaching repercussions for the global balance of power -- potentially hurting the U.S. dollar and economy and providing a massive boost to the euro zone. "We do not rule out that it is possible. That would be interesting for our European partners," Putin said at a joint news conference with German Chancellor Gerhard Schroeder in the Urals town of Yekaterinburg, where the two leaders conducted two-day talks. "But this does not depend solely on us. We do not want to hurt prices on the market," he said. "Putin's putting a big card on the table," said Youssef Ibrahim, managing director of the Strategic Energy Investment Group in Dubai and a member of the U.S. Council on Foreign Relations, an influential body of leading world thinkers thought to help set the United States' foreign policy agenda. "In the context of what is happening worldwide, this statement is very important," he said.

Putin's words come in the wake of a protracted drive by the EU to attract more countries' trade and currency reserves into euros, in a bid to chip away at U.S. hegemony over the global economy and money supply. A move by Russia, as the world's second largest oil exporter, to trade oil in euros, could provoke a chain reaction among other oil producers currently mulling a switch and would further boost the euro's gradually growing share of global currency reserves. That would be a huge boon to the euro zone economy and potentially catastrophic for the United States. Dollar-based global oil trade now gives the United States carte blanche to print dollars without sparking inflation -- to fund huge expenses on wars, military build-ups, and consumer spending, as well as cut taxes and run up huge trade deficits.

Almost two-thirds of the world's currency reserves are kept in dollars, since oil importers pay in dollars and oil exporters keep their reserves in the currency they are paid in. This effectively provides the U.S. economy with an interest-free loan, as these dollars can be invested back into the U.S. economy with zero currency risk. If a Russian move to the euro were to prompt other oil producers to do the same, it could be a "catastrophe" for the United States, Ibrahim said. "There are already a number of countries within OPEC that would prefer to trade in euros." Iran, the world's No. 5 oil exporter, has also openly mulled a move into euros. And after the war in Iraq, there is growing debate in the United States' traditional ally Saudi Arabia on a switch too, though its government has not come down firmly on one side, Ibrahim said. "There is a revision going on of its strategic relationship with the United States. Already, they're buying more [French-made] Airbuses," he said. "The Saudi Crown Prince [Abdullah Bin Abdul Aziz Al-Saud]'s visit to Russia was of great significance and the regime is talking about closer cooperation with LUKoil and other Russian companies." Under Saddam Hussein, Iraqi oil was traded in euros. "This was another reason [why the U.S. attacked]," Ibrahim said. "There is a great political dimension to this. Slowly more power and muscle is moving from the United States to the EU, and that's mainly because of what happened in Iraq," he said.

Putin had previously brought up the proposal to switch to euros as prime minister in October 1999, at a meeting of EU leaders in Helsinki. Then, in an attempt to forge a new bloc to counterbalance the United States, he made the proposal alongside calling for closer cooperation between Russia and the EU, including on security issues. Since then, however, Russia's ties with the United States have warmed considerably -- and it is unclear whether Putin would risk damaging that relationship by going ahead with the euro move, analysts said. "Putin is very much interested in changing the structure of OPEC and he cannot do that without the United States," said Alexander Rahr, an expert on Russia at the German Council on Foreign Relations. "He can only get a foothold for Russia in the Middle East with [U.S. help]. And, he wants to get contracts for the Russian oil industry in Iraq -- for this, too, he needs the United States."

Some analysts said that the statement appeared to be aimed at boosting Russia's global clout on the world stage. "Putin is trying to create a position for Russia as an independent player. But his aim is not to undermine relations [with the United States]. He just wants to boost Russia's position up from being a junior partner," said Dmitry Trenin, geopolitical analyst at the Carnegie Moscow Center. Yevgeny Gavrilenkov, chief economist at Troika Dialog and an earlier architect of the Putin government's first economic plan, said debate is growing on a move to the euro as Russia mulls siding with the EU. "Such an idea is really possible," he said. "Why not? More than half of Russia's oil trade is with Europe. But there will be great opposition to this from the United States." He said that while a switch would have no direct impact on the Russian economy, it would give a great boost to the euro zone.

Lukoil vice president Leonid Fedun said Thursday that he saw no problem in the euro switch and that payments for such transactions would be minimal, at just 0.08 percent. "There is no problem ... If the state decides to do this, then we will support this initiative. From the point of view of the economy, there's no difference," Interfax quoted him as saying. But even Fedun could not help putting a political price tag on the move. "We are ready to move to the euro if the country will be included in a visa-free regime with Europe," he said. Rahr agreed that the timing of the statement seemed calculated to extract political concessions from the EU. "It's a bargaining chip," he said. Gavrilenkov suggested Putin was also angling for EU concessions on other issues discussed in Yekaterinburg, such as terms for Russia's WTO accession.

That should be enough to keep the average American awake at night.

I presented the article because it was based on facts, not supposition.

I read your article, and nowhere in it did it address the two points I made. That's why I brought them up. I think rate of pay is important when you want to cheer for all these new jobs. If the majority of them are near minimum wage, they're not really helping anyone except maybe teenagers.

Excellent points. I am concerned about the deficit, but not nearly as concerned about it as I am about job creation and continued income increase. I suspect that many who express "great concern" about the deficit are siezing on it as another way to beat this Administration over the head for hope of political gain.

So true. In 2003 I had an argument with this moron from Germany(he was a carpenter who was living large in India because of how far his salary went in terms of Rupees vs Marks).

He kept bitching about how the US was endangering the world because of its decifits?? I kept telling him that he didnt havea clue about what he was talking about, and if deficits caused him nightmares then he should look to his own gvernments systemic deficits. Of course this was beyond his simple understanding and he ended the conversation by saying I should wear an American flag as a tee shirt.

Its scary how ignorant people are and how much they are manipulated by the soundbite media.

So true. In 2003 I had an argument with this moron from Germany(he was a carpenter who was living large in India because of how far his salary went in terms of Rupees vs Marks).

He kept bitching about how the US was endangering the world because of its decifits?? I kept telling him that he didnt havea clue about what he was talking about, and if deficits caused him nightmares then he should look to his own gvernments systemic deficits. Of course this was beyond his simple understanding and he ended the conversation by saying I should wear an American flag as a tee shirt.

Its scary how ignorant people are and how much they are manipulated by the soundbite media.

:)

Read my post and although that guy may or may not be a moron he may have had a point...

The recession wasn't really Bush's fault. It was the bursting of the dot-com bubble, plus the overzealous Federal Reserve (whose May 2000 50 basis point hike considerably worsened the bubble's bursting. a classic example of overtightening) that did it. Job growth is slow because of the sheer amount of losses from 9/11 and the bubble, plus the collapses of Enron and Worldcom; this is also combined with record productivity, which reduces the need for hiring.

Quit fucking with their worldview eutrusca, you know they're unbalanced as it is :p

While it IS being used for political reasons, one look at what the economists are all talking about shows that its not ONLY being used for political gain. From what I have seen the Economists of the world are divided into two main camps over this issue.

"The New Bretton-Woods" (official term) camp suggest that, as Isanyonehome suggests, that foriegn governments HAVE to buy our debt, and thus this system can go on indefinately (or more precisely, for about 20-30 years by most estimates).

The "Oh f*ck, we're screwed" (My own name for them) group suggests that as Bretton-Woods failed before, the new Bretton-Woods system won't fare much better. The debt will eventually (and eventually varies from economist to economist, generally within the 5-20 year mark) be too great to bear and whole system will collapse.

The numbers could support either theory really, but in both cases we're talking about how many decades this will last before it blows up, not wether or not it "matters." I've seen no economists at all support the idea that this can be ignored for longer than a few presidential terms.

Interesting.

Except that you are leaving out a couple of major factors.

1) Large deficits act like a hammer. At some point(debt service coverage notwithstanding), deficits will control spending(at least that is the hope). Starve the monkey type thinking.

2) Currencies will revalue. We all know that China will unpeg within the next 3-5 years. The Indian rupee will freely float soon(RBI is maxed out in terms of greenback purchase(135Billion), they were supposed to stop at 75 billion.)

3) it is entirely possible that oil sales will be conducted in Euros instead of dollars within the next 10 years.(Unlikely I think, but possible). This one shift would have enormous impact on the US BOT. Of course it would have other offsetting effects such as spuring global oil production. Ahh, dreams of the gold standard.

I read your article, and nowhere in it did it address the two points I made. That's why I brought them up. I think rate of pay is important when you want to cheer for all these new jobs. If the majority of them are near minimum wage, they're not really helping anyone except maybe teenagers.
If you look at the average hourly earnings in constant 1982 dollars in the BLS site, you'll see that the average at the current time, $8.19. That would indicate that most of the new jobs being created over the past 3 or so years have not been minimum-wage level jobs, or that existing jobs have seen their pay increase substantially enough to make the average earnings higher than any point in the Clinton, Bush Sr., or Reagan administration.

:)

Read my post and although that guy may or may not be a moron he may have had a point...

YOU may have a point. That guy though was a moron who tried to impress my younger female cousins by throwing around money. Unfortunately for him, my cousins are rich(by any standards) and they thought he was doubly an idiot.

I on the other hand, am the son of working class people(doctors not industrialists like my cousins) and can actually put a monkey like him in his place. (He thought he was a big shot because he was earning in marks and spending in rupeess, but at the end of the day, he is still a carpenter. A good profession no doubt, but still, basically a person who works with wood, brains really arent required much.)

If you look at the average hourly earnings in constant 1982 dollars in the BLS site, you'll see that the average at the current time, $8.19. That would indicate that most of the new jobs being created over the past 3 or so years have not been minimum-wage level jobs, or that existing jobs have seen their pay increase substantially enough to make the average earnings higher than any point in the Clinton, Bush Sr., or Reagan administration.

Productivity growth has been responsible for the rise in real earnings. However, productivity can also hamper job growth, and so it requires a balance between job creation and productivity to truly benefit. This situation occured during the late 90's, and has begun to revive itself again.

NOTE: Although I'm no rabid fan of President Bush, I have a real problem with those on here who blame the President for everything up to and including global warming and tectonic plate movement! Recently, several of you ( and you know who you are ... and so do I! Mwahahaha! ) have been preaching doom and gloom about the US economy, saying that the President has caused higher unemployment, etc. I probably shouldn't try to confuse you with the facts, but here they are for April, 2005:


Creation of Jobs Surged in April, and Income Rose (http://www.nytimes.com/2005/05/07/business/07econ.html?th&emc=th)

By LOUIS UCHITELLE
Published: May 7, 2005

Overriding earlier evidence that suggested the economy was slowing significantly, job creation and income growth appear to be holding up their end of the recovery.

Page One: Saturday, May 7, 2005

Text: Unemployment Report The government reported yesterday that the nation's employers generated an unexpectedly large number of jobs in April - 274,000 - even as they gave their existing employees additional hours of work.

The employment report was the most positive news about the economy in weeks. It dented the gloom that had accumulated after a number of recent measures provided evidence that last year's robust growth might be fading.

"The main thing I think these employment numbers tell you is that all this worry about the economy experiencing a significant soft patch has been exaggerated," said Richard D. Rippe, chief economist at the Prudential Equity Group.

Employment rose across all sectors except manufacturing. The Bureau of Labor Statistics also revised its estimates for February and March, adding 93,000 jobs - enough to erase the impression that job growth had faltered, particularly in March.

The unemployment rate last month was 5.2 percent, unchanged from March but well below the 6.3 percent rate of nearly two years ago.

The Bush administration greeted the April jobs report as a sign of better times ahead. Treasury Secretary John W. Snow said in a statement that the surge in job creation showed that "President Bush's jobs and growth agenda has again produced results for Americans."

"No! I wnt to beeleev teh librul media you republican SUXXOR!!!11ONE!!ELEVEN"

...What this hasn't happened yet?

Interesting.

Except that you are leaving out a couple of major factors.

1) Large deficits act like a hammer. At some point(debt service coverage notwithstanding), deficits will control spending(at least that is the hope). Starve the monkey type thinking.

2) Currencies will revalue. We all know that China will unpeg within the next 3-5 years. The Indian rupee will freely float soon(RBI is maxed out in terms of greenback purchase(135Billion), they were supposed to stop at 75 billion.)

3) it is entirely possible that oil sales will be conducted in Euros instead of dollars within the next 10 years.(Unlikely I think, but possible). This one shift would have enormous impact on the US BOT. Of course it would have other offsetting effects such as spuring global oil production. Ahh, dreams of the gold standard.

Your major factors all seem to have significant caveats. Deficits controling spending is a bit of a pipe dream at times.

Shade the argument any way you want; simply put I can't find any economist who doesn't think we're getting into serious long-term trouble. All of the "outs" that you've mentioned won't save the US from significant financial trouble.

Your major factors all seem to have significant caveats. Deficits controling spending is a bit of a pipe dream at times.

Shade the argument any way you want; simply put I can't find any economist who doesn't think we're getting into serious long-term trouble. All of the "outs" that you've mentioned won't save the US from significant financial trouble.

Of course they have caveats.

They are no free and clear answers, and even if there, were politicians wouldnt take them.

If you exclude social security, I think you would be hard pressed to find an economist that thinks the US is in any real fiscal danger.

It is only when you factor in the growth of all the entitlement spending that you see a real crisis looming. A crisis that few politicians want to deal with because they will be out of office when it happens.

It is only because politicians of both parties have been able to raid the Social security funds(thereby spending without increasing taxes) that we are approaching the bind that we are almost in.

Solution: cut their purse strings.

This problem can be fixed. We can make hard choices now, or harder choices tomorrow. The politicians prefer the latter, maybe its time the people stood up?

No! I wnt to beeleev teh librul media you republican SUXXOR!!!11ONE!!ELEVEN

No! I wnt to beeleev teh librul media you republican SUXXOR!!!11ONE!!ELEVEN

...Thank you.

I suspect that long before they allow the entire economic system to "collapse," the government would try everything they could think of, including devaluing the dollar, etc. The final step would be to simply abrogate the debt and refuse either to pay any of it, or simply declare that they would pay fifty cents on each dollar of the debt ( or something similar ). Politicians do not like economic turmoil!
Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

yes, 274,000 new jobs were created. However, the actual rise in the number of jobs was closer to 25,000 (still not bad, but no where near as impressive). In order to have a constant unemployment rate, the US must create 250,000 new jobs monthly. This will employ new immigrants and citizens entering the workforce for the first time.

Additionally, the deficit in nominal terms is the highest. In real terms (deficit/gdp) it is not. It is still, however, one of the highest, among the top 3.

If you made one million dollars from the year 1 every day until today, you would STILL not be able to pay off the US debt.

Of course they have caveats. They are no free and clear answers, and even if there, were politicians wouldnt take them.

If you exclude social security, I think you would be hard pressed to find an economist that thinks the US is in any real fiscal danger.

It is only when you factor in the growth of all the entitlement spending that you see a real crisis looming. A crisis that few politicians want to deal with because they will be out of office when it happens.

It is only because politicians of both parties have been able to raid the Social security funds(thereby spending without increasing taxes) that we are approaching the bind that we are almost in.

Solution: cut their purse strings.

This problem can be fixed. We can make hard choices now, or harder choices tomorrow. The politicians prefer the latter, maybe its time the people stood up?

I find your logic extremely hard to follow. These deficits didn't come from Social Security. They came from other programs, new programs and departments, and massive military expenditures. Social Security isn't the issue here; the runaway government spending on mismanaged new programs combined with major military expenditures is the problem.

Besides, the current "solution" for social secutiry includes immediate outlays of...how many trillion dollars? 1-3 trillion I believe? That's not a hard choice, that's cutting off your nose to spite your face.

Heh... yeah... I think it takes talent to turn a budget surplus into a deficit in less than 1 term is all. Just because something improves in the short term doesn't mean that it hasn't gotten worse in the long term. Which it has.

I suspect that long before they allow the entire economic system to "collapse," the government would try everything they could think of, including devaluing the dollar, etc. The final step would be to simply abrogate the debt and refuse either to pay any of it, or simply declare that they would pay fifty cents on each dollar of the debt ( or something similar ). Politicians do not like economic turmoil!


Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.


Could you dumb this down for me please? :)

Could you dumb this down for me please? :)

It says we can't shrug off the debt. No way, no how.

Debts to people who betray the US or those claims involving payment for freed slaves not included.