NationStates Jolt Archive

I've always had a profound respect for the man even if I don't always agree with him, but in this case I have absolutely no negative criticism of Dr. Reich's logic. What fault can you find?

http://robertreich.blogspot.com/2008/03/are-we-heading-for-another-great_5588.html

<snip>

WE’RE sliding into recession, or worse, and Washington is turning to the normal remedies for economic downturns. But the normal remedies are not likely to work this time, because this isn’t a normal downturn.

The problem lies deeper. It is the culmination of three decades during which American consumers have spent beyond their means. That era is now coming to an end. Consumers have run out of ways to keep the spending binge going.

The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy, is to give middle- and lower-income Americans more buying power — and not just temporarily.

<snip>

I disagree. This is just part of the Economic roller-coaster. It has it's ups and downs, and the best thing government can do is lower taxes, making the burden less on people. And I fail to see the 3 decades of a "Spending binge".

I disagree. This is just part of the Economic roller-coaster. It has it's ups and downs, and the best thing government can do is lower taxes, making the burden less on people. And I fail to see the 3 decades of a "Spending binge".

Don't you see it? We are all going to die.

Don't you see it? We are all going to die.

Don't forget the hellfire.

Don't forget the hellfire.
Can't forget the hellfire.:D
Don't you see it? We are all going to die.
OH GOD! I SEE IT NOW! THIS IS ALL POINTLESS!AHHHHHHHH!!!!*Jumps off cliff*

I disagree. This is just part of the Economic roller-coaster. It has it's ups and downs, and the best thing government can do is lower taxes, making the burden less on people. And I fail to see the 3 decades of a "Spending binge".

Is that a confession of epic fail? :) It's there, you just need to look from an unbiased standpoint.

Lowering taxes won't fix anything, unless it's to restore the progressive tax that created the middle class in the first place.

we do have many people that have no equity- they may own a home, but they have borrowed all their equity and are struggling to make the mortgage payment and line of credit payment.

They are making car payments on a car they owe more than its worth and may have a 60, 72 or even 78 month loan. They will always owe substantially more than the car is worth. They may trade it in on another car and further reduce the equity in that car.

They rely on credit cards for purchases like food and fuel-two things you should never borrow for and pay interest on.

Then-they or their spouse lose their job, or overtime hours are cut.

I think there is/was too large a trend of people borrowing too much to live at above what they can afford on ther income.

And I think we are seeing the symptoms on a large scale now,between the housing mess,etc...

Right, and now we might very well be seeing the beginning of the end of easy credit. It's taken a long time to create the mess, so I expect it to take a long time to fix it. The hard part is convincing modern citizens to tighten their belts and brace for tough times ahead.

we do have many people that have no equity- they may own a home, but they have borrowed all their equity and are struggling to make the mortgage payment and line of credit payment.

They are making car payments on a car they owe more than its worth and may have a 60, 72 or even 78 month loan. They will always owe substantially more than the car is worth. They may trade it in on another car and further reduce the equity in that car.

They rely on credit cards for purchases like food and fuel-two things you should never borrow for and pay interest on.

Then-they or their spouse lose their job, or overtime hours are cut.

I think there is/was too large a trend of people borrowing too much to live at above what they can afford on ther income.

And I think we are seeing the symptoms on a large scale now,between the housing mess,etc...

I've always had a profound respect for the man even if I don't always agree with him, but in this case I have absolutely no negative criticism of Dr. Reich's logic. What fault can you find?

http://robertreich.blogspot.com/2008/03/are-we-heading-for-another-great_5588.html

I do respect Dr. Reich, but don't always agree with him. In this case, I fully agree with him. Now, if we could just elect people to Congress who are fiscally responsible that would be a good start. The Democrats have not been fiscally responsible since Truman's administration, and the Republicans haven't since Bush II. :mad: Time for a new order in Washington. Throw them all out and start over...but...but...the only good Congressman is my Congressman. :mad:

I disagree. This is just part of the Economic roller-coaster. It has it's ups and downs, and the best thing government can do is lower taxes, making the burden less on people. And I fail to see the 3 decades of a "Spending binge".

How can you possibly judge 30 years of economic trends? you're only half that old

Right, and now we might very well be seeing the end of easy credit. It's taken a long time to create the mess, so I expect it to take a long time to fix it. The hard part is convincing modern citizens to tighten their belts and brace for tough times ahead.

I've always felt it should be a required course in high school-a class that stressed living within your means, and how credit cards work in graphic detail.
Teach these kids not to start off owing.
Teach them to use interest to their advantage,rather than be a slave to it.

If we start a generation off right-and soon- it may be the leading edge of a trend that strengthens the US again.

I've always felt it should be a required course in high school-a class that stressed living within your means, and how credit cards work in graphic detail.
Teach these kids not to start off owing.
Teach them to use interest to their advantage,rather than be a slave to it.

If we start a generation off right-and soon- it may be the leading edge of a trend that strengthens the US again.

well there are times where credit is a good thing. Most people can't afford to buy a house, many can't buy a car. I know I couldn't gone to grad school without taking out credit.

The line I think, instead of putting it at a point of saying "no credit", teach how to evaluate, where taking credit is necessary, or investing (either in property, or yourself) as opposed to simply using credit to avoid delaying gratification.

OH GOD! I SEE IT NOW! THIS IS ALL POINTLESS!AHHHHHHHH!!!!*Jumps off cliff*

Can I have your stuff? :p

I went through a neighboorhood yesterday to look at houses (in a tract built within the last five years) and I saw a lot of $300k+ houses with beater cars and junk out front. I told my wife, "You know, by rule of thumb, 300 thousand divided by 4 means you should have at least $75,000 a year income to even think about living there. I don't think half of them make nearly that. How can these people survive?" I suspect a not-small chunk of the populace is going to learn some hard mistakes. And expect the government to bail them out.

My wife and I are *gasp* actually saving for the big ticket items we want to get in the future. Are we in the minority?

I've always felt it should be a required course in high school-a class that stressed living within your means, and how credit cards work in graphic detail.
Teach these kids not to start off owing.
Teach them to use interest to their advantage,rather than be a slave to it.

If we start a generation off right-and soon- it may be the leading edge of a trend that strengthens the US again.

Remember kids:

1: take out a loan from the bank.
2: Invest money in stocks.
3: Use stocks to get loan from bank.
4: Use Loan from bank to buy stocks...

well there are times where credit is a good thing. Most people can't afford to buy a house, many can't buy a car. I know I couldn't gone to grad school without taking out credit.

The line I think, instead of putting it at a point of saying "no credit", teach how to evaluate, where taking credit is necessary, or investing (either in property, or yourself) as opposed to simply using credit to avoid delaying gratification.

Is it just me, or can anyone else see the parallels here to arguments for sex education?

Click Stand;13499168']Remember kids:

1: take out a loan from the bank.
2: Invest money in stocks.
3: Use stocks to get loan from bank.
4: Use Loan from bank to buy stocks...

5. Go to Costco and get cardboard boxes to live in afterward. :p

we do have many people that have no equity- they may own a home, but they have borrowed all their equity and are struggling to make the mortgage payment and line of credit payment.

They are making car payments on a car they owe more than its worth and may have a 60, 72 or even 78 month loan. They will always owe substantially more than the car is worth. They may trade it in on another car and further reduce the equity in that car.

They rely on credit cards for purchases like food and fuel-two things you should never borrow for and pay interest on.

Then-they or their spouse lose their job, or overtime hours are cut.

I think there is/was too large a trend of people borrowing too much to live at above what they can afford on ther income.

And I think we are seeing the symptoms on a large scale now,between the housing mess,etc...

Well, you have people who purchase a house with an ARM that "adjusts" in five or so years. (Yeh, that's great, I'll get that promotion in two more years.)

Or the interest only loan (Oh super, we only have to pay $500 a month for our $250,000 home)...until it adjusts...(God honey, how are we going to pay this $3,000 a month house payment?)...

Oh, take out an equity loan on the house...(I'm sorry Mr & Mrs Smith but your $250,000 home is now worth $175,000 and because you had an interest only loan you now owe $300,000 on the house)

PERSONAL RESPONSIBILITY but the print was so small :rolleyes:

Teach these kids not to start off owing.

And yet people stress how important it is to go to college....

Is it just me, or can anyone else see the parallels here to arguments for sex education?

Well, as most teens ignore sex education as much as financial education, I'll have to say yes. :D

Is it just me, or can anyone else see the parallels here to arguments for sex education?

You mean...we should not reduce a complex life to an overly simplistic, and thus inefficient "don't do it" and instead actually teach our children to rationally, intelligently analyze their situations in order to determine what is the best course for them so they can make smart choices?

Fuck that shit.

And yet people stress how important it is to go to college....

In the not-too-distant past, students could usually count on the higher earning power of a college graduate to offset the financial crunch from student loans. My wife finished college and I'm still working on it (two classes left after the ones I'm in), but my earning power is higher than hers because I've been working longer.

The advice to go to college is good, but not as strong as it used to be.

Countless studies have firmly established that teenagers do not ignore comprehensive sex education.

Highlighted the key word. How many teens actually get that? I would imagine not many more than get comprehensive financial education.

Well, as most teens ignore sex education as much as financial education, I'll have to say yes. :D

Countless studies have firmly established that teenagers do not ignore comprehensive sex education.

In the not-too-distant past, students could usually count on the higher earning power of a college graduate to offset the financial crunch from student loans. My wife finished college and I'm still working on it (two classes left after the ones I'm in), but my earning power is higher than hers because I've been working longer.

The advice to go to college is good, but not as strong as it used to be.
I agree. A good hand in a trade will probably make as much money as many college grads. That's a pretty broad comparison, but a good electrician, HVAC tech, diesel mechanic, etc, can make a fair amount of money with relatively little expended on education.

I disagree. This is just part of the Economic roller-coaster. It has it's ups and downs, and the best thing government can do is lower taxes, making the burden less on people. And I fail to see the 3 decades of a "Spending binge".

You're....what, 13? 14? 15? How on earth would be able to see it?

And LOWERING TAXES DOES NOT ALWAYS FIX THE PROBLEM! Im sick of people parroting this solution "Oh well, you see, its an economic roller coaster, so lower taxes..." NO! Sometimes, you actually need to RAISE taxes. Its economics. Im not intimate with the current situation as Im not on the Federal Reserve, so I dont know what this situation calls for, but sometimes lowering taxes MAKES IT WORSE.


God politicians need to grow a pair of em and be willing to say "Hey guys, we gotta raise taxes," and people need to get over themselves and part with a little bit of their precious money to help out society in the long run.


As an aside, economists have been saying this for a few years now. It will probably happen. Sooner rather than later. Unless this huge refund thing the US government just did will actually work out, in which case Bush may have a positive part of his legacy.