Heavy debt threatens American economy

[mmarsh]

Mmarsh by your logic me eating McDonnald's drive through for breakfast instead of my normal yogurt and oatmeal on 9/11/2001 caused the terrorist attack.

Whispering Death

You missed the point.

I did that on purpose because I didnt want to bore people with a dull monologue about economic Flow and Trends. It was a light hearted post.

I never said that Presidents control economic markets, I said that they can HAVE AN EFFECT. A big difference. Obviously if presidents did control our economy we would never have a bad economy, ever.

There are plenty of other examples that have effected economic trends both positively and negatively. Right off the top of my head: when the US went off the Silver standard, When Jackson closed the First National Bank, both were negatives, the Square Deal and New Deal both had positive effects.

Its kind of like bull riding, sometimes you can control the animal and sometimes the animal controls you.

 

[Missileer]

Cutting everything would not pay off the countries debts while at the same time opening the door for the worst Robber Barons you can image.

You don't understand the concept of economy stimulation. Cutting taxes, Which was JFK's position on economic stimulation, helps the largest amount of employers in America, small business owners who have to claim income from their business as personal income. They are hit the hardest by raising income taxes. Thus the employees lose jobs or take paycuts.

800 years ago Alchemists tried turning lead into gold, it didnt work too well...

I don't know, plumbers have done it for years.

As far as robber barons, I've never worked for a poor person in my life.

 

[Duty Honor Country]

Doody

I find myself again in agreement. We must RAISE taxes in order not only to pay off the debt but to balance the budjet. I warn you all there is a rumour that Bush will announce a new cut next year. We must also prevent him from making permanent the disasterous tax cuts of 2001 and 2003.

2 times in one week we agree on something...maybe there is some truth to this madness

We do need to eliminate waste, pork, and corruption. The Highway Bill comes to mind (a.k.a Highway robbery) and various useless DOD projects is another.

I agree 100%, that useless spending needs to go.

I feel we need to move away from the blame game and more into what can be done to fix the issue. The fact is the USA has :cen: loads of debt. Rather than saying Clinton's policies are better than Bush's or vice versa, try to point out the good parts of each. NO President has been perfect when it comes to economics.

Doody

 

[Missileer]

It doesn't really matter what an administration thinks of the economy or taxes, it's the riders put on bills going through Congress that is the real problem. Every State wants their Congressmen to help his/her state or they won't be re-elected. Thats pork but the bill sponsors have to figure the pros and cons because without Presidential line item veto, the pork stays in so funding for schools will go through. Congress makes laws using bills, they are the only ones who can make laws.

Highway taxes are paid by the State to the Federal Government who turns around and returns some of it as funding. But, the State has to do things like speed limits, smog control, or anything that the Government dictates or they will receive no funding at all.

Your Senators and Representatives are the people you need to choose wisely. And remember the old adage, "Government can harm the economy, but they can't help it."

 

[mmarsh]

Doody+All

Well, I think to fix our growing deficiet (and money problems in general) will have to include a mix of some cost cutting (espically on 'pork politics') but on helpful programs as well. Our $5 Billion a Month war in Iraq is also burning a very large hole in our wallet. Speaking economically only, It would be good if it got wrapped up shortly.

We are going to have to be realistic, there is no solution possible without a tax increase. Anyone who says different is running for office. My thoughts (although I'm no expert) would be to revoke Bush's taxes cuts and perhaps even raise them further (at least temporarily). Our deficiet is over $425 billion we need to increase tax revenue.

**Either that or we open an international plumbing service

 

[Missileer]

Doody+All

Well, I think to fix our growing deficiet (and money problems in general) will have to include a mix of some cost cutting (espically on 'pork politics') but on helpful programs as well. Our $5 Billion a Month war in Iraq is also burning a very large hole in our wallet. Speaking strictly economically, It would be good if it got wrapped up shortly.

We are going to have to be realistic, there is no solution possible without a tax increase. Anyone who says different is running for office. My thoughts (although I'm no expert) would be to revoke Bush's taxes cuts and perhaps even raise them further (at least temporarily). Our deficiet is over $425 billion we need to increase tax revenue.

**Either that or we open an international plumbing service

I'm all for the plumber idea, if that's not turning lead into gold, I don't know what is.

 

[Rich]

i pay arounf 33 cents in the dollar to tax,

but i know i can go to hospital for free, that my kids education is pay for till the end of high school, if i have an accident at work i wont be pennyless.


horses for course i guess, and as was stated in another thread...this is easier to pull off in a smaller country

But, how long would you wait on a heart or kidney transplant list?

We do have private health insurance in Australia, and once you earn over a certain amount, the government will tax you extra if you don't provide for your own medical coverage.

The difference with private insurance is that you get to choose which doctor treats you and you are covered for "non-life threatening" treatments, such as dental, optical or plastic surgery in the event of an injury. A public patient can wait for months or even years to get new dentures, for instance.

As far as transplants such as heart or kidneys go, everyone, public or private, are treated pretty well the same if it is life threatening. The one exception to that is if you have enough money to pay someone for what you need - Australian billionaire, Kerry Packer paid his helipcopter pilot for one of his kidneys!

While its a good system, it is getting harder for the govt to afford as the baby boomers hit retirement.

Chewie - is the NZ system the same or similar?

 

[chewie_nz]

sounds very similar to me. i dont know if the govt taxes the rich harder if they dont get private health insurance (personally i think its the "done thing" for the wealthy any way)

about five/ten years ago we had big problems with the public health sector, huge waiting lists (try five + years to get a new hip) but now days they seem to have got that under control.

what the govt is doing now is pushing hard for people to save for their own retirement, this is due to our shrinking tax base (baby boomers growing old), put simply we are going to get to the stage where we HAVE to tax the rich harder.

 

[Whispering Death]

Here's the bottom line though. Gas prices are going to hurt our economy WAAAAAAAAAAAY more than any deficit will. Gas prices go up, discretionary income goes down, jobs get cut, and we're starting a cycle that ends in trouble.

 

[chewie_nz]

it'll be a rough transition....but surely you dont think that the oil companies wont have a back up plan.

they've seen the writing on the wall, there are viable alternatives to Oil i am certian

 

[Duty Honor Country]

Here's the bottom line though. Gas prices are going to hurt our economy WAAAAAAAAAAAY more than any deficit will. Gas prices go up, discretionary income goes down, jobs get cut, and we're starting a cycle that ends in trouble.

ah yes but our friends across the big pond are paying at least twice as much as we do for gas and they have learned to live with it. Their governments tax the crap out of gas. Our federal government only taxes us 18.3 cents per a gallon of gas while Europe pays over $2 per 4 liters. The US uses between 300 to 400 million gallons of gas per day (depending on the source). Lets say we use 350 million a day. If the government was to raise the gas tax by $1, the money would flow in. Raising the tax would ultimately force people to conserve. So lets assume a 20% reduction per day. That amounts to 280 million gallons of gas used per day. That comes to $102 billion in taxes a year vs $23 billion with the old system.

I have to admit, I supported that 50 cent per a gallon tax increase that was talked about back in the realy 90's.

 

[chewie_nz]

we are paying around $1.50 per litre here in NZ when a couple of years ago .85c per litre was the norm.

(US dollar buys around 2 NZ dollars)

 

[Rich]

Here's the bottom line though. Gas prices are going to hurt our economy WAAAAAAAAAAAY more than any deficit will. Gas prices go up, discretionary income goes down, jobs get cut, and we're starting a cycle that ends in trouble.

ah yes but our friends across the big pond are paying at least twice as much as we do for gas and they have learned to live with it. Their governments tax the crap out of gas. Our federal government only taxes us 18.3 cents per a gallon of gas while Europe pays over $2 per 4 liters. The US uses between 300 to 400 million gallons of gas per day (depending on the source). Lets say we use 350 million a day. If the government was to raise the gas tax by $1, the money would flow in. Raising the tax would ultimately force people to conserve. So lets assume a 20% reduction per day. That amounts to 280 million gallons of gas used per day. That comes to $102 billion in taxes a year vs $23 billion with the old system.

I have to admit, I supported that 50 cent per a gallon tax increase that was talked about back in the realy 90's.

I hate to sit on the fence - but you're both right.

Below is the TOE rating for four countries. TOE is the energy supply per person per year (tonnes of oil equivalent)
UK 3.89
France 4.25
Australia 5.71
US 8.35

Raising tax will, in the long run, lower US consumption of oil, reducing oil imports and hence lower debt.

Problem is that US industry, particularly manufacturing is heavily reliant on oil prices. (e.g think of all the plastic manufacturers). Prices therefore must go up to offset oil price rises, but these industries are already combatting cheap imports. They will have the double wammy of less demand (from less discretionary income as people adjust to fuel prices) and be less competitive against cheaper imports. That will lead to job cuts and, higher imports.

Still, in the long run, US consumption of oil needs to decrease and taxes will need to be raised. You can't keep spending more than your earning forever. How they manage that without grinding into a recession will be a real work of art though.

 

[Whispering Death]

I disagree Doody. Europeans have a different style of living. Generally, they don't live in the suburbs and commute for an hour into work. If you haven't noticed, England is a tad bit smaller than the US so there really is less need to get around.

We have a HUGE need to drive and the vast majority of us don't have busses that stop infront of our houses. There just is not another option but to drive where we have to go. We can't conserve because we still have to DRIVE to work, DRIVE to the grocery store, DRIVE to everywhere we need to go.

Gas prices are going to chew the shit out of discretionary income way before it makes a very sizeable shift in consumption if gas prices keep going up at this rate. I mean, there are long term price controlls like buying more fuel efficient cars and such but the average car lasts for 6 years. So we're still 6 years off, 5 if we're lucky, till' that kicks in. Think about that, that's 2 presidential elections from now.

Before then, we'll be having economy problems. And so far I've only hit the discretionary income side of the problem. Then you've got inflation from the price of everything going up due to the cost to transport.

 

[chewie_nz]

yes but it's also the WAY you drive....



big cars,

big thirsty engines

petrol Vs Diesel


these are some of the biggest stumbling blocks for the US in the future. here in NZ and Australia a "truck" usually runs on diesel.

people driving fuel inefficiant SUV's has to stop...they aren't safer and they sure as hell aren't a good option with prices going up and fuel reserves going down

 

[Locke]

amen on the 4wds/SUV's
i read in the paper yesterday that the % of 4WD sales has dropped in the last 3 months and the # of 4wd's that have been traded in is increasing, which is good. they are pointless unless you are using them for 4wd'ing, which very few people do

petrols prices:
petrol :$1.29 per lt
gas $.44

i remember when even less than 10 years ago when gas was $.15/lt

 

[chewie_nz]

scooter and moped sales here have gone up 200% in the last year

 

[Whispering Death]

Well the "blame the SUV" thing just doesn't add up. Like I said if, right this very day, a law where enacted banning all cars that get under 25mpg it would still take 6 years before a significant majority where all converted over.

People don't buy cars every year, like I previously said the average lifespan for a car in an American family is 6 years. The price has doubled in the last 18 months, that's a big BIG problem that isn't going to be solved with a few people voluntarily switching from SUVs.

 

[mmarsh]

Whispering Death

You are abit out of date. That has changed. It used to be people got to work by driving (a syndrome coined in France as La Car). This has totally changed now because of congestion, very high gas prices, and government regulation.

Most people in Europe do live in the suburbs (because of high rents) and they mostly commute via public transportation. For example, In my office I am the only person of 30 that lives in Paris and only 5 of those people actually drive to work.

European governments in France, Italy and the UK have for years been penalizing drivers with things like higher gas taxes, increase tolls, closing of roads while rewarding those who commute.

 

[Missileer]

My wife inherited some of the mineral rights to her Stepdad's land when he died. We were talking to the a land office worker about crude and he explained that a barrel is 42 gallons. Out of a barrel, about 4 gallons are refined to gasoline, depending on the grade of crude, the rest goes to aviation fuel, heating oil, diesel, and oil based products such as plastics. Most of a barrel is heavy oil that is mixed with sand and binders to make asphalt.
The crude is sold on the market as futures then goes to refineries and the gasoline is then traded and sold to retailers, usually for $2.00 per gallon. The rest is taxes, advertisement, and transportation. The market elements will raise and lower prices depending on price of crude, amount of crude available, and refinery output quotas.

If, all of a sudden, we found the 100 mile per gallon hybrid, the price of the gasoline would go up proportionately to how much was being used. In other words, drillers and refiners have to pay wages and that depends on
the bottom line in accounting. Back during the energy crunch in the 70's everyone was told to turn your thermostats higher and use less electricity all the way around. We did and the energy companies raised the price per BTU because they needed more money.

I don't know where to start to look for a guest at a lynching party, Detroit for still making the big dinosaurs, speculators, oil producers, refiners, the list goes on.