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(Washington Post)   All things being equal, another recession is coming   (washingtonpost.com) divider line 68
    More: Scary, Congressional Budget Office, Real GDP, recession, debt limit  
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2250 clicks; posted to Business » on 23 Aug 2012 at 10:20 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-08-23 09:55:25 AM
This is not a repeat from every single day since 2009's first round of improved employment numbers.
 
2012-08-23 10:29:23 AM
We're piling on debt and we have no significant growth. We're pretty farked no matter what.
 
2012-08-23 10:33:36 AM
Fiat currencies always fail. The dollar's failure is imminent.
 
2012-08-23 10:35:50 AM

Pick: Fiat currencies always fail. The dollar's failure is imminent.


This is a repeat from every year since 1976. Imminent. Any.day.now.

DOCTOR RON PAUL!
 
2012-08-23 10:35:58 AM
Yeah, austerity.
 
2012-08-23 10:36:16 AM

unlikely: This is not a repeat from every single day since 2009's first round of improved employment numbers.


This.

We get it, we're doomed, just shut up about it.
 
2012-08-23 10:36:47 AM
when you have imbeciles running the country, no other outcome is available.
 
2012-08-23 10:40:47 AM
The nice thing about predicting cyclical events for the generic future, you have a good chance of being correct multiple times.
 
2012-08-23 10:43:43 AM

State_College_Arsonist: We're piling on debt and we have no significant growth. We're pretty farked no matter what.


*sigh*. We are not piling on debt, Obama has reduced the deficit by about a 100 billion, primarily through the reduction of government workers.

You do understand that interest rates that the government can borrow at are below inflation, right? You do understand that is negative amortization and the government could borrow money virtually for free as the rate of inflation would negatively affect returns for those who loan the US government money?

The real question is not why are we not doing more to reduce the deficit, but why is the government not borrowing as much money as possible and forcing growth? Yes, Keynesian economics works, has always worked, and if the Republitards George Bush had not screwed it up in the 00's we would not be in this mess.

If we want to avoid a recession the the US government needs to borrow around 4 trillion dollars and stimulate the economy. It is not clear that the Republicans want to avoid a recession, because austerity, the reduction of government spending, causes recessions.

Personally, I'm all for our current pay, reducing the deficit through increase of taxes and reduction of government spending is going to piss people off. I believe that Obama gets re-elected, but after four years of austerity another Republitard will get elected to president and once again reap the benefits of the Democrats hard work, just like Ronald Reagan reaped the benefits of Jimmy Carters hard work on the economy.
 
2012-08-23 10:52:14 AM
well since the Republicans have the House majority i'm sure this is Fartbama fault
 
2012-08-23 11:10:05 AM
I propose we nominate Ned Stark for President then.
 
2012-08-23 11:17:02 AM
"Fortunately, it's possible for policymakers to address the cliff in a way that prevents economic harm in the short-run without undermining medium-term debt reduction goals. As the Committee for a Responsible Federal Budget shows in this graph, the largest negative economic effect comes from the budget cuts in the debt ceiling deal, whereas the overwhelming share of the deficit reduction benefits of doing nothing come from the expiration of the Bush tax cuts."

That right there is a key part of the article.
 
jgi
2012-08-23 11:26:25 AM
Minimize your financial liabilities, stock a little cash away, and you can weather any recession. If you feel you deserve that big house (aka big mortgage), desperately need that shiny new car (and the accompanying auto loan), or feel its your God-given duty to procreate (more mouths to feed), you might have a little trouble making ends meet.

Say it with me: No debt. No debt. Get out of debt. Pay off your debt and stop taking on new debt.
 
2012-08-23 11:36:48 AM
Or we could let the tax cuts expire and spend more money. The debt is a income problem at least as much (likely more) than a spending problem.
 
2012-08-23 11:42:40 AM

soakitincider: when you have imbeciles running the country, no other outcome is available.


Not just the ones running the country. It is also us rank and file imbeciles that have no concept of fiscal responsibility.

www.thebasispoint.com

Untill us folks in the poor and middle class can continue to deleverage and get back on our feet, a full recovery will not happen. It is going to take some time. Get used to it. It is time to pay the piper.
 
2012-08-23 11:44:47 AM

Slaves2Darkness: Yeah, austerity.


4 years in a row of over a $1T deficit is being austere. I'd hate to see wreckless spending
 
2012-08-23 11:46:38 AM

cgraves67: I propose we nominate Ned Stark for President then.


All of him, or just his head?
 
2012-08-23 11:47:42 AM

Pick: Fiat currencies always fail. The dollar's failure is imminent.


Know how I know you don't know anything at all about economics, or probably anything else?
 
2012-08-23 11:47:56 AM

satanorsanta: Or we could let the tax cuts expire and spend more money. The debt is a income problem at least as much (likely more) than a spending problem.


It is both. Spending if ~24% of GDP, while revenue is around 16%. Increase revenue to 19% or so and decrease spending to 21% and we might just make it.
 
2012-08-23 11:57:57 AM

MugzyBrown: Slaves2Darkness: Yeah, austerity.

4 years in a row of over a $1T deficit is being austere. I'd hate to see wreckless spending


*sigh* Comprehension failure.

The current 1.5 trillion dollar deficit is just maintaining the current status and anemic 2.4 GDP growth rate. The austerity that is coming is the sequestering, i.e. the automatic 10% cut of government spending across all categories, and lapse of the George Bush tax cut.

A more sane plan to cut the deficit would be two fold first increase all tax rates by 30% and borrow roughly 4 trillion dollars to stimulate the economy over the next 10 years. This will provide a massive shot in the arm to the economy as the government buys goods and services to rebuild infrastructure, increase access to health care, and other needed projects while at the same time get people used to the real cost of government, sot hat when the borrowing stops the growth and taxes should close the deficit.
 
2012-08-23 11:58:43 AM

HeadLever: satanorsanta: Or we could let the tax cuts expire and spend more money. The debt is a income problem at least as much (likely more) than a spending problem.

It is both. Spending if ~24% of GDP, while revenue is around 16%. Increase revenue to 19% or so and decrease spending to 21% and we might just make it.


Unfortunately that also cuts roughly 1.5 trillion dollars out of the economy, which will force a recession.
 
2012-08-23 11:59:18 AM

satanorsanta: Or we could let the tax cuts expire and spend more money. The debt is a income problem at least as much (likely more) than a spending problem.


Not really.. Until the recession, the % of federal tax revenue to the GDP today is about what it's always been. The spending is higher.

Revenue 1951-2000 - 18.1% of GDP
Revenue 2001-2008 (Bush Tax cuts) - 17.6%
Revenue 2009-12 (Recession) - 15.2%

Spending 1951-2000 - 19.9%
Spending 2001-08: - 19.6%
Spending 2009-12 - 24.5%
 
2012-08-23 12:11:18 PM

Slaves2Darkness: Unfortunately that also cuts roughly 1.5 trillion dollars out of the economy, which will force a recession.


Not necessarily, since it is a function of GDP and not necesarily dollars. We can do quite a bit by 1) increasing GDP while keeping spending somewhat flat. Increasing GDP also typically increases revenues/GDP ratios.

However, I am ultimately not very optimisitc that this will happen. Household debt is way too hight for us to see the booms that we had in the past. If we do, I would be even more concerned about the next crash than I am with our current situation. I belive we need to deleverage debt and this means a sluggish economy for a number of years.

Everyone loves to blame the democrats or republicans for this mess. I say you need to point that finger into the mirror.
 
2012-08-23 12:15:02 PM

HeadLever: I say you need to point that finger into the mirror.


I have 0 household debt other than my mortgage which I have equity in my home.. not as much as I want, but still above water.

So my mirror is fine, it's the rest of you deadbeats pulling me down!
 
2012-08-23 12:24:12 PM
There's been a minor or major recession roughly every five years for a long, long time.
 
2012-08-23 12:31:21 PM

MugzyBrown: HeadLever: I say you need to point that finger into the mirror.

I have 0 household debt other than my mortgage which I have equity in my home.. not as much as I want, but still above water.

So my mirror is fine, it's the rest of you deadbeats pulling me down!


I am in the same boat. Also trying to throw an extra grand at every mortage payment. However, I was speaking more as a collective. I know, I know. That is awful socalist of me.
 
2012-08-23 12:32:50 PM
I am in the same boat. Also trying to throw an extra grand at every mortage payment. However, I was speaking more as a collective. I know, I know. That is awful socalist of me.

Isn't it fun to do the right thing and then pay the price by funding everybody else's bailout? (individual or corporate)
 
2012-08-23 12:37:12 PM

MugzyBrown: Isn't it fun to do the right thing and then pay the price by funding everybody else's bailout? (individual or corporate)


Just wait until we have a few years of 5% to 6% inflation and we redistribute more money from those that saved some money to those that are way over thier head.

Might be a really good time to invest in something that weathers inflation really well.
 
2012-08-23 12:48:20 PM

HeadLever: It is also us rank and file imbeciles that have no concept of fiscal responsibility.


Cool chart. I like how it shows how income hasn't kept up with living costs since the 80s (when we started moving massive amounts our country's wealth to the rich), resulting in a year over year drop in savings, and a mirror increase in having to live off of accumulated debt.

It is another good illustration that shows just how much we've all been farked since Reagan.

That was your goal, right? Not some BS about personal responsibility and bootstraps, I hope?
 
2012-08-23 01:05:24 PM

HeadLever: MugzyBrown: Isn't it fun to do the right thing and then pay the price by funding everybody else's bailout? (individual or corporate)

Just wait until we have a few years of 5% to 6% inflation and we redistribute more money from those that saved some money to those that are way over thier head.


I know I'm going to regret this, but, this doesn't make any sense. If your concern is deleveraging household debt, then inflation is not something that should concern you considering it reduces household debt to wage ratios.

Furthermore, I've never heard of a link between inflation and increased taxation.
 
2012-08-23 01:07:10 PM

sendtodave: like how it shows how income hasn't kept up with living costs since the 80s (when we started moving massive amounts our country's wealth to the rich), resulting in a year over year drop in savings, and a mirror increase in having to live off of accumulated debt.


Not necessarily. It could be a result of folks simply taking on more debt for things they don't necessarily need and having to pay a larger chunk of thier income on interest payments. Bigger houses, SUVs, flat screens, computers, iPhones, and every other must have gimmic that is purchased via debt does not cost just in terms of the produce, but the interest you end up paying. The looser the credit, the more 'free' money you have access to, right?

If you wanted to plot the cost of groceries, basic shelter, transportation and other essentials with income, I would expect not a large change. Medical care, is a big exception to this, however.

While I don't discount you point entirely, I don't think that it tells the entire story either.
 
2012-08-23 01:13:06 PM

Rapmaster2000: If your concern is deleveraging household debt, then inflation is not something that should concern you considering it reduces household debt to wage ratios.


My concern would be to deleverage household debt without hitting those that have acted responsible and actually saved some of thier hard-earned money. Inflation is one tool that can be used to help the deleveraging process, but it is not without its drawbacks. Inflation is basically a redistibution tool and I am typically not a fan of redistribution policies.

There are not many good options at this point. If I had my way I would try keep inflation somewhat low and place Dave Ramsay on every channel/radio station, while recognizing that we are going to have a sluggish economy for a number of years.
 
2012-08-23 01:14:11 PM

Slaves2Darkness: State_College_Arsonist: We're piling on debt and we have no significant growth. We're pretty farked no matter what.

*sigh*. We are not piling on debt, Obama has reduced the deficit by about a 100 billion, primarily through the reduction of government workers.

You do understand that interest rates that the government can borrow at are below inflation, right? You do understand that is negative amortization and the government could borrow money virtually for free as the rate of inflation would negatively affect returns for those who loan the US government money?

The real question is not why are we not doing more to reduce the deficit, but why is the government not borrowing as much money as possible and forcing growth? Yes, Keynesian economics works, has always worked, and if the Republitards George Bush had not screwed it up in the 00's we would not be in this mess.

If we want to avoid a recession the the US government needs to borrow around 4 trillion dollars and stimulate the economy. It is not clear that the Republicans want to avoid a recession, because austerity, the reduction of government spending, causes recessions.

Personally, I'm all for our current pay, reducing the deficit through increase of taxes and reduction of government spending is going to piss people off. I believe that Obama gets re-elected, but after four years of austerity another Republitard will get elected to president and once again reap the benefits of the Democrats hard work, just like Ronald Reagan reaped the benefits of Jimmy Carters hard work on the economy.


You were doing great. You sounded intelligent and I was following along willing to give your point a shot and look into what you were saying.

Then you pulled out the word 'republitards' and threw it all away. You went right into the wastebasket with birthers, sekert mooslims, moon landing deniers and vaccine haters.

I now highlight your posts in that 'special' color I reserve for opinions from those that only learn what agrees with their own pre-conceived notions.

Sooooo close too. I was rooting for you, but I can only assume your whole post was drivel.
 
2012-08-23 01:14:50 PM
Start Charging a .05 cent tax on Trades and Speculations like the other world markets do.

That is all.
 
2012-08-23 01:14:51 PM

HeadLever: soakitincider: when you have imbeciles running the country, no other outcome is available.

Not just the ones running the country. It is also us rank and file imbeciles that have no concept of fiscal responsibility.

[www.thebasispoint.com image 451x346]

Untill us folks in the poor and middle class can continue to deleverage and get back on our feet, a full recovery will not happen. It is going to take some time. Get used to it. It is time to pay the piper.


Actually, unless I'm reading it wrong, that graph shows that the American public is indeed continuing to deleverage. The government not so much.
 
2012-08-23 01:17:54 PM

AngryDragon: Actually, unless I'm reading it wrong, that graph shows that the American public is indeed continuing to deleverage.


Yeah, that graph is a little bit out of date. Current indicators show that this deleveraging has flattened out and that we are still around the 122%. Better than we were, but this level is still very high.
 
2012-08-23 01:20:57 PM

HeadLever: Rapmaster2000: If your concern is deleveraging household debt, then inflation is not something that should concern you considering it reduces household debt to wage ratios.

My concern would be to deleverage household debt without hitting those that have acted responsible and actually saved some of thier hard-earned money.


You can act responsibly and save your hard earned money and not be hit by inflation. These things are not mutually exclusive. This depends on where you've saved your money. If it's all in cash, then that's a problem.

The people who really get hit are those on fixed-incomes - pensions and reverse mortgages.
 
2012-08-23 01:27:57 PM
YAY OBAMA?
 
2012-08-23 01:30:11 PM

Rapmaster2000: You can act responsibly and save your hard earned money and not be hit by inflation.


Very true. However, not all investments are inflation-proof. True there are things you can do to mitigate this (see my post @2012-08-23 12:37:12 PM) however, I would expect a large number of savers are going to get hit. That is only part of the issue since there is also no guarantee that wages will keep up with inflation.
 
hej
2012-08-23 01:33:09 PM
Sweet, we'll have one to blame Romney for.
 
2012-08-23 01:33:37 PM

Slaves2Darkness: *sigh*. We are not piling on debt, Obama has reduced the deficit by about a 100 billion, primarily through the reduction of government workers.


*Sigh*

Deficit is not Debt. Piling on debt and reducing the deficit are not mutually exclusive.
 
2012-08-23 01:36:17 PM

Slaves2Darkness: State_College_Arsonist: We're piling on debt and we have no significant growth. We're pretty farked no matter what.

*sigh*. We are not piling on debt, Obama has reduced the deficit by about a 100 billion, primarily through the reduction of government workers.

You do understand that interest rates that the government can borrow at are below inflation, right? You do understand that is negative amortization and the government could borrow money virtually for free as the rate of inflation would negatively affect returns for those who loan the US government money?

The real question is not why are we not doing more to reduce the deficit, but why is the government not borrowing as much money as possible and forcing growth? Yes, Keynesian economics works, has always worked, and if the Republitards George Bush had not screwed it up in the 00's we would not be in this mess.

If we want to avoid a recession the the US government needs to borrow around 4 trillion dollars and stimulate the economy. It is not clear that the Republicans want to avoid a recession, because austerity, the reduction of government spending, causes recessions.

Personally, I'm all for our current pay, reducing the deficit through increase of taxes and reduction of government spending is going to piss people off. I believe that Obama gets re-elected, but after four years of austerity another Republitard will get elected to president and once again reap the benefits of the Democrats hard work, just like Ronald Reagan reaped the benefits of Jimmy Carters hard work on the economy.


If you really believe that the feds are actually improving their position when they borrow, why bother to have taxes at all? Just borrow whatever is needed to fund the federal government, make taxes zero, and still end up to the good.
 
2012-08-23 01:39:37 PM

jgi: Minimize your financial liabilities, stock a little cash away, and you can weather any recession. If you feel you deserve that big house (aka big mortgage), desperately need that shiny new car (and the accompanying auto loan), or feel its your God-given duty to procreate (more mouths to feed), you might have a little trouble making ends meet.

Say it with me: No debt. No debt. Get out of debt. Pay off your debt and stop taking on new debt.


If it's fixed-rate debt, then you might want to rethink that if you expect inflation to get bad. The 30-year mortgage that's taking a big hunk out of your income today might be much less onerous after a decade of 10%+ inflation.
 
2012-08-23 01:41:01 PM

jjorsett: If you really believe that the feds are actually improving their position when they borrow, why bother to have taxes at all? Just borrow whatever is needed to fund the federal government, make taxes zero, and still end up to the good.


Heh, I once asked someone that. His answer was: "Tax them too, because the gov't is the wisest spender of money."

At that point he realized that he was a fool. It was sorta funny to see.
 
2012-08-23 01:54:43 PM

HeadLever: sendtodave: like how it shows how income hasn't kept up with living costs since the 80s (when we started moving massive amounts our country's wealth to the rich), resulting in a year over year drop in savings, and a mirror increase in having to live off of accumulated debt.

Not necessarily. It could be a result of folks simply taking on more debt for things they don't necessarily need and having to pay a larger chunk of thier income on interest payments. Bigger houses, SUVs, flat screens, computers, iPhones, and every other must have gimmic that is purchased via debt does not cost just in terms of the produce, but the interest you end up paying. The looser the credit, the more 'free' money you have access to, right?

If you wanted to plot the cost of groceries, basic shelter, transportation and other essentials with income, I would expect not a large change. Medical care, is a big exception to this, however.

While I don't discount you point entirely, I don't think that it tells the entire story either.


Except that when we look at family expenditures over the years, things like computers, iPods, cars, etc, all are selling at below inflation adjusted prices for their category. Housing, education, a second car, and child care are the main causes of people taking on more debt.
 
2012-08-23 02:04:21 PM

dlp211: Except that when we look at family expenditures over the years, things like computers, iPods, cars, etc, all are selling at below inflation adjusted prices for their category.


True, but more and more of these large consumables are finding thier way into the average households. Often with debt financing.

Housing, education, a second car, and child care are the main causes of people taking on more debt.

Very true. When you see someone just start thier carreer with 100K of student loan debt hanging over thier head, you can see why we are in trouble.
 
2012-08-23 02:14:45 PM

dlp211: Housing, education, a second car, and child care are the main causes of people taking on more debt.


And housing and education have exceeded inflation due to poor lending policies enacted by the government & federal reserve.
 
2012-08-23 02:18:54 PM
No way whoever is in charge is going to crash the economy like this with unemployment so high. Will not happen no matter the outcome of the election.
 
2012-08-23 02:38:25 PM

Pick: Fiat currencies always fail. The dollar's failure is imminent.


As opposed to gold-backed currencies, which have always succeeded.
 
2012-08-23 02:40:07 PM

cgraves67: I propose we nominate Ned Stark for President then.


He's too concerned with Climate Change.
 
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