How bad could the U.S. economy get?

Our bad economy is due to a couple of things from what I can see.

1. The housing market taking a dump. Who caused that but a large percentage of people who though they could live beyond their means and by God you owe me that attitude.

2. Fuel is cheaper in America because we do not tax at the rate that, say France does. The price of gasoline is 70% tax!

3. If there is any reason that Exxon of any other company is making boodles of money it is because of the Greenies not allowing drilling or any other power being generated.

I would love to be an oil producing company in America. Here is how it works folks. Let's say that I have a 100 oil wells and hey I am doing pretty good so my friend says "Hey I am going to make some money here and drill a 100 oil wells like my friend Rich over there" , sounds good!. Ohhhh the government steps in and says "No more drilling for oil allowed!" My friend says "That sucks" ,I say "Hey this is great, just imagine more customers every day and I have the only wells in the country"! This is the way it works. We have a larger population than 20 years ago but we produce less oil than we did 20 years ago, no surprise when the demand hit the roof the price goes up!



Later,
Richard

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Originally Posted by ScottS

I'll take the opportunity to point out that Obama's economic plans include cutting the govt's revenue by 10%-- i.e., an overall tax cut.

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A discussion about a tax cut is rather irrelevant for a presential candidate to have since they have no real contol over making that come to pass. The Congress is the only body that has any control over such legislation.

I wish I had an answer. The US is so dependent upon foreign oil, and the cost may continue to increase with higher global demand and war, or rumors of war.
Something has to change and we in the US and Western Europe may not like the result or the process.
After all that doom and gloom I will say that I'm an optimistic person. I've been through cycles in the economy, survived the Nixon price controls, the Carter inflation, the Hunt brothers attempt at cornering the silver market, Black Monday, the dot com bubble, 9/11, and Greenspan's (why will he not shut-up?) credit disaster. I've also been laid off after 23 years with a company and made it just fine, thank you very much.
But....... I think we need to acknowledge that some of the political BS we have been willing to put up with in the past because there seemed no harm is going to have to go.

Since the destruction of our industry via Nafta/GATT all the production jobs have gone overseas, we buy stuff left and right made somewhere other than the US. To create wealth you must produce, we as a nation do not produce, what little wealth we have is going. to Mexico, China etc Via WalMart and others. When we can produce and not just consume we will have something. If you cant buy american, try to do without, then the industry will come back. Let them sell their poorly made crap to the 3rd world slave laborers.

Only buying Americans is not a solution.
A national economy cannot make everything itself, or at least not as cost effective.
Buying American 'just because' is charity or make-work.

To be healthy, an economy should both import and export, and you should export the same as import, on the whole. That is a sign of a healthy economy, and it allows you to be resilient against both internal and external problems.

So that problem is not that Americans don't make everything themselves, it's that they can't compete in certain areas.
The same thing happened in detroit with the car industry. Buying US cars because they are American is pointless. You should buy American cars if they are the best. And if they aren't, then you shouldn't buy them and the manufacturer should improve or go away. That is the free economy in action, and one of the most basic tenets of western economy (and it is one of the creeds of the US economy as well).

Bruno I agree with you, especially the corporate charity remark and competitive quality of goods(Detroit was a good example).But America has and can do quite a bit in and on its own. What I mean to say is we need to quit subsidizing our own demise, dont buy from slave labor countries, I dont mind doing business with countries with a similar standard of living, its the countries that are abusing their workers for the sake of corporate profit. Its not fair for the labor force in either country. As for the present hard economy, its time to do as our grandparents did, "Use it up, wear it out, make it do or do without." Live simply and frugally, do not need so damn much. Quit being consumer oriented and find a way do do it for yourself.

BTW: Levis jeans are a prime example, when made in America so many years ago, it would take months to break them in and make them comfortable and they would last. Now they cost so much more, are made in 3rd world countries with slave labor and of inferior material and wear out in the amount of time it used to take to break them in. Slave labor makes it cheaper for the corporation, not the consumer who used to have that job. They still sell their inferior jeans at a superior price. They used to be worth the extra money, now they are worthless, they are making their money on slave labor and what is the demand for what was once a great name. People should wake up to this fact and and buy something else, you can get cheap crap anywhere and a lot more affordable.

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Originally Posted by ProfessorChaos!

2. He proposes a tax increase on the rich who, by IRS standards, make 70K+ as individuals. For those who find themselves in the highest tax bracket the marginal tax rate will reach 58%. This alone is enough to stall the economy at the best of times.

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Well, $200,000+, but what's a factor of 2.5 between friends??

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Originally Posted by ProfessorChaos!

4. GM killed itself, not Washington. Its been dying slowly for decades. If any one thing has killed it, that would be GMs inability to swiftly adapt to changing consumer demand.

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I didn't say Washington killed GM-- I said the oil companies did. I know it's tempting to tie those together, what with them dictating our energy policy and all, but it's not perfectly accurate.

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Originally Posted by Bruno

Only buying Americans is not a solution.
A national economy cannot make everything itself, or at least not as cost effective.
Buying American 'just because' is charity or make-work.

To be healthy, an economy should both import and export, and you should export the same as import, on the whole. That is a sign of a healthy economy, and it allows you to be resilient against both internal and external problems.

So that problem is not that Americans don't make everything themselves, it's that they can't compete in certain areas.
The same thing happened in detroit with the car industry. Buying US cars because they are American is pointless. You should buy American cars if they are the best. And if they aren't, then you shouldn't buy them and the manufacturer should improve or go away. That is the free economy in action, and one of the most basic tenets of western economy (and it is one of the creeds of the US economy as well).

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Actually the problem is as Bruno Says not buying American, but what American is has changed. I have a Friend who bought a Toyota because it was built down the road from his house, in Tenn most of my Ford was built in Canada and I can have a Ford that was entirely built in Mexico with most of its part from Asia.

The reason Michigan and the American car companies are doing so poorly is because they can't compete due to their past commitments. The can't shed debt or spare workers the way the other car companies can, so they shed them as fast as they can, killing our economy up here because no new company's want to do their business in the same way that has killed their predecessors. It's funny because I know several guys who were were laid off in union shops only to move out of our union controlled state and get higher paying jobs in non-union states. I'm not saying this is either good nor bad, just true. I look at union retirees and see the good that the union has done by ensuring that they have a pension and get to keep it, unlike the non-union employees who are getting dumped on right now. On the other hand I see the companies sinking under the weight of excess production and their inability to manage the size and scope of their own workforce.

how bad will things get, hmmm? well, I'm going to go ahead and predict that they will get worse before they get better.

I will further make myself unpopular by suggesting that our current economic difficulties are entirely the fault of meddling government regulators, and that a true lassez faire (which I spelled wrong, no doubt) market would solve more problems than it creates.

I heartily agree with Bruno's comments that you should buy the best product for the best price, regardless of who made it. that's straight up capitalism, baby, and I love it! if America can't stay competitive, internationally, then we deserve to crater.

I'd also like to slap a disclaimer down that America is still a country of opportunity, and your financial success is limited only by yourself, regardless of what the economy is doing. as long as you are better at what you do than anyone else, and can meet demand with your supply, better faster or cheaper, then there is a heap of money waiting to be made.

maybe I'm just biased because of my particular situation (my company, and entire industry, has done nothing but post ridiculous and obscene record profits the last 3-5 years) but I really don't see the current trend as a bad thing. the lending industry did some incredibly stupid things, and now they and certain of their customers are suffering. what a shock. I actually experienced the dot com crash as a much more severe situation, but hard work and good old American ingenuity carried us through that, and will again.