Thread: How bad could the U.S. economy get?

Originally Posted by jockeys

... but hard work and good old American ingenuity carried us through that, and will again.

Ladies and Gentlemen, Jockeys nails it once again.


I am going to go ahead and propose that this word stand in for the word "innovation". Ignoring it helped kill GM and indeed all of the auto industry in America in my opinion. Embracing it lead Apple to the creation of the iPod (which they first designed and produced DURING the last recession!) and we all know where that has gone. Think about it, ever been by an Apple store in the mall before it is open? There is usually a line to get in before the door is unlocked. Innovation isn't limited to making stuff either. Procter and Gamble is now in the throws of completely redesigning their supply chain, which means spending tons of money and hiring lots of folks, to help off set rising fuel costs. P&G is doing this in the face of lower performance. They are good at innovation and it will be very interesting to watch how they solve the problem. Innovation, Ingenuity whatever we call it, it is sure to be one of the most important things for us to focus on in the coming months.

I hope this hasn't been a thread Hijacking!

-Rob

I think the US federal account could completely dissolve within the next decade. I would not be shocked to see 50 to 100% inflation of the dollar per year within a year's time

I also think it could start improving soon, but gradually. The november elections will hire or rehire dozens of people who will have direct influence on the current strangling restrictions on the US economy such as unrestricted printing of currency, unrestricted congressional spending, and unrestricted industrial regulations

Originally Posted by ProfessorChaos!

Perhaps more importantly, most policies advocated by Barrack Obama and Congressional Democrats are anti-business, anti-growth, economy stiffling, high tax nightmares. Make no mistake, THESE ARE THE FAILED POLICIES OF THE PAST! Should the Democrats win the presidency and greater control of Congress, the damage they do could echo for decades. Should they run amok, I truely believe there is no practical end to the suffering.

Looking at the whole thing from across the Great Pond I think one of the major problems of the USA are: spending a fortune in Irak and Afghanistan, buying cheap inports from China instead of making the same stuff in America and living on borrowed money. I read that the Wall Street Journal expects another mortgage crisis in a couple of years as there are many more bad mortgages around that have not yet been included in the current bank losses.

Although the US involvement in Afghanistan was unavoidable after 9/11, I think the war in Irak was simply a big mistake of a president who wanted to finish his father's unfinished business. Irak did not pose a serious threat to the US (Saddam was too clever to harbour terrorists as he did not want to geve the US a pretext to attack his country) and the so-called wapons of mass destruction were a big lie by Bush and his Republican cronies. In an interview UN investigator Blixen has said he never believed they did exist but was told time and again by Bush to look better. It turned out he looked well enough!

The war in Irak is one of the causes of high oil prices and this is another cause of econmomic problems.

Originally Posted by Chris L

As an offshoot of a post regarding the bankruptcy of a restaurant chain in the U.S., and knowing that there have been what seems like a steady wave of "disposable income" type of businesses either dramatically hurt or shut down completely by the sagging economy, foreclosures left, right and sideways and.....given that I am NOT an economist, and wish I knew more about economics, I'm hoping others who are more knowledgeable or keep up on this area will have some input here.

I'm not looking for a finger pointing thread pitting one administration's errors against another's.

How bad could the economy get? What kind of timeline? Why? Does anyone have any projections they can share?

I don't think of myself as a doom and gloom person, but I'm ready to batten down the hatches now from what I've already seen first hand around me.

Chris L

Well, if Sen Obama wins the Presidency, things will get real bad real quick. Six months after inaugeration and it will all be over but the crying.

Originally Posted by Kees

Looking at the whole thing from across the Great Pond I think one of the major problems of the USA are: spending a fortune in Irak and Afghanistan, buying cheap inports from China instead of making the same stuff in America and living on borrowed money. I read that the Wall Street Journal expects another mortgage crisis in a couple of years as there are many more bad mortgages around that have not yet been included in the current bank losses.

Although the US involvement in Afghanistan was unavoidable after 9/11, I think the war in Irak was simply a big mistake of a president who wanted to finish his father's unfinished business. Irak did not pose a serious threat to the US (Saddam was too clever to harbour terrorists as he did not want to geve the US a pretext to attack his country) and the so-called wapons of mass destruction were a big lie by Bush and his Republican cronies. In an interview UN investigator Blixen has said he never believed they did exist but was told time and again by Bush to look better. It turned out he looked well enough!

The war in Irak is one of the causes of high oil prices and this is another cause of econmomic problems.

I'd have to agree with Kees here. Offcourse I'm not in the US and might therefore not be informed enough about it's current policies.

But from what I understand the US debt has gone UPUPUP in the last few years. I don't know what your momma told you but mine told me that debt is never a good thing.

A few years ago one of the leaders of our church made a statement about debt and I quote:

"Remember this: debt is a form of bondage. It is a financial termite. When we make purchases on credit, they give us only an illusion of prosperity. We think we own things, but the reality is, our things own us.

"Some debt—such as for a modest home, expenses for education, perhaps for a needed first car—may be necessary. But never should we enter into financial bondage through consumer debt without carefully weighing the costs" (Joseph B. Wirthlin, "Earthly Debts, Heavenly Debts," Ensign, May 2004, 40-41).

He made this statement for the reason that he saw more and more people living beyond the means they have real access to.

A few years later the housing market in the states crashes, coincidence? I don't think so. Turn on your tv, watch Oprah Winfrey for a while to see a lot of shows dedicated to people being in debt over for tens of thousands of dollars. People who make less money than I do but live in a house that's 5 times the size of mine and driving big expensive cars.

People who's entire paychecks go to the interest on the loans they take out simply to buy a bigger tv, a newer stereo, a bigger car, a massive house (when they have only 2 kids) etc etc etc.

Now I'm not saying this is a solely american thing. It happends all over. Over here in the netherlands you can't turn on the tv without seeing a loan advertised. This has only started a few years back, it's happening all over. America just seems to be in a more advanced state of this degradation.


Now an entirely different subject. Companies moving out of the US. This makes complete sense to me. American labor is expensive, Indian/Taiwanese/Chinese/Japanese labor isn't.

Specialist things are still done in the US, think Design, think services, think management, think banking etcetc. But labor based indistries will offcourse move to another country. It's the same over in europe. Does that mean that there's less work? Offcourse not, but it DOES mean that the type of available work shifts. It needs to become more "brain" oriented instead of labor oriented.

Alex has it on the nose here. When outsourcing started getting big, a lot of the people in my industry started sweating. I never worried. Know why?

If your job is so easy that some untrained idiot in a third world country can do it for 10 cents a day, guess what? You had it coming. Mindless labor is a commodity, and not a particularly valuable one at that. Look at all the American auto workers that lost their jobs not to foreigners, but to robots. If your job is sitting on the line screwing bolts in, you don't deserve a living wage. You can't possibly compete with a robot/Chinese person when it comes to price vs. effectiveness.

Now me, I have an engineering job that required a college degree, and needs creativity and innovation. I am SO not worried about some starving wage slave taking my job. It isn't gonna happen. And if someday, the world changes and they ARE able to compete with me... then it's MY fault I didn't stay competitive and no one else's. If I am so uncompetitive that I have to hide behind government regulations to keep me safe from global competition then I deserve to starve.

Originally Posted by jockeys

Alex has it on the nose here. When outsourcing started getting big, a lot of the people in my industry started sweating. I never worried. Know why?

If your job is so easy that some untrained idiot in a third world country can do it for 10 cents a day, guess what? You had it coming. Mindless labor is a commodity, and not a particularly valuable one at that. Look at all the American auto workers that lost their jobs not to foreigners, but to robots. If your job is sitting on the line screwing bolts in, you don't deserve a living wage. You can't possibly compete with a robot/Chinese person when it comes to price vs. effectiveness.

Now me, I have an engineering job that required a college degree, and needs creativity and innovation. I am SO not worried about some starving wage slave taking my job. It isn't gonna happen. And if someday, the world changes and they ARE able to compete with me... then it's MY fault I didn't stay competitive and no one else's. If I am so uncompetitive that I have to hide behind government regulations to keep me safe from global competition then I deserve to starve.

No job is safe, no matter how highly trained you are. There are a lot of intelligent, well-educated Indians who speak English and will work for half what you get. Italian architectural and engineering firms are already starting to outsource to India, the US is just a little behind the wave, but it's coming to your town, too, as sure as god made little green apples.

I understand that you are proud of your personal accomplishments but, seriously, you wouldn't want to live in a country where the majority of the people are not making a living wage. Whether you think they "deserve" it or not. And believe me, if you're talking about everyone whose job could be sent overseas or done by a machine, you're talking about alot of unhappy people and your environment will deteriorate quickly. Sometimes we need to be altruistic and think of others in order to protect ourselves.

Originally Posted by Chimensch

Italian architectural and engineering firms are already starting to outsource to India, the US is just a little behind the wave, but it's coming to your town, too, as sure as god made little green apples.

I've reviewed graduate school application packages from Indian engineering students. I find the curricula there do very little to encourage creativity. I think US engineers will maintain an edge, at least so far as engineering leadership goes.

Originally Posted by ScottS

I've reviewed graduate school application packages from Indian engineering students. I find the curricula there do very little to encourage creativity. I think US engineers will maintain an edge, at least so far as engineering leadership goes.

That's true right now but we said the same thing about the quality of Japanese manufacturing in the 1950s and, guess what, they learned to adapt. Hunger is a great incentive. The real issue is shortsightedness. Yes, the US leads the world in technology but, throughout history, every country has had periods of greatness followed by periods of decline.

Originally Posted by Chimensch

No job is safe, no matter how highly trained you are. There are a lot of intelligent, well-educated Indians who speak English and will work for half what you get. Italian architectural and engineering firms are already starting to outsource to India, the US is just a little behind the wave, but it's coming to your town, too, as sure as god made little green apples.

I understand that you are proud of your personal accomplishments but, seriously, you wouldn't want to live in a country where the majority of the people are not making a living wage. Whether you think they "deserve" it or not. And believe me, if you're talking about everyone whose job could be sent overseas or done by a machine, you're talking about alot of unhappy people and your environment will deteriorate quickly. Sometimes we need to be altruistic and think of others in order to protect ourselves.

and, as I said, it's my responsibility to stay ahead of that wave, and surf along in front of the crest until I retire. if I screw it up and don't constantly update my skillset, my job WILL be outsourced, and I'll deserve every bit of it.

if the majority of the people aren't making a living wage, it's their own fault for not working hard enough, both at what they do, and to stay competitive. I know a fair few people who DID lose their jobs to outsourcing, and you know what? none of them worked very hard. none of them worked 80 hour weeks (40 of them uncompensated), like I do. none of them ever went even one week without seeing their families because they were living at work, grinding hard to make a deadline, running on nothing but nicotine, caffeine, and desperation. none of them spent their free time learning and studying to grow their skillset and stay competitive, like I do. none of them are constantly evaluating their employers and changing jobs when they have to in order to stay on the bleeding edge, like I do. folks like me don't have to worry. not because we have technical jobs, but because we are always pushing the edge, and we are always staying ahead of "the wave" as you so aptly put it.

a good surfer never tries to ride the crest of the wave, if he slips at all, he'll slide down the back of the wave and get left behind. the best surfers, literally and other wise, ride in the trough, as close to the nadir as they can get. even when the wave curls tight and fast, you've got to scrunch up and get right in the tube to ride it. not just stand on your board picking your nose and complaining that the wave moves too fast and the gov't "ought to do something about it."

you say "altruism" but I head "coddling"