PatriotsReign

No, these aren't my reasons. I read them on Mish's Global Economic Analysis. I like reading this guy's analysis. He seems to favor moderate non-partisan economic policy. Here's what he has to say;

"There Is No Mystery

Of course we know why job growth has slowed. Here are 12 good reasons.

1. We consumed more than we produced for a decade. Consumers are deep in debt and need to take care of their balance sheets.

2. We built enough houses for 15 years in a 5 year window.

3. People thought home prices would rise forever and borrowed against their homes. They are now underwater and cannot sell or move.

4. There is rampant overcapacity everywhere. We do not need any more Walmarts, Pizza huts, nail salons, Targets, Home Depots, Lowes, gas stations, grocery stores, or anything else.

5. Global wage arbitrage and outsourcing.

6. Boomers heading into retirement are scared half to death. They will not be spending or traveling as much as they thought. Indeed they will be attempting to downsize their lifestyle.

7. Attitudes everywhere have changed. People have finally caught on to the idea that home prices do not always go up. Businesses have caught on to the idea that home prices and commercial real estate does not always go up. Thus banks have tightened lending standards and consumers are reluctant to borrow.

8. "Frugality is the New Reality". Here is a Search for the word "frugality" in this blog.

9. Misguided federal tax policy. The administration plans to raise taxes on the wealthy. On top of that the health care plan is going to be very costly for small businesses. Thus the administration has inadvertently given small businesses two more reasons not to hire. Instead the administration should be slashing corporate tax rates.

10. Government Pension Plans. States are raising property taxes to help fund pension plans that have blown up. This is a drain on the economy. These plans need to be killed. Please see California Treasurer Spanks Legislature Over Pension Reform And Reckless Spending for an interesting rant about the pension mess in California. Most states are in the same boat, although California is the worst of the lot.

11. Stimulus Spending. Japan has already proven that Keynesian and Monetarist solutions cannot and do not work, yet we try anyway. Please see Will Stimulus Take Hold? for details.

12. Deficit spending in general. Spending what you don't have and cannot afford never solves anything. We can no longer afford to be the word's policeman but still attempt to do so at enormous cost. Indeed, there are many things we cannot afford and do anyway. As a result, interest on the national debt is soaring, the dollar is weakening, and this is drain on the real economy regardless of what the stock market thinks about it."

Mish's Global Economic Trend Analysis: Twelve Reasons For A Job Loss Recovery

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DarrylS

#12 that military industrial complex drain keeps popping up all over the place.. what is it $.53 of every dollar goes to our military... that is a lot of money.

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"Being the best doesn't mean you always win. It just means you win more than anyone else".. tweet from Kurt Warner to Tom Brady.

apple strudel

The irony is that our military spending is a form of socialism. Cut the amount of public military spending and you cut jobs. It's all public dollars. Funny how that works.

BelichickFan

The obamans have taken care of that. The $500B or so defense budget seems like a drop in the bucket compared to the drunken sailor obamans.

And $.53 of every dollar is way off. For discretionary spending you might bu in the ballpark but not every dollar (Social security and medicare say "hi").

PatriotsReign

You're really stretching the definition of socialism. But if you want to say that all public services (paid for by tax dollars) are socialism, you're prolly right "by definition".

But real world....all advanced nations need basic public works. I like to use the term socialism only when discussing economies. Despite providing basic (water, roads, bridges, defense, etc.), our economy isn't socialist. My lord, America wouldn't be America if we went to a Eurpean economic framework.

I guess in some respects, the "Military-Industrial" complex works...as far as keeping people working. But at some point, we need to find another way.

But since my thread topic isn't "socialism", let's save that discussion for another thread. Nice try though!

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Real World

Excellent opening post PR. I agree with all your points. We're likely headed to a period of slow growth, stagnant wages, and fairly high unemployment. Sadly, the gubmit keeps spending money we don't have, thinking that such spending is going to get us out of the current mess. I'm very worried about the coming years. I'm not sure how long this lull is going to be, but I think it's going to last a while. I'm getting zero calls on my empty commercial space. Scary stuff.

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

DarrylS

That figure includes benefits for the retired and disabled as well...

Global Security puts the figure at 623 Billion, and that is a conservative source..

World Wide Military Expenditures

Here is a very biased source, take it or leave it.. puts it @ .$54 of every dollar...

The Federal Pie Chart

Without regard for the rhetoric, we could save hundreds of billions if we got rid of many of our 700+ out of country bases, and got out of the mideast...

__________________
"Being the best doesn't mean you always win. It just means you win more than anyone else".. tweet from Kurt Warner to Tom Brady.

BelichickFan

The Federal Pie Chart
As I said, that's discretionary spending, not all spending. When you remove the two biggest pieces (Social Security, Medicare) then the third is clearly going to look high

Fine with me.

PatriotsReign

I sincerely hope things turn around for you RW! You gotta keep the new wife happy ya know! Well, maybe you can find other ways!

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"No one walking this earth knows what is truly righteous"

maverick4

I'm pretty sure you don't actually understand European economics, or have a clear definition of socialism. Somehow it's all twisted in your head that you're FOR salary caps in the financial industry (yet don't consider it socialist), believe in public works like roads, libraries, fire departments, etc (and don't consider it socialist)... and yet think nationalized health care is socialist.

The best part is you don't even think you contradict yourself.