Fiero Economics 101

[Hondo]

I get tickled as I read all these economics "experts" trotting out different causes and cures for the current financial woes. Even funnier are the direct contradictions in the various theories. The fact that so few saw any of this coming and even fewer seem to know how to cure it leads me to believe there is no such thing as an economic expert. They are highly educated thieves and overall, a bunch of loonies.

I'm not an economics major anything but I saw the mortgage crisis coming years ago, and said so at the time. I was amazed that friends were quailifying to buy houses at $200,000 and up. After seeing the house that realistically should have been priced at maybe $120,000, I would tell them to enjoy it because they were going to own it forever. Once mortgage rates returned to proper levels, house prices would drop and they would be stuck with a house that was worth nowhere the price they paid for it. Few would listen as ego and desire rode roughshod over common sense. As the terms of their "bells and whistles" mortgages kicked in, they found their payments creeping ever higher. Thats not including the credit card debt they ran up furnishing the new house.

I didn't know the economic experts were bundling a bunch of weak mortgages into packages and selling them to other economic experts that thought they were getting a killer deal.

Our current situation is nothing more than a refusal to accept that nothing stays the same forever. Our leaders lack the courage to make unpopular political decisions at the right times and we, in turn, refuse to make our lives a little more difficult until we are forced to do so. We need to learn to accept a balance that, while not necessarily equal, is benevolent and rewarding for all involved. Something that management and unions fail to embrace which will cause mutual destruction eventually.

The western post-ww II world industrial world was built on the availability of cheap energy and plentiful jobs available for any who wanted to work. Life was good and we multiplied. Governments allowed social programs to run wild as a way to remain in office. We failed to make adjustments as needed. Volkswagon snuck the Beetle into America. A well made car that you didn't have to tinker with. You put gas and oil in it and off you went. The Americans, Brits, and Europeans paid no attention and dismissed it as a cult followed by disturbed people. Everybody knows if you have a car, they break down and you have to tinker with them. The Japanese saw the change, made adjustments, and look at where they are today for pushing economy, quaility, and reliability. Then in the '70s, cheap energy went away. Ever since then we have failed to make major adjustments and even prevented ourselves from making adjustments. We just muddle from one crisis to another, slapping on band-aids.

This recession will end as all the others have. It will have nothing to do with government or big business. It will end as the common, wage and salary earning people gain a sense of stability and adapt to dealing with the new way of doing business. They will make the adjustments that allow them to save a little and spend a little. There will be other changes as a result of their decisions. Maybe fewer cars will be sold, but more bicycles and motorbikes sold requiring expansion in those industries. Once we achieve our comfort levels, we will banish this recession as we have all the others. Society and industry will adjust to the new market norms and government will take credit for the whole thing. Unfortunately, some fools will believe it.

It's not much different than losing a leg. Your life is changed in a major way but you learn to work with and around the loss and get on with life in a slightly different manner.

[Mark in Oshawa]

Fiero...c'mon...didn't government solve all the problems? Oh you radical you....

[Rudy Tamasz]

It will have nothing to do with government or big business. It will end as the common, wage and salary earning people gain a sense of stability and adapt to dealing with the new way of doing business.

Disagree. Unfortunately, "the common, wage and salary earning people" are outnumbered by far by welfare eaters, insane borrowers and mad consumers who want to live a high life they don't deserve. I don't expect that madness to end anytime soon. I prefer to mind my own business.

[slorydn1]

I'm a firm believer in "You make more money, your economy will be better!" :p :

[Mark in Oshawa]

Disagree. Unfortunately, "the common, wage and salary earning people" are outnumbered by far by welfare eaters, insane borrowers and mad consumers who want to live a high life they don't deserve. I don't expect that madness to end anytime soon. I prefer to mind my own business.


Rudy..in the US unfortunately that is becoming more evident, but I think in the end, too many people in the US wont be content to just wait for the Gov't to help them...

It is a nation based on taking a chance and creating wealth through hard work and entreprenuerial efforts....and I don't see that changing.

[Rudy Tamasz]

Mark, I think you overstimate the human race, Americans or not. People tend to get lazy with time. Try to speak to people who work for the U.S. government. They like to work fixed hours and get sizeable benefits. People from private companies tend to go there and that is a worrying sign.

[anthonyvop]

Mark, I think you overstimate the human race, Americans or not. People tend to get lazy with time. Try to speak to people who work for the U.S. government. They like to work fixed hours and get sizeable benefits. People from private companies tend to go there and that is a worrying sign.

That is why socialism/communism never works.

For our recession I advocate the same remedies that were initiated in response of the Depression of 1920.....Yes...1920.

[Mark in Oshawa]

Mark, I think you overstimate the human race, Americans or not. People tend to get lazy with time. Try to speak to people who work for the U.S. government. They like to work fixed hours and get sizeable benefits. People from private companies tend to go there and that is a worrying sign.

That is true..but eventually, people in societies such as the US usually look to make things happen. Not everyone is working for government....and the best and brightest chafe at the non-productive nature of it.....

Not even this President is going to change that...

[Rollo]

For our recession I advocate the same remedies that were initiated in response of the Depression of 1920.....Yes...1920.

The 1920-21 depression was mainly a deflationary recession caused in reaction to a post-war readjustment and a flood of labour markets of returned servicemen.

So basically you are in favour of a massive government downsizing, and mostly in the area of military spending coupled with official interest rates spiking to about 8%.

To actually carry out the plan we'd need to see a cut in government spending of roughly $300bn in Mandatory Spending and almost $750bn in military spending for the next fiscal year.

Good luck in trying to get either of those through the congress.

[Mark in Oshawa]

The 1920-21 depression was mainly a deflationary recession caused in reaction to a post-war readjustment and a flood of labour markets of returned servicemen.

So basically you are in favour of a massive government downsizing, and mostly in the area of military spending coupled with official interest rates spiking to about 8%.

To actually carry out the plan we'd need to see a cut in government spending of roughly $300bn in Mandatory Spending and almost $750bn in military spending for the next fiscal year.

Good luck in trying to get either of those through the congress.

The US Congress is incapible of spending less. It wont make cuts. That is why the approval rating for Congress as a whole is about 20 %...and people would shoot Nancy Pelosi if they they could get away with it. Congress right now is taking all the political heat for what Obama has been pushing.

[anthonyvop]

The 1920-21 depression was mainly a deflationary recession caused in reaction to a post-war readjustment and a flood of labour markets of returned servicemen.

So basically you are in favour of a massive government downsizing, and mostly in the area of military spending coupled with official interest rates spiking to about 8%.

To actually carry out the plan we'd need to see a cut in government spending of roughly $300bn in Mandatory Spending and almost $750bn in military spending for the next fiscal year.

Good luck in trying to get either of those through the congress.

Different situation in the fact that the Military is much more important now than it was in 1920.
The Cuts must come from the truly wasteful departments like Education & Energy.
I can go on and on about entitlement programs.

[Rollo]

The Cuts must come from the truly wasteful departments like Education & Energy.

Even if you eliminated ALL of the US Federal Education Budget, it would only amount to $62.6 billion (2009). The Annual budget of the Dept of Energy is also only a paltry $24.1 billion (2009).

Sorry, but you need to try harder.

[anthonyvop]

Even if you eliminated ALL of the US Federal Education Budget, it would only amount to $62.6 billion (2009). The Annual budget of the Dept of Energy is also only a paltry $24.1 billion (2009).

Sorry, but you need to try harder.

That was only a start.
I can list hundreds of programs that can be cut or privatized.
Privatize Social Security....That is 20% of the budget right there. Medicaid and Medicare should be cut back.
Then there is the 12% of the budget that is know as "Discretionary Spending" which is politician speak for "pet projects" and earmarks.

Can somebody please explain how the Dept of labor can spend $13.3 BILLION a year?

Combine that with Tax cuts which always raise receipts and we are on our way

[Rollo]

That was only a start.
I can list hundreds of programs that can be cut or privatized.
Privatize Social Security....That is 20% of the budget right there. Medicaid and Medicare should be cut back.


Privatise the military? That's also 20% of the budget right there. Better still, how about someone start implementing a more efficient tax system.

In Australia we've just had released this morning, a report reviewing the tax system yet again; 150 odd recommendations have been made in it.
In Australia we seem to be doing fairly well, we were the only industrialised nation not to dip into recession, and the tax system is such that it will eventually go back into surplus without very much effort at all.

[anthonyvop]

Privatise the military? That's also 20% of the budget right there.


The Military is the only agency of the Government that actually is worth the money.

I agree about a better tax system. A flat tax on the first $75K on income with no deductions would be about right.

[Rollo]

The Military is the only agency of the Government that actually is worth the money.

Do you propose a return to nineteen century capitalism? Because that worked so well. Between 1870 and 1900 there were 8 distinct business cycles and the economy spent almost the same amount of time in recession as it did in growth.

Pure-Free Market Capitalism simply doesn't provide things which are unprofitable, and this is odd, because I presume that you went to a publicly funded school and/or university at some point. How did you learn to read?

[anthonyvop]

D because I presume that you went to a publicly funded school and/or university at some point.

No....My parents loved me.

[ioan]

The Cuts must come from the truly wasteful departments like Education & Energy.

Funny, I believe that those two are the ones that should get more money to invest in the future of a nation and even mankind on the long term.

[ioan]

No....My parents loved me.

Many parents love their kids, but in your world, the US, love won't pay you an expensive education. And education is most important if we want to get rid of wars and the armies!

[anthonyvop]

Funny, I believe that those two are the ones that should get more money to invest in the future of a nation and even mankind on the long term.

Name me one thing either of those departments have done to improve education or the energy sector?

Just one!!!!

[Mark in Oshawa]

Tony, I think in MOST nations...the Education bureaucrats at some level might have gotten something right, and in most nations, a ministry or dept. of energy would be a good oversee safety and operations of power facilities and oil exploration. The problem is in the US, neither dept. does much but get in the way. The US civil service is about the most clumsy and overstaffed operation going....