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  1. #1
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    Recovery will run out of gas...

    There's two kinds of information when it comes to assessing the state of economy:

    1) The Whistling past the graveyard, variety -- (ie: "we've hit bottom," and "the recovery has begun.")

    And

    2) Almost anything other than No. 1.

    You, the American consumer, home owners (and former home owners), workers (and former workers,) are the targets of the No. 1 variety of information. Those peddling it are a very nervous collection of politicians up for re-election and bankers/Wall Streeters, hoping to get you off their backs about crashing the economy so the aforementioned politicians don't get spookedand pass (gasp) new regulations or take their bonuses away.

    Those spewing the No. 1 variety of information remind me of an old Gary Larson cartoon of lions around a fresh kill telling onlookers, "It's all over folks, nothing to see, move along, move along."

    Then there's the -- far less reassuring -- second variety of information. You know, the stuff that comes out of "doom and gloomers," like yours truly. We are usually brushed off as Chicken Littles. But what no one ever seem to mention is this: We know what's in it for those No. 1-ers -- re-election, business as usual, a new bubble to play with. But what's in it for the Chicken Littles? I mean, a fella can't eat "I told you so's."

    Anyway, unemployment passed the 10% mark this month. Fifteen million former workers are now on the dole. Every Friday afternoon the garments of another four, five or six insolvent banks are quietly parceled out to bigger banks, themselves being propped up like stone-dead Bernie by taxpayers. (Article follows:)



    Have a nice day.
    Steve


    Nobel Laureate Phelps Says U.S. Recovery Will 'Run Out of Gas'
    By Jeffrey Donovan and Erik Schatzker

    Nov. 6 (Bloomberg) -- The U.S. economic recovery will probably "run out of gas" as it heads toward a "new normal" of lower long-term growth and higher unemployment than over the previous decade, Nobel laureate Edmund Phelps said.

    The U.S. economy "is groggy, but it's getting to its feet," Phelps, who won the Nobel Prize in 2006, said in an interview with Bloomberg Television today in New York. "We're already seeing a strong recovery, I just think that it's going to run out of gas."

    The U.S. unemployment rate rose to a 26-year high of 10.2 percent in October, a level not seen since 1983, and payrolls fell more than economists forecast, a report today showed. While the economy grew the most in two years in the third quarter and the decline in payrolls may bottom in the first quarter of 2010, that doesn't change the fact that the economy has lost its "dynamism," Phelps said.

    The jobless rate in the medium-term may settle at between 6 percent and 7.5 percent, said Phelps, who was speaking before the payrolls data was published. That compares with a 4.9 percent average in the decade through 2007.

    Economists' Battle

    "As output goes up, employment is going to continue to lag," said Phelps. "Firms have gotten rid of a lot of their workforce cushion, so to speak, and they're going to do without that for a quite a while."

    Phelps, wading into a battle between Keynesian economists, who favor fiscal stimulus, and neoclassicists, who believe markets best solve economic problems on their own, said both may be ignoring the fact that the economy has changed.

    "Neither of these schools recognizes the structural changes that the economy is susceptible to," he said. "There are signs that the economy has lost its dynamism, its urge to innovate, or its ability to innovate."

    Phelps also said that while government stimulus "made sense" during the height of the slump to balance supply and demand, there is less need for it now.

    "In that situation it made perfect sense for the government to throw in some fiscal stimulus," he said. "But now we are in an equilibrium. We don't like it, it's a bad equilibrium, but now it's no longer appropriate to think there is an imbalance between supply and demand."




    Stephen Pizzo
    News For Real
    www.newsforreal.com



  2. #2
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    Re: Recovery will run out of gas...

    I've stopped buying into the "recovery" stuff. I honestly think Americans are going to have to adjust to the idea of higher unemployment, fewer jobs, and a less cushy life.

  3. #3
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    Re: Recovery will run out of gas...

    The average American citizen has been living beyond the average american's net value for far too long. From now on unless you have a legitimate skill or education, things aren't going to be quite as nice as they were before. People will have to settle on just being comfortable, and nothing more.

  4. #4
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    Re: Recovery will run out of gas...

    Our economy has already started pointing upwards again. Here in Hawaii the tourist industry ( a huge part of the economy) took about a 20% hit this last year but hotel bookings and restaurant/shop earnings are already starting to edge up. They are now calling for about a 7% dip in the industry next year which is glorious compared to what we've had.

  5. #5
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    Re: Recovery will run out of gas...

    Quote Originally Posted by WitchBoy View Post
    Our economy has already started pointing upwards again. Here in Hawaii the tourist industry ( a huge part of the economy) took about a 20% hit this last year but hotel bookings and restaurant/shop earnings are already starting to edge up. They are now calling for about a 7% dip in the industry next year which is glorious compared to what we've had.
    which island you on!? always wanted to go there to see if it's really the paradise we all dream of!? came close to buying property during the last real estate plunge.(big island) :freak3: :spin2: :
    i do not endorse/recommend any advertising on scam.com associated with my name /posts or otherwise. thank you

  6. #6
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    Re: Recovery will run out of gas...

    Quote Originally Posted by lisan23 View Post
    I've stopped buying into the "recovery" stuff. I honestly think Americans are going to have to adjust to the idea of higher unemployment, fewer jobs, and a less cushy life.
    Who provides jobs?

    Who is Obama increasing taxes on?

    Jimmy Carter took the same approach as Obama when it comes to taxes during a recession, and what did it get us?

    Kennedy, Reagan and Bush took the opposite approach and lowered taxes on upper income people and industry, and it created jobs and revived the economy.

    Do the math.

    .
    Last edited by Grim17; 11-07-2009 at 03:52 AM.

  7. #7
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    Re: Recovery will run out of gas...

    Quote Originally Posted by Grim17 View Post
    Who provides jobs?

    Who is Obama increasing taxes on?

    Jimmy Carter took the same approach as Obama when it comes to taxes during a recession, and what did it get us?

    Kennedy, Reagan and Bush took the opposite approach and lowered taxes on upper income people and industry, and it created jobs and revived the economy.

    Do the math.

    .
    Neither Bush's dealt with a crash like the one we're experiencing now. Ronald Reagan was president during the crash in the 80's, but even then the two aren't similar.

    No math needed, the situations aren't the same so you're trying to compare apples to oranges.

  8. #8
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    Re: Recovery will run out of gas...

    Quote Originally Posted by Grim17 View Post
    Who provides jobs?

    Who is Obama increasing taxes on?

    Jimmy Carter took the same approach as Obama when it comes to taxes during a recession, and what did it get us?

    Kennedy, Reagan and Bush took the opposite approach and lowered taxes on upper income people and industry, and it created jobs and revived the economy.

    Do the math.

    .

    I bet I can get an A on this quiz.

    1) The private sector, small and large businesses.

    2) Same as one.

    3) It got us double digit unemployment followed by double digit unemployment and double digit inflation and interest rates. A feat that up until that time economist thought not possible.

    The math is that economic recovery can only come from the private sector. The government can not cause the economy to recover. It is obvious that if you tax something you get less of it. So if you tax business you get less economic activity which results in ..... (see answer to 3 above).

    How did I do professor?
    Last edited by cirussell; 11-07-2009 at 07:44 AM.

  9. #9
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    Re: Recovery will run out of gas...

    Quote Originally Posted by cirussell View Post
    I bet I can get an A on this quiz.

    1) The private sector, small and large businesses.

    2) Same as one.

    3) It got us double digit unemployment followed by double digit unemployment and double digit inflation and interest rates. A feat that up until that time economist thought not possible.

    The math is that economic recovery can only come from the private sector. The government can not cause the economy to recover. It is obvious that if you tax something you get less of it. So if you tax business you get less economic activity which results in ..... (see answer to 3 above).

    How did I do professor?
    A+

    To the head of the class young man.

    .

  10. #10
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    Re: Recovery will run out of gas...

    Quote Originally Posted by lisan23 View Post
    Neither Bush's dealt with a crash like the one we're experiencing now. Ronald Reagan was president during the crash in the 80's, but even then the two aren't similar.

    No math needed, the situations aren't the same so you're trying to compare apples to oranges.
    Wrong Lisa... You never raise taxes during a recession... NEVER

    And that's exactly what Obama is doing... It will result in many more years of economic hardship. Mark my words.

  11. #11
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    Re: Recovery will run out of gas...

    I'm going to start saving "mark my words" posts. They almost always end up with egg on the face of the author.

  12. #12
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    Re: Recovery will run out of gas...

    Quote Originally Posted by Grim17 View Post
    Wrong Lisa... You never raise taxes during a recession... NEVER

    And that's exactly what Obama is doing... It will result in many more years of economic hardship. Mark my words.
    Well.. At least we know one thing will never run out of gas.


    .
    "The best case against democracy is a five minute conversation with the average voter"
    -- Winston Churchill

  13. #13
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    Re: Recovery will run out of gas...

    so we examining the idea of the 'private sector' as the preeminent PROVIDER for mankind!? does this mean that the private sector is less likely to be capable of outright evil than gov!? as far as overall reaching effects on mankind go!? :freak3: :spin2: :
    i do not endorse/recommend any advertising on scam.com associated with my name /posts or otherwise. thank you

  14. #14
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    Re: Recovery will run out of gas...

    Quote Originally Posted by dchristie View Post
    Well.. At least we know one thing will never run out of gas.


    .
    THAT was hilarious.

  15. #15
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    Re: Recovery will run out of gas...

    I don't blame you bozo's for going after me... You certainly can't criticize what I posted... Unless you want to re-write history.

    Wait... Your liberals... I forgot that re-writing history is one of your specialties.

    .

  16. #16
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    Re: Recovery will run out of gas...

    Your assessment is spot on. You NEVER raise taxes during a recession. Who can possibly defend the idea that taking more money out of Americans' pockets during a down economy is a good idea ?

    Especially the moronic "tax the rich" proponents who are doing nothing more than raising taxes on those who provide jobs. What happens to unemployment then ? It doesn't take a PhD in economics to guess the answer to that question.

    Coming out of the economic malaise of the Carter years (double digit inflation, interest rates, and unemployment), Reagan cut taxes across the board and it led to the longest sustained peacetime economic growth in history. Though people were individually paying less in taxes, the increased number of jobs and taxpayers led to the government receiving more in tax receipts as a whole.

    With businesses waiting to see what's going to happen with Health Care Reform and Cap and Tax, it's unlikely that unemployment trends will improve in the near future.

    The best thing for the economy is for the government to cut everyone's taxes and then stay out of it and let the private sector work its magic. It's been proven to work everytime it's been tried.

    Unfortunately this administration would rather buck the trend and try to pass all of their pet projects and ignore the devastating effects these things will have on our economy. 2010 and 2012 can't come soon enough.
    "All tyranny needs to gain a foothold is for people of good conscience to remain silent."- Thomas Jefferson

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