Bush's Economic House of Cards Nears Collapse

or so this article says. I have been hearing this a lot in the past year but i am still unsure if it is true.


<http://www.axisoflogic.com/artman/publish/article_16296.shtml>

http://abcnews.go.com/Business/wireStory?id=598298

If you want to believe ABC more, this is the most important "news" item today and of course no one is really paying attention.

if it does happen, what kind of collapse are we looking at? A mid-80's collapse or a 1929 style collapse?

My view is something closer to 1929. Too many people are carrying a lot of personal debt and don't live where they could sustain themselves on subsistance income. Add to that, most people don't keep the close familial ties so there's no one to help them through the hard times. Another aspect that won't help is the limited skills that people develope. In the 20's to 50's it was the norm that you would be able to build or repair your house or car or any other basic aspect of life. Today most people have developed the skills they need for their job and pay someone else to take care of their basic needs. I don't know that it will be as bad as that or worse, but I think that those that will do best will be those that can take care of their basic needs or can profit by doing the same for others.

Grapes of Wrath, eh?

I wonder where next year's dust bowl will be...

Colorado.. Washington State..

Sue

This is hyperbolic stuff in the article. The economic structures are not that tenuous. If one does a complete mathematical model of the economy of 1901 - 1930 and compare it to the one of the last 30 years, there is really no valid similarity.

Pricing to value in both the equity and consumer markets are totally dissimilar to that of the 20's, for instance. The U.S. was effectively a debtor nation then, even though the books balanced, because money was still worth gold, so the gov't owed everyone exactly the amount of the money they held. That's often left out of the equation, which is why you see things like we were a creditor nation. Not completely true, because the perspectives were so much different than they are today.

Don't get me wrong, these idiots in the administration are totally clueless about the economy. They don't understand it, they think they know how to manage it, (they're wrong), things that matter they say don't, things that don't matter (marginal tax rates) they think do. It goes on and on.

But, as little optimism as i have apropos this bunch making things better (we'll need someone with the guts to raise the marginal tax rates to balance the outflow), it's not on the precipice of collapse. This is already a recession, and it will deepen some, slowly. But, we'll pull out of it. I've run the models on iterations, even including some chaos mechanics elements, and in about 17 tries (in which the model iterates 72,400 times each try), i can only get the economy to go into measurable collapse if everything on earth was suddenly worth nothing, there was zero demand for ALL goods and services, and nobody had any money. Of course, that's tautological. So, i didn't need a model to figure that out. But, the model can't simulate a collapse unless the obvious conditions of global collapse are extant.

It won't necessarily be pretty for the next few years, but there's no 1930 on the horizon, as far as i can tell.
The Professor

Whatever the outcome, I'll never be able to forgive this gang in Washington for taking us down so far!

... because of the axisoflogic link. It's worth reading.

and was totally avoidable.

Didn't need to cut got revenues and feul massive deficits.
Didn't need to accelerate shipping jobs overseas through tax policies (credits, giveaways, breaks, etc. and encouraging investing off shore)
Didn't need to opt for a 'voluntary' war (that is - no threat) - further escalating debt and diverting money away from solving fiscal problems.

the list could go on - but the point is that this is NOT about business as usual - this is not something that was inevitable. This situation was intentionally created by bushco.

If the US is putting $665 Billion dollars into foreign countries
(that are relying on us for their strong economies) why would they want to back away from the dollar? Wouldn't that jeopardize their own economies when we collapse? (if we are unable to buy their cheap goods) so why would they want to do something that will bankrupt themselves?

The deficit represents the amount in resources that the United States is transferring into the hands of foreigners in exchange for foreign oil, cars and other products that Americans are purchasing.”

So, $665 billion of American assets fled the country in just one year alone!

The danger is that central banks across the globe will start backing away from US greenbacks; a fact that’s already reflected by the steadily falling dollar.

When China, India, Brazil, and other large rapidly growing countries reach a level where they have a mature consumer class then they have less need to prop up our economy as a market for their goods. We'll have a hard crash, then they'll have an adjustment period followed by continued growth.

China's min wage is 31 cents an hour, how the hell are they going to become a mature consumer class?

India is only productive because our companies moved there and are employing them, without the american corporations they would be nothing and fall back to the third world country they have always been.

and how much that loss will explode if the dollar falls to fast - thus continuing to buy props up the "ious" held. How long can this be sustained? Some reports suggest that a slow shift away from dollars that is starting - is being pursued to try to blunt the magnitude of the losses by making the dollars decline more slow and steady- and thus hoping to avert major shocks to the US economy - which would further devalue their already held investment... not to mention send huge tidal waves of economic turmoil across international markets.

I guess Micheal, steroids, terri, Scott, and Blake are the only REAL news.

Well, 6-8 months from now when the shit hits the fan, what will our Mainstream media be doing their stories on?

I just can't f***inq wait.

There are still all sorts of fast shuffles and accounting ledgerdemain that can be used in an economy as big as the United States' that the Republicans will avail themselves of. Then, when the million pound shithammer starts coming down, they'll all run as "outsiders" against the "librul establishment" and the media will trumpet all sorts of fresh faces and voices for the Republicans like Little Tommy Delay and Newbie Billy Frist as the saviors of Amurika.

Then they'll renooberate the interest rates and print more dough.

:kick: