What Happened To Our Great Nation

[Sonthert]

I, sir, am a liberal. I make a lot more sense, in my opinion, than any talking-head Fox news, Rush Limbaugh loving conservatives.

Scotsman: The first signs of instability in the economy date back to the early 1900s, 1903-1904. Right in the middle of T. Roosevelt's Administrations. McKinley and Taft weren't geniuses or anything and their policies did not avert the coming Depression (could it?)...not that Wilson was a professor or anything. Oh yeah, he was.

I would conjecture that what we call the Great Depression was actually a contraction. The contraction of the economy from the transition from largely biological (horse, human, mule) labor to mechanized labor. Mechanized labor requires less people to do the same amount of work. Of course the population doesn't oblige by getting smaller in response. Unemployment goes up. People hang on for awhile, watching their real wages slide or the availability of jobs get worse, the government can stimulate the economy temporarily until the tide can no longer be stemmed. Why the shift from human labor to mechanized labor? Its cheaper, its more efficient. To the industrialist mindset, assuming all other things remain constant, this is perfectly desirable. What is really happening is that the same amount of goods and services require less labor, so fewer people get jobs. When this is replicated across the economy, it makes for fewer people able to buy goods and services. If real wages grow by a sufficiently large span to eliminate the benefits to the companies, the number of unemployed people's spending might be offset. They of course wouldn't because people don't inherently spend all the money they get. If the real wages didn't rise to an offsetting point and most companies follow suit, less money will enter the economy in terms of sales. Putting it more simply, I would theorize, the money that companies save because of technological advances reenters and benefits the economy less than wages payed to employees. Making up numbers to illustrate the point, a dollar saved by a company because of technological development might increase the GDP by $2, where a dollar paid out as a wage benefits the economy by $6. To the company, the question of saving a dollar or spending a dollar is obvious. They'd rather save a dollar. To the economy, however, its a different story. The economy today is a different place, the landscape is more controlled by large corporations, so the effect isn't as dramatic as it was in the 1920s. In the 1920s, money would pass through more hands, a worker would buy groceries from the local shopkeeper, the local shopkeeper would buy something else from another local shopkeeper, and so on and so forth. The economy was more divided and stratified. Now, the money hits fewer corporations in its travels.

A better question to think about is my example of the insurance company of 1965. Where did the data come from? People, largely. People sorting, collecting, tabulating and organizing. Now computers have replaced those jobs. I think its absurd to propose that there are 10 computer technicians that replaced 10 data analysts. If there were...what would be the advantage of the switch to the company? Why make the capital investment? What have we got to replace these human-based "insurance Company jobs" and manufacturing jobs? Service jobs. People might need a washing machine, but they don't really need a dog groomer. If people begin to reject all the idiotic service industries that have sprung up to give people displaced by technology jobs again, the economy is in for a real downward spiral. As more people go out to unemployment, there are fewer people to support service industries. I would further theorize the economy can't survive too many more technological innovations.

What is the net effect of getting rid of one employee? Does it benefit the economy or hinder it? What if we multiply that by tens of thousands?

It would follow that each technological advancement creates a successively smaller incremental increase in company productivity in the final analysis per dollar of capital investment. (Or does it?) It would follow because there are fewer employees that are more productive, so replacing a more efficient, profitable cell (employee) is more difficult. There is less fat to cut off...so making a leaner, more efficient company is progressively harder. Perhaps we could invoke the law of diminishing returns on a larger scale, across all technology. So companies that develop technology are endangered, eventually. The cost of additional advancements are progressively larger than the benefits they produce.

The economy was showing signs of weakness for some amount of time, as the mechanized contrivances got cheaper and more efficient, the economy slopped over completely. The Great Depression didn't just magically happen. There were symptoms for 20 years before hand. You might even trace some of the roots back as far as the Long Depression.

These latest installments of recessions started with a dire prognostication about the possibility of deflation in 2001. There is continuing instability in the economy. Is it another contraction? The contraction of the economy from the transition between mechanized labor and digital labor? Perhaps. Digital labor is clearly putting/has put large numbers of people out of work and dropped the price of labor due to increased unemployment. The localized nature of the economy in the 1920s clearly made the problem more acute...or is it shifting the contraction around until it makes for a very large contraction?

Good questions to ask, I think.

I agree, on another point. I hate T. Roosevelt. I think he was one of the worst Presidents of the 20th Century. To have his visage on Mt. Rushmore is stupid, putting him on the same level as Lincoln, Jefferson and Washington is such an overstatement.

A lot of this seems discoordinated, when I read over it. I may revamp all this and repost it.

[Scalliwag]

The more current problems we've had since the 80's have been republicans willingness to spend spend spend starting with Reagan and Starwars by far more money than the government takes in. It's real popular too cut taxes and claim you're gonna cut spending, but when your own spending proposals after you're own proposed cuts still leave a huge deficit there is something wrong.
You wanna get really current? Where were all these teabaggers when it came to invading Iran and wanting to ship everybody that did not have their heads up GW's ass along with them while their stupid asses believed Iran was an immenate threat. No exit strategy, no cost limit, no bid contracts awarded to Cheney's former business that botched shit so bad we've had soldiers fucking electricuted taking god damn showers.
I didn't see you pissed them Scotsman and others when we got into and stayed into all this shit.
So I get real pissed seeing all these same dumb son-of-a-bitches getting all upset now than someone want to spend some of the money here other than the middle east.
I'm a moderate who likes liberals but I hate, repeat hate, the way conservatives think. They aren't very damn conservative when it comes to the lame ass shit they want. They hear about a black person getting discriminated against they show barely if any concern, they hear about reverse discrimination they go flippin nuts. Some of us get really pissed when we see either. You know which you are.
Some people think they know enough to actually make an argument by cutting pasting and most of all omitting history. But if you weren't on the bandwagon to pitch GW and Cheney's ass out early on and against the Iraq war since before it started I have no respect for your judgment and a complete disdain for you lack of common sense. People that think, if that word can even be applied, are the reason things are the way they are now. The easy to bullshit.
The ones Hitler took advantage of except that they did not have access to as much information as we have today.

Oh, and I really love those who promote term limits. They don't think that idea has it's bigger problems? They do favors, wait a few years if there is a limitation in place and go to work for whoever they went to bat for.
Also, during the Bush administration and while repubs were in power did anyone notice the cries for term limits ceased altogether. Get a fucking clue.

[Scalliwag]

^ dammit Eric I said Iran again instead of Iraq

[SimplexCoda]

I personally think that one of the biggest problems with what our government is doing to the citizens is trying to protect us from our selves by telling what to do and what not to do. I personally hate that, its very reminiscent of some terrible times in the past.

Dont get me wrong i like America fine and dandy, but our current form of government has to go. i have almost gotten to the point to say that either the governement goes, or I go.

[twoapplesplease]

the real problem is that theres just to many people in the world.And the current financial issues are just the begining.Don't expect this thing to turn around anytime soon or ever.We are reaching a fundimental tipping point in human existance.Get ready for some big changes.In 5-10 more years the $hiznt is gonna really start hitting the fan.

As for our american economy it all comes down to consumable goods.No matter how much the boss makes or saves by producing things in china or elsewhere or using cheaper labor ,if the consumable goods are made elsewhere than thats where all the money ends up eventually.

[Sonthert]

the real problem is that theres just to many people in the world.And the current financial issues are just the begining.Don't expect this thing to turn around anytime soon or ever.We are reaching a fundimental tipping point in human existance.Get ready for some big changes.In 5-10 more years the $hiznt is gonna really start hitting the fan.

As for our american economy it all comes down to consumable goods.No matter how much the boss makes or saves by producing things in china or elsewhere or using cheaper labor ,if the consumable goods are made elsewhere than thats where all the money ends up eventually.

Gloom and Doom. Love it!

I should point out that in the landmark case that paved the way for the desegregation of American Schools, Thurgood Marshall, in his summary pointed out:"The thirteenth Amendment guarantees equal protection." He went on further to say granting the government time to rectify inequities is nowhere stated in the 13th Amendment. I say that applies to some our complaints here.

I have to reread and check my last post. I was tired and its a mess. I ran some numbers from government websites (which are a mess...) and found no corroborative statistics in my assertions. I have to recheck some other numbers, but I think there still may be a pattern. In fact the employment rate, not including institutionalized individuals, has been going up. Adding in incarcerated individuals (which has more than tripled in the past 20 years...if you were unaware) makes a slight difference. I think the stiffer sentences and more laws and wanting criminals off the streets is whats contributing to our languish. You take people who could be working, put them in a cell, feed them and give them magazines to read...thats a serious drag on the economy. Us having to pay for it anyways. It does lower the unemployment rate, though.

[Svaals]

I think the stiffer sentences and more laws and wanting criminals off the streets is whats contributing to our languish. You take people who could be working, put them in a cell, feed them and give them magazines to read...thats a serious drag on the economy. Us having to pay for it anyways. It does lower the unemployment rate, though.

This is a big deal. Economists like to fright about the the unemployment rate, but it's not all bad. Unemployed people will pay less for goods and services, and are a major contributing factor to slowing inflation. Consumers sometimes forget the power that they have to fight inflation. JUST DON'T BUY CRAP YOU DON'T NEED.

There are certain things that you cannot avoid buying, but you can buy it locally and cut out the corporations.

[twoapplesplease]

I agree on the prison system being a tottal drag on the economy.These people should be put on a chain gang and building our new high speed rail trains.not getting a free education and a membership to the gym on the tax payers wallet.There supposed to be repaying there debit to society so why are we paying them.Put them to work.It costs about $40000 dollars a year to house,feed,babysit,and educate them.I think it should be the other way around.We should be getting$ 40000 dollars of labour out of them a year that way we know the repaid there debit to society.

[Scalliwag]

I think the stiffer sentences and more laws and wanting criminals off the streets is whats contributing to our languish. You take people who could be working, put them in a cell, feed them and give them magazines to read...thats a serious drag on the economy. Us having to pay for it anyways. It does lower the unemployment rate, though.

This is a big deal. Economists like to fright about the the unemployment rate, but it's not all bad. Unemployed people will pay less for goods and services, and are a major contributing factor to slowing inflation. Consumers sometimes forget the power that they have to fight inflation. JUST DON'T BUY CRAP YOU DON'T NEED.

There are certain things that you cannot avoid buying, but you can buy it locally and cut out the corporations.

The frightening thing about unemployment isn't so much the numbers but the impact. Most people can't make house payments etc. on unemployment benefits. Common people that were hardworking and productive are becoming homeless.
Most people live within their means from an employed standpoint and base their bills and lifestyle accordingly. If everybody lived within the lifestyle of what they could survive off of if they became unemployed there would be a lot more apartments than houses and really lowend cars.
So it's not so much a matter of buying crap you don't need. I understand your point but the problem is just a lot bigger than that.

And prisoners should be working on things that are of benefit to the rest of us paying to incarcerate them. I agree they are there to be punished but once their time is served those that are prone to trying to fit back into society need to be more prepared.

[TheScotsman]

The frightening part of unemployment is that most people are clueless to the fact the benefits are subject to income tax after the first 2400$, but none is withed. Not only do the unemployed get the problem of not being able to pay their bills, but they own the IRS a third of it all back. That just seems completely illogical, doesn't it.

Hey scallii... can't blame bush for this one, it was the brainchild of dick(head) gephardt, and Bill bradley... both dems. Originally supposed to be a tax cut bill, but like any democrap tax cut, it added as much as it subtracted, essentially ending as nothing but a waste of paper, and more BS to obey.

[Dr. B]

Long post, Yesterday, 02:42 AM

sounds like we need a Solow model with some definitive quantifications!

speaking of, to reply to Scotsman above you, we are theoretically increasing the savings rate (or at least pursuing that agenda). We're bound to take a hit in consumption, but we'll ultimately realize a greater capacity for consumption; put simply.

[kudomonster]

<br />the real problem is that theres just to many people in the world.And the current financial issues are just the begining.Don't expect this thing to turn around anytime soon or ever.We are reaching a fundimental tipping point in human existance.Get ready for some big changes.In 5-10 more years the $hiznt is gonna really start hitting the fan.<br /><br />As for our american economy it all comes down to consumable goods.No matter how much the boss makes or saves by producing things in china or elsewhere or using cheaper labor ,if the consumable goods are made elsewhere than thats where all the money ends up eventually.<br />

<br /><br /><br />
The financial crisis has absolutely nothing to do with the amount of people in the world.
You're right, our economy is driven a large part by consumer consumption. But saying "Who makes the goods gets the money" isn't perfect. We have many American companies creating goods in China, and the point I'm the country that originates the good isn't the one getting the money. Company X creates Awesome Pants™ hookahs, in America, for 50 bucks a piece. Let's say they're making a 20 dollar profit on each hookah, 10 bucks for transportation and what not, and 20 dollars to employees and what not. All the money goes right back into American hands.
Now let's say they're making the hookahs in China, and paying 5 bucks for labor. That's now 5 for labor, 10 for transportation (Realistically higher but whatever) 35 dollars profit. Right now, you're thinking "Where the fuck is this going..?"

What would drive company X to produce the hookahs elsewhere at a lower price? For the most part, competition. Simply moving to a different country to produce isn't something you're going to do to get 5% more profit. You have to establish a factory, (perhaps use a company in China) and disrupt supply lines (perhaps). So lets say, to stay competitive company X cuts ten bucks off their price.
America: 20 profit, 20 labor, 10 other: 50 dollar hookah
China: 25 profit, 5 labor, 10 other: 40 dollar hookah
So 5 dollars go to China, and American consumers save 10 dollars, and profits for the company go up 5.

Everyone benefits :3

[Scalliwag]

The frightening part of unemployment is that most people are clueless to the fact the benefits are subject to income tax after the first 2400$, but none is withed. Not only do the unemployed get the problem of not being able to pay their bills, but they own the IRS a third of it all back. That just seems completely illogical, doesn't it.

Hey scallii... can't blame bush for this one, it was the brainchild of dick(head) gephardt, and Bill bradley... both dems. Originally supposed to be a tax cut bill, but like any democrap tax cut, it added as much as it subtracted, essentially ending as nothing but a waste of paper, and more BS to obey.

So Scotty you're saying that people on unemployment pay 33% of their income over $2400 to taxes?
Let's do the math on that. Here in Texas the max unemployment benefit is about $400 per week. At 52 weeks that would be $20,800 minus the $2400 would be $18,400 at 33% taxation would be $6072 is what you're claiming?
I'm calling BS on that. One of those arguments that sound good but some major fudging on the numbers.

[Rani]

The frightening part of unemployment is that most people are clueless to the fact the benefits are subject to income tax after the first 2400$, but none is withed. Not only do the unemployed get the problem of not being able to pay their bills, but they own the IRS a third of it all back. That just seems completely illogical, doesn't it.

Hey scallii... can't blame bush for this one, it was the brainchild of dick(head) gephardt, and Bill bradley... both dems. Originally supposed to be a tax cut bill, but like any democrap tax cut, it added as much as it subtracted, essentially ending as nothing but a waste of paper, and more BS to obey.

So Scotty you're saying that people on unemployment pay 33% of their income over $2400 to taxes?
Let's do the math on that. Here in Texas the max unemployment benefit is about $400 per week. At 52 weeks that would be $20,800 minus the $2400 would be $18,400 at 33% taxation would be $6072 is what you're claiming?
I'm calling BS on that. One of those arguments that sound good but some major fudging on the numbers.

From the IRS Website the way it works is:

In California right now, unemployment is maxed at $475 per week including the federal add-on. Or:

$475.00 per week X 52 weeks (assuming a full year on EDD) is $24,700.00 Per the IRS website the tax rate is $782.50 plus 15% of everything over $7825.00. So, $24,700 minus $7825 equals $16,875 times .15 equals $2531.75 plus $782.50 = $3113.75

So $3113.75 is your total tax liability for an income of $24,700. Since the standard deduction is $5450.00 for someone single, your final tax owed actually comes out to zero, nada, zip. In fact thecnically you'd be entitled to a refund from the system of $2336.25. I'm not certain if you'd receive it or not but theoretically you should. This works only if the person is on unemployment for the entire year.

In the case of someone who starts the year on unemployment, and then goes back to work, it would be highly recommended that they calculate in the benefits and adjust their withholding accordingly to account for the untaxed unemployment benefit as added income.

'Rani

http://www.irs.gov/formspubs/article/0,,id=164272,00.html

[Scalliwag]

that's not what Rush Limpdick told Scotty. He said we have to pay 33% over the first $2400 and it's all that Gephardt and Bradley's fault.
The reality is what Rani stated but a typical republitwat argument is what Scotty used. But of course Scotty is not a repub he just seems to subscribe to their worn out ficticious talking points.
I still wanna know why the repubs never worried about where the money to fund the war was going to come from but their pissed over spending money improving heathcare here? They acted like we had all the money in the world for 8 years as long as it was not money to fix our infrastructure or healthcare, or VA hospitals, or....
They fooled alot of people but their BS caught up with them.
In case Limpdick didn't mention the repubs got their no good asses handed to them last November.

[Sonthert]

[attachment=3922:Gross_Bu...er_Graph.doc]

The Data is from the US Census Bureau, the US Department of Energy and Professor Saez of University of California at Berkeley.

The Horizontal Axis is Year.
The Vertical Axis a function: The average US Income divided by the Consumer Price Index (The price of basic goods in The United States). All are adjusted for inflation. The function I call Gross Wealth Function.

The second Series is the money valuation, periods of inflation (Price Increases) will show a drop in this curve, while periods of deflation (Price Increases) will show a rise in the curve.

The devaluation of money is important because if the value of money is in decline (Times of inflation) (like in 1920, due to World War I), the Gross Wealth Function will decline as well.

The ultimate message of this graph is that the basic package (that makes up the Consumer Price Index...the CPI) of goods for the average American are getting progressively more expensive. in relation to the amount of money they make. Americans have been making more money, incomes keep going up...but the cost of basic goods has been rising far, far faster.

I don't know if it can be attributed specifically to the advent of technological advances or the transition of laborers to other fields. I am basing this on the phenomena that happened in Japan in the early 50s, after WWII. The economy was devastated after WWII. Smashed. Japanese companies hired Japanese people to make handmade crap (kinda like China, is now, but moreso). When I was a kid, if it said made in Japan, it meant it was a piece of junk. Japanese companies hire people on for much longer periods of time than we do in the United States. It is common for people to get a job with one company in Japan and stay with that company indefinitely....

So, Japan began to get wealthier, modernize more, build new factories and tackle more complicated stuff, like TVs and tape players. The jobs that had people making handmade junk left Japan and unemployment went up...and up. Japan had modernized and used more automated procedures. This instability finally shook and collapsed in the early 1990s. In terms, the transitions (quite quick in Japan) from manual, biological labor to computerized and mechanized labor and finally out-sourcing (as the jobs left Japan) produced this series of events. I would surmise that the same may be true for the United States. I need to find other data to demonstrate this principle (or explain the data I already have).

It does demonstrate that America is getting far, far worse off.

So to answer the question of the original poster: I think America's prosperity is draining away.

[Tyler]

I blame the Nargols.

[twoapplesplease]

<br />the real problem is that theres just to many people in the world.And the current financial issues are just the begining.Don't expect this thing to turn around anytime soon or ever.We are reaching a fundimental tipping point in human existance.Get ready for some big changes.In 5-10 more years the $hiznt is gonna really start hitting the fan.<br /><br />As for our american economy it all comes down to consumable goods.No matter how much the boss makes or saves by producing things in china or elsewhere or using cheaper labor ,if the consumable goods are made elsewhere than thats where all the money ends up eventually.<br />

<br /><br /><br />
The financial crisis has absolutely nothing to do with the amount of people in the world.
You're right, our economy is driven a large part by consumer consumption. But saying "Who makes the goods gets the money" isn't perfect. We have many American companies creating goods in China, and the point I'm the country that originates the good isn't the one getting the money. Company X creates Awesome Pants™ hookahs, in America, for 50 bucks a piece. Let's say they're making a 20 dollar profit on each hookah, 10 bucks for transportation and what not, and 20 dollars to employees and what not. All the money goes right back into American hands.
Now let's say they're making the hookahs in China, and paying 5 bucks for labor. That's now 5 for labor, 10 for transportation (Realistically higher but whatever) 35 dollars profit. Right now, you're thinking "Where the fuck is this going..?"

What would drive company X to produce the hookahs elsewhere at a lower price? For the most part, competition. Simply moving to a different country to produce isn't something you're going to do to get 5% more profit. You have to establish a factory, (perhaps use a company in China) and disrupt supply lines (perhaps). So lets say, to stay competitive company X cuts ten bucks off their price.
America: 20 profit, 20 labor, 10 other: 50 dollar hookah
China: 25 profit, 5 labor, 10 other: 40 dollar hookah
So 5 dollars go to China, and American consumers save 10 dollars, and profits for the company go up 5.

Everyone benefits :3

Yes there are profits that you see upfront but what are you going to do with those profits?Spend them of coarse and on what?consumable goods.Yes you will see profits at first and ensue that this is good but after a few more transaction all these profits get eaten up threw consumable goods.Like office pens,shoes,typewrighters every thing that isn't nailed down basically.If our great grand parents who lived through the great depression could see that nearlly everything available in stores is made over seas thear heads would explode.

[Sonthert]

<br />the real problem is that theres just to many people in the world.And the current financial issues are just the begining.Don't expect this thing to turn around anytime soon or ever.We are reaching a fundimental tipping point in human existance.Get ready for some big changes.In 5-10 more years the $hiznt is gonna really start hitting the fan.<br /><br />As for our american economy it all comes down to consumable goods.No matter how much the boss makes or saves by producing things in china or elsewhere or using cheaper labor ,if the consumable goods are made elsewhere than thats where all the money ends up eventually.<br />

<br /><br /><br />
The financial crisis has absolutely nothing to do with the amount of people in the world.
You're right, our economy is driven a large part by consumer consumption. But saying "Who makes the goods gets the money" isn't perfect. We have many American companies creating goods in China, and the point I'm the country that originates the good isn't the one getting the money. Company X creates Awesome Pants™ hookahs, in America, for 50 bucks a piece. Let's say they're making a 20 dollar profit on each hookah, 10 bucks for transportation and what not, and 20 dollars to employees and what not. All the money goes right back into American hands.
Now let's say they're making the hookahs in China, and paying 5 bucks for labor. That's now 5 for labor, 10 for transportation (Realistically higher but whatever) 35 dollars profit. Right now, you're thinking "Where the fuck is this going..?"

What would drive company X to produce the hookahs elsewhere at a lower price? For the most part, competition. Simply moving to a different country to produce isn't something you're going to do to get 5% more profit. You have to establish a factory, (perhaps use a company in China) and disrupt supply lines (perhaps). So lets say, to stay competitive company X cuts ten bucks off their price.
America: 20 profit, 20 labor, 10 other: 50 dollar hookah
China: 25 profit, 5 labor, 10 other: 40 dollar hookah
So 5 dollars go to China, and American consumers save 10 dollars, and profits for the company go up 5.

Everyone benefits :3

That is of course, false.

By that logic, if nobody in the United States had a job, if we shipped over every job to China (although not possible) we'd be doing really well; better than we are now. The fallacy is that a man (and a woman) needs a job to provide for themselves. The more jobs that leave this country for other countries put more people out of work. Those people spend less money for goods and services. I think twoapplesplease is closer to correct on "Who produces the goods gets the money". Service sectored economies are fine, when they are shadowed by a vigorous manufacturing sector domestically. When they are the only thing, they create poverty. The money keeps flooding out of the country in your scenario, people save money, but the money leaves the country. This is not say "support American Companies"" This is also a fallacy. Toyota, Honda and Nissan produce cars in the United States of America. They employ American workers. Good job and value-added production is what spurs the economy. When people have jobs, the economy booms. When those jobs leave, the economy sags and flags.

Examples: Boom: Japan 1960s. Bust: Japan 1990s.
Boom: China (current)
Why is it that booming countries are associated with lots of production, jobs and high employment percentages, by your theory then? Why wouldn't China be failing because of all those nasty domestic Chinese jobs and using domestic manufacturing for their needs? China imports little. They are the world's largest manufacturer of tobacco, for instance...and export none of it. So, by your logic, they should be doing quite badly...instead of sending their plants over to New Guinea or Sampam.

The fallacy goes deeper. One company doing it has an advantage to their profitability. One company doing it impacts the economy little. The implicit assumption is that "All other things remaining equal". If the other 20 companies in that industry do it...and lay-off workers, what do those workers do for money? They spend less and all the companies make less money. If there are more jobs than people, all is well. If there aren't, if there are more people than jobs, it just reduces the number with jobs and less spending. The final prong of the fallacy is really hard to fathom. Each company, now has no more advantage than it did...since all the companies are doing it. There are more unemployed and sales will drop accordingly...if companies were tethered to a particular country, and they could only sell goods in their own country...then they would suffer. Globalism is an excuse to be able to remove responsibility for the workers that work for the global corporation. It was a not uncommon that companies 50 years ago went global to bring more money into their own country. They had, at least on a superficial level, a dedication to their country.

So no, I don't agree with your overly-simplistic freshman-economics explanation. If it were true, the United States would be doing better now than it was 20 years ago. That isn't the case. The cost of basic goods in relation to average income continues to grow, people have less money to spend and the economy is stagnating. What Americans need are real jobs, jobs that give them a purpose, jobs that earn them a paycheck for an honest day's work. A good amount of money, not starvation wages for a job that people are over-qualified for. More people are employed now than they were 40 years ago...yet average income continues to plummet in relation to the CPI. That must mean more people are doing bullshit jobs, more Walmart cashiers and less machinists. More McDonald's fry cooks and less electronics assemblers. More poverty, more misery.

If your explanation was correct...why has the CPI been increasing? Why hasn't the CPI been going down in the last 10 years as more and more goods are being produced overseas? Why hasn't it even slowed down a little? Why isn't income in relation to CPI increasing? Your explanation works fine...for the companies that make the decision...for the workers, they have to make due with less money.

[Svaals]

Eric hit the nail on the head:

Of course a service industry can function, but only if supported by a manufacturing industry. One can logically see why this is true. In this country, for instance, retail and finance are the big hitters in the service industry. The problem with this model, is that it relies solely on the American consumer/borrower. Unfortunately, when the ball starts rolling and the buying power starts to die off, then the unemployment rises even faster because of hits to the service sector.

In a manufacturing economy, even if sales drop locally, there are other markets that you can sell to. Unfortunately for other major manufacturing economies, Americans buy an extremely high percentage of their junk. So a downturn here causes a downturn in their markets as well.

The best we can hope for in a situation like this is a downpour of wealth from the top. A redistribution from the very top down. Unfortunately, the average American would spend any stimulus immediately causing even more inflation. The Fed and other banks have been lowering interest so much that there is no incentive to save, and too much incentive to borrow. Until Americans start saving more and spending less, the economy will not get any better no matter what the government does.

[TheScotsman]

The frightening part of unemployment is that most people are clueless to the fact the benefits are subject to income tax after the first 2400$, but none is withed. Not only do the unemployed get the problem of not being able to pay their bills, but they own the IRS a third of it all back. That just seems completely illogical, doesn't it.

Hey scallii... can't blame bush for this one, it was the brainchild of dick(head) gephardt, and Bill bradley... both dems. Originally supposed to be a tax cut bill, but like any democrap tax cut, it added as much as it subtracted, essentially ending as nothing but a waste of paper, and more BS to obey.

So Scotty you're saying that people on unemployment pay 33% of their income over $2400 to taxes?
Let's do the math on that. Here in Texas the max unemployment benefit is about $400 per week. At 52 weeks that would be $20,800 minus the $2400 would be $18,400 at 33% taxation would be $6072 is what you're claiming?
I'm calling BS on that. One of those arguments that sound good but some major fudging on the numbers.

From the IRS Website the way it works is:

In California right now, unemployment is maxed at $475 per week including the federal add-on. Or:

$475.00 per week X 52 weeks (assuming a full year on EDD) is $24,700.00 Per the IRS website the tax rate is $782.50 plus 15% of everything over $7825.00. So, $24,700 minus $7825 equals $16,875 times .15 equals $2531.75 plus $782.50 = $3113.75

So $3113.75 is your total tax liability for an income of $24,700. Since the standard deduction is $5450.00 for someone single, your final tax owed actually comes out to zero, nada, zip. In fact thecnically you'd be entitled to a refund from the system of $2336.25. I'm not certain if you'd receive it or not but theoretically you should. This works only if the person is on unemployment for the entire year.

In the case of someone who starts the year on unemployment, and then goes back to work, it would be highly recommended that they calculate in the benefits and adjust their withholding accordingly to account for the untaxed unemployment benefit as added income.

'Rani

http://www.irs.gov/formspubs/article/0,,id=164272,00.html

That was the point I was trying to make, however poorly.

[twoapplesplease]

wow some nice posts there.I like to think about henry ford when he started the whole auto manfacturing boom.Workers were plentiful and jobs were scarce.He could have payed his workers a fraction of what he was paying them but he understood that if all of his workers could afford to by one of his cars then it would be good for everybody.We have a terriable problem with greed these days

[Sonthert]

Testify brother twoapples!

Svaals: Actually, saving in a time of recession deepens the recession. This is why deflation deepens recessions...it encourages saving...because your money will be worth more later. On the other hand, Americans are way over extended, so its not a question of saving, its a question of not having the money to spend. That being said, the credit card companies (notably Bank of America and Chase, with Citi being a lesser player) are screwing people left and right, raising interest rates in retaliation for the United States cracking down on rules for credit card companies which isn't helping...people are having to make higher monthly payments reflected by higher interest rates. I watched two credit cards raise my interest rates for no reason...to 35% or 40%. Its a good thing we let the Credit Card companies bypass usury laws...they certainly haven;t abused that little perq.

So, the next question is: When is GM going to finish pissing away the money we gave them? When will they be back on the back porch asking for more?

[Charley]

We lost sight of what really matters.

once this nation was great we could rely on our neighbors to be there to give us a hand up when we fell on hard times just as we were there to raise them up when they fell. now we lock our doors and put up fences to keep them out because we fear that they will steal our TVs, kill our wives, and molest our daughters.

the media has played a big part in this. turning us into a nation of fear instead of a nation of neighbors and friends.

"big brother" has thus used this fear to limit our freedoms and brainwash our people into believing that we need billions of dollars to fight wars against other countries that we really have very little to fear from.

they have used this fear to take away things we have the natural right to do such as smoking in our favorite bar or on the sidewalk or even in our own homes(and yes in parts of this country smoking has been banned in all of these places)

when we as individuals wake up and notice this making our voices herd we are called unpatriotic.
But remember this every single one of our founding fathers were unpatriotic. in fact they were criminals and traitors. fortunately for us otherwise we would be saying god bless the queen instead of god bless America.
and thanks to them we can voice our opinions and even work for change in this country now without having to become criminals and traitors ourselves.

our government has become bloated and corrupt. this country was founded by the people for the people but now is ran by the politician for the politician.

we need to get back to our roots. unfortunately they have rotted in the ground and the tree of liberty has fallen we are mearlly living on the branches that have yet to die. there is hope tho even the branch of a fallen tree may take root and grow to continue life.

we need more good honest people to fight for there rights in the arena of the corrupt.

if there is something you dont like about this country make your voice heard. contact your representatives voice your opinions in the streets take a stand and get it changed.

as it stands right now it is not the majority that makes the laws simply the pawns of those who cry the loudest.

I say do not ask where this country went wrong. I say ask what can I do to make this country right again.

[Scalliwag]

The frightening part of unemployment is that most people are clueless to the fact the benefits are subject to income tax after the first 2400$, but none is withed. Not only do the unemployed get the problem of not being able to pay their bills, but they own the IRS a third of it all back. That just seems completely illogical, doesn't it.

Hey scallii... can't blame bush for this one, it was the brainchild of dick(head) gephardt, and Bill bradley... both dems. Originally supposed to be a tax cut bill, but like any democrap tax cut, it added as much as it subtracted, essentially ending as nothing but a waste of paper, and more BS to obey.

So Scotty you're saying that people on unemployment pay 33% of their income over $2400 to taxes?
Let's do the math on that. Here in Texas the max unemployment benefit is about $400 per week. At 52 weeks that would be $20,800 minus the $2400 would be $18,400 at 33% taxation would be $6072 is what you're claiming?
I'm calling BS on that. One of those arguments that sound good but some major fudging on the numbers.

From the IRS Website the way it works is:

In California right now, unemployment is maxed at $475 per week including the federal add-on. Or:

$475.00 per week X 52 weeks (assuming a full year on EDD) is $24,700.00 Per the IRS website the tax rate is $782.50 plus 15% of everything over $7825.00. So, $24,700 minus $7825 equals $16,875 times .15 equals $2531.75 plus $782.50 = $3113.75

So $3113.75 is your total tax liability for an income of $24,700. Since the standard deduction is $5450.00 for someone single, your final tax owed actually comes out to zero, nada, zip. In fact thecnically you'd be entitled to a refund from the system of $2336.25. I'm not certain if you'd receive it or not but theoretically you should. This works only if the person is on unemployment for the entire year.

In the case of someone who starts the year on unemployment, and then goes back to work, it would be highly recommended that they calculate in the benefits and adjust their withholding accordingly to account for the untaxed unemployment benefit as added income.

'Rani

http://www.irs.gov/formspubs/article/0,,id=164272,00.html

That was the point I was trying to make, however poorly.

I must've missed because it sure looked like you were saying that because of Gephardt and Bradley a person collecting unemployment would have to pay the guv 33% of everything over $2400.
While I agree the tax system is too complicated and creates huge loopholes mainly for the wealthy, with the system being what it was at the time if the unemployed did not have subtract some tax owed, their tax "refund" would be to the tune of 5k instead of 2k.
Some people like to entertain the idea of replacing the current system with a national sales tax. The wealthiest would be huge beneficiaries of that. The majority of people are closer to living paycheck to paycheck so virtually all of their income would be taxed. They want no business taxes which would mean that it would be highly likely the wealthiest would even pay for their basic needs from their companies to avoid taxes there as well.
Greedy people will always figure out a way to weasel around things and they will use ficticious numbers and claims to make their case. Taxes are a neccesary evil. Prisons and the rest of the shit already covered cost money and if they cost money you can't just keep writing IOU's because some politician wants to be popular.