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What's Wrong With The Economy?
Can the cause of the current economic woes be pin pointed?
My top guesses are: (not in order)
High paying manufacturing jobs were shipped to Mexico with NAFTA.
There continues to be a widening gap between the rich and poor. The middle class is losing ground.
The United States is now $9 trillion in debt.
Tax cuts for the rich didn't "trickle down" since most of their investments are involved with making profits by sending jobs overseas.
High price of oil making oil dictatorships very rich while we hand over our money at the gas pump.
Overheated prospecting in the housing market.
Other reasons?
My top guesses are: (not in order)
High paying manufacturing jobs were shipped to Mexico with NAFTA.
There continues to be a widening gap between the rich and poor. The middle class is losing ground.
The United States is now $9 trillion in debt.
Tax cuts for the rich didn't "trickle down" since most of their investments are involved with making profits by sending jobs overseas.
High price of oil making oil dictatorships very rich while we hand over our money at the gas pump.
Overheated prospecting in the housing market.
Other reasons?
Views: 45
Replies to This Discussion
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Permalink Reply by Jeff on -
Do a little exercise for me -- go down to the mall/Target/Wal Mart store, and pick up a random item, just anything, but especially any kind of houseware or small electronics. Where was it made? Now go and pick up another random item. Where was it made? Repeat this process until you get a feel for where the things you're buying are made.
The answer in about 8 out of 10 cases will be China, and NOT Mexico. Why are people blaming NAFTA for the loss of manufacturing jobs when, in fact, the work has almost entirely gone to China, which isn't even a part of the NORTH AMERICAN Free Trade Agreement?
In fact, head on down to your nearest unfinished housing development (if there are any left with the market falling out) and see the real problem with NAFTA. Who are the people working there? That's right, Mexicans. But why would they be here, if all the manufacturing jobs were shipped down near their hometowns in Mexico? Answer: They weren't. The jobs went to China.
The problem isn't that NAFTA succeeded too well. The problem is that NAFTA failed. The jobs that we thought would go to Mexico (and therefore stay in North America) were shipped halfway around the world to China.
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Permalink Reply by Willie on
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No matter where the jobs went and how they got there, one thing for sure is that the high paying manufacturing jobs have flown the coop. People in manufacturing jobs used to get over $20/hour with benefits, but now those jobs are closer to $10/hour with the benefit of being employed..
European companies are starting to manufacture things in the United States. Now we are considered a low wage, low regulation country.
Yikes!
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Permalink Reply by James Scott on -
I think the high oil prices are hurting the economy. More consumer spending is going to gas with less money being spent on other items and services. Oil is now over $100 per barrel so this squeeze on our economy might get worse before it gets better.
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Three months later - oil has become an even bigger problem for the American economy. If you get a chance, watch a new movie called A Crude Awakening: The Oil Crash. (It is on Netflix watch instantly)
The movie basically shows how the United States used to be the top oil producer in the world until we sucked ourselves dry. It then makes the point that the world is now sucking the oil wells dry all over the world and our oil based economy is in trouble.
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The dollar keeps losing value and that must have something to do with the worsening economy.
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Although I guess a weak dollar gives the American consumer less spending power, but it makes American labor and production cheaper.
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Permalink Reply by James Scott on
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Well, now it is late 2008 and the overheated housing market has really messed up the credit markets.
The stock market is tanking and companies are going under.
The latest jobs report showed over a hundred thousand jobs being lost.
The stock market has fallen below 10,000 and the goverment just passed a $700 billion bailout plan to get the bad mortgage debt off the books of some financial institutions.
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Permalink Reply by Tom McCann on -
I watched a video from an economics professor saying that American wages have been frozen since the 1970's while corporate profits have skyrocketed. SInce companies are not paying their employees as much, most of this profit goes into banks. With the huge influx of money, the banks loan the money to the American workers who no longer make as much. Now a lot of these workers can't pay back their loans which means the banks are losing their money and can't give money to the corporations to pay their employees.
Most of the bad loans were in the housing market. A lot of banks told people they could borrow much more than they could afford to repay. This messed everything up as the banks now are going broke and have no money to loan to people and companies who have good credit.
If good people and companies can't get loans, then they can't buy things and pay people to work for them or make investments in their own companies. This brings down the entire economy.
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Permalink Reply by Stupidtex on
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First step would be to halt oil speculation/ lower gas prices! Big oil and speculators helped get us in this mess they should help fix it. Gas should be fixed at a low price $1.00 for several years. After that: Close the borders, Close all tax loopholes (everyone should pay their fair share), Do whatever you can to bring jobs back to America (American workers need to give up unions to be competitive), Impose severe $penalities/jail for tax evasion, quit the bailing out the lame!
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Permalink Reply by James Scott on
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Well, I don't agree with a fixed price of gas. I agree there are issues with speculators, big oil, and OPEC distorting the true value of oil and gasoline, but I still think the market should set the price of oil and gas. A fixed price for gas will encourage people to use lots of gas and this will only further our problem with diminishing global supplies.
I also don't agree with the idea of closing the border. I want to continue to trade with and travel to other countries. I also want the best and the brightest from other countries to continue coming to this country to go to school and start businesses.
I agree we need to close all tax loopholes and agree with hefty penalties for tax evasion.
I agree with taking steps to bring back jobs to America, but I don't think we should give up unions. There are times when unions overstep their bounds, but unions are very important for workers to be able to organize and protect their working environments. Instead of owering standards here to compete with low wage and low regulation workers overseas, we should continue to support the increase in worker rights and workplace regulations in other countries.
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