Are things really that bad?

[TripleDigitRide]

There's no doubt our economy isn't what it was several years ago, but from where I'm sitting, I think there are certain groups that would like us to believe things are much worse than they really are. I'm in the decorative surfaces (countertops, tile, hardwood flooring, etc) industry, and we've seen huge increases in volume and revenue over the last year or so. We defiantly aren't doing the type of business we were prior to the bursting of the bubble, but because the type of products we deal in aren't necessities, I think it's a good sign. We've even seen decent increases in new construction.

My father is in the demolition business, and he was telling me today that they've also seen a substantial increase over the last several months. The same thing can be said for the local mattress manufacturer where my girlfriend is employed. And all three of us are making more money than we were a few years ago.

I'm not going to say things are where we want them to be, but I do have a difficult time buying into the hype that the world as we know it is going to end any day now.

Edited September 8, 2012 by TripleDigitRide

[piercedan]

For me, the biggest concern is the very large debt load that we have. There are many facets to my fear of collapse, but that is the biggest. As anyone who has ran a business or even a family budget knows, eventually you have to pay the piper.

Edited September 8, 2012 by piercedan

[Caster]

Yes.

Actually, things are worse than they appear. Infrastructure sits on a razors edge.

[RichardR]

I agree Caster, not only ours but the rest of the globe is also teetering on the edge of a serious economic collapse, Europe will probably go down the rabbit hole first, followed soon after by us, then Asia will follow shortly after us, its inevitable since almost all of the Asian nations economies are based on exports to Europe and the United States.

[Guest 6.8 AR]

Go look at the price of a bushel of corn or a gallon of gas. There will always be a part of the economy that

will outperform or underperform. Housing is relatively calm until the next round of rate increases. GM will

fail if the government stops buying their autos. yada yada yada. Up and down. Too much money in circulation

with next to nothing but less than the last round printed in value.

You are doing well and that's good, but the dollar you earn is worth less than it was before.

Too many houses built of glass and the debt is a sledgehammer.

[G27]

To read some folks, tomorrow the US will look like Somolia.

The reality is most of us understand economics at an extremely macro level at best, and I'm not certain even the most educated of economists can see en economy as large and complex as the United States' other than very generally...

That said, it's not nearly as bad as the repubs would have you believe, nor nearly as good as the dems would have you believe.

[RichardR]

To read some folks, tomorrow the US will look like Somolia.

It isn't like it happened over night, we've been digging this hole since the Carter administration, we've just finally dug so deep that there is no way to get out of it now.

And there is no one who can toss us a rescue rope either because everyone is all down in the hole with us.

[Guest 6.8 AR]

To read some folks, tomorrow the US will look like Somolia.

The reality is most of us understand economics at an extremely macro level at best, and I'm not certain even the most educated of economists can see en economy as large and complex as the United States' other than very generally...

That said, it's not nearly as bad as the repubs would have you believe, nor nearly as good as the dems would have you believe.

No argument from me, but you might consider if it were you borrowing a third of your budget each year

and not retiring any debt, how long do you think you would last? Macro thinking, maybe, but totally unsustainable,

regardless of one's economic bent.

[Guest 6.8 AR]

It isn't like it happened over night, we've been digging this hole since the Carter administration, we've just finally dug so deep that there is no way to get out of it now.

And there is no one who can toss us a rescue rope either because everyone is all down in the hole with us.

That actually may be our salvation, in a perverted way.

[JG55]

Middle Tn usually escapes the worse of any recession due to location and diverse business in the area. Because of this people from all over the country are moving here, which in turns stimulates (there's that word) the economy, i.e. their need for housing and all the affiliated industries that go with it, Look at the growth Hendersonville, Mt. Juliet, Franklin etc.. So it is no surprise that we in this area could very well see increases in business actives but that doesn't mean other areas of the country are.

[Garufa]

Don't let the local economy be an indicator of the national situation. Tennessee has fared much better than other places in the country and traditionally is not quite as susceptible to the pain of massive fluctations. That is not to say we have not been affected because we have, just not on the same scale as other areas.

That being said, with 16 TRILLION dollars of federal debt that grows exponentially every day, our crumbling infrastructure that is econonically infeasible to repair, overwhelming reliance on other countries and their fragile economies for needed resources, an increasingly overwhelming number of people who do not want nor have the wherewithal to work and contribute to society, no selfless, intelligent leaders to speak of, etc, etc, etc.

Yes, we are screwed.

Edited September 9, 2012 by Garufa

[Guest ThePunisher]

Yes, we are screwed.

Yep, I agree.

[Chucktshoes]

Yep, I agree.

We found something we agree on.

[Oh Shoot]

'Bout only question I see is whether we stay on a gradual decline of the overall living standard or whether at some point there's a relatively quick and cataclysmic period into exactly gawd knows what.

- OS

[Seabeejason]

I read the other day that when the national debt hit $16 trillion it equaled approximately $50,000.00 of debt for every person (including children) living in the United States. That's $140,000.00 for every taxpayer.

To understand how much of a threat this debt is to our nation you need to scale it down to something more simple. Imagine an individual that has really good credit. The credit card companies send him several credit cards in the mail. Each card has at least a $10,000.00 limit. Knowing that he makes a good salary at his job he decides to take advantage of the credit and the extremely low introductory interest rates knowing he can easily afford to make the payments. Fairly soon he starts buying televisions, guns, and other nice things with these credit cards. The debt starts accumulating, but he can still afford the payments, so he keeps spending thinking that eventually he will start paying off the debt. Soon, all the credit cards are nearly maxed out. The payments have become a burden, but he can still make them even though most of what he is paying is interest. Since he still has good credit the banks send him a couple more credit cards. He uses them and starts accumulating more debt. Then all of a sudden a few financial difficulties hit and he misses a few payments. The credit card companies then decide to reevaluate his credit worthiness due to the missed payments. They realize he is overextending himself and decide to reduce his credit lines on the remaining two cards and and his credit score is then downgraded. At the same time the introductory interest rates on the other cards expire. The guy with once outstanding credit is now on the brink of bankruptcy and can't meet his payment obligations on his debt.

The United States is the guy with the credit cards and the credit card company is China, among other countries. Eventually countries like China are going to stop extending credit. When that happens it's all over. The United States is at the point now that it cannot afford to pay down the principal on the debt, so it pays interest and gets more loans. It's only a matter of time.

Our current GDP is $15.3 trillion.

http://www.usdebtclock.org/

"The single biggest threat to our national security is our debt".

-Admiral Mike Mullen

Chairman of the Joint Chiefs of Staff

Edited September 9, 2012 by Seabeejason

[quietguy]

The United States is the guy with the credit cards and the credit card company is China, among other countries.

You do understand that US concerns hold about 7x more of the National Debt than China. They are the largest foreign holder, but it is fairly small portion when you look at the real situation. To use your credit card comparison, China is nothing more than a small service fee. We are also the largest market for their goods, and declining market conditions here would have a much bigger impact on them than if we defaulted on our debt. In fact, all foreign interests are only about half of the "investors" in our debacle.

The situation is critical, and getting worse every day. But it is a complex situation, and we have to do our part to educate ourselves about the real facts. We can't take the word of anyone - not the media, not the talking-heads, and not the a$$clowns that we elect to manage these things.

[quietguy]

'Bout only question I see is whether we stay on a gradual decline of the overall living standard or whether at some point there's a relatively quick and cataclysmic period into exactly gawd knows what.

- OS

I am having a little trouble locating it, but I read an interesting study a few months ago. Its assertion was that while the overall US economy had progressed, the average US household had actually been in a fiscal decline since the early 70's. I am not sure that I completely agree with their conclusion, but the numbers were pretty solid. The focus on the study was real income in relation to CPI.

[Guest ThePunisher]

We found something we agree on.

Lord, heavens to Betsy, it's a miracle.

[RichardR]

I am having a little trouble locating it, but I read an interesting study a few months ago. Its assertion was that while the overall US economy had progressed, the average US household had actually been in a fiscal decline since the early 70's. I am not sure that I completely agree with their conclusion, but the numbers were pretty solid. The focus on the study was real income in relation to CPI.

[RichardR]

I have not seen the study, but from my own observations all of years that is the conclusion that I have also come too.

[BigK]

This country needs a balanced budget amendment REAL bad. I'm ok with provisions for deficit spending for true emergencies, but what's happening cannot continue. I don't know what the limit is, but we should use Greece as an example of what NOT to do.

[Seabeejason]

You do understand that US concerns hold about 7x more of the National Debt than China. They are the largest foreign holder, but it is fairly small portion when you look at the real situation. To use your credit card comparison, China is nothing more than a small service fee. We are also the largest market for their goods, and declining market conditions here would have a much bigger impact on them than if we defaulted on our debt. In fact, all foreign interests are only about half of the "investors" in our debacle.

The situation is critical, and getting worse every day. But it is a complex situation, and we have to do our part to educate ourselves about the real facts. We can't take the word of anyone - not the media, not the talking-heads, and not the a$$clowns that we elect to manage these things.

I know that. My analogy was simply that...just an analogy.

Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.

Read more: http://www.foxnews.c.../#ixzz25wU5HoTd

To say that China will keep buying our debt because their economy is dependent on ours is simply a mistake. China is investing heavily all over the world. They are diversifying heavily to insulate them from economic turbulence in the United States or otherwise. Not to mention the fact that they are buying up gold and other resources at an astounding rate. China knows that they can no longer be dependent on the United States for their growth. Also, the United States is heavily dependent on the dollar remaining the world reserve currency. All it would take is for that to change.

China is definitely a force to be reckoned with. They may only hold a small chunk of our debt, but what if they decided to suddenly and completely stop buying U.S. debt? Every other country and investor may decide to do the same. Then it's game over. Currently, United States treasury bonds are a safe haven. Who knows how long that will last with the dire financial situation of the U.S.

Also, holding over $1 trillion in U.S. debt is a great strategic advantage. If the United States ever succeeds in really pissing off China they can just dump all those treasuries onto the market at the same time. That would drive up interest rates and cause rapid inflation. Right now, this could hurt China because it would make their products cost more in the United States. Plus, the world economy as a whole is not currently doing well. But eventually that will not be the case as demand picks up in other countries such as Brazil, India, Russia, and China due to a growing middle and upper class.

It's food for thought at least.

Edited September 9, 2012 by Seabeejason

[quietguy]

This country needs a balanced budget amendment REAL bad. I'm ok with provisions for deficit spending for true emergencies, but what's happening cannot continue. I don't know what the limit is, but we should use Greece as an example of what NOT to do.

If you don't pass a budget, what good would it do? That is where we are today, and have been for the last three years. There are a lot easier solutions than a balanced budget amendment. All it would take is a rule change in both houses of congress.

[quietguy]

I know that. My analogy was simply that...just an analogy.

To say that China will keep buying our debt because their economy is dependent on ours is simply a mistake. China is investing heavily all over the world. They are diversifying heavily to insulate them from economic turbulence in the United States or otherwise. Not to mention the fact that they are buying up gold and other resources at an astounding rate. China knows that they can no longer be dependent on the United States for their growth. Also, the United States is heavily dependent on the dollar remaining the world reserve currency. All it would take is for that to change.

China is definitely a force to be reckoned with. They may only hold a small chunk of our debt, but what if they decided to suddenly and completely stop buying U.S. debt? Every other country and investor may decide to do the same. Then it's game over. Currently, United States treasury bonds are a safe haven. Who knows how long that will last with the dire financial situation of the U.S.

I am not recommending completely discrediting the Chinese influence on our economy, but am just saying that all of the press reports are extremely exaggerated. If you look at the trends, Japan will actually hold more US debt than China in the next 18-24 months than China.

Edited September 9, 2012 by quietguy

[RichardR]

It is too late for balanced budgets, too many parasites would get upset and there isn't a viable political party willing to risk the parasites wrath, the end is near, prepare yourselves and your families for the inevetable is the best advice I can give.