Country Economy

[Roamy]

Here is what I think right or wrong.

We can't get rid of the IRS and do a flat tax system because we have too many accountants - where would they go.

We can't have tort reform because we have too many attorneys and congress is made up of attorneys - where would they all go.

illegal drugs has created their own economy and the bottom line is the country has no intention of stopping illegal drugs. They couldn't afford the welfare.

I hear we have enough natural gas to run our sh!t for 100 years while we develop correct energy sources. So what is the hold up F____ Opec

It appears that nuclear energy is the winner but the problem is the waste. Well load this sh!t up on a good space ship and send it away. If it take light years to get anywhere then this will be cool upon arrival. I hear Sweden just buries it far underground.

I can fly a unarmed aircraft all over afghan and blow up some guy smoking some hash in a freaking cave in the worlds worse terrain but I can't see a Mexican crossing the Rio Grande.

Well this is my little rant for the eve. Ring in TIRE's

[Hondo]

There's no problem with the economy at all. Nobody's currency is backed by anything other than the full faith and credit of the governments. The money we use every day has value because you believe it does. You can exchange that money with me for goods and services as an easier way of doing business because I believe it has value as a medium of exchange also. It's loads easier than you trading me a cow for some electrical work. Except for theory and stacks of books and papers, our money is no worse or better off than the Euro, Pound, Franc, or the Chinese money. The only thing that truly has an honest value is food and water. If every country out there went bankrupt, so what? You gonna take the country? How are you going to occupy it? The common citizen might have other ideas about you moving in.
What's going on in Egypt is class warfare because common people have just about had it with their governments and their cosy relationships with the very rich, at the people's expense.

If there was such a thing as an economics expert there would be no recessions and all would agree on what system is best. They don't, because like pyschology, it's all theory and in your head.

Good night sweetie.

[schmenke]

There's no problem with the economy at all. Nobody's currency is backed by anything other than the full faith and credit of the governments. ...

But the problem is that the value of all U.S. credit far exceeds the value of cash currently in circulation by the Federal Reserve Bank. The situation worsens every time the government borrows money for minor things like $700B bailouts :rolleyes: .
A start to improving the situation would be to abolish the Federal Reserve Bank and transfer the country's banking responsibility to Congress... But we all know the fate of the last two presidents that tried to do just that :rolleyes: .

[Hondo]

Doesn't matter. The cash that's in circulation now has nothing behind it of value...nothing, except the belief it has value. It doesn'tmatter if 1 dollar is in circulation or 6 trillion, there is nothing of value behind it.

Just for fun, say the food supply got real tight and very guarded. You've got $2 million in cash, gold, and gemstones but I'm sitting on a years supply of food. I can't eat your paper, gold, and rocks so it has no value to me at all. All these monies in circulation is just a big numbers game and only has value because we choose to believe it does.

[schmenke]

That's simplistic Honda.

The reality is that the value of that credit is what continues to supply the goods that maintain the consumer lifestyle that has become complacent among Americans.

The U.S. economy is humming along on the basis that the current $14 trillion debt has some intrinsic value to those who own it.

Yes, the debt is represented merely by pieces of paper (bonds), but the U.S. debt-to-GDP ratio continues to climb (pushing 90% now, is it not?), resulting in inflation affecting everyone, particularly the lower-income who cannot afford to purchase the wheat that you’re hanging on to.

I'm no expert in global economics so perhaps someone else can explain it better :mark: .

[billiaml]

A start to improving the situation would be to abolish the Federal Reserve Bank and transfer the country's banking responsibility to Congress... But we all know the fate of the last two presidents that tried to do just that :rolleyes: .

You have way more faith in our Congress than I do. I've heard them described as "the most economically illiterate group of people ever assembled." While that's probably a bit of an exaggeration, I doubt that it's entirely off the mark. They can't balance their own budget, and we're supposed to trust them with the country's banking system? I don't think so.

[schmenke]

Be that as it may Bill, the alternative is to continue to allow the Feds to loan money to the government with interest all at the taxpayers' expense. Everytime this is done the country digs itself deeper into the debt hole. The only ones who profit are the Federal Reserve bankers, whose best interest (pun not intended) is to keep the nation in debt.
As I said, I'm no expert (Lord knows I can't even balance my own budget) but the U.S. banking system makes no sense to me at all.

[Hondo]

It sounds simplistic, because when you get right down to it, that's what it is...simple. You're still treating the paper as something valuable when it's not. So what happens if we say we're not paying off the debt and restarting again at zero?

[schmenke]

Well, by saying "we're not paying off the debt" you're really saying that the U.S. will not honour the ~$4 trillion of bonds currently held by a multitude of foreign countries, not to mention defaulting on trust funds currently set aside to pay social security, pensions, etc. to Americans :mark: .

Defaulting on loans would result in the U.S. being never able to issue bonds again to raise cash, devaluing the dollar.

The cash in your savings account would be useless.

Simplistically, the government, hence you, would go bankrupt.

[Hondo]

Well, by saying "we're not paying off the debt" you're really saying that the U.S. will not honour the ~$4 trillion of bonds currently held by a multitude of foreign countries, not to mention defaulting on trust funds currently set aside to pay social security, pensions, etc. to Americans :mark: .

Defaulting on loans would result in the U.S. being never able to issue bonds again to raise cash, devaluing the dollar.

The cash in your savings account would be useless.

Simplistically, the government, hence you, would go bankrupt.

That's theory of course, because it hasn't been done. The USA wouldn't go away and the trust funds you mention have been empty for years. As long as the president could convince the people that their money had the same face valve, they might get away with it. The debt levels now are at a level that will never be paid off anyway. It's a big game, that's all. Show me a country that has ceased to exist because of bankruptcy.

[schmenke]

Countries don’t go bankrupt because before economies sink to those levels they print more cash into circulation. The currency devalues, hyperinflation results and it costs you $100 for a loaf of bread.

Go ahead Honda, make the suggestion to your congress representative. In the meantime, do you have a couple of bucks you could spare me? I’ll write you an IOU ;)

[Rollo]

It appears that nuclear energy is the winner but the problem is the waste. Well load this sh!t up on a good space ship and send it away. If it take light years to get anywhere then this will be cool upon arrival. I hear Sweden just buries it far underground.


It currently costs about USD1800 per pound to put stuff into low earth orbit. If the USA generates roughly 2500 metric tonnes of nuclear waste in a year (it generated about 2,468 metric tonnes in 2009 or thereabouts), then to put a year's output of nuclear waste just into low earth orbit would cost about $9bn.
NASA's total budget was just shy of $18bn for 2010. Turning it into a commercial waste removal system doesn't sound quite so silly as it first sounds.

If it was seriously proposed, then you need not throw it into deep space. The sun will work just as well and instantly dispose of pretty well much everything I should think.

[Brown, Jon Brow]

It currently costs about USD1800 per pound to put stuff into low earth orbit. If the USA generates roughly 2500 metric tonnes of nuclear waste in a year (it generated about 2,468 metric tonnes in 2009 or thereabouts), then to put a year's output of nuclear waste just into low earth orbit would cost about $9bn.
NASA's total budget was just shy of $18bn for 2010. Turning it into a commercial waste removal system doesn't sound quite so silly as it first sounds.

If it was seriously proposed, then you need not throw it into deep space. The sun will work just as well and instantly dispose of pretty well much everything I should think.

What about potential lauch failures? I know a nuclear flask can withstand a train crash, but what about a rocket explosion a few miles in the air?

[Rollo]

Oh tut tut tut.

Columbia, Challenger, Apollo 1, Kosmos 2251, and Kosmos 954 all prove that space travel is perfectly safe and that nothing ever happens.
"Once the rockets are up, who cares where they come down
That's not my department," says Wernher von Braun :D

[Tazio]

It currently costs about USD1800 per pound to put stuff into low earth orbit. If the USA generates roughly 2500 metric tonnes of nuclear waste in a year (it generated about 2,468 metric tonnes in 2009 or thereabouts), then to put a year's output of nuclear waste just into low earth orbit would cost about $9bn.
NASA's total budget was just shy of $18bn for 2010. Turning it into a commercial waste removal system doesn't sound quite so silly as it first sounds.

If it was seriously proposed, then you need not throw it into deep space. The sun will work just as well and instantly dispose of pretty well much everything I should think.This was a discarded solution (shooting it into the Sun) when I took Physics as a freshman in 1973 for the exact reason that B-J-B has presented. My German Physics professor was all for it, and she stated that at that time it would be commercially viable, and if we stored it too long the potential for "other misuses or accidents" would be of a much higher risk. She was a very intelligent woman when you could understand her English!

[Hondo]

Apollo 1 was a fire within the manned caosule, on the launch pad doing radio tests. It was neither flying nor did it involve the rocket itself. Saturn 5 was a hugely successful rocket with few problems and no failures. Go von Braun!

[Tazio]

Apollo 1 was a fire within the manned caosule, on the launch pad doing radio tests. It was neither flying nor did it involve the rocket itself. Saturn 5 was a hugely successful rocket with few problems and no failures. Go von Braun! Interesting that you bring up Von Braun!
I grew up about 3 miles from the Astronautics division of General Dynamics. A good friend mine's father worked with Von Braun on the very successful Atlas Booster. They had the best park. "Missile Park" I had a girlfriend that sung in a band that played there on dance weekends it was really a great facility, and built for the employee's of General Dynamics (which may have been under the umbrella of the Convair Corporation)
I believe the Atlas was involved in the Mercury projects but eventually was designated as a ballistic missile and a heavy weight in our nuclear arsenal :eek:

http://www.signonsandiego.com/uniontrib/20080810/news_1m10rocket.html


BALBOA PARK – The San Diego Air & Space Museum wants to bring a nearly 100-foot Atlas rocket to Balboa Park and install it near the museum's parking area.

A private group of Atlas aficionados is raising $150,000 to move the 48-year-old craft from its current spot at Gillespie Field in El Cajon, where it serves as a landmark for drivers along state Route 67.

“We thought it could be a beautiful icon for the park,” said Jacquelyn Collins, an Ocean Beach resident and Atlas committee member.

[rah]

It would probably cost less to invest in technology that will efficiently use the fuel anyway. Therefore you will get less waste. If it is dangerous, then it still has energy in it.

[Jag_Warrior]

A start to improving the situation would be to abolish the Federal Reserve Bank and transfer the country's banking responsibility to Congress... But we all know the fate of the last two presidents that tried to do just that :rolleyes: . :eek:

Wouldn't that be akin to co-signing for a credit card in Charlie Sheen's name... and then dropping him off in front of a porn studio?

I'm just saying that we already let Congress write checks (and look where that's gotten us). I don't think it would be such a great idea to let them print money too. The American people may not have much love for or faith in the Fed. But from the last poll that I saw, Americans from both parties had almost no faith in Congress... and (IMO) rightly so.

[Bob Riebe]

What about potential lauch failures? I know a nuclear flask can withstand a train crash, but what about a rocket explosion a few miles in the air?
The astronauts survived the shuttle explosion, they found water in their lungs.

[Rollo]

I believe the Atlas was involved in the Mercury projects but eventually was designated as a ballistic missile and a heavy weight in our nuclear arsenal :eek:


I though that Atlas was SM-65 and as such was given a "bomber" number.

The Apollo 9 CM "Gumdrop" is in the The San Diego Air & Space Museum which is pretty impressive. What happened to "Spider", it's LM companion? The Apollo 10 LM "Snoopy" is forever in orbit around the moon.

Equally impressive is that bridge over the 163 in Balboa park on El Prado. You don't realise it and then you look over the side.... whoooooaaaahaaeeeeey... don't want to accidentally lose your sunglasses over that drop.

[Tazio]

I though that Atlas was SM-65 and as such was given a "bomber" number.

The Apollo 9 CM "Gumdrop" is in the The San Diego Air & Space Museum which is pretty impressive. What happened to "Spider", it's LM companion? The Apollo 10 LM "Snoopy" is forever in orbit around the moon.

Equally impressive is that bridge over the 163 in Balboa park on El Prado. You don't realise it and then you look over the side.... whoooooaaaahaaeeeeey... don't want to accidentally lose your sunglasses over that drop. It used to be referred to as "Suicide Bridge". A friend of mine actually saw someone jump. The Coronado Bridge became the bridge of choice for offing yourself after it was built around 1970.
I'm not really sure about the details of the Missile programs. I did search it at one time and I think the information I posted is generically true. I'm glad you got to enjoy Balboa Park. Having lived in San Diego since 1960 I have still not thoroughly inspected it.

[schmenke]

:eek:

Wouldn't that be akin to co-signing for a credit card in Charlie Sheen's name... and then dropping him off in front of a porn studio?

I'm just saying that we already let Congress write checks (and look where that's gotten us). I don't think it would be such a great idea to let them print money too. The American people may not have much love for or faith in the Fed. But from the last poll that I saw, Americans from both parties had almost no faith in Congress... and (IMO) rightly so.

Currently borrowing money from the Feds results in millions of dollars in yearly interest payments by the taxpayer.
Transferring the banking responsibility to Congress (is this not what the Constitution requires anyways?) would mean interest-free loans.

Besides, I'm not convinced the Federal Reserve Bank has the taxpayers in mind. Like I said, they're a privately owned bank, with shareholders whose purpose is to maximize their own revenues. Hence, it’s in their best interest to keep the nation in debt to make the government borrow more :mark: .

[billiaml]

It seems like the members of Congress are more concerned about getting themselves re-elected -- and getting more power for their parties -- than anything else. They also have a habit of developing programs that aren't exactly financially sustainable -- both Social Security and Medicare are at risk of going broke. If they didn't spend more money than they take in, they wouldn't need to borrow from the Fed.

[Tazio]

I though that Atlas was SM-65 and as such was given a "bomber" number.

The Apollo 9 CM "Gumdrop" is in the The San Diego Air & Space Museum which is pretty impressive. What happened to "Spider", it's LM companion? The Apollo 10 LM "Snoopy" is forever in orbit around the moon.

Equally impressive is that bridge over the 163 in Balboa park on El Prado. You don't realise it and then you look over the side.... whoooooaaaahaaeeeeey... don't want to accidentally lose your sunglasses over that drop. This quote is taken directly from the link I provided in my previous post. As you can see it was a very versitile rocket!
The Atlas space program changed the character of San Diego in the late 1950s as the Convair division of General Dynamics hired 30,000 people to help design and build the rockets in Kearny Mesa and near Lindbergh Field.

In the 50 years since, Atlas rockets have carried astronauts into space, put the first commercial payloads into orbit and lifted probes that have explored every planet in the solar system. Loaded with nuclear warheads, Atlas missiles also stood by throughout the Cold War.

The rocket intended for Balboa Park is a model 2E built in 1960. It was a test missile once fired up at Convair's old Sycamore Canyon testing site near Poway, organizers said.

It stood at Kearny Mesa's Missile Park, on the former General Dynamics site at Lightwave and Overland avenues, from 1963 until 1996, when the land was redeveloped for housing.

Then the rocket was donated to the San Diego Air & Space Museum, which housed it at its Gillespie Field restoration annex.

[Jag_Warrior]

Currently borrowing money from the Feds results in millions of dollars in yearly interest payments by the taxpayer.
Transferring the banking responsibility to Congress (is this not what the Constitution requires anyways?) would mean interest-free loans.

Besides, I'm not convinced the Federal Reserve Bank has the taxpayers in mind. Like I said, they're a privately owned bank, with shareholders whose purpose is to maximize their own revenues. Hence, it’s in their best interest to keep the nation in debt to make the government borrow more :mark: .

I'm a little confused, Schmenke. I think you're talking about some other entity, rather than the Federal Reserve. The interest payments are a result of the payments made on the various issued debt instruments. Whether it is the Fed issuing bonds and notes or the Congress, there would still be interest payments. And the Fed isn't a private bank and there are no shareholders, certainly not in the sense of Bank of America or Wells Fargo. Any "profit" made by the Fed is a profit made by the American taxpayers. The Fed is simply a central bank (a government entity). And although its decisions are made in a (supposed) apolitical environment, it is subject to Congressional oversight.

The Fed determines monetary policy in the U.S. Between them, Congress and the President determine fiscal policy. Fiscal policy is where we seem to have the biggest issues. Given the complete mess that is fiscal policy in this country (tax policy, infrastructure spending, entitlement programs, military spending, etc.), I would not be in favor of giving Congress the reins over monetary policy as well. The Congress is made up of partisan political animals. Imagine waking up one day and finding that Michele Bachmann (or some other flake) was in charge of determining the monetary policy of the U.S. :eek:

[Jag_Warrior]

It seems like the members of Congress are more concerned about getting themselves re-elected -- and getting more power for their parties -- than anything else. They also have a habit of developing programs that aren't exactly financially sustainable -- both Social Security and Medicare are at risk of going broke. If they didn't spend more money than they take in, they wouldn't need to borrow from the Fed.

The ___ portion sums up my feelings exactly! That is exactly the reason that we should not give Congress any more control than it already has over this nation's finances. If anything, we should be looking for ways to take away some of the control the Congress has now. My state has a balanced budget requirement. I think the U.S. Congress should have the same requirement. Remember, it is not because of the Fed that we are in this fiscal mess. It is because of the reckless spending of Congress. Even the President, whether it be Reagan or Obama, cannot pass a budget on his own. The Congress has to take his hand and walk with him.

Here's what I'd like to see: someone with the massive stones of Paul Volker becoming President... as an Independent or member of a (sane, rational) third party. I know he must be in his 80's by now. But there is no foolishness about Paul. And you'd only see some little bomb throwing weasel, like Joe Wilson, shout something at Volker once. While President Volker was giving a speech about his proposals to cut spending or move toward a flat tax, if Joking Joe Wilson were to shout, "You lie!"... Big Paulie would probably tell the networks to go to a station break and he'd stroll down off the podium and into the gallery.

Big Paulie: "Get up weasel!"
Joe Wilson: "Uh oh! Why come? I ain't done nothin' but exercise my 1st Amendment rights!"
Big Paulie: "Either you get up, boy... or I'll yank your dumb azz outta that chair. Now up!"

The network feeds pick back up. What sounds like a woman screaming (or a terrified man) is heard in the background. Joe Wilson is seen laying back in his seat with a black eye and a busted lip... and everybody else figures out that the new dog barks as well as bites. And as long as what few semi-intelligent Americans remain would get behind Paul, the Congress Critters would fall in line. But *sigh*... that's nothing more than a thuggish fantasy. As was said in a movie: "A foundation built on 'the people' is a foundation built on mud."

While Reagan and Congress were spending money like it was going out of style (this is the fiscal period when the U.S. went from being the biggest creditor nation on Earth to the biggest debtor nation), Volker ratcheted up interest rates in the 80's to break inflation. It was not a popular move. I'm sure a politician would have lowered interest rates around election time, inflation be damned. But as an apolitical Fed Chairman, Volker wasn't worried about the hand wringing of the masses, approval ratings or getting re-elected. I have no doubt that he would kick ass and take names - but ONLY if he was outside of the two party structure. He'd be a one term President though. IMO, the American people are basically blissful sheep seeking shelter in an echo chamber (whether it be Fox News or MSNBC)... happy to be told what they want to hear. The Dems and Repubs have figured that out and they feed the sheep the grain that keeps them happy (to get re-elected) - even if it's killing them.

[billiaml]

I'd vote for Volker.

[schmenke]

I'm a little confused, Schmenke. I think you're talking about some other entity, rather than the Federal Reserve. The interest payments are a result of the payments made on the various issued debt instruments. Whether it is the Fed issuing bonds and notes or the Congress, there would still be interest payments. And the Fed isn't a private bank and there are no shareholders, certainly not in the sense of Bank of America or Wells Fargo. Any "profit" made by the Fed is a profit made by the American taxpayers. The Fed is simply a central bank (a government entity). And although its decisions are made in a (supposed) apolitical environment, it is subject to Congressional oversight.

The Fed determines monetary policy in the U.S. Between them, Congress and the President determine fiscal policy. Fiscal policy is where we seem to have the biggest issues. Given the complete mess that is fiscal policy in this country (tax policy, infrastructure spending, entitlement programs, military spending, etc.), I would not be in favor of giving Congress the reins over monetary policy as well. The Congress is made up of partisan political animals. Imagine waking up one day and finding that Michele Bachmann (or some other flake) was in charge of determining the monetary policy of the U.S. :eek:

Like I previously said, I’m certainly no expert in U.S. banking or finance.
I was lead to believe that the Federal Reserve Bank is not a government institution, but a collection of 12(?) privately owned banks, each with a board of directors and shareholders, who receive a guaranteed annual dividend (6%?) on the interest generated from the bonds they issue.
Yes, congress overseas their operation, but all that means is that they are subject to periodic audits. The Feds are not directly accountable to the government.

I’m sure there’s much more to it than that if I actually bothered to research it, but I’ll let you lot enlighten me instead :p :

[markabilly]

The ___ portion sums up my feelings exactly! That is exactly the reason that we should not give Congress any more control than it already has over this nation's finances. If anything, we should be looking for ways to take away some of the control the Congress has now. My state has a balanced budget requirement. I think the U.S. Congress should have the same requirement. Remember, it is not because of the Fed that we are in this fiscal mess. It is because of the reckless spending of Congress. Even the President, whether it be Reagan or Obama, cannot pass a budget on his own. The Congress has to take his hand and walk with him.

Here's what I'd like to see: someone with the massive stones of Paul Volker becoming President... as an Independent or member of a (sane, rational) third party. I know he must be in his 80's by now. But there is no foolishness about Paul. And you'd only see some little bomb throwing weasel, like Joe Wilson, shout something at Volker once. While President Volker was giving a speech about his proposals to cut spending or move toward a flat tax, if Joking Joe Wilson were to shout, "You lie!"... Big Paulie would probably tell the networks to go to a station break and he'd stroll down off the podium and into the gallery.

Big Paulie: "Get up weasel!"
Joe Wilson: "Uh oh! Why come? I ain't done nothin' but exercise my 1st Amendment rights!"
Big Paulie: "Either you get up, boy... or I'll yank your dumb azz outta that chair. Now up!"

The network feeds pick back up. What sounds like a woman screaming (or a terrified man) is heard in the background. Joe Wilson is seen laying back in his seat with a black eye and a busted lip... and everybody else figures out that the new dog barks as well as bites. And as long as what few semi-intelligent Americans remain would get behind Paul, the Congress Critters would fall in line. But *sigh*... that's nothing more than a thuggish fantasy. As was said in a movie: "A foundation built on 'the people' is a foundation built on mud."

While Reagan and Congress were spending money like it was going out of style (this is the fiscal period when the U.S. went from being the biggest creditor nation on Earth to the biggest debtor nation), Volker ratcheted up interest rates in the 80's to break inflation. It was not a popular move. I'm sure a politician would have lowered interest rates around election time, inflation be damned. But as an apolitical Fed Chairman, Volker wasn't worried about the hand wringing of the masses, approval ratings or getting re-elected. I have no doubt that he would kick ass and take names - but ONLY if he was outside of the two party structure. He'd be a one term President though. IMO, the American people are basically blissful sheep seeking shelter in an echo chamber (whether it be Fox News or MSNBC)... happy to be told what they want to hear. The Dems and Repubs have figured that out and they feed the sheep the grain that keeps them happy (to get re-elected) - even if it's killing them.

Seems all too true...but I would not worry that much if we still had a strong industrial base......but no, that has melted away. But we are now very essential to the Chinese and the reason they keep shoring up this counttry, is because they figured out that they really need us to buy their stuff......if they ever really figure out otherwise, well I guess I will be calling on you for that survival place you got laid out.

All these other countries need to realize how essential we are to their economic well being, much like the dope dealer needs the addicted, and the prostitutes need their johns (or martin Sheens).......so sad really

But being willing to be strong and advocate to the contrary, to take those steps so necessary, that will not get you elected.

Just look at McCain, he was not a TV personality type, and what he was advocating was only a tiny step in the right direction which was reform of wall street, -or more like a return to the old laws and restrictions on Banking in the USA that had been implemented after the great depression----- and see what THAT got him.

[schmenke]

...All these other countries need to realize how essential we are to their economic well being, much like the dope dealer needs the addicted, ....

In the case of trade between the U.S. and China you should really think about which country is the addicted... :dozey: .

[markabilly]

In the case of trade between the U.S. and China you should really think about which country is the addicted... :dozey: .
that should be obvious, as to who else is gonna be writing checks on empty bank accounts to hookers and otherwise buying as much of that crap as the good ole USA does from them????


used to be sellers, now we be buyers, sic transit gloria

[Alexamateo]

Seems all too true...but I would not worry that much if we still had a strong industrial base......but no, that has melted away....

Not to quibble, but you do realize the US is still the world's #1 manufacturer. It's high tech and high value, and we do it with fewer and fewer workers all of the time, but to say we don't have an industrial base is wrong.

[Rollo]

Not to quibble, but you do realize the US is still the world's #1 manufacturer. It's high tech and high value, and we do it with fewer and fewer workers all of the time, but to say we don't have an industrial base is wrong.

Yes to quibble, but do you realize the US is still the world's #3 manufacturer?
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2078rank.html
Germany overtook the US in about mid-2004, and China took the number one spot in the late 90s.

[Alexamateo]

Well you know how statistics are, you are referring to exports, I was referring to total output. Much US output is resold right here at home.

http://4.bp.blogspot.com/_otfwl2zc6Qc/TS9LxXXgmiI/AAAAAAAAO0E/lRk49Zp0YFY/s1600/worldmfg.jpg

[Roamy]

Lets see now 2.334 billions vs 14 trillion - yea we are F_______D

[Jag_Warrior]

Like I previously said, I’m certainly no expert in U.S. banking or finance.
I was lead to believe that the Federal Reserve Bank is not a government institution, but a collection of 12(?) privately owned banks, each with a board of directors and shareholders, who receive a guaranteed annual dividend (6%?) on the interest generated from the bonds they issue.
Yes, congress overseas their operation, but all that means is that they are subject to periodic audits. The Feds are not directly accountable to the government.

I’m sure there’s much more to it than that if I actually bothered to research it, but I’ll let you lot enlighten me instead :p :


Wiki sums it up better (and quicker) than I could:


According to the Board of Governors, the Federal Reserve is independent within government in that "its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government." However, its authority is derived from the U.S. Congress and is subject to congressional oversight. Additionally, the members of the Board of Governors, including its chairman and vice-chairman, are chosen by the President and confirmed by Congress. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees. Thus the Federal Reserve has both private and public aspects.[12] The U.S. Government receives all of the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. The Federal Reserve transferred a record amount of $45 billion to the U.S. Treasury in 2009.

So as you can see, the 6% dividend is on the banks' own (required) capital investments/reserves, not based on profits or the interest from bonds. With even 30 year Treasuries now yielding less than 6%, the Fed would be going in the hole with each at par bond sale if that was the case. And as I mentioned previously, the shareholdings are not akin to stock shares as most of us think of them. They are not transferable or capable of being used as collateral. Banks within a Fed region are required to be part of the Fed, and to be a member of the Fed, a bank is compelled to purchase stock. Think of the shares more as membership certificates with dues and benefits.

[Jag_Warrior]

GDP vs. debt is probably what you're looking for. And that stands somewhere around $14.5 trillion (GDP) vs. about $14 trillion (debt). The debt issue is one thing. The deficit issue is quite another - though the deficit contributes to the running debt total.

I don't recall if I posted it here or somewhere else. But realize that even if we began running $500 billion SURPLUSES this fiscal year (and every year thereafter), it would still take nearly 30 years, at a zero percent interest rate, to pay off our debt. So I must agree with your final statement: "yea we are F_______D"

Purty much... :)

[schmenke]

Wiki sums it up better (and quicker) than I could:



So as you can see, the 6% dividend is on the banks' own (required) capital investments/reserves, not based on profits or the interest from bonds. With even 30 year Treasuries now yielding less than 6%, the Fed would be going in the hole with each at par bond sale if that was the case. And as I mentioned previously, the shareholdings are not akin to stock shares as most of us think of them. They are not transferable or capable of being used as collateral. Banks within a Fed region are required to be part of the Fed, and to be a member of the Fed, a bank is compelled to purchase stock. Think of the shares more as membership certificates with dues and benefits.

Thanks for the info Jag (although TBH I try to avoid Wiki as a realiable source of info).
I didn't realise that the Feds actually transfer profits to the Treasury. Using the 2009 figures quoted, can the $45B not be used to pay off part of annual the deficit?

[billiaml]

Lets see now 2.334 billions vs 14 trillion - yea we are F_______D

If not us, our kids, our grandkids, ...

[Jag_Warrior]

Thanks for the info Jag (although TBH I try to avoid Wiki as a realiable source of info).
I didn't realise that the Feds actually transfer profits to the Treasury. Using the 2009 figures quoted, can the $45B not be used to pay off part of annual the deficit?

No problem. I use Wiki when I can see that the contributor knows what he's talking about. What was written was pretty much what you'd read in any Econ Money & Banking text book. But if you want another source to verify any of that, here's one that's pretty much "the horse's mouth":
Federal Reserve.gov (http://www.federalreserve.gov/pf/pf.htm)

I'm relatively certain that the deficit is calculated AFTER any such payments/profits have been accounted for.

[markabilly]

problem is not a snapshot of today's standing, it is the trend of the last forty years.
Today's numbers are a bit misleading as to what is "manufacturing"
We remain the leader in production of quality military stuff, and related industries of a science nature (space, medicine and so forth), but most of that is paid by the government via taxes.
Then there is construction work.
Other things are more of an assembly work using foreign made parts.

Look at basic industries such as steel, heavy machinery, oil and gas, textile and so forth. The trend is towards a steady and clear decline, coupled with both domestic debt and foriegn trade deficit that is overly burdensome.

Indeed, there are all the state and local governments now talking about bankruptcy.....

Ultimately, I think we will just print more money to try to relieve the debt......did that in the late 70's, but the industrial and techonolgy fundamentals were different. Today that might not work, and indeed we could end up in long term mired in debt economy, much like japan of the last 20 years.

No one to blame but ourselves, and no politican will accept credit or blame. The worst problem is that we think "stats" showing profits and some folks doing well, means it is all healthy and good.
best example right now is and remains Spain, where in 1492 it was on its way to being the leader of Europe, with incredible industries and so forth, only to be become a nation of bankers and financiers, that lasted until it lost its colonies and inflow of gold.....

The USA has 'colonies" but for the most part, they hold us hostage over oil.......just writing checks to hookers, with a bank account that was depleted sometime back, while we beg for more credit, so we can keep doing what we got us into the mess :rolleyes:


sic transist gloria