Pledge to America

[FinanceDude]

Quote:

Originally Posted by Emeritus The question is who creates jobs . you did not ask who invents products etc. Consumer create jobs.

How about if we agree that the American consumer drove economic growth for 30+ years and now they are tapped out, and that IS a real problem for economic recovery?

[HFWR]

Quote:

Originally Posted by FinanceDude How about if we agree that the American consumer drove economic growth for 30+ years and now they are tapped out, and that IS a real problem for economic recovery?

Then we have to blame the liberals for lowering loans standards, and the conservatives for easy money and lax regulation...

Somewhere in the middle is a realization that we will either hang together, or hang separately...

[ERD50]

Quote:

Originally Posted by HFWR Then we have to blame the liberals for lowering loans standards, and the conservatives for easy money and lax regulation... Somewhere in the middle is a realization that we will either hang together, or hang separately...

Actually, we don't have to "blame" anyone. But we should try to understand what leads to a problem, so we can determine some rational action going forward.

-ERD50

[HFWR]

Quote:

Originally Posted by ERD50 Actually, we don't have to "blame" anyone. But we should try to understand what leads to a problem, so we can determine some rational action going forward. -ERD50

My point exactly...

[Texarkandy]

Quote:

Originally Posted by REWahoo Does it have anything to do with broken promises?

I made no promise to you nor anyone else when I left off posting on here a while back. Apparently you are wishing I had and that I had kept it?

My last post on this particular thread was questioning clarification of a statement Ha made that seemed to be a generalization about the voting habits of government employees.

I'm not sure what your post has to do with that, except perhaps to let me know that my presence on the forum is personally unwelcome to you? ( I was already aware of that; so, not necessary, thank you.) Or perhaps you would like to clarify?

In any case, in response to your completely off-topic question to me: I've noted a number of folks who have left this forum for a period of time and then returned for a time.



*

[ERD50]

Quote:

Originally Posted by FinanceDude How about if we agree that the American consumer drove economic growth for 30+ years and now they are tapped out, and that IS a real problem for economic recovery?

Or, if a job is 'created' by a consumer with money he doesn't have, did that 'job' ever really exist?

-ERD50

[ERD50]

Quote:

Originally Posted by HFWR My point exactly...

sorry, a little to subtle for me in the midst of all this mud-slinging

-ERD50

[FinanceDude]

Quote:

Originally Posted by ERD50 Or, if a job is 'created' by a consumer with money he doesn't have, did that 'job' ever really exist?-ERD50

Well, we could all become wards of the state.......

It appears we are going about this all wrong. We need to round up all the poor people in America, give them free farmland, pay them massive subsidies NOT to grow anything, give them food stamps because they are not allowed to grow anything to eat, give them free healthcare, and provide free state run child care so someone else can raise their kids while they are NOT farming the fields........... I guess that would get the economy cranked up!!

[REWahoo]

Quote:

Originally Posted by Texarkandy I've noted a number of folks who have left this forum for a period of time and then returned for a time.

Sure, and if they departed with an "I'm outta here!" message and then return, I like to provide the quote for those who might have forgotten or missed it.

Just my way of saying "OFGS".

[FinanceDude]

Quote:

Originally Posted by REWahoo Sure, and if they departed with an "I'm outta here!" message and then return, I like to provide the quote for those who might have forgotten or missed it. Just my way of saying "OFGS".

Oh For Goodness Sakes (OFGS)

[Texarkandy]

Quote:

Originally Posted by REWahoo Sure, and if they departed with an "I'm outta here!" message and then return, I like to provide the quote for those who might have forgotten or missed it. Just my way of saying "OFGS".

I see nothing has changed with you, then. Perhaps you could stick with the topics at hand in the thread instead of attempting to make my presence one of them?

[Independent]

Quote:

Originally Posted by ERD50 Strangely circular. Got any good chicken-egg jokes? Hmmm, so let's consider a start-up? In some cases, an individual or group has a vision for a new product/service that doesn't yet exist. There are no consumers if there is nothing to consume. But to bring that product/service to market, they need to first (wait for it...)... hire some people (AKA - create jobs)! Now, which came first, the chicken or the egg? -ERD50

I hesitate to even start here, but this is so basic. The inventor doesn't make the investment to bring the new product to the market unless the inventor believes there are customers with money in hand who will buy the product when they see it. Inventing jobs don't exist without consumers. Any company thinking about investing in a new product tries to estimate the market size before they put money into the product.

(I've heard that private drug companies haven't been big on anti-malarial drugs for the smple reason that most people who could use them are so poor that the total potential dollar sales won't repay the development costs.)

Yes, the economy is circular. Which came first, the consumer or the producer? Both. They both appeared the first time two cavemen traded an arrowhead for a leather "shoe". Workers earn money by producing things, they become consumers as soon as they walk out the door and spend their money, which gives firms the revenue to pay the workers who will produce more stuff, and who then become consumers again who will buy more stuff, etc.

Our economy isn't working because the cycle isn't completing itself. Some money gets parked on the sidelines instead of going around another time. Firms lay off workers because they don't see enough customers, laid off workers cut back on spending, firms lay off more workers becuase sales dropped again, etc. Our problem isn't a shortage of willing workers, or a shortage of tools (capital goods) for the unemployed workers, it's a shortage of customers with money.

Yes, we're coming off a period when we were accelerating the cycle with borrowed money, so that's one of the causes of our problem. But a sudden change in the borrowing rate throws the engine out of whack. Now we're stuck at a recycling rate that doesn't use all the willing workers and already-built tools that we've got.

[Texarkandy]

Quote:

Originally Posted by haha A hint for you Tex-One Swallow Does Not Make A Spring. Ha

Sorry, I allowed myself to be derailed [moderator edit] and forgot to get back to you.

As to your comment alluding to the voting habits of government employees, if you are saying what I think you are saying (OK, I won't make you say it out loud) I wonder how valid the surveys are as to that, particularly when it comes to federal employees. I would have to ask when & where were/are any surveys on that conducted & are the sectors being surveyed really representative of the entire workforce?

I was in a number of locations in the federal government for quite some time & my personal experience with a variety of other government employees, anecdotal though it may be, doesn't really bear out the stereotype on that.

[samclem]

Quote:

Originally Posted by Independent Our economy isn't working because the cycle isn't completing itself. Some money gets parked on the sidelines instead of going around another time. Firms lay off workers because they don't see enough customers, laid off workers cut back on spending, firms lay off more workers becuase sales dropped again, etc. Our problem isn't a shortage of willing workers, or a shortage of tools (capital goods) for the unemployed workers, it's a shortage of customers with money.

Consumer spending is increasing slightly, but would increase a lot more if people (and businesses) were saving less. Businesses and people are keeping more money on the sidelines because confidence is low right now. If people believed the economy (and economic policy) were on the right track, you can bet they'd be spending more.

Figures as of Jul 2010.:





For the long term and for the good of the country, I wish we would move to a higher overall national savings rate (we'd adjust over a painful period). But, since I don't think Americans are going to fundamentally change their stripes, I wish they'd just get back to their old profligate ways soon so that the economy rebounds. What will make them start spending? The same thing that makes businesses spend: a stable set of rules that make it easier to see how things will be int he future. Anyone think we've had a stable set of rules over the last 2 years? Ask a Chrysler bondholder.

[Emeritus]

Oh for goodness sakes (OFGS)

I suggest a quick review of the debate about Says law for those who do not believe that consumer create jobs
Say's law - Wikipedia, the free encyclopedia

Ieven if you accept says law Creating products or services is not the same thing as creating "jobs"

[REWahoo]

Quote:

Originally Posted by Texarkandy Perhaps you could stick with the topics at hand in the thread instead of attempting to make my presence one of them?

Perhaps, but what would be the fun in that? Staying on topic is so 20th century...

[REWahoo]

Quote:

Originally Posted by FinanceDude Oh For Goodness Sakes (OFGS)

Yup. Here's yours: http://www.early-retirement.org/foru...ing-45393.html

[ERD50]

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Originally Posted by Independent Quote: Originally Posted by ERD50 Strangely circular. Got any good chicken-egg jokes? Hmmm, so let's consider a start-up? ... I hesitate to even start here, but this is so basic. .... Yes, the economy is circular. Which came first, the consumer or the producer? Both.

I'm not sure why you are hesitating, we seem to be in agreement. I threw out the start-up example to counter the Emeritus one-sided comment that "consumers create jobs". It does take both.

Quote:

Our economy isn't working because the cycle isn't completing itself. .... Our problem isn't a shortage of willing workers, or a shortage of tools (capital goods) for the unemployed workers, it's a shortage of customers with money. Yes, we're coming off a period when we were accelerating the cycle with borrowed money, so that's one of the causes of our problem. ...

I'm largely in agreement with that, though I might re-phrase that: "it's a shortage of customers willing to spend as much money". That is due to a variety of reasons - some are out of a job, others fear losing their job, some increase their savings because they've seen the danger of not having some set aside for a rainy day, etc. But (unfortunately) I don't see any sustainable solution, other than slowly working off the credit/debt hangover.

I find it easier to look at some of these things at an individual level. If a person was living beyond their income by running up their lines of credit month after month, and one day those sources got frozen - what to do? They need to cut back their spending to match their income, minus at least the minimum payments due. If a 'someone' came in and gave them the difference in cash for a year, what would it accomplish? If they spent it and kept the economy humming, they'd be right back where they were, and someone would eventually have to pay back the 'someone'. Not sustainable. And if they use it to pay off the debt to reduce interest charges (smart), they still need to cut back their spending to LBYM to work up an emergency fund. The economy slows.

It just seems to me we had a bubble, and now that needs to be back-filled. As much as we might wish for it, I don't see any way to pull a rabbit out of a hat here.

-ERD50

[FinanceDude]

Quote:

Originally Posted by REWahoo Yup. Here's yours: http://www.early-retirement.org/foru...ing-45393.html

What's that have to do with anything? I was merely deciphering the acronym............having a bad week or something?

[REWahoo]

Quote:

Originally Posted by FinanceDude What's that have to do with anything? I was merely deciphering the acronym............having a bad week or something?

I'm having a great week, how about you?

I was just pointing out I don't discriminate when it comes to OFGS posting....