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  1. Thread Author  Thread Author    #1  
    Serial Fordicator's Avatar

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    Default A new depression

    I was watching Cinderella Man and got to thinking. With all of this debt that we will default on, what will happen if we go into another depression? How would people act? If you've ever seen the movie, you'll see that the people from that era were mostly good people and the movie was pretty accurate on that aspect.

    After seeing how people acted during Katrina, how will they act when social services break down? The me me me instant gratification state of mind nowadays is too scary to contemplate. You wouldn't be able to go to work even if you had a job because you would be robbed blind by the time you made it home. I hope it never happens, but I'm glad I don't live near any major city if it ever does.

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  2. #2  

    Default Re: A new depression

    Since you said, "...With all of this debt that we will default on...", you sound extremely pessimistic. What can we do to make you a little more optimistic and turn that frown upside down?
  3. Thread Author  Thread Author    #3  
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    Default Re: A new depression

    Quit spending what we don't have

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  4. Thread Author  Thread Author    #4  
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    Default Re: A new depression

    And some ice cream. Ice cream cheers up anyone, unless they're lactose intolerant.

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  5. #5  

    Default Re: A new depression

    What's truly sad is with China holding our debt, we may be closer to this happening than most people realize.

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    Default Re: A new depression

    Quote Originally Posted by Serial Fordicator View Post
    I was watching Cinderella Man and got to thinking. With all of this debt that we will default on, what will happen if we go into another depression? How would people act? If you've ever seen the movie, you'll see that the people from that era were mostly good people and the movie was pretty accurate on that aspect.
    I was trying to figure out how best to ask this, but I guess I'll just outright ask it, about how old are you? The only reason I ask is because Hollywood is probably one of the worst resources when it comes to getting a glimpse at how things were in certain eras. A lot of my elderly family members would scoff at what was considered "the greatest generation". Some of the stories I've heard about the injustices that took place were enough to make me sick and disheartened. I recently read a good article (Hopefully it isn't a violation to post from this source) What you have to realize is that Hollywood is going to take what actually took place and amplify it to the umpteenth factor to get the desired effect. Think an artsy form of the Jersey Shores.

    Also, it's my opinion that the debt is another fear tactic that seems to be deployed come election time. Immigration, Gay Marriage, and Terrorism were all big hits of the past as well. If you look at both sides, they're both amping up the rhetoric to excite their base. If you look at what started the Great Depression, you'll find some similarities (greed being one of the biggest) but the similarities are more tied to people being people. If by any chance we do slide into another event like the Great Depression, what would be most concerning to me is that it seemed that it took a World War to pull us out of the Depression. I'm not sure I believe this planet can survive another world war especially when you take into account that we've increased our firepower immensely since the last World War we were involved in.
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  7. Thread Author  Thread Author    #7  
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    Default Re: A new depression

    Quote Originally Posted by TXGTOU View Post
    I was trying to figure out how best to ask this, but I guess I'll just outright ask it, about how old are you? The only reason I ask is because Hollywood is probably one of the worst resources when it comes to getting a glimpse at how things were in certain eras. A lot of my elderly family members would scoff at what was considered "the greatest generation". Some of the stories I've heard about the injustices that took place were enough to make me sick and disheartened. I recently read a good article (Hopefully it isn't a violation to post from this source) What you have to realize is that Hollywood is going to take what actually took place and amplify it to the umpteenth factor to get the desired effect. Think an artsy form of the Jersey Shores.

    Also, it's my opinion that the debt is another fear tactic that seems to be deployed come election time. Immigration, Gay Marriage, and Terrorism were all big hits of the past as well. If you look at both sides, they're both amping up the rhetoric to excite their base. If you look at what started the Great Depression, you'll find some similarities (greed being one of the biggest) but the similarities are more tied to people being people. If by any chance we do slide into another event like the Great Depression, what would be most concerning to me is that it seemed that it took a World War to pull us out of the Depression. I'm not sure I believe this planet can survive another world war especially when you take into account that we've increased our firepower immensely since the last World War we were involved in.
    Actually, I'm 35 but from what I've read, yes, there were some bad things that happened, but people had a different state of mind. They actually cared about their fellow man and had a complete different mindset that what we have now. Katrina made me realize alot about how animalistic our culture has became.

    I'd agree of debt being a weapon, but I think it's a lot worse than we think. We print money we don't have. Inflation will happen. It's really not a question of if, but when. If hyperinflation hits, we really will be hurting. If a person has $10000 in the bank, after hyperinflation hit, it would only be worth $100, people will go ape. That's why people talk about investing gold. But, during the first depression, the government took all but 20 oz of gold. I figure that can happen again.

    I was frustrated with GW Bush spending money, but I'm furious at Obama.

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    Default Re: A new depression

    Quote Originally Posted by Serial Fordicator View Post
    Actually, I'm 35 but from what I've read, yes, there were some bad things that happened, but people had a different state of mind. They actually cared about their fellow man and had a complete different mindset that what we have now. Katrina made me realize alot about how animalistic our culture has became.

    I'd agree of debt being a weapon, but I think it's a lot worse than we think. We print money we don't have. Inflation will happen. It's really not a question of if, but when. If hyperinflation hits, we really will be hurting. If a person has $10000 in the bank, after hyperinflation hit, it would only be worth $100, people will go ape. That's why people talk about investing gold. But, during the first depression, the government took all but 20 oz of gold. I figure that can happen again.

    I was frustrated with GW Bush spending money, but I'm furious at Obama.

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    I've also noticed how much gold is being pushed, but I see it mostly in advertising during conservative talk shows. I haven't seen much lately, but I also remember when a lot of the advertising was bunkers and safe houses because the end of days was being pushed. To me it's just advertisers trying to peddle their snake oil. Between now and Valentines Day you're going to see an onslaught of commercials peddling health products since advertisers know that people will try to make New Year's resolutions that tend to die down right before they start pushing candies and sweets for one's sweetheart.

    The only problem with the U.S. debt is there is no consensus among our politicians on how to address it. Where do we make cuts? Where do we look for revenue? I personally was looking forward to the Bush tax cuts expiring. The 'job creators' didn't exactly shower us with the jobs that they claimed we'd be showered with. All it did was put us deeper in an already deep hole. Government programs were also trimmed but what some people don't understand is some government assistance programs are really subsidies. Take food stamps for instance, while some people think that cuts mean less food for the 'leaches of society', regardless of who people think it hurts the most, it also hurts farmers. The program itself is very strict on what one can and can't buy. Most of what is approved is food that goes back to the farming industry. So now that we've cut some of the funding that helps farms turn crop over, all we've done is ensure that maybe some people will grow a little more hungry, and that the demand for some farm products will go down. Hopefully the farmers don't lose so much that they'll be forced to ask for government aid from a government that's already overspent.

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    Default Re: A new depression

    Quote Originally Posted by Serial Fordicator View Post
    We print money we don't have. Inflation will happen.
    The primary driver of inflation is fractional lending, not borrowing. In the relationship between the Fed and the Treasury they somewhat go hand in hand, but if the Fed was loaning us assets (money) it actually possessed, inflation would be very minimal.

    Quote Originally Posted by Serial Fordicator View Post
    I was frustrated with GW Bush spending money, but I'm furious at Obama.
    On our current budget trajectory the deficit will be gone by 2019 and we'll be able to begin paying down the debt. On Bush's trajectory by 2019 the deficit would be 3.7 trillion today, which is almost 5 and a half times what it actually was for this year. By 2019 it'd be -4.5 trillion per year, rather than 0. I strongly oppose giving either president credit for either of those numbers, that's 100% the Congress's power, but the fiscal direction has definitely improved over the past 4 years and is heading in the right direction. We can do more, but it's definitely not getting worse. The deficit controls the debt and if we want to lower the debt, we have to continue lowering the deficit until we have a surplus greater than the interest on the debt. From 2001 to 2009 we increased the deficit by 2 trillion. THAT was the wrong direction.

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  10. #10  

    Default Re: A new depression

    Quote Originally Posted by NothingIsTrue View Post
    The primary driver of inflation is fractional lending, not borrowing. In the relationship between the Fed and the Treasury they somewhat go hand in hand, but if the Fed was loaning us assets (money) it actually possessed, inflation would be very minimal.



    On our current budget trajectory the deficit will be gone by 2019 and we'll be able to begin paying down the debt. On Bush's trajectory by 2019 the deficit would be 3.7 trillion today, which is almost 5 and a half times what it actually was for this year. By 2019 it'd be -4.5 trillion per year, rather than 0. I strongly oppose giving either president credit for either of those numbers, that's 100% the Congress's power, but the fiscal direction has definitely improved over the past 4 years and is heading in the right direction. We can do more, but it's definitely not getting worse. The deficit controls the debt and if we want to lower the debt, we have to continue lowering the deficit until we have a surplus greater than the interest on the debt. From 2001 to 2009 we increased the deficit by 2 trillion. THAT was the wrong direction.
    I know the cuts we made during the sequestration but I didn't think they'd make that kind of difference. Is there anything else that took place to make these cuts possible? Also, even if the deficit were to shrink down to manageable levels, regardless of what party helped make the most meaningful cuts, something tells me we'll never get a straight answer.

    It reminds me of when Clinton was in office for his 2nd term, the Democrats insisted that it was their efforts that helped us realize a budge surplus, and it GOP insisted it was Bush I policies that brought us the surplus. Thus, when someone insists that the economic mess we've seen lately is all Obama's fault, I ask them if that means that Clinton was responsible for the surplus we had during his 2nd term. Sometimes I'll can smell a faint burning bacon smell as they try to reconcile their position, give Clinton credit for the surplus and blame Obama for the economy under his terms, or give Bush 1 the credit for the surplus under Clinton and give Bush 2 the blame for the economy under Obama. I personally think Clinton was in the right place at the right time and benefited somewhat from the dot com expansion, and GWB didn't exactly benefit when the dot com bubble burst in 2000.
  11. #11  

    Default Re: A new depression

    There's a few things here I'd like to touch on.

    Society up to the 1950s is a radically different thing than how it previously was, and I know this from multitudinous conversations I've had with people who were old enough then to know how it was "back then". Yes, up to a point, we've always had an "every person for themselves" streak, but we used to pull together a lot more than we do now, and more to the point, we didn't used to be so divided and antagonistic as we are now, so "pulling together" didn't involve traveling such a great distance, if you'll pardon the mixed metaphor.

    On the societal level, we are dependent on infrastructure like at no time in our past. I'm not referring to the stereotypical "youth who don't know what to do without an Internet connection". I mean that so much of what is now required for us to function as a society is much more involved and complicated and arguably delicate than it ever used to be.

    What I think will likely happen is that a second Great Depression will separate the wheat from the chaff in a big way. The strong will wipe out the weak, for better or worse, and the results will not only be Godawfully bloody and gruesome, but they will almost certainly prove catastrophic. The late British author Douglas Adams riffed on this idea once by taking the civilization of some planet and, in order to get rid of what they considered to be the useless people, invented the story of global cataclysm and supposedly created three great spacecraft, known as the A Arc, the B Arc, and the C Arc, and it was into the B Arc that they put the hairdressers and telephone sanitizers and middlemen and such. Ultimately, the civilization collapsed and was wiped out by disease because included with the "useless" people were, in fact, quite useful jobs.

    The problem is that we as a people are so uninformed about what is really going on, and so ill-educated in the process of analytical thinking and logical reasoning, and history, and the idea of context, and of cause and effect, and a litany of other things, that we can't even now get our society to agree on what is actually wrong and what is actually causing it. To be fair, this is in part due to too many people with their hand in the pot, or being dependent on things that they shouldn't be, so there is what you might loosely term as a conflict of interest.

    Everybody likes to harp about our economic situation and even a lot of people will complain about our monetary policy (and of course the Keynes vs. Hayek element is often mentioned but just as often lampooned) but nobody wants to do anything to change it. Remember when there was this big push for Walmart to carry only American-made products? That didn't last very long.

    There is no economy to sustain a country in which a nation can habitate if, as a for instance, there are no real jobs. To think we can sustain ourselves just by being a service economy is a bunch of mindlessness. If we don't make anything here and don't service anything here, then on what basis do we have jobs and the rest of the economy here, either? Because if those things can be outsourced, then every single thing can be outsourced, or we can just determine the positions are no longer required. And if nobody then has an unnecessary job in an era where basically all jobs have been made unnecessary, where do we get any money? Even for a company like Walmart, how does it make any money if nobody here has a job and so has no income to spend there?

    Keynesian economics is the lie that makes this all work, because under that system we don't basically need jobs or any other "real" wealth producers to have wealth.

    The reason I'm bringing up the whole economic and monetary angle here is that, from a purely practical standpoint, it really doesn't matter what other problems we're having in this country if you can't afford to live here in the first place.

    That being said, and I won't repeat what I've said above or in other threads ad nauseum, but we are so conflicted here that I don't see us coming together.

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  12. #12  
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    Default Re: A new depression





    Revenue climbed fairly steadily throughout the last first 25 of the last 40 years, falling off at the end of the Clinton admin and throughout the first half of the Bush II admin, then climbed again faster than ever before until 2007/2008, when revenue crashed. Over the last 4 years it's begun climbing again.

    Expense climbed steadily until the Bush II admin when the rate of climb nearly doubled, until 2008 where it immediately tripled, going through the roof of 3 trillion and all the way to 3.5 trillion by the end of his last budget. It took us 25 years to move from .5 trillion to 2.5 trillion, (.4 trillion gain per year 5 years average) 3 years to go the next .5 trillion (.8 trillion per 5 years) and 1 year to go the next (2.5 trillion per 5 years). Since 2009 expenses have remained relatively flat (not good), but at least revenue is coming up to meet it.

    As such, the debt continues to increase (obviously, if there is a deficit, it will increase), however the rate of growth has finally begun to slow from the astronomic increase caused by the irresponsible actions of the Congress presiding during the Bush II Presidency. The yellow line is the deficit (or surplus, when applicable from 1998 to 2001), which went out of control to an all time worst at -400 billion with the War on Terror beginning, was almost recovered by 2007 and then immediately fell to -1400 billion by the end of 2009. The Congress during the Obama admin has started the long climb back up (2013 is -680 billion for those interested, so 3 more steps up and 3 steps below breakeven). Unfortunately that means the debt increased by more than $680 billion this year, but that's a vast improvement over the previous year, which was a vast improvement over the year before, etc.

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  13. #13  

    Default Re: A new depression

    Yes, NothingIsTrue, you're right in showing those graphs. However, we're still talking about Keynesian Economic Theory which is what we run our country on and have done for a very, very long time. We have a baseless currency and debt financing and debt monitization. So ultimately, what does it matter? The economy is a sham based on a lie.
  14. Thread Author  Thread Author    #14  
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    Default Re: A new depression

    Quote Originally Posted by NothingIsTrue View Post
    The primary driver of inflation is fractional lending, not borrowing. In the relationship between the Fed and the Treasury they somewhat go hand in hand, but if the Fed was loaning us assets (money) it actually possessed, inflation would be very minimal.
    I'd have to disagree here. When you print more money than you have, its like writing hot checks. Its only a matter of time before the checks aren't worth the paper they are written on. People will spend all of their money before the value of the dollar is worthless. IMHO

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    Default Re: A new depression

    Quote Originally Posted by Serial Fordicator View Post
    I'd have to disagree here. When you print more money than you have, its like writing hot checks. Its only a matter of time before the checks aren't worth the paper they are written on. People will spend all of their money before the value of the dollar is worthless. IMHO

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    What you just said agrees with what I said, aside from your first sentence.. It's not borrowing that inflates the currency, but the printing/creation of money from nothing. If we were borrowing pre-existing money, it'd be much less dangerous, but still pretty stupid.

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