What can we learn from past economic collapses to prepare for the future?

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In summary, the increasing debt is no biggie. The US can create massive surpluses incredibly easily, it can dump stupid ass military projects like star wars, it can butt out of the Middle East and remove its listening posts etc from the face of the Earth and can stop bailing out down the dirt companies. If an economy collapses, teachers/doctors/lawyers survive.
  • #36
Art said:
Some achievements of Bush that spring to mind are;
He declared a war on terror and succeeded in changing a small terrorist network with supporters numbered in the 1000s into a formidable international fighting force with supporters now in the millions and all for the paltry sum of several hundred billion dollars of U.S. tax payers money. Way to go! :rolleyes:
He's managed to undo 40 years of hard work the U.S. spent in building an excellent relationship with europe and all in just a few years. Quite an accomplishment.
He has alienated just about every muslim on the planet.
He's now turning his 'charm' on the Chinese with similar effects.
He has managed to eliminate the Clinton budget supluses and run up a record deficit by handing out trillions of dollars in tax cuts mainly to his already extremely rich friends.
He has increased american debt even further by borrowing every cent used to fight his personal crusade in Iraq for which he lied to the american people to gain their support. (This is in addition to the budget deficit as he hasn't funded this through the budget)
He has introduced torture as a 'repectable' means to glean information.
The list just goes on and on... of Bush's 'achievements'
Not all of these are good examples.

You're overestimating the number of new terrorists Bush policies have created. The real impact is to move the problem from Chechnya and Afghanistan into Iraq. That's a result that's bad enough in its own right since fighting terrorists in backwater countries is better than fighting terrorists in the heart of the world's oil supply.

The economy is cyclic and has more to do with budget surpluses and deficits than presidential policies. The important thing is what a president does with the money during the surplus periods. Clinton at least had a reasonable plan for putting the money to good use - at least in January 1999:

Clintion '99 State of the Union speech said:
...Third, we must help all Americans, from their first day on the job -- to save, to invest, to create wealth. From its beginning, Americans have supplemented Social Security with private pensions and savings. Yet, today, millions of people retire with little to live on other than Social Security. Americans living longer than ever simply must save more than ever.

Therefore, in addition to saving Social Security and Medicare, I propose a new pension initiative for retirement security in the 21st century. I propose that we use a little over 11 percent of the surplus to establish universal savings accounts -- USA accounts -- to give all Americans the means to save. With these new accounts Americans can invest as they choose and receive funds to match a portion of their savings, with extra help for those least able to save. USA accounts will help all Americans to share in our nation's wealth and to enjoy a more secure retirement. I ask you to support them. (Applause.)

...Saving Social Security, Medicare, creating USA accounts -- this is the right way to use the surplus. If we do so -- if we do so -- we will still have resources to meet critical needs in education and defense. And I want to point out that this proposal is fiscally sound. Listen to this: If we set aside 60 percent of the surplus for Social Security and 16 percent for Medicare, over the next 15 years, that saving will achieve the lowest level of publicly-held debt since right before World War I, in 1917. (Applause.)

Alas, he was no more successful in the middle of budget surpluses than Bush was six years later in the middle of budget deficits.

I think it is fair to blame Bush for making the deficits worse through an expensive war that has little impact on the overall problem of terrorism and for trashing the American image among Muslims, Europeans, Asians ... well, probably it would be easier to list the few countries whose image of America hasn't been tarnished by Bush.
 
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  • #37
russ_watters said:
The technicality is that if you have the money in your own account, it's surplus in another area - so you subtract that from your debt to find your net debt. One column to the right of the one you were looking at... (actually, my data may have been old - it's 26.5% for 2004).
Russ the reason why there is a difference between gross debt and nett debt is because the gov't has borrowed from itself. i.e. It has borrowed from monies put away to pay state pensions. This money will have to be repaid just like the rest of the debt or an awful lot of people are in for a nasty surprise when they retire. One of the things Clinton did when he was in power was refund the state pension scheme to safeguard it for the future but that has now been "reborrowed" by Bush.
BTW What did happen to the republicans' balanced budget bill??
 
  • #38
BobG said:
Not all of these are good examples.
You're overestimating the number of new terrorists Bush policies have created. The real impact is to move the problem from Chechnya and Afghanistan into Iraq. That's a result that's bad enough in its own right since fighting terrorists in backwater countries is better than fighting terrorists in the heart of the world's oil supply.
I didn't mention the number of terrorists I spoke about the number of people who support terrorism as popular support is the key to a terrorist network surviving and I think it is save to say these supporters can now be numbered in the millions.
BobG said:
The economy is cyclic and has more to do with budget surpluses and deficits than presidential policies. The important thing is what a president does with the money during the surplus periods. Clinton at least had a reasonable plan for putting the money to good use - at least in January 1999:
It is the presidents policies that determine whether or not there will be a budget surplus or deficit both directly by weighing income against expenditure and indirectly by creating a favourable environment for business to thrive and a motivation for people to work.
BobG said:
Alas, he was no more successful in the middle of budget surpluses than Bush was six years later in the middle of budget deficits.
I have no idea what you mean by this?? :confused:
BobG said:
I think it is fair to blame Bush for making the deficits worse through an expensive war that has little impact on the overall problem of terrorism and for trashing the American image among Muslims, Europeans, Asians ... well, probably it would be easier to list the few countries whose image of America hasn't been tarnished by Bush.
The deficit exists because Bush inherited a balanced budget then drastically reduced the state's income through his tax giveaways whilst at the same time increased expenditure massively in other areas such as defence. Deficits don't just happen. They are a result of policy decisions.
He also scared off foreign investment by effectively devaluing the dollar, a tactic that destroys international confidence and is usually seen as an act of desperation in the financial markets.
And again I'd like to emphasise the current deficit doesn't even include the $100s billions for the Iraq war as that has not been funded through the budget. The money for that has come from congress on separate bills.
 
  • #39
cronxeh said:
I wonder who will be the one who survives the collapse of the government and law n order once the Government debt reaches its tipping point?

Why debt? Why not debt-to-GDP?
 
  • #40
phcatlantis said:
Why debt? Why not debt-to-GDP?

Debt to GDP is no longer the standard indicator that it once was. Much of GDP is based on consumer spending, which previously would have indicated strong factory and industrial growth, however the products being purchased are to a great degee coming from other countries.

Much of the current consumer spending has involved the building boom. And as with all booms it can not maintain itself indefinitely.

Even worse a large portion of consumer spending has been done on credit. Consumer credit debt is at a record high in this country as is the national debt. At the same time, individual savings are dangerously low.

Debt to GDP is fine as a basic indicator, but a much bigger overall picture must be looked at when considering the long term economic outlook. Especially with a large pecentage of the national debt being owed to foreign countries, while the trade deficit with those countries continues to grow.
 
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  • #41
Art said:
BobG said:
The economy is cyclic and has more to do with budget surpluses and deficits than presidential policies. The important thing is what a president does with the money during the surplus periods.
It is the presidents policies that determine whether or not there will be a budget surplus or deficit both directly by weighing income against expenditure and indirectly by creating a favourable environment for business to thrive and a motivation for people to work.
Next year's budget is based on a prediction of next year's economy, which affects how much tax money comes in. Even if the next year's economy could be predicted with better accuracy, having government expenditures fluctuate up and down with the economy wouldn't necessarily be the best policy. In other words, a few years with a budget deficit isn't that bad as long the surplus years are balancing the deficit years. It's better than government policies that lose any semblance in continuity since their funding fluctuates too rapidly.
Art said:
BobG said:
Alas, he was no more successful in the middle of budget surpluses than Bush was six years later in the middle of budget deficits.
I have no idea what you mean by this?? :confused:
Bush wasn't the first to suggest privatization of Social Security in some form. Because of budget surpluses, Clinton was actually in a better position to accomplish some serious Social Security reforms, but hit the same brick wall Bush did. Even if it makes sense, it's a hard sell, regardless of who's president.
Art said:
The deficit exists because Bush inherited a balanced budget then drastically reduced the state's income through his tax giveaways whilst at the same time increased expenditure massively in other areas such as defence. Deficits don't just happen. They are a result of policy decisions.
With the economy taking a downturn, a reduction in the amount of taxes the government would take in shouldn't have come as a surprise. Without some serious budget cutting, there was going to be a budget deficit. In any event, it's a technicality. Bush pushing through tax cuts and starting an expensive war when budget deficits were already expected is still fiscally irresponsible.

The bottom line is that, without the Iraq war to complicate matters, Bush would rate as about average in his ability to deal with the economy.
Ironically, if the Iraq war weren't complicating matters, Bush probably would have lost re-election. Usually, a president that inherits a good economy is doomed to a single term, regardless of how he handles the economy, since a downturn that brings the economy back into line with long term averages is almost certain to hit at the most inopportune time.
 
  • #42
The key to end poverty for everyone imo is to stop excessive consumerism and to set limits to business monopolies and government power (crony capitalism).
 
  • #43
X-43D said:
The key to end poverty for everyone imo is to stop excessive consumerism and to set limits to business monopolies and government power (crony capitalism).


In my humble opinion, the key to our survival as a civilization is to conserve our population numbers. In last 50 years our population has increased by 4 BILLION people. People want cars, house(s), spirits, foods, books, and various other commodities nowadays and with this boom of population we are destined to run out of natural resources as well as create a hazardous environment for the future populations.
 
  • #44
cronxeh said:
In my humble opinion, the key to our survival as a civilization is to conserve our population numbers. In last 50 years our population has increased by 4 BILLION people. People want cars, house(s), spirits, foods, books, and various other commodities nowadays and with this boom of population we are destined to run out of natural resources as well as create a hazardous environment for the future populations.

My knowledge on this subject is sparce, but don't wealthy families tend to have less children? Kind of a brutal cycle if so.
 
  • #45
Smasherman said:
My knowledge on this subject is sparce, but don't wealthy families tend to have less children? Kind of a brutal cycle if so.

well if you would draw parallel between intelligence and wealth, then I suppose it makes sense
 
  • #46
cronxeh said:
well if you would draw parallel between intelligence and wealth, then I suppose it makes sense
Other parallel's you could draw might be; Wealthier people tend to be spoiled and selfcentered don't want to have to deal with children. Wealthier people have better access to birthcontrol and have an easier time with the financial part of getting an abortion. ect..
 
  • #47
Hard work and materialism encourage population growth. Poor people work harder to survive and therefore need more children. Only post-materialism can result in liberty and happiness for all.
 
  • #48
X-43D said:
Hard work and materialism encourage population growth. Poor people work harder to survive and therefore need more children. Only post-materialism can result in liberty and happiness for all.

Ironically we may have to have an economic collapse in order for a post-materialism era to happen.
 
  • #49
cronxeh said:
I wonder who will be the one who survives the collapse of the government and law n order once the Government debt reaches its tipping point? With raising national debt to both domestic and foreign entities,

the US Government will start printing more money and the inflation will take place. ...

You are 8 years behind.

After the tech wreck came the housing bubble. Someone who can answer as to why this occurred has at least some credibility in predicting the future economy.
 
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  • #50
Phrak said:
You are 8 years behind.
Do you realize you are responding to a post that's nearly 3 years old?
 
  • #51
How did that happen? I was scanning New Posts. So that would be 5 years late.
 
  • #52
cronxeh said:
I wonder who will be the one who survives the collapse of the government and law n order once the Government debt reaches its tipping point? With raising national debt to both domestic and foreign entities, the US Government will start printing more money and the inflation will take place. As it happens to be so, I was born in Russia in 1984 and I've seen this happen before. With India and China today, I know where the US is heading - an economic collapse so severe, it will be almost overnight.

What kind of jobs will survive? Farming? Engineering? I'd like to know, thanks.

this boy is crazy.. 3 years ago talking about today :biggrin:
 
  • #53
Government debt hasn't reached its tipping point; the current economic crisis doesn't really have a whole lot to do with government debt in fact

BTW, learn your lessons from previous hyperinflation: The toilet paper industry will be the first to tank, because it will be cheaper to wipe yourself with dollar bills
 
  • #54
Office_Shredder said:
Government debt hasn't reached its tipping point; the current economic crisis doesn't really have a whole lot to do with government debt in fact

BTW, learn your lessons from previous hyperinflation: The toilet paper industry will be the first to tank, because it will be cheaper to wipe yourself with dollar bills

... which can then be used to pay off gambling debts accumulated by falling for sucker bets that you're sore about.
 
  • #55
Office_Shredder said:
Government debt hasn't reached its tipping point; the current economic crisis doesn't really have a whole lot to do with government debt in fact

BTW, learn your lessons from previous hyperinflation: The toilet paper industry will be the first to tank, because it will be cheaper to wipe yourself with dollar bills

Ha.. I got some Bear Sterns stocks for you instead.

How about this.. as the subprime mortgages were being written and foolish people were locking into those variable rates, Alan Greenspan raises the rates because the country is not in the position to give away free money to grow the housing industry, and the people default on their loans. Alan Greenspan made a bubble (fart) :biggrin: This is why we are here today, and not to mention that superduper debt that we can't pay off in my lifetime.
 

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