Why is the US economy so bad?

Suburbanite · #11 (**permalink**) 03-23-2008, 04:32 AM

Quote:

Originally Posted by Istok

I was listening to a liberal radio talk show this morning and some economist claims we are bad off and lists the reasons: home values, foreclosure, jobs lost, dollar value, mortgage meltdown, dollar value, bla bla bla. All the same stuff everyone is complaining about. Now if you bought an overpriced home 1 year ago with nothing down what exactly did you lose? Logically speaking the prices will come down now that there is a greater supply of homes on the market. You lost your home now you will have to save and have a good down payment to buy the next home. What is the problem here, the market is at work. Oh yeah and now you cannot borrow against that house to spend on plasmas, German Ultimate Driving Machines and crap. Too bad.
The lady economist practically admitted that the drop in dollar value is a benefit to the US economy because now we export more. Oh and trips to Europe will be more expensive.
So without sounding rhetorical in my title, tell me what is so wrong with the economy other than we cannot borrow against our homes to buy imported gadgets?

because, when our stock market drops, it becomes even cheaper for foreign investors to use THEIR currency to buy OUR companies. And now, the profit, the money American companies really make, it being exported.

wow · #12 (**permalink**) 03-23-2008, 08:20 AM

Quote:

Originally Posted by Istok

I was listening to a liberal radio talk show this morning and some economist claims we are bad off and lists the reasons: home values, foreclosure, jobs lost, dollar value, mortgage meltdown, dollar value, bla bla bla. All the same stuff everyone is complaining about. Now if you bought an overpriced home 1 year ago with nothing down what exactly did you lose? Logically speaking the prices will come down now that there is a greater supply of homes on the market. You lost your home now you will have to save and have a good down payment to buy the next home. What is the problem here, the market is at work. Oh yeah and now you cannot borrow against that house to spend on plasmas, German Ultimate Driving Machines and crap. Too bad.
The lady economist practically admitted that the drop in dollar value is a benefit to the US economy because now we export more. Oh and trips to Europe will be more expensive.
So without sounding rhetorical in my title, tell me what is so wrong with the economy other than we cannot borrow against our homes to buy imported gadgets?

This is what we get from the media when we have a Republican President.

Qurmudjin · #13 (**permalink**) 03-23-2008, 10:25 AM

I just watch what the wealthiest people do with their money. That's the best economic indicator there is. When they start buying lots and lots of gold, I do the same, expecting a recession. When gold reaches $2000 an ounce, I'll probably start stocking up on bottled water and ammo, too.

dab11999 · #14 (**permalink**) 03-23-2008, 02:18 PM

The problem is that many people bought homes at high prices and funded them with loans that will raise interest rates over time. Now that house prices are falling, people are realizing that they will not have much equity in their homes for many years due to high interest payments and rising loan to value percentages. In addition, they are going to end up paying many times what the property is worth. Many are cutting their losses by going into foreclosure. That is what has started the credit crisis. With cash flow drying up, the dollar has gone into a tailspin. If companies cannot obtain working capital, then they will begin contracting. Job losses are going to add to the capital contraction.
This process has bled over into some foreign markets, compounding the problem. You will begin to see much of our assets become foreign owned. Many people buy gold as a hedge against inflation when the dollar loses value.
This is the short version.

wow · #15 (**permalink**) 03-23-2008, 09:39 PM

Quote:

Originally Posted by World Hegemony

They keep saying that there is a recession imminent, well im not feeling it. My life hasnt been affected in the smallest way by the supposed economic breakdown.

I agree. It's strange how the economy has collapsed, 12,000 Dow Jones, some DJ 30 companies are posting big profits, employment gains, etc....??
It's even more strange, in 2000, when we did have an actual recession, the media did not say it was a collapse or breakdown or crisis, they did not say much about, stocks over priced, etc....
I'm glad the US has a fair and balanced media.

Suburbanite · #16 (**permalink**) 03-25-2008, 03:56 AM

Quote:

Originally Posted by dab11999

The problem is that many people bought homes at high prices and funded them with loans that will raise interest rates over time. Now that house prices are falling, people are realizing that they will not have much equity in their homes for many years due to high interest payments and rising loan to value percentages. In addition, they are going to end up paying many times what the property is worth. Many are cutting their losses by going into foreclosure. That is what has started the credit crisis. With cash flow drying up, the dollar has gone into a tailspin. If companies cannot obtain working capital, then they will begin contracting. Job losses are going to add to the capital contraction.
This process has bled over into some foreign markets, compounding the problem. You will begin to see much of our assets become foreign owned. Many people buy gold as a hedge against inflation when the dollar loses value.
This is the short version.

it isnt the people's fault for getting a loan, its the banks for offering it, knowing it would end this way. an intentional bubble, popped.

Emi · #17 (**permalink**) 03-25-2008, 07:37 AM

Quote:

Originally Posted by Suburbanite

it isnt the people's fault for getting a loan, its the banks for offering it, knowing it would end this way. an intentional bubble, popped.

It is the institutions falt that people are stupid? People should be more conscious. It is not the lender's fault that people will do stupid things. Just like it is not the governments fault or problem when people do stupid things. People need to stop blaming thier mistakes on other people.

I was inexperienced when I first bought my home. But I received help that I needed from those more experienced around me. Why? Because I understood that I did not know everything.

It is not the government's fault that people do not have healthcare or a house. People should stop whinning for the government and other people to help them out when they are too lazy to do it themselves. The government is here just to make sure that we have oportunities and ensure that they are safe. People like hillary want to treat the americans like stupid children that must be taken care of.

World Hegemony · #18 (**permalink**) 03-25-2008, 10:33 AM

Quote:

Originally Posted by mulp

To pay for the war that Bush and Cheney wanted.

You people have to realize that at the beginning, almost everyone wanted this war. Even democrats. Now nobody wants it but we cant just get out or 4000 American lives have been spent in vain.

George O Well · #19 (**permalink**) 03-25-2008, 12:09 PM

Quote:

Now nobody wants it but we cant just get out or 4000 American lives have been spent in vain.

>>>That argument doesn't hold water for me. 1) Iraq has to potential to bleed us white financially (which IS Al Qaeda's goal) and 2) why do we have to have more Americans die in vain to justify the 4000 Americans who have already died in vain?

George O Well · #20 (**permalink**) 03-25-2008, 12:13 PM

I think we're in for another round of stagflation. If your life hasn't been affected, you don't shop.