Future In the Economy?

[baileyuph]

Where we headed, immediate future I mean.  Given that there is no movement in government to reduce spending nor size, how much more money can this country borrow and be able to pay the interest alone on our debt?  We are at 16 to 17 trillion and it is understood the debt is still growing because government is not willing to face the music and pull the plug.

Even if it is half as bad as it looks, the results are definitely in the direction of another recession (or something worse).

But, to keep the subject simple and practical, how in the world can we keep borrowing money that we cannot afford? 

My business cannot run like that!

What can we as individuals do to soften the fall that will happen if our government doesn't stop the run away spending?

Doyle

[SteveA]

There's nothing that can be done.  We don't even have the ability or numbers to vote folks out who have that  budget busting philosophy.  The Country has/is changing - watch that stock market - don't be fooled by the current gains - protect your savings in low risk funds. Real estate is a decent place to invest.  What else can I advise - marry up - be nice to your Children so they will let you live in their basement, be nice to your relatives so they remember you -
SA

[bobbin]

1.)  Address the revolving door to the corporate Lobby.  Work to overturn Citizen's United.
2.)  Remove the cap on earnings and insist that SS be paid on 100% of earnings, including capital gains for the wealthiest in our country.
3.)  Require that "free" health care benefits be counted as income and tax them accordingly.
4.) Stop the foolishness of "nation building" and prosecuting war on sovereign nations based on faulty intelligence.
5.)  Include any "war" in the budget and institute a war tax to fund it.  Make sure the tax is levied on everyone so they understand precisely the seriousness and implications of our foreign policy.
6.)  Gradually increase the retirement age and consider "means testing" benefits.
 
You asked.   

[baileyuph]

Regarding the government, input there is technically very limited to a vote, from my perspective.

In terms of what a small business person, like me, can do is work, invest, and do it smartly.  Real estate has been suggested and stocks are a bigger risk.  Stocks went down considerably during the beginning of the down turn, but sure look over priced at this point. 

Thanks for the suggestions, if that dollar falls, it will be difficult to keep all boats floating at the current level or close to it, right?

My business has changed dramatically during this down turn.  So many in the market place, literally cannot or don't think they can afford traditional quality upholstery in anything.  So far, I have been able to take advantage of what does come (other business) but another downturn is the expected, hence the question.

Doyle

[bobbin]

I think it is imperative to be as resourceful as we can be in our business policies and our home economics.  Keep watching the expenses and control them to the best we're able.  Easier said than done!

I am keenly aware of advertising expenses... what will give the biggest bang for the buck?

I work really hard to offer my customers options.  I can do new work and if they can't afford new I do my level best to offer a lower cost option.  eg:  dodgers/biminis.  I look carefully at what would be required to bring the old one up to reliable working order and quote that price.  Sometimes "buying" someone a couple of years is the Goldilocks "just right" option.  I get the work, they get a rehabbed piece of canvas and the chance to budget for a new one with no great pressure.  I restyle clothes.  Change out the buttons on a suit, reshape the skirt, alter the hemline, cut down the lapels... I try to offer options. 

I've always been interested in improving energy efficiency and minimizing energy costs.  High efficiency fluorescent lighting, servo motors, programmable thermostats, clean burning EPA wood stoves, improved insulation and weather stripping.  I am presently trying to figure out how to better "recycle" fabric and foam scraps (any ideas?).  How do we as small business owners begin to LOBBY our suppliers to get them on board with recycling efforts??

I have to "invest" in the stock market.  No pension for me.  "Low risk" is meaningless if you can't really afford to "lose" any of it, or if the USA defaults on the Treasury Bonds.  And with interest rates so low I can't afford to keep my money in FDIC "insured" banking institutions without losing principle.  "Choice" has been systematically eliminated (why? who's the winner in that one?).  Real estate? who is going to buy all that real estate in the future? kids with upwards of 60-100K in student loans (facing an economy that is stagnant and creates no jobs)? (who's the winner in that one?). 

One vote.  "Nothing can be done".  One vote, individually, you're right.  But what if all our "one vote"s were pooled together?  Perhaps, if we weren't distracted by incendiary "talking points" from one faction or the other OUR vote would better reflect the greater good and send the moneyed Lobby packing.  The moneyed lobby is all about keeping US "just smart enough to run the machines".
         
       

[JuneC]

Maybe we could sell Alaska back to Russia.  Or China.

Seriously, I wonder, Bobbin, how many voters in this country could read your posts and understand what you're saying.  Education may be better in the Northeast than here, but I'd wager that the majority in this country couldn't pass a very basic economics test and these are your voters.  It would take a generation, but I believe education is key.  Otherwise we, as a nation, will continue to vote into office those politicians who will maintain the status quo.

June

[bobbin]

I have absolutely no doubt about that, June!

[kodydog]

Not only economics but how about a test on how the government is run. Most high school graduates couldn't pass this U.S. citizenship test.
http://civicsquiz.com/10-question-civics-quiz/

Do they no longer teach civics in school? Some would say this is a calculated dumbing down of Americans.

[baileyuph]

Interesting quiz Kody, scored a 100.  Had Civics in high school, but didn't gain the knowledge there.  My understandings are attributed to reading, do it daily.

I would suggest scores from high school graduates today would be quite varied, the bulk less than 70%.

Doyle

[baileyuph]

More on the future of our economy.........

Just read an economic report that stated over the next two decades, the growth in our economy is in the area of 2% a year.  That is 20 years, so we better get used to something like we have. 

The reason is (main one cited anyway) is baby boomers are retiring in big numbers and workers replacing them are earners of a lot less.  In essence, there will not be near as much money earned to spend in the economy as before. 

This fact has several ramifications, as a starter, how on earth is our government going to pay off the many trillions of debt we already have?  I think we have a pretty good idea.  Us and our kids.

Again where/what does one do regarding investment plans?

Doyle

[Mojo]

20 years ago I was a reading machine. I read volumes on the economy and marketing. One good read I came across ( I have since forgotten the author ) was an economist that predicted exactly what is now happening.

It was his theory that as the baby boomers age and retire our economy would slow down to a crawl. His belief was that when the baby boomers ( the largest segment of our current population ) retired they would begin a pull back on their spending. They would be buying less cars, trucks, furniture, appliances, homes, etc. and this would create a drag on the economy. Also as they retired they would be starting to draw on SSI and would no longer be paying into the system. Obviously this economist had vision.

While I lean conservative on most issues there is one area of conservatism I do not believe in. This is giving huge tax breaks to wealthy individuals because they will create more jobs. Stop and think about it. The way to stimulate an economy is by putting more money into the middle class which is the largest consumer group by far. The more they have the more they will spend. The more they spend the more products will need to be produced. The more that products are produced the more workers needed to produce these products.

Throwing money into corporate coffers simply allows them to pay out bigger bonuses to their elite. While tax breaks and tax rates were given to the wealthy in the mid 2000's what happened ? They moved jobs and manufacturing overseas, cut costs by cutting wages and then paid themselves massive bonuses and gave themselves stock options. Hell some of them never shared it with their own shareholders. Look at Apple that amassed billions in cash holdings.

Thankfully I will not be around to witness the collapse of this great nation when the house of cards comes tumbling down. Unfortunately my kids, grandkids and great grandkids will be. :(

One other world economy that is nothing more then a house of cards is China. They have financed their growth with massive debt and sooner or later it will catch up with them. The big difference is they have a multi billion population and thus a huge tax pool in which to help bail them out. In the USA we do not and the vast majority of the liabilities our government is writing will fall directly onto the backs of consumers which will take even more money out of the economy and be reflected in the loss of more jobs.

JMHO.

Chris

[baileyuph]

The big picure was summarized in the printed media today.  The US, European countries,
Japan, and even China are doing this monthly stimulus action to prop up their economies.  One can readily understand that the world economy is in some form of trouble.

A statistic that stuck out for me, was basically all counties except China demonstrated economic growth somewhere around 2% except China.  They scored approximately 7% in spite of their down turn.  That one is saying couple things; growth before the down turn was phenomenal and 7% is a good ways from 2%.

There is a strong chance IMHO, that we are in a bubble and the pull back isn't all that far away, after Xmas?

Doyle