Pardon me for cutting in but I had to comment on this. High gas prices will negatively affect the economy accross the board. If gas costs $6 a gallon its not like I make it up by working nights at UPS because UPS costs will go up and subsequently people will be cutting back on their shipping. With the exception of finding an odd job on an oil field its going to be hard to get an odd job if the price of oil skyrockets and our economy takes a tumble.
Unfortunately I missed the President's speech but saw some of the highlights and heard that the solidiers only spontaneously applauded once. Was it meant for the troops to sit on their hands? If not then I think the lack of applause for the President infront of a crowd of Marines doesn't bode well for support overall.
Missing the mark texxx 1. by cost, I don't mean number of lives lost, I mean both economic (4b month, about) & opportunity costs, which have both been tremendous. Do you think the US military can carry out a sizable occupation of another country any time in the near future? Doubtful. We don't have the people, and the people we have are being burned out, quickly. 2. You honestly think Chinese will just sit on long term bonds (and help finance government debt) forever, making inferior returns, rather than to convert their $ to strategically (unocal) and economically (maytag) valuable acquisitions? If so I've got some beautiful oceanfront property here in Dunhuang to sell you. You should be thankful that that is what is happening rather than just abandoning $ outright. 3. Notice I'm referring to the price of oil, not gasoline - but maybe your kind words can reassure the markets. Regardless if you think the long term trend is anything but up... Regarding the argument of "nobody can replace us". I'm not saying that, I'm just saying that the scope of American "power", for lack of a better word, in 2008, will not be as broad in relative terms as it was in 1998 or even 1988.
I have a strong feeling a new Greatest Generation will arise or die trying. The reasons (please excuse the sentence fragments...)- A high deficit in national trade, consumer spending and government revenue- According to the nation's top accountant, ~41 trillion in 40 years. Legacy costs are being shifted to the government infrastructure. Medicaid in dire insolvency within 20 years. Entitlement benefits will be around 40% of the GDP around that time. Combine that with debt payment to foreign investors and that's 50%. The military industrial complex won't relent, and the public will support it. Reason- maintaining the current hegemony and status quo. Tensions with other nations will sustain the popular drive. Infrastructural concerns from a debtor's society- Flagging public education and increasingly expensive entry levels for higher education, cutbacks in the sciences and the splitting of brain power with the military industrial complex, privitization of health care and hospitals, rising costs in law enforcement and the growing penal system, and the willingness for companies to pass employee entitlements to the government. Cultural consideration... the looming Mexican/Latino majority within the next 15 years. Possibile shifts in political power and a possible Clash of Cultures. Limited money will consume all issues. The lifestyle of all Americans are hinged upon the dollar being the unofficial currency reserve. Major factors for investors, stability and reliability. If the dollar depresses too much, OPEC could change the petrodollar status. Current world housing bubble- Currently people are borrowing to invest in real estate, unlike the stockmarket. Dwarfs the tech bubble with it's inflated value in the trillions. No crash, but very painful whimper. Since there's an investing rush, once the bubble pops, the mass selling will depress and suffocate rising real estate values. Investors and home owners are taking loans hinged on the rising value of their homes. Home prices could fall by 20% in 5 years. Raising interest rates doesn't seem likely. The world economy will be affected. "Two-fifths of all American jobs created since 2001 have been in housing-related sectors such as construction, real-estate lending and broking. If house prices actually fall, this boost will turn into a substantial drag." Source Best case scenario, a gradual fall without widescale investor panic.... The looming resource and environmental crisis- Already discussed before on another thread. China and India have been acquiring energy companies in their drive to sustain their economies. Currently, both consume around 20% of the world's oil. The US is consuming 25% and it's growing instead of declining. The US has Iraq once their fields are fully operational in 5-8 years. Energy and resource driven moves will become more and more prevalent as 2/5 of the world's population move towards modernization. Right now, the rise in oil prices is demand driven, not an artificial limitation in supply. When accounting inflation, it's not as high as the former oil crisises. That's why a $100 barrel sounds possible. The effects of world inflation at that level is unknown. Partial solution- As the price of sweet crude rises, there will be more profit incentives to open up refineries that accepts sour heavy crude. There will also be more incentives to look at costly alternatives such as shale oil, tar sands, and clean coal gasification. All support the current oil infrastructure.... Ending dependence upon oil and promoting domestic energy. Global warming could change the entire equation. Last year's Defense Department's report titled "Abrupt Climate Change" concluded that the worst case scenario, global warming could make certain parts of the world inhabitable while epidemics of malaria would spread across new regions. Solution? - Carbon sequestration, enforcing stricter CAFE standards, alternate "clean" energies (even nuclear can be green with modular pebble bed reactors), greater world consciousness... Realistically, it's hard to pin down when the other two factors are in play. Economics take precedence over ecology. Loss of ecosystems and regional biomes? Too esoteric for outsiders to care. 3 reasons why the world and the US face challenges and why the current US isn't equipped to handle the future. I have no delight with Bush failing to address these concerns...more like morbid disappointment. If Gore followed the same pattern, I'd burn him at the stake too.
When I wrote Entitlement benefits will be around 40% of the GDP around that time. I meant 40% of the government's expenditures. My mistake...
This one may be a bit over your head in terms of financial knowledge. I'll be nice and explain it to ya, because I like you, Sam. The Chinese are sitting on these bonds because buying them keeps their currency pegged to the dollar. This keeps the Yuan low compared to other currencies around the world. If their currency rises, China has a huge amount to lose economically because their exports will become more expensive world-wide, which would be a severe negative blow to their emerging economic gains, which are first and foremost on the Chinese government's mind right now (pls verify this fact while you're there - thx in advance). China is very dependent on these exports. So if China starts selling US bonds, their currency could appreciate and hinder their ability to export. A more likely explanation for the proposed purchases of these companies is the fact that China wants to secure oil supply and buy a manufacturing company with a long history, since cheap mfg is China's comparative advantage on a worldwide basis.
Sishir From what I understand the WH didn't want it to be a "Ra Ra" speech so the boys were asked to be respectful and solemn.
What did he have to speak in front of (or with the backdrop of) troops - reminding people he was once a member of Texas Air National Guard? I don't know whether Richard Nixon would have done the same if he had had to make a nationally televised speech at a particularly difficult time of Vietnam War.
gas prices still need to rise higher for it to effect the economy from it to have a very significant negative effect.
Uh, maybe because George Bush is the head of this country's military, and the troops are kind of important to the war in Iraq? Sometimes I think some of you liberals are incapable of thought. Everything is a reason to bash the President, even his choice of audience for the speech about the war. Who did you want him to speak to? PETA in San Francisco? Moveon.org's national convention? Andymoon's pot smoking evening in Montrose? Please.
Can't he just speak from the White House? I personally think he would have appeared more sincere if he had done that. I mean he didn't need to earn support from military, which obeys him by default. His job IMO was to convince people, that's why I think the surrounding by troops may not necessarily achieve its intented purpose.
To go further, I actually think it would be a wonderful idea to speak to an audience of doubtful minds or opposing views. What are better ways (than this) to demonstate a great leadership? There are no lack of "liberals" (Sisir Chang, major, to name a few) on this BBS that support stay-the-course strategy. I wouldn't be surprised to see that, in the end, the majority of the people remain supportive of this war effort are the bleeding-heart liberals - after conservatives like Walter Jones finish with their "hit and run"s - willing to clean up the mess Bush and Co. created in the first place.
Everything you say is correct in the short run. The problem is in the long run when China, India and Europe's market approach the size of the US market and they realize its more valuable to trade for cash with each other than credit with the US. I can tell you as a fact that there are many in Asia already planning for a global economy not based on the dollar or the US as the premier market. This is why we have probably passed the zenith of our power because now economically we are largely costing on the inertia of our market size and the free flow of capital in rather than production of capital ourselves.
Yes I basically agree with your points. It's one thing to say that we've passed our "zenith" in terms of power, and quite another to say that we're not by far the most important economic power in the world. Our GDP is still close to twice what China's is. One of the main factors that distinguishes the US model is our extremely efficient financial markets which allow efficient allocation of capital. By far the most efficient in the world, a fact that should extend our dominance for some time.
Everyone is aware that Gas is still very cheap when you adjust for inflation, right? Don't get me wrong, it sucks to pay $2 plus for a gallon of gas but it's still cheaper in the U.S. then just about anywhere else in the world (except, maybe the Middle East). I would expect that gas will continue to increase in price. Personally I think this is good as a moderate increase shouldn't hurt our economy too much but it could cause people to actually think about more efficient cars, public transportation, alternative energy, etc.... We live in a democracy. The government won't take alternatives to oil seriously until the people demand it. The people won't demand it until oil costs too much.
I agree with you there that is one of the things that could still keep our economy dominant but at the same time though its not going to help us as long as we're being fueled by credit from overseas. At a certain point credit will catch up to us if we don't make some changes. I don't think we can expect an indefinate free flow of capital in with little return out.
Congress just gave themselves another pay raise, the 7th time since 1997 (the last time they raised min.wage) the real value of the minimum wage is $3.50 below what it was in 1968
