[Acheron]

Ya that has more to do with everywhere elses economy being even shittier than the U.S. right now. Leading to investors seeing US Bonds as the safest choice.

But the government IS the spender of last resort. The one font of demand when all else fails.

If the government of the world's largest economy can't spend how can any household or developing country reasonably do the same?

[B-Dubs]

Yes, but surely printing more money makes the cash that we do have worth less so overall this is just screwing the pooch and the ones that suffer is anyone that has to use money, with a greatly reduced buying power, on a daily basis?

It depends on how much you print and what it's used for. Inflation isn't a significant issue, despite what some Paulites may say we're not just around the corner from hyper-inflation. So long as everyone knows it's going to happen and it doesn't happen all at once it's fine. There is a difference between printing $500 billion all at once and doing it over the course of a year.

[Ghost_Protocol]

Hope and Change

Change
U.S. official policy on torture
Federal funding status for stem cell research
Don't Ask Don't Tell
Bin Laden's existence
Job Losses
Healthcare
Iranian economy

Hope
U.S' reputation in the world
Nuclear arms treaty with Russia
Mars exploration
A foreseeable end to permanent wars in Iraq/Afghanistan
30 million more people insured
Marriage equality

[Czigga]

Inflation is something that I really can't "get". It just seems like a quiet way of making things worth less over a timeline so the the fiscal gerbils must run harder in order to stay in their cages. Have you ever looked into gold/silver backed currencies and how they apparently do away with inflation which is only due to our fiat policy?

Most people here think anything related to a gold-standard is crazy. Mostly Keynesians.

Inflation, bailouts, stimuli, printing money etc. are all short term fixes that will exacerbate the problem in the long term. But it's too poisonous politically for anyone in office to do anything different. People want their money now.

[Zaptruder]

Consumption economy is going to get it shit wrecked by... virtual goods.

Seriously... I know it's not something most 'serious thinkers' have even considered, but when digital goods are starting to provide pretty much every level of human requirement, except for the obvious of food, water, shelter, sex...

And as the fidelity and efficacy of those virtual/digital goods increase...

And as the generations that grow up on this goods become more comfortable and accustomed to their consumption...

And as they have less money and ability to buy actual things

While getting use to the convenience and responsiveness of those things...

Even while the growing amount of distraction from those digital goods pushes reduces the amount of time we spend on other more physical experiences...

I honestly can't see how this (along with other factors mentioned in this thread) isn't going to have a big impact on our future economy and society.

[Byakuya769]

Change U.S. official policy on torture Federal funding status for stem cell research Don't Ask Don't Tell Bin Laden's existence Job Losses Healthcare Iranian economy Hope U.S' reputation in the world Nuclear arms treaty with Russia Mars exploration A foreseeable end to permanent wars in Iraq/Afghanistan 30 million more people insured Marriage equality

Take Mars off of that list before there's a derail.

[Neo C.]

Depends on policy choices, Japan never really did after its property/banking meltdown.

Japan is the perfect example of doing it wrongly. They (the politicians but also the society) never dare to face to core issues, therefore they keep struggling until today.

I truly think some people won't change their view/policy unless the country hits rock bottom.

[LosDaddie]

It is the New Normal. And I don't have any faith Americans have the backbone to do anything about it.

But hey, I live in The South, and people here honestly believe the govt, and those dirty poors, are 100% responsible for the crash.

[vcassano1]

Also I'd be happier if the government itself actually handled some/most of the projects to ensure maximum stimulative effect. Throwing some dollars at a few companies to keep doing what they're doing with only a faint idea they might expand plants or workforce (with no accountability to do so) isn't great. Obama talked about high-speed rail and Hoover Dam, but what came out seemed rather like a feeding frenzy for connected existing firms. Seeing the government actually hire to build wind farms, a national fibre to the home network etc. would probably be better if adequate project management is retained.

I absolutely agree. It may avoid some of the prevalent cronyism between some politicians and areas of the private sector too. However the political circumstances in the USA are definitely not favourable to this idea, without meaning to excuse the administration. They have enough problems with their public/private initiatives, just see the Soylandra controversy.

[Ra\/en]

Just keep plugging along I guess. My wife and I are trying to carve out a future for ourselves and (maybe one day) children.

We have to live with the reality that is given to us I guess. I've been fortunate. I am thankful for that.

Some people can't/won't get ahead no matter how hard they work.

I do wonder what the economic landscape will look like in about 10-20 years once the boomers start getting OLD. They are retiring now, but things are really going to start heating up in another decade.

[speculawyer]

You're not supposed to say it out loud, dude.

Exactly.


Yes, this is the new normal. Stiff foreign competition, aging population, and rising natural resource prices just strangle the economy.


The only way I can see that we break out of it is for some "hot new thing" to become big . . . the way PCs were hot in the 80s and the Internet was hot in the 90s. But there just isn't a hot new thing right now.

[eznark]

Change U.S. official policy on torture Federal funding status for stem cell research Don't Ask Don't Tell Bin Laden's existence Job Losses Healthcare Iranian economy Hope U.S' reputation in the world Nuclear arms treaty with Russia Mars exploration A foreseeable end to permanent wars in Iraq/Afghanistan 30 million more people insured Marriage equality

US economy (ya know, the topic of this thread) unsurprisingly absent

[replicashooter]

Thats a good point. The reason why all this problems exist is the way money is created. http://www.peakprosperity.com/crashc...money-creation

Thats about the way I see it too. The system, at its roots, is built on a ponzi scheme of bunny money (reproduces like rabbits) therefore the boom and bust cycles are unnatural as a stable economic system creates stable growth.

But that isn't how you create multi-generational legacies now is it?

[B-Dubs]

Really the gold standard? We're going back to that? Look at how the price of gold fluctuates, goes up when the economy sucks, goes down when it's good. It's a precious metal with a set amount that has value to people, there is a reason you only see buy gold commercials when the economy sucks, that's because it's worth more then. Why would you want to tie your currency to something that's price changes?

[Gotchaye]

Inflation is something that I really can't "get". It just seems like a quiet way of making things worth less over a timeline so the the fiscal gerbils must run harder in order to stay in their cages. Have you ever looked into gold/silver backed currencies and how they apparently do away with inflation which is only due to our fiat policy?

It's the opposite, really. Inflation causes cash to be worth less relative to everything else. Anyone with more debt than savings likes inflation. People whose income comes largely from capital investment don't like inflation. We all have a reason to fear really high inflation, but moderate inflation is great for typical wage earners (also it reduces unemployment). Central banks are really worried about inflation right now because they're controlled by Big Finance, not because they're watching out for the little guys.

[CharlieDigital]

US economy unsurprisingly absent

We didn't crater into a depression, which could have easily happened without the stimulus.

[calza]

Its the new normal in that it takes time for things to get 'good' again and it only seems good once it has gotten bad again.

These things take tine, firms need less workers because there is less demand, once demand increases then the supply will rise to match it and people will start getting hired again.

[Mr. B Natural]

Exactly. Yes, this is the new normal. Stiff foreign competition, aging population, and rising natural resource prices just strangle the economy. The only way I can see that we break out of it is for some "hot new thing" to become big . . . the way PCs were hot in the 80s and the Internet was hot in the 90s. But there just isn't a hot new thing right now.

America has had the hot new thing for a while...either apple product or google, but that's all enveloped with one company. One company can maybe save a city (and make the city ultimately perish when it becomes dependent on it...cough cough Rochester NY or Fliint Michigan) but it can't save a country.

Imagine when we DON'T have the new thing or there simply isn't one. Then what?

[Kabouter]

I feel like it's far to early to say really. Major economic crises have long lasting consequences that can fundamentally reshape how economies are made up, and when we're going through a crisis, it's hardest of all to see what the changes are and how they will affect us in the future. This might be the new normal, but at the same time, it might also be a transitional phase. After previous crises, we often saw the economic realities of the world shift completely, as well as government philosophies on how an economy is to be run. For instance, during the Great Depression, many nations turned away from long held economic beliefs, but it took a long time for these things to actually be clear to a contemporary observer. It's very hard to view the long term consequences of something when you're still in the middle of it.

As far as Baby Boomers go, the 46ers are 66 now. Those born at the peak of post-WW2 birthrates everywhere will retire over the next 2-3 years or recently did.

[Rentahamster]

Depends on policy choices, Japan never really did after its property/banking meltdown.

Maybe we won't do the same things they did. But then again, maybe we will.

[GCX]

There are so many simultaneous problems causing the crisis that it takes a long time to recover from it. In that sense it's the new normal but I think in due time we'll start to see slow rise again.

[Kinitari]

This is interesting. Because you cannot convince anyone older than 40 that this is a real inevitability. Was having a discussion with a professor very focused on poverty, and he just couldn't wrap his mind around the idea that a lot of service jobs can and will be automated. If decision makers and policy thinkers cannot fathom this, we are in a heap of trouble once it begins to happen.

I know Wal-Mart is looking into introducing many more automated checkouts - their last fiscal report they mention it as a cost saving measure because of the millions they spend on cashier salaries every second.

McDonald's is trying out a bunch of touch screen kiosks in Europe, with the intention of bringing them to north America...list goes on. Factory jobs ain't better, motherfucking robots son

[vcassano1]

Exactly. Yes, this is the new normal. Stiff foreign competition, aging population, and rising natural resource prices just strangle the economy. The only way I can see that we break out of it is for some "hot new thing" to become big . . . the way PCs were hot in the 80s and the Internet was hot in the 90s. But there just isn't a hot new thing right now.

I completely disagree. You have a great, science-oriented approach that I respect but you lack imagination on this matter. So does most of the Western political class to be fair ;) . Governments - particularly the incredibly powerful USA government - lack the ambition and imagination to fix their countries. They hide from problems, allow infrastructure to crumble, delay and fail to bring their countries forward. In the post war years many countries had this ambition - look at the NHS being established by a ruined UK or at the amazing efforts of the space race. Now they tweak interest rates, and they aren't even the elected officials. Rubbish.

[thefro]

Its the new normal in that it takes time for things to get 'good' again and it only seems good once it has gotten bad again. These things take tine, firms need less workers because there is less demand, once demand increases then the supply will rise to match it and people will start getting hired again.

We're basically at the point now where productivity is so high to where demand can't be high enough for everyone to get their jobs back.

[greepoman]

What doesn't add up to me is the recent boom times seem to be due in large part to increases in credit/debt and not real wage growth. How can you expect to have a really good recovery when we're cutting back on credit/debt and there is no real wage growth?

[Emily Chu]

since 2008-2012 I've completely reinvented my life style as per to the new economic realities of our future.

as in investing in solar panels and purchasing a decent RV in the near future so I don't have to pay rent or be stuck with a 20-30 year home mortgage or be homeless.

I just want to eat, drink and go on the internet and have a simple place to go to the bathroom, sleep, and live.

I've sold everything I've own but a T430 Thinkpad 14" laptop and the bare essentials back in 2010 ish

why do I need a big house for if I got next to no stuff ?

I figured sooner or later I might be evicted anyways from this single room with a bathroom in Brooklyn NY, if I don't make the monies from my e online day trading thingy.

so yeah thats the new economy, at least for graduating students of 2010-20xx

in short super simplify my lifestyle and finances to one that makes more sense post 2010
to fit in with the new economic reality.

[Acheron]

Foreign competition isn't really a major drawback. Sure it reorients the economy and hollows out certain industries, but the goal is that every area or hub focuses on its most efficient product.

England can't produce a lot of Port, and what it may produce would be very expensive. Trading what you're good at for what you aren't isn't a bad deal. Even if you're good at nothing eventually your currency will fall enough to export something successfully and that foreign currency will be quite valuable domestically.

EDIT: To clarify re: stimulus, I think the government has a poor record picking winning ideas, and often lacks the nimbleness to reorient if it bets poorly. However, any project that creates demand and almost any long-run benefit is preferable to continued malaise. Even if the government builds a solar farm that would be less efficient than a privately run natural gas plant, it is still preferable in the current scenario to neither which is the real outcome without intervention.

[UnblessedSoul]

No its not the new norm, its a slow recovery because unlike the past where there was countries you could rely on, now there's nobody to rely on.

[demon]

I know Wal-Mart is looking into introducing many more automated checkouts - their last fiscal report they mention it as a cost saving measure because of the millions they spend on cashier salaries every second. McDonald's is trying out a bunch of touch screen kiosks in Europe, with the intention of bringing them to north America...list goes on. Factory jobs ain't better, motherfucking robots son

Didn't you get the memo? The luddites were wrong. Two centuries ago but hey whatever..

[zero_suit]

What doesn't add up to me is the recent boom times seem to be due in large part to increases in credit/debt and not real wage growth. How can you expect to have a really good recovery when we're cutting back on credit/debt and there is no real wage growth?

Excellent question

[Lord Error]

I'm reading all these futurist/economy books that have recently come out - and basically their take is "it doesn't get any better, watch what happens when fast food jobs are fully automated"

That's already happening, and I'm sad to say I'm contributing to it. Company I work for develops the automated ordering systems for fast food restaurants, among other things, and they're actually working fine.

All these low entry jobs are slowly being automated, cashier checkouts, fast food ordering, etc. There's of course going to be people saying "yeah, but there's jobs made in IT that create those things". Thing is, jobs in IT are a drop in the ocean in numbers compared to low entry jobs lost due to this automation.

How's this going to play out is going to be interesting, and possibly scary.

[replicashooter]

Really the gold standard? We're going back to that? Look at how the price of gold fluctuates, goes up when the economy sucks, goes down when it's good. It's a precious metal with a set amount that has value to people, there is a reason you only see buy gold commercials when the economy sucks, that's because it's worth more then. Why would you want to tie your currency to something that's price changes?

It only does that to reflect the instability of the paper money thats buying it, not due to its own intrinsic value. Flip your example and you'll see the truth, if gold is used as the standard then the prices of everything tend to stay stable and reflective.

Most people here think anything related to a gold-standard is crazy. Mostly Keynesians. Inflation, bailouts, stimuli, printing money etc. are all short term fixes that will exacerbate the problem in the long term. But it's too poisonous politically for anyone in office to do anything different. People want their money now.

I agree, nobody wants to tell the Emperor they can see his peepee. Still, kicking the can down the street means that when it does eventually blow up the fallout will be that much larger.

Then again, maybe thats the plan.

[ronito]

No its not the new norm, its a slow recovery because unlike the past where there was countries you could rely on, now there's nobody to rely on.

well then, wouldn't that make this the new norm?

[Dave Inc.]

The price of gold has gone up several hundred percent in the last ten years. Let's not be idiots and call it some sort of standard, okay?

[Acheron]

That's already happening, and I'm sad to say I'm contributing to it. Company I work for develops the automated ordering systems for fast food restaurants, among other things, and they're actually working fine. All these low entry jobs are slowly being automated, cashier checkouts, fast food ordering, etc. There's of course going to be people saying "yeah, but there's jobs made in IT that create those things". Thing is, jobs in IT are a drop in the ocean in numbers compared to low entry jobs lost due to this automation. How's this going to play out is going to be interesting, and possibly scary.

Everyone used to be in agriculture, then they weren't needed anymore. Somehow we're still better off for it. Your career probably didn't exist twenty years ago, labour tends to be used in expansions.

If we have artificial intelligence yes, we won't have work, but then again we won't need to.

[replicashooter]

The price of gold has gone up several hundred percent in the last ten years. Let's not be idiots and call it some sort of standard, okay?

Read this, my friend

[B-Dubs]

It only does that to reflect the instability of the paper money thats buying it, not due to its own intrinsic value. Flip your example and you'll see the truth, if gold is used as the standard then the prices of everything tend to stay stable and reflective.

Except with gold your at the mercy of the markets as to how much your currency is worth, the way it is now we get to decide how much inflation we need and the like. There is a reason we're not on the gold standard anymore.

[vcassano1]

Read this, my friend

Read this: https://en.wikipedia.org/wiki/Praxeology

[Gotchaye]

What doesn't add up to me is the recent boom times seem to be due in large part to increases in credit/debt and not real wage growth. How can you expect to have a really good recovery when we're cutting back on credit/debt and there is no real wage growth?

Real wages have been flat, but productivity has gone way up. There's been plenty of real growth in the economy, and there continues to be real growth. The problem is that it's all captured by a handful of people at the top. So we need to move away from forcing the poor and middle class to go into debt and towards more redistribution.

[Wafflecakes]

But the government IS the spender of last resort. The one font of demand when all else fails. If the government of the world's largest economy can't spend how can any household or developing country reasonably do the same?

Yes but where do you stop? Its simply not sustainable.

[replicashooter]

Except with gold your at the mercy of the markets as to how much your currency is worth, the way it is now we get to decide how much inflation we need and the like. There is a reason we're not on the gold standard anymore.

Or with fiat you're at the mercy of banksters:



Gold standard or not, the whole system needs to be chucked in the bin and retuned for what we work on now is naught but legalized fraud.

[ronito]

Read this, my friend

Austrian economics? Seems legit.


Cause this


seems much more stable than this

[HylianTom]

right now I am focused on renewable self sustainable energy as in investing in solar panels and purchasing a decent RV in the near future so I don't have to pay rent or be stuck with a 20-30 year home mortgage or be homeless. I just want to eat, drink and go on the internet and have a simple place to go to the bathroom, sleep, and live. I've sold everything I've own but a T430 Thinkpad 14" laptop and the bare essentials back in 2010 ish why do I need a big house for if I got next to no stuff ? I figured sooner or later I might be evicted anyways from this single room with a bathroom in Brooklyn NY, if I don't make the monies from my e online day trading thingy. so yeah thats the new economy, at least for graduating students of 2010-20xx right I'm looking to just super simplify my finances and lifestyle.

Same here: simplicity.

In the move last year, we must've gotten rid of at least 50% of our personal belongings, giving them away to family/friends, or donating them to charity. We had so much "stuff!" We've become a one-TV(non-cable!) household with so much less clutter - I'm loving it!

We moved into town where driving isn't necessary, and are looking to build a very modest ICF house capable of sheltering us and one set of parents (Dad's our architect). A big yard where raised-bed gardens and egg-laying hens can be kept is valued much more than useless interior square footage. More house means more maintenance, insurance, air conditioning, etc..

We also both took classes on PV/wind power system installations so that when we finally go off-grid, we're able to maintain and repair it ourselves.

If there's more economic trouble, we'll be a bit more insulated from it with this living arrangement..

[Czigga]

OMG people are linking to Mises.org and praxeology articles. I'm not alone!

[Acheron]

Yes but where do you stop? Its simply not sustainable.

Unfortunately politicians tend to be all carrot and no stick. Yet governments ought to suspend stimulus and begin hiking taxes when the economy is hitting its stride, unemployment is at or below long-run average and financial markets are finding better bets than gov't securities.

I'd have a hard time giving you a set benchmark of what the salad of indicators ought to be, but policy makers and the Treasury Department ought to be able to tell a healthy expansion from recession or stagnation.

[commedieu]

"But this time it's different!!"

Well. It is, we didn't have a globalized economy that we all relied on. We outsourced everything, and that crippled local economy.

Heres my question, where are jobs going to come from now? Now that all of the factory/mom and pop/everything, is gone from our country? Tech-jobs aren't going to bring back a lot of basic jobs in the mid-west, who were reliant on factories that sustained towns for generations.

This attitude is putting your head in the sand, and just hoping its going to be ok.

Thats why neither political party can do a single thing about this, it is more a purchasing attitude that drove us into failure. Cheapest product drove out a lot of jobs for people in the country. People have to start supporting their local economy, although it may be more expensive, but it will provide jobs. In thenpursuit of cheaper products, we got rid of the little industries we had here. A temporary lower quality of life is mandatory. So that the future can be better

Thats not coming back with time, and inaction.

[Dave Inc.]

Read this, my friend

So you link me an Austrian economics paper written near 60 years ago chock full of predictions that never happened. Okay.

Also, it says nothing about the absurd fluctuations in recent gold prices.

[Lord Error]

Everyone used to be in agriculture, then they weren't needed anymore. Somehow we're still better off for it. Your career probably didn't exist twenty years ago, labour tends to be used in expansions. If we have artificial intelligence yes, we won't have work, but then again we won't need to.

Things that held true centuries ago won't necessarily hold true today or in near future. People who would do agriculture before, would just do some other menial jobs later on as agriculture was phased out. There's possibility there simply won't be such jobs left anymore.

Also, while your point about AI sounds true in theory, it's the road up to that point that will most likely be very painful. It's not like AI will be invented and then the next day goverments will start giving everyone everything for free while AI creates that everything. It's much more likely that developing AI will slowly be replacing more and more jobs.

[Gotchaye]

But, to the topic, yes, this is the new normal until we claw back all of the gains that the rich have taken for themselves. Real economic growth comes from making and selling more useful stuff, which requires an increasingly better-educated and able workforce (quality public education and health care are necessities) and a big market for useful stuff (extreme income inequality reduces the effective market size because lots of people can't afford the stuff they're helping make).

It's important to recognize that, while high taxes do disincentivize work, the degree to which they do so depends on the level of income inequality. Back when a high salary might be only four times higher than a low salary, a high tax on the high salary meant that the difference between the low and high salary was substantially reduced. Using random numbers - a 90% tax on everything between $50k and $100k is a big disincentive to working in that range; someone making $100k before taxes is only making 5% more than the person making $50k before taxes. But when the difference between a high salary and a low salary is a million dollars or more, it's different - ain't nobody going to Go Galt because they're only allowed to make 10x more than the proles instead of 20x.

[Czigga]

Austrian economics? Seems legit. Cause this seems much more stable than this

Lol are you serious? Nice cherry pick on the gold. Put that graph at 5 years instead of 1 and post that one. Then see which looks better.