Who would you vote for

[Dr. Shane]

Absolutely. Consumption drives the economy. I think all economists agree on that.

[fccool]

Would you also agree, that for healthy economy to exist, the production has to be somewhat proportional to consumption?

[Dr. Shane]

Consumption drives production. What do consumers consume? Goods and services. The more consumers consume, the more producers produce. That is simple supply and demand economics. When the two balance things go well. Too much supply causes problems (deflation) and too much demand causes problems (inflation).

[fccool]

Good, although I think you are confused about the inflation and deflation parts of it, but we are on the same page here.

I would encourage you to look at what at what these terms were used to be as defined by the fathers of the economic theory, as originally inflation and deflation had nothing to do with hikes and drops in prices. Hikes in prices are results of inflation, and not the opposite. Take a look at what the word originaly meant:

http://www.clevelandfed.org/research/Commentary/1997/1015.pdf

To spare some reading time - Inflation, just like inflating a balloon, is referred to as disproportionate increase in supply of money in economy.

But I concede that modern economist attach the word to CPI measured price hikes and drops.

Nevertheless. Going from here. My next question would be... Do you think that American consumer economy is driven by domestic goods, or foreign bought ones?

[Bravus]

The problem with the graph Shane posted was not that it was in comparison to GDP - that makes perfect sense, because if the economy grows massively the raw size of the debt means something different. The problem is that the graph is clearly and correctly labelled as a graph of debt held by the public, i.e individuals. It doesn't show goverment debt and was never meant to. That's a completely different graph, and I'm sure looks quite different over the past 8 years.

[Dr. Shane]

The federal debt is held in part by the public and in part by government accounts. The graph shows what is held by the public as the public holds the greater share of the debt.

When Reagan took office 20.5% of the debt was paid by government accounts. When he left office it was 21%. Not a lot of difference.

When Clinton took office 25% of the debt was paid for by government accounts. When he left it was 39% of the debt was paid for by government accounts.

Last year 43% of the debt was paid for by government accounts.

1998 chart:

The debt held by the public is most meaningful because it is the amount the government owes individuals, companies and foreign governments. However total government debt does give a more accurate picture.

Here is how it is spent:

[Dr. Shane]

Quote:

Do you think that American consumer economy is driven by domestic goods, or foreign bought ones?

We live in a global economy. One nation's economy is dependent upon another. What we have found is that free-trade agreements are mutually beneficial. Of course, this type of free trade does set the world up to be more susceptible to international laws like the prophetic Sunday law.

I do not believe the US economy can stand on its own without its international trading partners. Nor do I think it needs to. I am concerned about dependence on our enemies for our oil. I think the high price of oil, while painful, is having a positive effect. Oil companies are discovering reserves in new areas and more R&D is being done with alternative energy.

International free trade agreements may actually be a way to make nations get along with each other. As we become dependent upon each other economically, the incentive to go to war with each other diminishes.

[fccool]

OK, that's great as we do have consensus here. There are relative cost of production that all of us could benefit from. And this is a classic Adam Smith's, and even pre-fed Greenspan economic theory. It's very basic and easy to understand for anybody, even a child who trades Baseball cards.

Here's were where we split though... and it is precisely that you hold to the Keynsian economic model, which is a liberal model IMO. And that's where conservative values end.

Naturally, when countries trade... they exchange something of value for something of value. A hammer for a fruit, a drug for a pair of socks. All are happy and all are benefiting. Enters Keynsian model of spending now, buying later by way of central bank credit expansion. What happens now? Banks loan money to spend on goods, and the money is what classical economists would call inflationary money, it is not supported by anything substantial but the goods that that money will buy, which constitutes the economic growth. So the economic growth is faster, because it is not due to savings of wealth, but because of spending of future wealth that does not yet exist. Now, all is good and shiny.

Enter credit expansion for an ordinary person. A person can borrow money to buy foreign goods. If the perceived value of the currency is higher worldwide... the person would enjoy a life of prosperity by buying a foreign goods at a cheaper price and selling them at higher domestically, and still would beat out the local competition... because they would have to lower their standards of living like salary, and etc... just to keep up with foreign producers. Eventually, they stop producing goods, and find their way into a service sector of the economy in which the foreigners do not have advantage of (because they are living outside across the oceans). So they run their business of providing services now and let the foregners produce the goods because the world still have faith in dollar.

Today, US of A hardly produces any everyday things that we use (outside of food) as they can be cheaply imported from abroad in exchange for dollars. So we are enjoying a service economy here at home. Ask people around you what they do, and you will be surprised to see how many people actually involved in production sector and how many are in service sector. It becomes a problem in times of war and international crises, as other countries not can put economic pressure and this is done by Iran now by switching to Euros.

Do you see ANY problem with the above stated and do you think that in many cases this resembles reality of US economy? Won't you agree that without cheap labor and products from overseas, US standards of living would be substantially lower?

[Dr. Shane]

Pretty accurate except that US firms do not stop producing and move into the service sector. They get innovative and find ways to produce goods at a lower cost so they can compete with other nations. Automation is one of the principle ways this is done. The US still is a strong manufacturing base of automobiles, aviation and ship-building. Developing countries do not embrace automation because the cost of labor is so cheap, they can be more competitive paying workers to do what machines do in the US.

Of course many manufacturing jobs have went over seas. Those jobs stimulate the economies in the respective nations and increase their lifestyles in those area. Economies are dynamic and ever-changing. As global markets continue developing, borders will become less important to various independent economies much as the state lines that divide the individual states in the US are not so relevant to the overall economy of the country.

Many fear change and hope to stop it. Change is inevitable so we must embrace it and thus try to shape it. The world is moving away from nationalism and into internationalism. This is likely part of prophecy being fulfilled. There is no stopping it - only shaping it.

[fccool]

See, we do share common views on some things . I'm not naive enough to believe that US has no manufacturing base, as it does excel in high tech items that require years of training and education to produce. That's why I still have my job!

And regulated by the countries, like in China's case... it would greatly increase the overall standard of living. But like in case with Indonesia, it would lock people into working for foreign corporations that pay enough money just to get by. Sure, it is better alternative that starvation, but you can not honestly look at it as an improvement without looking at the relative profits reaped by the corporation that utilizes their labor.

In case of nike for example... relative labor cost/sales is ridiculous. They make shoes for cents and sell them for hundreds of dollars. People who make these shoes could not afford to buy a pair with a years salary that nike pays them. Nike freaks out if nations raise a minim wage from 1.5 to 2 dollars per day, yet they pay millions of money in endorsements to people just to wear these shoes. So to say that global economy is beneficial for everyone is a little overstatement. It is only beneficial with people who have money. People who do not have it, tend to except anything just to survive because other alternatives are diminished.

But then again, as you said it yourself... we can not stop it, but we can only attempt to shape it.

[Dr. Shane]

When an American company builds a factory in a foreign country they do not pay the countries minimum wage to its workers. The foreign country dictates how much the employees will be paid. Many of these American firms have company stores and give employees vouchers in addition to the MAXIMUM wages set by the foreign government. While these jobs are low paying in comparison to US standards, they pay better than other factories in the same country. I live just across the border from Mexico and know many Mexican workers that work at American and Japanese factories in Mexico. These jobs are much better than the jobs in the Mexican factories.

These "excessive" profits are what retired Americans receive as a retirement check. Mutual funds, insurance companies and retirement accounts are heavily invested in the stock market. The reason an insurance company can come in and clean up after a hurricane or other natural disaster is because of the money being made in the market - not because the insurance premiums are footing the bill. Corporate America making a profit is not a bad thing. The more they make, the more taxes they pay and the less the deficit. Corporate America making money is a good thing.

[CyberGuy]

Well on this forum John McCain is winning easily.

[olger]

It's a tough choice, Bruce. Deciding whether to vote for Null or Void..? I'll probably sit this one out..

[John317]

This sums up Obama's entire campaign.

Quote of the day

"My friends, we live in the greatest nation in the history of the world. I hope you'll join with me as we try to change it." -- Barack Obama

Any questions?

[John317]

You decide. Do you want him as the next president? Here's Obama:

http://www.youtube.com/watch?v=dl32Y7wDVDs

[lazarus]

And this man calls himself a Christian.

Opposing war!

Cutting waste!

Cuts in Nuke arsenals!

Getting rid of nukes!

[CyberGuy]

And this man calls himself a Christian.

Opposing war!

Cutting waste!

Cuts in Nuke arsenals!

Getting rid of nukes!

If you were in heaven that would be great but unfortunately we live in a world with a growing populations and limited resources. This will add to wars as nations try to sieze by force what limited resources there are left by that I mean Oil.

Some Chinese military officers has said their country will wait until the USA is bankrupt and cuts their military down to a level that we will be limited in what we can do globally and then they will strike siezing the Philippines and Indonesia and even maybe South Korea and Japan and most definitely Tawain. Already China has taken some unclaimed Atolls around the Philipines and put airbases there preparing for that day.

Do we cut our military and nukes and let other nations build their nukes up and military up until they threaten their neighbors and ourselves?

We live in a hostile world with nations who talk peace but who have other hostile long term agendas. We cannot let our guard down or we will be powerless to stop an agressor in the future.

[John317]

Completely agree, Cyber. We have to face the fact that we live in a very dangerous world.

I also oppose war, would like to see waste and Nuke arsenals cut and even gotten rid of.

But for the US president to announce to the whole world that these are our plans seems very naive to me. This takes us back to the issue of Obama's judgment and preparation for the office. Before you give away your plans, you first have to lay the groundwork and find out what other countries, especially our self-declared enemies, are willing to give. If they think you want disarmament badly, there is no reason for them to bring anything of their own to the bargaining table.

I can already see in my mind's eye the Russian, Chinese, North Korean, and Iranian leaders rubbing their hands and saying they can't wait for Obama to become the president.

Of course Obama can't do these things by himself. He needs both houses of the US Congress to support his plan, fortunately.

I don't think of these issues in terms of Christian or non-Christian. We're dealing with some very complex questions, and it's a simple fact that good Christians can be on either side of them.

[Dr. Shane]

Quote:

for the US president to announce to the whole world that these are our plans seems very naive to me. This takes us back to the issue of Obama's judgment and preparation for the office.

Obama's military judgment does worry me. I have a few thoughts.

1. A lot of the anti-war rhetoric has been necessary for him to get the nomination. The Democratic Party has been taken over by the anti-war liberals as the Joe Lieberman case so clearly demonstrates.

2. Obama has said he will govern from the middle and not from either extreme. His record in the Senate has been to the extreme left but that is also explained by his political ambitions and needing to vote as the leadership wanted him to.

3. The Joint Chiefs of Staff are going to give the same advice regardless of who is President. The advice they are giving Bush now will not change because the President does. Obama can say a lot of things but when he sits in the Oval office and the head of the Army, the head of the Navy, the head of the Marines, the head of the Air Force and the head of the Coast Guard start giving him advice he is going to get a reality news flash.

4. Character is what matters. If the Joint Chiefs of Staff present a compelling case to Obama that his preconceived opinions about war and peace were wrong, does Obama have the character to do the right thing despite positions he has already taken? That is what I have still not decided and what Obama must convince me of before November.

[John317]

Good thoughts, Shane. I pretty much agree with you.

I'm concerned about his promises to start pulling troops out of Iraq immediately. That would mean all the 4,000 who died there will have died for nothing, because as soon we pack up, it's real obvious what's going to happen. We will have lost and the extremists will have won, and that will only give them greater enthusiasm and assurance that they have "the Satan" on the run. It will be interpreted as a defeat and give pause to all of our allies and joy to all those who oppose democracy and stability in the mideast.

I've read that Al Qaieda has said that Iraq is the place they see as the center of their war against the US. So, then, if Obama pulls our troops out of Iraq, and Al Qaieda then fills the vacuum-- or if Iran does-- Obama will be forced to go back in and start the fight all over again. I hope he realizes this, but based on what he says, he does not appear to. It would be much wiser to stay where we are and complete the job than to pack up and come home, only to realize we left prematurely and must go back in.

[Bravus]

The 4000 *have* died for nothing! (Not to mention the hundred thousand or so Iraqis that are so seldom mentioned.) They should never have been there in the first place! Keeping the troops there longer doesn't 'honour their sacrifice' - it just means more deaths for nothing!

This mess is all Bush's, but America owns it. And the next president's best course for minimising the damage is to get out as fast as possible. If Al Qaeda is there it is there to fight the Americans, and if they leave it will largely leave. Al Qaeda is not going to set up a government - it is a loose terrorist network of small cells... and it wasn't even in Iraq before the invasion.

What a horrendous mess.

[Bravus]

Try this on for size, supporters of the troops:

http://abcnews.go.com/WN/Politics/story?id=4513250&page=1

Not the servicemen who died, not the families they left behind: apparently Dubya bears the greatest burden of all. Sickening. How you can support this administration and claim to support the troops is beyond me.

Sorry, I can't play nice on this any more. I'm sending myself to timeout for a while.

[lazarus]

The actions of the Bush admin has obviously weakened the USA position in the world. China is NOW rubbing its hands because the US is bogged down in Iraq and Afghanistan. The catastrophic blunders of George Bush has left the US more vulnerable than it ever was.

Russia is stronger and more confident on the world stage.

North Korea has nukes

Iran is more confident and has MORE influence in the middle east since the fall of Iraq

Chinas US military is between a rock and a hard place and the economy is in trouble

Gentlemen you cannot surely believe that more of same kind of poor leadership by Bush III will not make things worse.

[Woody]

The 4000 *have* died for nothing! (Not to mention the hundred thousand or so Iraqis that are so seldom mentioned.) They should never have been there in the first place!

Funny ... The last poll that I saw ... The majority of Iraqis supported the US presence.

[Woody]

Quote:

Russia is stronger and more confident on the world stage.

North Korea has nukes

Iran is more confident and has MORE influence in the middle east since the fall of Iraq

Chinas US military is between a rock and a hard place and the economy is in trouble

Hmmm. Maybe it is time for the rest of the world to step up to the plate ???