Iraq War "Caused Slowdown in the US"

[questionmark 11,371]

You have some that plan on having a national healthcare plan and fight global warming and the other half that want to cut taxes across the board, you just cant do both at once, or do to much of one of them.

Mostly you can't cut taxes if you must spend half of the taxes collected as interest for existing debts.....

[Caesar 3]

If it spurs growth and increases gdp production you can and it has. look at the period after WWII or dept as a % of gdp was far worst. gdp growth greases everything in an economy!

[questionmark 11,371]

If it spurs growth and increases gdp production you can and it has. look at the period after WWII or dept as a % of gdp was far worst. gdp growth greases everything in an economy!

The difference between then and now is that US made merchandise was in demand then, but, except a few items, hardly a commodity now. Have a look at how much of the US GDP went into export in 1950, and compare that to today.

In the 1940s the US trade balance was positive.... it has not been positive for three decades now.

[Dowdy 1]

Caesar what you fail to realise with a weak dollar is everything you own, every profit you make is not a much as what it was a year ago. It just makes your purchasing power worth less. Take oil for example - what has it done in the last week (reach record highs $102 a barrel) and what has the US dollar been doing in that same time (reaching record lows. The AUD is at a 24year high against the US dollar)

A weak US dollar doesn't just effect the US, it effects the world because oil is traded in US dollars.

[questionmark 11,371]

A weak US dollar doesn't just effect the US, it effects the world because oil is traded in US dollars.

Not as long as the oil price correlates the devaluation of the dollar, which it does for the most part (the oil price only increased about 10% if you pay in Euros, not sure about the AUD).

The ones that feel it most is those that only have dollars or have their currency pegged to it.

[Caesar 3]

The difference between then and now is that US made merchandise was in demand then, but, except a few items, hardly a commodity now. Have a look at how much of the US GDP went into export in 1950, and compare that to today.

In the 1940s the US trade balance was positive.... it has not been positive for three decades now.

Yes and our GDP has increased. since the decline in the U.S. dollar, trade has improved and alot of countries have been moving to the U.S. just in my area alone I've seen three companies from Europe. inexpensive foreign imports have also helped prevent inflation. many of these nations like China and India have also helped many U.S. company sales.

[Caesar 3]

Caesar what you fail to realise with a weak dollar is everything you own, every profit you make is not a much as what it was a year ago. It just makes your purchasing power worth less. Take oil for example - what has it done in the last week (reach record highs $102 a barrel) and what has the US dollar been doing in that same time (reaching record lows. The AUD is at a 24year high against the US dollar)

A weak US dollar doesn't just effect the US, it effects the world because oil is traded in US dollars.

No, it has no effect on me unless I buy over seas. what you fail to realise is that a dollar is worth a dollar in America!

[Dowdy 1]

No, it has no effect on me unless I buy over seas.

Yes it does because everything you buy is bought overseas (imports), unless it's made in America. Imports will cost more because of a weak dollar and hence make you buying power worth less

[Caesar 3]

Yes it does because everything you buy is bought overseas (imports), unless it's made in America. Imports will cost more because of a weak dollar and hence make you buying power worth less

Services, such as government, medical, utilities, amusements and food make up most of U.S. consumer spending and have little to do with buying overseas. euros, pounds and the yen, add up to far more dollars for U.S. large cap corporations since almost 50% of their earnings are from sales overseas as the dollar declines.

[Aztec Warrior 2]

The economy is in a recession.

1. The Fed continues to lower interest rates every few months to prevent a looming crisis.(credit collapse)

2. The American government continues to borrow money from China or who ever.

3. Then in turn the Fed continues to print fiat money(money with no backbone) out of thin air, give it to citizens and it injects into the market.

(does the recent 160 billion approved last month ring any bells? Will this injection 'stimulate'

the economy or merely stop some bleeding and panic temporarily?)

4. Most important is the devaluing of the 'Dollar'. The dollar is devaluing at an alarming rate.

When a market is flooded with an excessive amount of 'fiat' money it in turn devalues the current currency.

That last statement is simple economics and should be taken seriously.

How can this not be taken as a measure? Inflation is caused by a weak american dollar.

5. Most countries trade oil for American dollars, always have, yet that trend is in jeoprady as

an increasing number are opting to change towards a more stable and stronger currency

, the Euro.

6. The looming American financial crisis(depression) will create a ripple effect through out all of North America, this is a given.

The current monetary system has been broken, by design many will agree who study economics, to purposely devalue the

the 'dollar' spawning a brand new currency, the 'Amero'.( The North American Union )

It's important to understand the how, why's and what's led to the rise and collapse of the 'dollar' since the birth of America.

I suggest going to a library(or ebooks) and signing out a book that documents the history of economics in America since the signing of

the Constitution to grasp a keen understanding of how America has arrived to this point.

Let me repeat it for you. The economy of the US is not currently in a recession, but it is in a period of slow growth. Last quarter GDP was nearly 1%, so unless that number is later revised...not a recession. All those points that you cut and pasted from Paul, while you may find them interesting are not evidence of a recession. Interest rates, selling bonds, the value of the dollar and M1 and M2 in circulation are not factored into the conditions that define a recession.

Perhaps you should take your own advice about researching economics; I suggest you first grapple with a basic understanding of what is a recession and how it is measured.

[BlueZone 1]

Iraq War "Caused Slowdown in the US"

The Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy, according to Nobel Prize-winning economist Joseph Stiglitz.

To me this is as obvious as 1+1=2. You blow all your money on something useless and you wind up broke. I can't believe this is even a subject of debate. It's on a par with saying "the World Trade Center bombing was bad". Horrifically understated, insultingly obvious.

No wonder so many people in America are facing foreclosure and massive credit card debt. They don't get the concept that spending more than your savings + your income results in debt. As a population, we deserve this recession/depression.

We're not only broke... Bush has borrowed money from CHINA. Maybe since we elected him we deserve that too...

[Caesar 3]

To me this is as obvious as 1+1=2. You blow all your money on something useless and you wind up broke. I can't believe this is even a subject of debate. It's on a par with saying "the World Trade Center bombing was bad". Horrifically understated, insultingly obvious.

No wonder so many people in America are facing foreclosure and massive credit card debt. They don't get the concept that spending more than your savings + your income results in debt. As a population, we deserve this recession/depression.

We're not only broke... Bush has borrowed money from CHINA. Maybe since we elected him we deserve that too...

I hate to seem like a pollyanna here but if we apply that logic to personal finance then no one wouldn't be able to buy a house ect. the facts are America has always been in debt and probly always will, along with most other advanced econommies around the world. I don't understand why alot of people on this site think this slowdown is because of the Iraq war, when this slowdown started in late 2007. I thought it was congress that has control of our funds?

[Dowdy 1]

I hate to seem like a pollyanna here but if we apply that logic to personal finance then no one wouldn't be able to buy a house ect. the facts are America has always been in debt and probly always will, along with most other advanced econommies around the world.

Australia is not in debt. We wiped our debt a few years ago due to wise spending and good economic management during a boom. And our federal reserve doesn't listen to public interest when deciding the rates. It raises them to try and stop inflation and excessive spending from people. The US fed does the exact opposite

On another note, alot of people here dismiss Ron Paul (hes a fool, doesn;t know about the economy etc etc) but he did predict the 1987 recession in 83 so i think you should give him a bit of respect he deserves. If you wont, he does have credibility so dont dismiss him so easily

[BlueZone 1]

Australia is not in debt. We wiped our debt a few years ago due to wise spending and good economic management during a boom. And our federal reserve doesn't listen to public interest when deciding the rates. It raises them to try and stop inflation and excessive spending from people. The US fed does the exact opposite

On another note, alot of people here dismiss Ron Paul (hes a fool, doesn;t know about the economy etc etc) but he did predict the 1987 recession in 83 so i think you should give him a bit of respect he deserves. If you wont, he does have credibility so dont dismiss him so easily

** applause ***

Ten years ago we weren't in debt either. Bush's obsession with Iraq combined with the idiotic political belief that Bush can imperviously spend as much money as he wants without consequences because he is a Conservative have destroyed our economy.

If a Democrat had spent this amount of money with this result, the conservatives would be yelling bloody murder. But since Bush is nominally Conservative we have a posse of baby Rush Limbaughs pretending the disaster doesn't exist.

Edited March 3, 2008 by BlueZone

[bathory 1]

Australia is not in debt. We wiped our debt a few years ago due to wise spending and good economic management during a boom. And our federal reserve doesn't listen to public interest when deciding the rates. It raises them to try and stop inflation and excessive spending from people. The US fed does the exact opposite

https://www.cia.gov/library/publications/th...k/print/as.html

Public debt:

15.2% of GDP

note: The Commonwealth government eliminated its net debt in 2006, but continues a gross debt issue to support the market for risk-free securities. (2007 est.)

I'm not mr economy guy, so maybe some can kindly explain the difference...

Ten years ago we weren't in debt either

google suggests otherwise

http://www.cedarcomm.com/~stevelm1/usdebt.htm

[BlueZone 1]

https://www.cia.gov/library/publications/th...k/print/as.html

google suggests otherwise

Ten years ago we weren't in debt either

http://www.cedarcomm.com/~stevelm1/usdebt.htm

Hmmm. I stand corrected by bathory. (Thank you) It's the GROWTH of debt that Clinton slowed. This doesn't change my belief that our current financial crisis has been caused by the Iraq War.

[bathory 1]

it should, considering that the Iraq war accounts for a tiny amount compared to total government expenditure each year

its no more to blame than the aid package to africa...

[questionmark 11,371]

it should, considering that the Iraq war accounts for a tiny amount compared to total government expenditure each year

its no more to blame than the aid package to africa...

You are perfectly right. Staying the Clinton course (though I don't agree with many things he did) of not making new debts and trying to pay for some of the outstanding would have done much more to alleviate this situation then not starting the Iraq war....

[Caesar 3]

You are perfectly right. Staying the Clinton course (though I don't agree with many things he did) of not making new debts and trying to pay for some of the outstanding would have done much more to alleviate this situation then not starting the Iraq war....

Well, you could give the Clintons credit, or the republican congress credit, or say since terrorism didn't really effect our economy credit.

[Dusty Digital 0]

https://www.cia.gov/library/publications/th...k/print/as.html

Public debt:

15.2% of GDP

note: The Commonwealth government eliminated its net debt in 2006, but continues a gross debt issue to support the market for risk-free securities. (2007 est.)

I'm not mr economy guy, so maybe some can kindly explain the difference...

I believe that to mean that the "debt" of the australian government is made up of government bonds, which it supplies to provide investors with risk-free investment alternatives. Generally government bonds are very secure but they have a very low yield. In other words the government has debt, but that debt is caused merely by market demand for its bonds, not by its need of loan capital.

[snooze 0]

Maybe the solution to America's economic woes would be to consolidate and then control the world drug trade. Like the legal code, global economics has grown so unnecessarily complex, intentionally. Everything is so interdependent on everything else, like a house of cards. What about the subprime mortgage crisis? If a lending company extends credit to buy a house and the creditor defaults, does not the lending company now own that house? I may be wrong, but that's how I thought it worked. So you place a value on something and you sell it on payments plus interest to someone, you get some payments (mostly interest), they default, you get the property back to sell to someone else. How could there be a crisis? You still have a tangible property. I know there is more to it than that, but why so dire? I would tend to think they have been cooking the books.

I think that most of the US economy's problem lies more in the foreign debt being held. If all our foreign debt were to be called in at once, we would be forced to liquidate our assets right. That in turn would shatter the global economy, so were told. But it seems more like smoke and mirrors to me. Is the unnecessary complexity designed to keep people from thinking like that? If things are only worth the value placed on them, how is that different than any other confidence game. The US still has more military might than any other country in the world, but that can soon change. If we are wasting resources that could also be considered money, how is that not damning the US economy. The buying power of the dollar seems to be worth only what others, not us, place on it. Am I wrong or what?

[questionmark 11,371]

If all our foreign debt were to be called in at once, we would be forced to liquidate our assets right.

Nope, the US would not have enough assets to pay the debt... there would be a foreclosure note on the White House.

[Dusty Digital 0]

If things are only worth the value placed on them, how is that different than any other confidence game.

I think you've hit the nail on the head with the confidence game remark. Yet what would be the alternative? As long as we have trade we have to place value on assets.

For a long time global confidence in the U.S. economy has been very strong (both in and outside the U.S.). Strong confidence has caused people to overvalue their future incomes and assets. As that confidence breaks that value will crash. Just like in the stock market, the value of things today is based largely on their expected value tomorrow.

In a way you are right to ask "what crisis?". We are hardly going to return to the stone age even if there was a recession. There is a big problem with losing confidence though. As people lose faith in the future value of their assets they are less likely to invest in them. Banks see the future as risky, so they raise their lending rates. I remember an economist once said: "When people start to think that we are in a recession, we are in a recession".

In a way it's all smoke and mirrors, a bubble of expectations, but that's largely because reality is very hard to depict. It makes sense that because of technological progress our productivity rises and economies grow. The speed and location of that growth is almost impossible to judge though, and so people speculate. For a long time americans themselves and the rest of the world with them have overestimated productivity growth in the U.S. (or rather they have mistaken growth in consumption for growth in productivity). Now comes the corrective adjustment - how steep it is remains to be seen.

I do disagree with you that economics is "unnecessarily complex". In a global economy everything does affect everything - and things are simply... complex

[snooze 0]

Good reply Dusty.

It is really hard to say whether or not that the complexity is necessary. That same logic also lends credibility to a one world bank system. I wholly don't believe in that either. If benevolence can be assured, it might not be a bad thing. It just seems that money is created out of thin air, and proven by the US Federal Reserve. That is what makes inflation real. GDP growth that cannot outpace that inflation is what I think is creating this crisis. If every little consumer product that America buys is manufactured in Asia or Mexico does that not mean we are sending all our money over there? Or does it mean that we are paying interest or reallocating debt? Why can't we make the same products ourselves? Is it because we owe them? Or that other people stand to make more money by prudent business decisions and savvy market evaluations? If we can take those same products and sell them into local economies would that not seem like a win win situation? Just because I don't understand the whole global economic theory, does that mean that I should hold faith in something that I don't completely understand?

It starts to become a mind crunch when you try to understand the global economy. Are you allowed to eliminate someone who owes you so much money? You'd like to, but that eliminates your chance at getting paid. Just because I can blow you up, does that mean I don't have to pay my debts? I think that is what is holding the world together. It is MAD. I think that there is such a thing called economic terrorism that is being enacted against GWB and if he is not a part of it, he is obviously the dumbest person to ever lead us down the tunnel. I think he is part of it though.

[snooze 0]

Take for instance the 'gold standard'. 1913 the US Federal Reserve was created. A gold standard was created to provide a backup of our paper dollar. The Secret Service was commissioned to prevent against illegal copying of our paper money. This was before we initiated world affairs.

The gold in Fort Knox was nowhere close to the gold held underneath the WTC. There has never been a mention of whether or not that the gold located under tower 1 has been recovered.