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Economic problems rant (why the stimulus packages wont work)


Razor512
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while it is always good to get free money, it will not help the economy in any way

the cure for the economy is the recession, it just hasn't gotten bad enough to send a message to the stupid people

the economy is failing because people are not buying as much

people are not buying as much because prices are too high

the government giving people free money will only cause the economic hardship to last longer because people will be able to afford those high prices for a few days or weeks.

the best solution is to let the economy get worst, then when prices come down far enough, the economy will become strong again.

remember prices go up but not salaries

eventually things get too expensive as the goal of a business is profit and greed, eventually the greed gets to a point where people no longer want to buy things

while the recession will bring down falsely inflated prices, to bring the prices of the rest of the products we buy to a affordable level, it will take a harder recession and government fines for companies that refuse to lower prices.

remember economic problems are like a traffic jam, a truck will flip over and block the road, and people will be stuck there for hours. while the problem can easily be fixed by having everyone reverse far enough to take another road, unless everyone wants to reverse, everyone will be at a standstill.

in cases like this, the police will come in, and go to each car and make them go back far enough to take another road but with out the police stepping in, the idiots will just stay there for hours honking their horns acting like the truck will magically fly away

the government needs to make every connected company lower prices.

you cant sell a mp3 player for $50 if your supplier is selling it to you for $60

every company down the line has to lower prices so the consumer can afford the items in the stores

and just like how the police will force every car to reverse if a road is blocked, the government needs to do the same thing with these companies.

and the only way to prevent future recessions is for people to stop being stupid, just don't accept higher prices, if something you buy goes up by 5 cents, don't buy it, don't think, "oh it's only 5 cents"

because 5 cents becomes 10 cents and then 20 cents, and so on, it is like a lazy person who says "I will do it tomorrow" well tomorrow comes and goes, and he says "I will do it tomorrow" again, and before you know it, it is 6 years later

stop the problem at it's source

consumers feel that they have no choice and no control over pricing.

they need to learn that businesses will charge what there willing to pay for

when we have idiots who are willing to spend more for the same item, then businesses increases the prices and everyone suffers

if you choose to buy a product at a higher price, then companies will constantly increase their prices to a point where most people cant afford them and the economy goes into a recession.

only accept lower prices, and accept sale prices but never accept a higher price, even if it goes up by 1 cent or 0.005 cents, don't accept it

if people stop buying products when the prices go up by any amount, then the prices will not change, and any item that goes up will most likely be right back to the normal price with in a day or 2

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See, there is a difference between Obamas stimulus and previous ones. A big chunk of the money goes to green technology and weathering houses. What that means is, for the houses getting weatherised, it wil require a workforce to do those jobs. In turn, it lowers the homeowners costs for energy consumption, putting both money in the workers pockets and the homeowners pockets at the same time. it creates jobs and saves money, while yes, spending some money as well. The offset comes from suppliers who manufacture the products used in weathering these houses. This puts them into higher production mode, which means they need to hire more people to keep up demand for the supplies, thus putting more people to work. Its a slow, but effective snow ball effect. This is just one small facet of the plan. The other part is, regulation and accountability. Up to now, companies getting this money did nothing to track its use or show how they were spending it. It also did nothing to put an end to corporate spending(Personal Compnay Jets, High Bonuses, etc). His plan isn't perfect, but its a start. Most of the places he is spending money in some way shape or form will put people to work. Whether it be directly to carry out what the money is spent on(ex: weathering houses, or indirectly for the manufacturers who will supply materiels used in the process of rebuilding our roads, bridges, infrastructures, etc.)

You have to start somewhere, and if we do nothing and spend nothing, then you will only see things get worse. Panasonic just announced they were laying off 15,000 people. NEC, 20,000. Ford, GM, and Chrysler are still in a bind, and they can't even lay off people without first buying people out of their Union contracts, most of which are too high to begin with. The US economy is in the worst shape it has ever been in.

Its going to get worse before it gets better, and its not going to get better any time soon. We have to understand that no matter how much money Obama tries to spend it won't fix things immediately but will help get the ball rolling, while doing nothing to jump start these jobs and rebuild infrastructure only makes the recession worse and our country more dependent on foreign energy sources. We have 8 years of finacial ruin to try and fix and people expect it to be done the first week the man is in office.

As for the cost of living, the job pay to cost of living do not match. Minimum wage in a lot of places is still around $5.00 an hour. Jersey only changed it in recent years to $7.00/hour yet NJ has the highest cost for car insurance and property tax in the nation. The average one bedroom apartment in NJ is about $700/month. Groceries are more expensive than they have ever been, and even after gas prices came down a little this year, everything else still seems to keep going up in price. Why when I go to the grocery store do we have all the produce coming in from other countries? Japanese apples, brazillian and mexican peppers, etc,etc. Jersey has some of the best farms and produce stands, yet the grocery stores rather import, costing more on gas and our carbon footprint in the process, while spending just as much on the produce as they would for local growers. We just don't do anything wisely these days, and are part of the cause of the problem to begin with.

In my house, we took steps to save money but its not enough to help our budget. We replaced all our lights with energy saving bulbs, turned off the cable TV and just went with the basic 3,6, and 10, changed phone companies to IDT(All inclusive long distance, call anywhere for about $54/month), stopped using credit cards, so we don't buy things we don't have cash on hand for, got rid of our second vehicle (which really is a pain in the ass at times, but one car saves costs on gas, insurance and repairs). We're barely geting by, and one fo the corners I had to cut was our health insurance. I took the cheapest option they had from my Employer. If I kept the same coverage, it not only would cost me more, it would wipe out the raise I got in November and put me in the hole, below what I was making last year before the raise. Now I pay out fo pocket for almost all of the medical costs, but its something I had to do just in order to have enough money for rent, food, etc.

By September, it will probably all be in vain though, as my work will be laying off our department when they finish the system conversion and outsource all our work to Canada. They have already told us this in advance, and because of our pay scale, there are no jobs for us to move into. Most of the jobs will be going away anyway, and the ones that are staying pay less than half of what I make. I will be getting a decent severance package, but that doesn't make up for the last 12 years I have been at this job. I have been trying to find a new job for the past year or so, since the merger, and if I leave before September, I lose my Medical and any Severance I may have gotten after getting laid off. That money could pay for me to go back to school and get certified in something for a new job. I have no certs or degree so my prospect of a new job get that much harder, so I am kind of stuck in limbo at this point. I have been taking side jobs doing web and graphic design, but that doesn't pay enough on a steady basis to live off of.

Obama may not have all the solutions right now, but the American people have all the problems that we need solutions for. Congress ha sbeen asleep for the past 8 years allowing the Bush adminstration to get away with financial murder and spending more money than any other administration. We had a surplus of money when Bush took office, and he spent through it in the first few years, starting the downward spiral we are in now. Bush was a flop on every buesiness he touched before he was president, why didn't people see this before electing him? We just followed blindly without regulation or acocuntability on any front. The fact that he couldn't make any money drilling for oil as Texan should have been the first red flag.

Obama and his people have the task of trying to fix a sinking ship that is capsizing, when we have been taking on water for so long, its going to require all of us to get out our buckets and pitch in to help.

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Firstly, its no where near free money. Your paying for it, not only in taxes but in monetary inflation. The government printing more money, makes your money worth less.

You say you want prices to come down, this will cause even more problems with the economy as it could lead to deflation in products, which is were people stop spending, because in a short time the price will be less and they will save money. This causes even more major problems.

Many of the reasons why prices in core commodities have been inflated is because people have been speculating on the price of the products and profiting on this rather than letting simple supply and demand take place.

Also, the problem with the economy now is that people aren't spending because they are fearful of losing their jobs, this prevents them from spending, not the fact that prices may be or may not be too high. Job security will help reduce the effect of the recession, this is why Obama is trying to create a huge public works effort. People not being afraid of losing their jobs will spend their money.

The knock on effect of the so called "credit crunch", which was created by banks buying their own securitised loans, as they were making money at one point, but ended up taking on a huge amount of risk. This is because the people who give the loans out, sold them on almost immediately, making money and reducing their risk to near zero. This is what lead to too many loans being handed out, especially in the sub-prime markets. So now the banks have already lost a lot of money and now don't want to buy so many loans to securitise as they have been bitten by it. This means that less loans are being given out and people who need them, like small business who perhaps want to expand because they are doing well. The knock on effect of this is less jobs and possibly people loosing them. Vicious Cycle.

People are also now stuck with the problem that they bought a house for £500,000, that is now worth £350,000 because of the housing market slump, but they had to take a loan out for £400,000 to pay for the house with the rest of money coming from their savings. This means the people have lost in the region of ~£150,000 because of the value decrease. This is not helped by the fact that people can't get loans to buy houses now so the price falls further still.

The stimulus packages will work, if they are applied properly and prevent job losses, which is the problem at the moment. When the job market picks up again, then the recession will be ending.

Also your theories on not accepting prices which increase are just going to cause more economic problems. People have to buy their core commodities to survive. The people who produce them have to make a profit to survive. Prices will fluctuate naturally anyway and if I'm going to pay slightly more for my bread, because the wheat farmer had to spend more money on oil last year for the diesel in his tractor then I'm going to, because it means he is going to stay growing wheat and employing the people that work for him. Perhaps it'll be a bumper year and be able to take on more people, helping to end this recession.

Also, consumers feel like they have little control over the price, because they have absolutely no control over the price. That price is decided by the major retail giants, such as WalMart or Tesco in the UK. Their price is a war between them and their competition, prices which are already as low as they can go. If you want a bargin, then find the loss leaders, which are the products they choose to sell under what they paid for it, to get you into the store, in the hope they make more money on the other things you buy. Giving up any sort of brand loyalty is the best cause of action for the consumer at the moment.

Here endth the lesson.

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Here is another thing people forget about. What happens when all these troops come home? What jobs will be available to them when they have been gone for 6 years or so.

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the main reason why I called it free money is because while it is our money to begin with, we wouldn't have gotten the stimulus money otherwise, (that money would have gone to someone in government looking to embezzle some cash

and the reason why i said that all linked companies need to be controlled because that way you wouldn't have to pay more for bread because the farmer wouldn't have to spend more on his stuff

and they will still stay in business, the only reason for price increases is more profits.

if you are selling tv's at $500 and a lot of people buy it, then you increase the price to $600 and a lot of people still buy it then you made profits. and greed will cause you to increase the price to 700 and higher, as a way ot testing the limits of peoples wallets

and think about this statement when reading this next part

Only two things are infinite—the universe and human stupidity

when I was in high school, they would charge students for just about everything except water, probably because they couldn't attach a water meter to each water fountain

a bag of chips would have the sujested retail price on it of 25 cents

in the lunch room, they would cost 80cents- $1.50 depending on the brand, cheetos were popular and even though the bag said 25 cents, the school charged $1.50

and guess what happened, lots of students bought it at that price.

many people in this country are stupid and see prices like this, "hey that 25 cent bag of chips cost $1.50, i have $1.50 in my pocket right now, i will go buy it"

it is like people cant see the value of money

and this money didn't go to the school, some company owned space there since the school didn't use it.

now in college, we have a subway and a starbucks in the building, they charge almost twice as much as the subway down the block from the college. and the starbucks 2 blocks away

and people buy it a lot.

this sends a message to the greedy companies "hey it's ok to rip us off, we wont eve notice it until the band and debt collectors come after us"

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We're geeks, hackers, IT people, and nerds; not economists.

<_<

It's also not free money.

I'd like the best place to get info on this would be NPR. They have an award winning show about how it all happened and it's incredible... the first step to fixing a problem is knowing how it happened.

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I dunno if it was bush or not but I know he spent every dime he had his hands on right before obama got in.

I also feel like the money rabbit hole in the government is so long the blue pill wouldnt show you how far it would go.

I also feel like all media in one way shape or form is too busy *with the exception of a few programs* bashing political parties or speculating bs to actually talk properly about the government and the economy.

***any rush limbaugh listeners out there... Quit listening to that fat bastard cause he's rotting your brains***

I feel like the stimulus package isnt going to put much of a dent in the can right now, but I think more overly it has to do with people with big amounts of cash that are being severely frugal right now, and thats whats causing all of this.

Sounds silly doesnt' it? But it's all a loophole one way or another, but in a good way.

Think about the economy like this: It's like an ubuntu logo. The gov. prints money, money is distributed to banks and organizations. Sooner or later it trickles down to the working class *and what few middle class people we have* these classes of people pays taxes,bills, purchases, etc. and it eventually gets back to the government.

So to simplify this analysis, think about it as cars going in a circle. Sometime in the past years, someone slowed down for one reason or another, so in turn the rest of the cars are going really slow, and there is a gap between the head car and the last car. There is no other option but for the first car to sooner or later speed up, therefore letting the rest of the cars go faster. It's that simple. This even goes for our government against other nations. It's a cycle, just with money.

The economy has been modeled this way since after the great depression... At least I could say all of our leaders back then thought about us in the future, but at the same rate, I feel people are putting too much pressure on obama. They watch his every move and it's got to be hard enough to know that the spotlight is on him anyway since he is the first black president.

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...

if you are selling tv's at $500 and a lot of people buy it, then you increase the price to $600 and a lot of people still buy it then you made profits. and greed will cause you to increase the price to 700 and higher, as a way ot testing the limits of peoples wallets

...

Example about different pricing.

Your wrong again, on both counts.

If sony make a TV in 2008 which costs them $250 to make, they then sell it to the distributor, who sells its to the Electronics store that you buy it from. Now everyone needs to make a decent profit and has their own costs of storing and shipping the TV. So its now $500.

Now sony make the same TV in 2009, but because of the spike in commodity prices, they've been hedging their price, unfortunately prices have gone down, which means that have lost out some what and paying a little more than the market price. This means that it now costs sony $300 to make the TV, it goes through the same supply chain, but again hedging of oil prices means fuel is still quite expensive and also rent and a electricity prices have gone up. This means that by the time the shop has got it they have to put prices up to $600 just to survive. This is not profiteering, this is naturally progression. Prices go up every year because of inflation anyway.

Your example about the crisps is an even worse example, its simply scale. Your large supermarket can buy millions of them, directly from the manufacturer at the lowest possible price, they then make a small profit on selling them, because when you go to their shop you buy lots of other things and that all adds up to a nice tidy profit which they can survive on.

Now your local school or small shop, can't buy from the manufacture, they have to buy through a distributor, this adds to the cost. Also the customers don't buy nearly as much, which means they have to make more money on the crisps so that they can pay for the rent on the location, the couple of staff, the electricity, the water, cleaning... the list goes on.

You have absolutely no concept of the different economic variables or how the world actually works.

Your telling people not to spend their money, which is the worst thing to do in a recession.

Perhaps you should move to a communist state, I think you'd enjoy that more.

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I think instead of calling it a stimulus package, its really just money spent where its needed and where Bush didn't bother to invest it. Its funding things Bush didn't bother to deal with, and at the same time, trying to create jobs and rebuild our infrastructure. Bush never focused on domestic needs as much, and shifted all funds to the war in Iraq and for drilling oil. Bush cut programs and lifted bans on drilling in protected land, often without consulting the parks he was selling off to drilling companies. We now have a president who at least for some part is trying to right those wrongs of the last 8 years while still having to deal with the debacle of the middle east that Bush left him with.

The Bush rules include: removing federal protection for gray wolves in the Northern Rockies and Great Lakes; opening parts of Oregon to logging, opening 2 million acres of public land in Wyoming, Colorado and Utah for oil-shale drilling; making it easier for factories and refineries to expand without applying for new federal pollution permits; and encouraging the commercialization of meat from genetically modified animals.

Under President George W. Bush, federal officials promoted drilling in the intermountain West, in Alaska and off both coasts to boost the nation's energy supply, awarding nearly three times as many oil and gas permits on federal land during the past four fiscal years compared with the corresponding period under former President Bill Clinton, according to a Washington Post analysis of Bureau of Land Management records.

Obama pretty much has his work cut out for him no to reverse a lot of that. Some of it has already been put into effect, but other deals have not been finalized. Under law, Obama has 60 days to set up a congesional revew to remove some of these finalized deals, effectivly wasting our tax dollars in the process to fix somethign Bush should have never done on the first place. A lot of this was done in the last week Bush was in office, so he kind of knew he was going to slip in these deals under the radar with the hopes that his oil consituents would get their fair shake of drilling needs, while giving a big middle finger to the environment and the local parks and preotected water/land/ and wildlife without even consiulting the parks in th process.

Yeah, we may be geeks, nerds, IT people, but were still human, and still tax paying hard working americans who care about whats going on in our country. If we didn't give a shit, Obama wouldn not be president, and we'd all be worrying about whether Sarah Palin would be taking over if John McCain ever crokes.

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Yeap they are trying the same thing in Australia.

From a poor student prospective I am all for having large sums of money chucked my way. But will it help the economy.... I think not, I am a geek and will spend that money on tech shit, said tech shit is made in Asia hence the bulk of the money goes over sea's only a small portion goes to the retail sectors. In our last package Australia consumes lashed out and purchased LCD or Plasma TV's with there hand out. So its not purely the I am a geek factor.

From my limited understanding in economics investing in vital infrastructure (schools hospitals etc) is the way to go, it keeps money within a country employee's people within that country while the projects are being developed and has a flow on effect with teaching nursing staff and what have you.

I think its most awesome that the American's are taking a cleaner greener approach (about bloody time), global warming arguments a side at the end of the day we all want clean air. LMFAO thats ironic seeing as I am a smoker =P

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lol getting rid of bush is another one of the most AWESOME things you American's did and was about bloody time.

Meh stuff bush I am a Brazilian kind of guy myself.

It makes me feel good that there are a lot of people around the world that understand that us US citizens hate him

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It makes me feel good that there are a lot of people around the world that understand that us US citizens hate him

I moderate a Anime forum with a large Aussie contingency at one point we started to get a few American guests. The minute these poor people posted they instantly got brought into the whole WAR debate and it spiraled into one giant cluster fuck of insults. The thing I couldn't comprehend is ever American guest we had didn't agree with his policies or like him in the slightest and yet they still copped a fair amount of flak for it.

People often forget that a Government is suppose to represent the people but more often than not this is never the case.

I can tell you guys right now that the minute Obama was elected a great sigh of relief was breathed from the global community. I can't help but feel some what sorry for Obama due to the fact he inherited one massive mess and the expectations of not just his fellow country men but also of the world. With that said he sure as hell hit the ground running.

I would hate to be a stand up comedian in these financially turbulent times, with bush gone writing witty material would be a right royal bitch.

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I moderate a Anime forum with a large Aussie contingency at one point we started to get a few American guests. The minute these poor people posted they instantly got brought into the whole WAR debate and it spiraled into one giant cluster fuck of insults. The thing I couldn't comprehend is ever American guest we had didn't agree with his policies or like him in the slightest and yet they still copped a fair amount of flak for it.

People often forget that a Government is suppose to represent the people but more often than not this is never the case.

I can tell you guys right now that the minute Obama was elected a great sigh of relief was breathed from the global community. I can't help but feel some what sorry for Obama due to the fact he inherited one massive mess and the expectations of not just his fellow country men but also of the world. With that said he sure as hell hit the ground running.

I would hate to be a stand up comedian in these financially turbulent times, with bush gone writing witty material would be a right royal bitch.

I hear Ya, Obama is Well appreciated with the citizens here in the US as well

These are some very good documentaries

Iraq and 9-11 Documentaries

http://www.911docs.net/iraq/

http://www.911docs.net/

http://www.moviesfoundonline.com/documentaries.php

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I think the governments of the world should realise that throwing money at the problem is not going to solve it (its partly how the problem was created). They should be putting barracades into their policies so when/if it get worse, the country will not be effected as badly.

Now, to bag my own country. I like that the governement in my country is trying to fix things, but they are really not thinking it through. Such as the VAT cut from 17.5% to 15%, did they really think it would get people spending? For every £1000 you spent, you would only save about £20. The Interest Cuts have helped, but not as much as they would hope though, yes people are saving around £200-£500, but utility bills and the cost of living in general keeps going so that seems less and less.

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I think the governments of the world should realise that throwing money at the problem is not going to solve it (its partly how the problem was created). They should be putting barracades into their policies so when/if it get worse, the country will not be effected as badly.

Now, to bag my own country. I like that the governement in my country is trying to fix things, but they are really not thinking it through. Such as the VAT cut from 17.5% to 15%, did they really think it would get people spending? For every £1000 you spent, you would only save about £20. The Interest Cuts have helped, but not as much as they would hope though, yes people are saving around £200-£500, but utility bills and the cost of living in general keeps going so that seems less and less.

I hear Ya, I live in the United States and I don't know anyone who isn't living paycheck to paycheck, I remember when people actually had a lives savings, that is very rare now days

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I agree with your points Razor 512 I was listening to someone on the radio (yes he was republican) and he made a point that in a capitalist country recession happen but yet let them go buy and it will be fine, its better than communism in the real world (in thought communism sounds great but in practice not so much). We should have never given "free money" to AIG or the car companies. Also for DIGIP

A big chunk of the money goes to green technology
we don't need green technology to be a focus because of global warming (which is usually why people want it) know if it provides lower energy costs and a less expensive product sure (you save money both ways) but if its a buy it to stop the evil global warming even thought its 5x the cost(ok I am exaggerating) thought stream then it I don't want money supporting it (I don't believe global warming bull shit we are coming out of an ice age.) Slide1.png

Also if were coming out of an ice age why is so fucking cold. ;)

Also what help get us in this mess was that people bought houses and then walked away and then they didn't have to pay for it anymore (yes it hurt their credit but it was to easy to get a loan.) and everyone else ended up footing the bill and this irresponsibly caused this. Credit Cards buy know pay later (then not be able to afford but pay it off with another credit card...). I think what America needs to learn is to live with in their means and not use things that are buy it know and pay it off later because then people get into debt.

It makes me feel good that there are a lot of people around the world that understand that us US citizens hate him

Then why did you elect him? Only when the economy went to the dogs did bush start doing such a horrible job in the minds of a large amount of the American populous (I don't believe in coincidence).

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I agree with your points Razor 512 I was listening to someone on the radio (yes he was republican) and he made a point that in a capitalist country recession happen but yet let them go buy and it will be fine, its better than communism in the real world (in thought communism sounds great but in practice not so much). We should have never given "free money" to AIG or the car companies. Also for DIGIP

we don't need green technology to be a focus because of global warming (which is usually why people want it) know if it provides lower energy costs and a less expensive product sure (you save money both ways) but if its a buy it to stop the evil global warming even thought its 5x the cost(ok I am exaggerating) thought stream then it I don't want money supporting it (I don't believe global warming bull shit we are coming out of an ice age.) Slide1.png Also if were coming out of an ice age why is so damn fucking cold. ;)

It's not 100% all for global warming. That's a side effect of getting off of foreign oil. Global warming also doesn't mean that everything gets warming, climate change is more appropriate. That picture is from oism, which is a shady source. They call themselves an institute, but don't teach courses, accept students, nor an edu domain. Sketchy business..., assuming the source is accurate and we are coming out of an ice age, the worry is that it's happening too fast, not that it's happening at all.

Besides, setting up internal, renewable energy sources that create jobs and less pollution can't be a bad thing..., right?

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Also what help get us in this mess was that people bought houses and then walked away and then they didn't have to pay for it anymore (yes it hurt their credit but it was to easy to get a loan.) and everyone else ended up footing the bill and this irresponsibly caused this. Credit Cards buy know pay later (then not be able to afford but pay it off with another credit card...). I think what America needs to learn is to live with in their means and not use things that are buy it know and pay it off later because then people get into debt.

Oooh, you edited to add this.

It wasn't just America that didn't live within their means, it was several countries. The blame is half banks, half people. You sorta covered the people part, but the bank part is crucial. I don't want to explain it wrong, so I'd get the story, brilliantly told, here. Banks gave the money away to people who couldn't pay it back, so it's partially their fault too.

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