Unemployment drops to 7.8%

[_krose]

Just noticed that my preceding post is sort of a mirror image of the Reagan question above it. Interesting.

Brackite, why did you quote me and not address the issue?

[_Bob Loblaw]

I think it's ludicrous to blame a president for unemployment. It might make sense if he were a autocratic dictator, but he's not. And, in case people don't realize this, our economy does not exist in a vacuum. We've been in a global recession, and one cannot pin the blame for that on a single president, whether it's Bush or Obama.

[_Kevin Graham]

I think it's ludicrous to blame a president for unemployment. It might make sense if he were a autocratic dictator, but he's not. And, in case people don't realize this, our economy does not exist in a vacuum. We've been in a global recession, and one cannot pin the blame for that on a single president, whether it's Bush or Obama.

And yet, that is basically the entire theme of the Republican argument this election season.

[_Bob Loblaw]

And yet, that is basically the entire theme of the Republican argument this election season.

Yep. I didn't say I agreed with it.

I'm far more concerned about long-term debt, which ought to scare the bejeezus out of Americans. We have far more debt per capita than any country.

[_cinepro]

I don't blame Bush for the bad economy either, except to the extent that repealing financial regulations allowed those institutions to run wild. I do blame him for most of the deficits, because of irresponsible tax cutting while expanding military and domestic spending. Lowering taxes during wartime is unprecedented. Such ventures need to be paid for.

Do keep in mind that the Glass-Steagall Act was repealed under the Clinton administration, and that was a factor in laying the groundwork for the bubble and crash.

There's plenty of blame to go around for everyone that was in political power in the late 90's-2007. Also, don't forget the key role Fannie May and Freddie Mac played in inflating the housing bubble, and the fierce support those entities had from the Democrats on Capitol Hill.

But I agree the Bush tax cuts and unpaid wars were huge economic mistakes as well.

I also can't figure out why more people aren't freaking out about the national debt.

In the debate, the President talked about student debt, and that seems to be something more people are getting concerned about. But it's the national debt that is the problem.

Imagine if a college came up with a new student loan that allowed students to assign payments directly to their future grandchildren. So the moment their grandkids are born in the future, they immediately assume the debt and must work to pay it off at some time in their lives. And if the student has no grandchildren, then the debt could be assigned to another child years later.

That sounds preposterous, and people would go nuts at the idea, but that's exactly what we're doing right now anyway, but we're using the government as our middleman. We want the government to borrow money and give that money to students, and then that debt will be passed along to the children and grandchildren of those students, the moment they are born.

People in their teens and 20's really don't get it either. They look at the people rioting in the streets in Greece or Spain and think they're kooky Europeans, and that our country is better or different somehow (if they even think about it at all). But we have the exact same problems they do, only it will be another few years or decades before we get there. But it's going to be on their shoulders. They make themselves feel better by complaining about "the 1%", but no one ever mentions that even if the "1%" were taxed at a 99.99% tax rate, it wouldn't come close to solving the problem.

Absolute insanity, I tell ya.

[_Kevin Graham]

Do keep in mind that the Glass-Steagall Act was repealed under the Clinton administration, and that was a factor in laying the groundwork for the bubble and crash.

Very true, but the repeal was orchestrated, if memory serves, by Senator Phil Gramm, a Republican. He managed to convince the Clinton administration that this would be a good thing. Boy were they all wrong. But perhaps more importantly, the derivatives market was completely deregulated. It was a "dark market" of something like 14 trillion that the government had absolutely no authority to regulate because the Right Winging, "anti-regulation" types in the Treasury dept were blackballing the only woman, Brooksly Born, who saw the dangers it posed. She had the authority to do something about it and tried, but Greenspan and his Ayn Rand crusaders went after her for daring to bring common sense to the Senate floor. In the end no one listened to her and we all suffered for it.

This is a must watch PBS documentary for anyone wanting to understand the groundwork for the collapse. It explains what she had to go through, how she warned the government about an imminent danger of unregulated derivatives, etc:


http://video.pbs.org/video/1302794657

[_Kevin Graham]

I also can't figure out why more people aren't freaking out about the national debt.

Because the only downside to deficit spending is the potential for inflation, which just isn't happening.

[_Kevin Graham]

People in their teens and 20's really don't get it either. They look at the people rioting in the streets in Greece or Spain and think they're kooky Europeans, and that our country is better or different somehow (if they even think about it at all). But we have the exact same problems they do, only it will be another few years or decades before we get there.

You're not really suggesting our debt could lead to the same problems Spain and Greece are facing, are you? We issue our own currency, they don't. That's the difference. They literally have to go out and borrow money using currency provided by the EU. We don't. Contrary to popular myth, we don't go beg China to lend us money. Too many people make the mistake of thinking our Federal budget is something like a household budget.

[_Bob Loblaw]

Because the only downside to deficit spending is the potential for inflation, which just isn't happening.

Tell that to Greece.

[_Bob Loblaw]

You're not really suggesting our debt could lead to the same problems Spain and Greece are facing, are you? We issue our own currency, they don't. That's the difference. They literally have to go out and borrow money using currency provided by the EU. We don't. Contrary to popular myth, we don't go beg China to lend us money. Too many people make the mistake of thinking our Federal budget is something like a household budget.

The US government sells Treasury bills to finance its debts. Here's a breakdown of our debt:

Federal Reserve and Intragovernmental Holdings: U.S. debt holdings: $6.328 trillion

China: U.S. debt holdings: $1.132 trillion

Private debtholders: U.S. debt holdings $1.107 trillion

Japan: U.S. debt holdings: $1.038 trillion

Pension funds: U.S. debt holdings: $842.2 billion

Mutual funds: U.S. debt holdings: $653.5 billion

State and local governments: U.S. debt holdings: $484.4 billion

United Kingdom: U.S. debt holdings: $429.4 billion

Depository Institutions: U.S. debt holdings: $284.5 billion

Insurance companies: U.S. debt holdings: $250.1 billion

True, the federal government can print money, but most of the debt is held by other entities than the federal government, including foreign countries. And these investors expect to be paid back.