What will the world be like WITHOUT America the economic superpower?

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China’s economy will be bigger than ours in just 5 years according to a new IMF analysis. By the year 2016, the purchasing power of the US economy will be $18.8 trillion – and China’s will be $19 trillion. Our reign as an economic powerhouse will end sooner than any of us predicted. The downward spiral starting with Reaganomics in 1981 and the explosion of free trade in the 1990’s has now reached terminal velocity today.

We need to start asking ourselves the tough questions, “What will the world be like WITHOUT America the economic superpower?” or "How do we get rid of Reaganomics?"

Thom Hartmann Administrator's picture
Thom Hartmann A...
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"How do we get rid of Reaganomics?"

We succeed.

"Conservatives" will not defeat us, but we may defeat ourselves with our own circular firing squads.

Success will breed more success. Rome is not built in a day.

Rosenthal's picture
Rosenthal
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Jul. 31, 2007 3:01 pm

I think that 2016 is a VERY optimistic outlook, lol, the US economy is going to fall apart long before 2016.

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Cheesebone
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Sep. 1, 2010 8:18 am
Quote Cheesebone:

I think that 2016 is a VERY optimistic outlook, lol, the US economy is going to fall apart long before 2016.

"lol?"

You think this is funny?

???

Of course you have no idea what will happen in the next five years, but, really, you find the prospect of our economic failure to be a laughing matter?

Rosenthal's picture
Rosenthal
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Jul. 31, 2007 3:01 pm

We have some serious problems but lack of wealth is not one of those problems. Our nation is worth what, exactly? Upwards of $300 trillion? That's what? $300 trillion?

Thom, the diminution of the value of labor is an old problem, only exasperated by cheap overseas labor. We fought the civil war over what? Arguably it was over the diminution in the value of labor because of the institution of slavery. Since then technology has steadily eroded the value of labor. We can produce more and more goods and services with fewer and fewer people. For example how many dockworkers' jobs have been lost to the advent of containers?

These are forces that will eventually overtake the Chinese. Yes, their GDP is growing faster than ours but they have serious infrasture issues to address as they are not really a developed nation, yet.

I have been wondering for years about the broader issue here. We can produce more and more goods and services with fewer and fewer people, so who can buy the goods and services? We are a consumer-oriented economy, so this trend is potentially earth-shattering. It is a game changer, but to what game exactly?

What happens when, like Star Trek, you can go to a machine and just ask for something and the machine fabricates it for you from the available atoms on the spot?

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Rosenthal
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Jul. 31, 2007 3:01 pm
Quote Rosenthal:
Quote Cheesebone:

I think that 2016 is a VERY optimistic outlook, lol, the US economy is going to fall apart long before 2016.

"lol?"

You think this is funny?

???

Of course you have no idea what will happen in the next five years, but, really, you find the prospect of our economic failure to be a laughing matter?

The fact that our economy is going to suffer a MASSIVE, unavoidable blow, is not funny at all. The part I think is funny is how people seem to think that we can avoid it, ESPECIALLY if we just apply more government, then we can regulate everything back into balance, lol.

This US borrow-and-spend economy is on it's last breath, we're going to go through a very, very deep and painful change in living standards for virtually everyone here in this country. In the mean time, all the resources and goods we used to siphon out of the global economy for our own use, are now going to be freed up for the rest of the planet to use. It's not like these goods are going to just vanish when the US stops demanding them - believe me, the rest of the world wants these goods too, and when we're too broke to buy them up, they'll become more affordable for everyone else.

One thing WILL happen - severe economic shift here in the US. One of two things are going to happen after that:

One - the government will let the recession/depression run it's course, and allow the economy to restructure itself into an entity that once again produces FOR it's own population instead of relies on other countries for goods production, which ultimately means massive slashes in Federal Budgets because revenues from taxes will be heavily diminished, no debt-ceiling hikes, no wars, no new programs...

Two - the government will intervene, continue to spend money at it's current rate, finance it all through the FED because nobody else will want to buy up our bonds, and they will buy a few more years of "happytime" at the expense of destroying the currency, which will ultimately result in the most painful form of economic disaster that any country can deal with.

My fears are that #2 are the most likely.

Cheesebone's picture
Cheesebone
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Sep. 1, 2010 8:18 am
Quote Cheesebone:The fact that our economy is going to suffer a MASSIVE, unavoidable blow, is not funny at all.

It's neither funny nor a fact. Take your place in the long line of gloomers and doomers.

Quote Cheesebone:The part I think is funny is how people seem to think that we can avoid it, ESPECIALLY if we just apply more government, then we can regulate everything back into balance, lol.

So you think we need to just give up just because you say so? And you think that's funny?

Quote Cheesebone:This US borrow-and-spend economy is on it's last breath, we're going to go through a very, very deep and painful change in living standards for virtually everyone here in this country.

The "US borrow-and-spend economy" is a nice bumper sticker slogan. A lot of people buy into bumper sticker slogans. I don't. What exactly is the mechanism you're trying to refer to here? Conclusions aren't good enough. Even your conclusions aren't good enough.

Quote Cheesebone:In the mean time, all the resources and goods we used to siphon out of the global economy for our own use, are now going to be freed up for the rest of the planet to use.

The first and most powerful thought that comes to my mind after reading this is STFW. It seems to me that increased demand, from an economic perspective, is a good thing. From and environmental perspective not so much.

Quote Cheesbone:It's not like these goods are going to just vanish when the US stops demanding them - I believe me, the rest of the world wants these goods too, and when we're too broke to buy them up, they'll become more affordable for everyone else.

More STFW.

Quote Cheesebone:One thing WILL happen - severe economic shift here in the US.

Sez you. Still just a bare assertion though.

Quote Cheesebone:One of two things are going to happen after that:

One - the government will let the recession/depression run it's course, and allow the economy to restructure itself into an entity that once again produces FOR it's own population instead of relies on other countries for goods production, which ultimately means massive slashes in Federal Budgets because revenues from taxes will be heavily diminished, no debt-ceiling hikes, no wars, no new programs...

Two - the government will intervene, continue to spend money at it's current rate, finance it all through the FED because nobody else will want to buy up our bonds, and they will buy a few more years of "happytime" at the expense of destroying the currency, which will ultimately result in the most painful form of economic disaster that any country can deal with.

My fears are that #2 are the most likely.

???

I admit that I don't understand all of the implications of moving from a manufacturing economy to a service economy. However you assume that "value" somehow resides exclusively in physical manufacturing.

This is patently untrue. More and more "value" is in information. One factor that is lost in the outsourcing debate is that actual manufacturing has less and less value. One reason why we are so much more productive today is because we have outsourced the low value manufacturing, and now have more of the higher value activities like sales.

I don't see outsourcing as a problem in and of itself. There is no magic in manufacturing as far as I can tell. The problem, it seems to me, is that outsourcing has rendered our economy more specialized and less diversified. Some people need the heavy lifting jobs. Well, there are not as many of those now. How do these people earn a living?

Moreover the less diversified we are, the more vulnerable we are to the business cycle. With fewer sectors to lead us out of recessions, we're just more vulnerable.

Where does Ricardian international trade theory fit into your cosmology?

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Rosenthal
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Jul. 31, 2007 3:01 pm

Cheesebone and I both agree the U.S. is headed for a massive economic blow. We just disagree on the causes/solutions.

A huge and permanent economic underclass will be the end result.

As the conservative economist Paul Craig Roberts notes:

"The American working class has been destroyed. The American middle class is in its final stages of destruction. Soon the bottom rungs of the rich themselves will be destroyed." - http://www.counterpunch.org/roberts11082010.html

That's been by intentional policy, not by accident. The policy remains intact.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm

I admit that I don't understand all of the implications of moving from a manufacturing economy to a service economy. However you assume that "value" somehow resides exclusively in physical manufacturing.

Well, simplify things a bit. Let's say there was no currency at all, just your country, and my country. You were relatively efficient at producing the things you needed, and therefore really didn't need my help at all. However, my country has taken a liking to oranges. Unfortunately, oranges aren't really indigenous to the area that my borders cover, and don't grow well there. Your country has GREAT capability for growing oranges, though. So I ask you "hey, can we have some of your oranges?" Obviously, unless you were currently producing so many oranges that they were simply going to waste, you'd want something in return for your production, right?

But if my country doesn't have anything to offer you, then there likely won't be any oranges coming over my borders. We need to produce something that you want, that you currently don't have, or can't produce that well on your own, and trade that for your oranges.

The downfall of the barter system, like this, is that if you grow oranges, and say - you want bananas, you have to find someone who has bananas and wants oranges. That's why currency is almost "necessary", because it really simplifies trade by creating an accepted medium of exchange for virtually any good or service available. The guy with the oranges no longer needs to find someone with bananas who WANTS oranges, he can just give the guy with bananas (who maybe wants apples) some currency, and get bananas in exchange. Likewise, the guy with bananas can now go buy apples with the money exchanged for his bananas.

The fact is that, this currency would have NO VALUE to another country if there wasn't any production behind it in the first place. Currency is a claim on a given amount of production within a particular country, then. Likewise, if my country came up to yours and said "here, I printed up these dollars, so now let me buy some of your oranges" - you'd have to ask "well, what can I buy from you with these dollars that I don't already have on my own?" Again, if I can't give you anything in exchange for these dollars that you don't already have - the trade simply doesn't make sense. The currency is essentially worthless to you, and is only really any good as a medium of exchange for the people in my own country.

Take this and apply it to the US, now. You, as everyone here, probably understand that our general manufacturing base has virtually evaporated. So much of our consumer goods, clothes, toys, pens, furniture, electronics, car parts, oil, packaging, appliances, you name it.. SO MUCH of it is now produced overseas. Eventually, these people are going to have to ask "what can I buy with these dollars in the US market, that I can't already make for myself?"

And as our monetary policy continues to increase the global supply of US dollars, these dollars lose value and purchasing power, making the hard work of other countries less and less rewarding if they are paid the same nominal amount for their production.

This process WILL NOT last much longer, it's on it's last breath right now and it won't be long before other countries get tired of giving us the goods they make, that they they could be consuming, in exchange for little green pieces of paper that are worth less and less every time they look at them.

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Cheesebone
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Sep. 1, 2010 8:18 am
"lol?" You think this is funny?

I think Cheesebone has done an excellent job answering this for him/her self. With that said, I just want to say I'm not answering this for him/her.... ...but, solely for me.

I don't think an economic collapse would be funny. I think it would be just the opposite. I think it would be ugly, chaotic and possibly evolve into something violent.

Now, what I do think would be funny is to be a fly on the wall to observe the reactions of the pathetically short-sighted dumb sums of greedy _________. Feel free to leave the blank - well, blank. There's a lot of interesting info out there if one does a couple of engine searches for "sums of greedy...."

It may take an intelligent abstract minded "thinker" to see parallels. But, that's what I think is cool about this forum. There seems to be an abundance of intelligent abstract minded "thinkers". :)

Anyway, as I was saying - "I'm the kind of gal that laughs at a funeral..." and I do think it would be funny to watch the way the pathetically short-sighted dumb sums of banksters, (that played a part in getting us here), would react to their self induced, (justified as "piss on the lower order"... ...err I mean "trickle down"), economic downfall, if it does in fact come to that.

bonnie
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Jul. 31, 2007 3:01 pm

There's humor in virtually anything if you squint hard enough, hehe. I think the little example I provided above paints a picture and helps expose the real dangers of our current economy. The reason we've been able to last as long as we did, is because we USED to be able to back our currency up with extremely high levels of production of the highest quality, lowest cost goods on the planet. On top of that, we were on a gold standard. And because of those characteristics, we had the privilege of owning the reserve currency for the globe - accepted virtually everywhere. That perception will change here as people realize we can't give them anything for their dollars anymore, and when no one wants them for currency, we'll be stuck producing for ourselves while at the same time having very little manufacturing base to start with.

This, isn't "Austrian Theory" or Keynes, or anything like that, this is simply basic economics, at it's core. It's one of those examples that I can type up virtually anywhere and get a "that makes sense" response, haha.

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Cheesebone
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Sep. 1, 2010 8:18 am

From the Economist: http://www.economist.com/node/18620710

Excerpts:

The first failing, of which Mr Obama in particular is guilty, is misstating the problem. He likes to frame America’s challenges in terms of “competitiveness”, particularly versus China. America’s prosperity, he argues, depends on “out-innovating, out-educating and out-building” China. This is mostly nonsense. America’s prosperity depends not on other countries’ productivity growth, but on its own (actually pretty fast) pace. Ideas spill over from one economy to another: when China innovates Americans benefit.

Of course, plenty more could be done to spur innovation. The system of corporate taxation is a mess and deters domestic investment. Mr Obama is right that America’s infrastructure is creaking (see article). But the solution there has as much to do with reforming Neanderthal funding systems as it does with the greater public spending he advocates. Too much of the “competitiveness” talk is a canard—one that justifies misguided policies, such as subsidies for green technology, and diverts attention from the country’s real to-do list.

Meanwhile, the biggest dangers lie in an area that politicians barely mention: the labour market. The recent decline in the jobless rate has been misleading, the result of a surprisingly small growth in the workforce (as discouraged workers drop out) as much as fast job creation. A stubborn 46% of America’s jobless, some 6m people, have been out of work for more than six months. The weakness of the recovery is mostly to blame, but there are signs that America may be developing a distinctly European disease: structural unemployment.

Youth unemployment is especially high, and joblessness among the young leaves lasting scars. Strong productivity growth has been achieved partly through the elimination of many mid-skilled jobs. And what makes this all the more worrying is that, below the radar screen, America had employment problems long before the recession, particularly for lesser-skilled men. These were caused not only by sweeping changes from technology and globalisation, which affect all countries, but also by America’s habit of locking up large numbers of young black men, which drastically diminishes their future employment prospects. America has a smaller fraction of prime-age men in work and in the labour force than any other G7 economy. Some 25% of men aged 25-54 with no college degree, 35% of high-school dropouts and almost 70% of black high-school dropouts are not working (see article).

Beyond the toll to individuals, the lack of work among less-skilled men could have huge fiscal and social consequences. The cost of disability payments is some $120 billion (almost 1% of GDP) and rising fast. Male worklessness has been linked with lower marriage rates and weakening family bonds.

All this means that grappling with entrenched joblessness deserves to be far higher on America’s policy agenda. Unfortunately, the few (leftish) politicians who acknowledge the problem tend to have misguided solutions, such as trade barriers or industrial policy to prop up yesterday’s jobs or to spot tomorrow’s. That won’t work: government has a terrible record at picking winners. Instead, America needs to get its macro-medicine right, in particular by committing itself to medium-term fiscal and monetary stability without excessive short-term tightening. But it also needs job-market reforms, from streamlining and upgrading training to increasing employers’ incentives to hire the low-skilled. And there, strange as it may seem, America could learn from Europe: the Netherlands, for instance, is a good model for how to overhaul disability insurance. Stemming the decline in low-skilled men’s work will also demand more education reform to boost skills, as well as a saner approach to drugs and imprisonment.

Technology and globalisation are remaking labour markets across the rich world, to the relative detriment of the lower-skilled. That’s why a rosier outlook for America’s economy does not necessarily mean a rosy future for all Americans. Mr Obama and his opponents can help to shape the process. Sadly, they are doing so for the worse rather than the better.

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Coalage
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Jul. 31, 2007 3:01 pm

The Great Thom Hartman says "We need to start asking ourselves the tough questions, “What will the world be like WITHOUT America the economic superpower?” or "How do we get rid of Reaganomics?"

Actually, total GDP is not a real good measure of an economic superpower. A number for 2008 shows GDP of Europe is larger than the US:

http://politicalcalculations.blogspot.com/2010/01/battle-of-titans-us-vs...

Per Capita GDP of developed nations is a better measure. And the US is still far ahead of China, and in fact one of the highest in the world. But that is probably due to unequal nature of income in the US - which is the real problem of free trade.

By spending the majority of our income taxes on defense, we are still a 'superpower' in the military sense, although you have to wonder how long that will last as we loose our dominance in manufacturing.

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Dr. Econ
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Jul. 31, 2007 3:01 pm

See, my perspective is that much of our GDP is completely phony. Compare our GDP (even per-capita) to other countries and yes, nominally, it's generally going to be larger. But look at how much of our GDP is consumption based (over 70%), and I think the light starts to shine brighter on our facade of prosperity.

The reason why our GDP looks so good (and keeps looking better, nominally) isn't because we're actually producing things and creating real economic growth. We're merely spending more borrowed dollars on goods that we didn't produce, and annually paying more for those goods as a result of rising prices due to inflation and a weaker dollar.

So yes, you can split up GDP across our population and come up with a figure of roughly $45,000 per person, but the reality is that much of that figure is an illusion.

What's going to happen to our GDP when China stops vendor-financing the USA, and decides they'd be better off consuming the goods that they're making for us instead of just shipping them here and lending us the money to pay for them?

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Cheesebone
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Sep. 1, 2010 8:18 am

Cheesebone, I would like to know where you got your your stats here. This is not to say you are right or wrong, and definitely not that you made anything up in #14. The specific things you are saying are about something interesting. I would like to help find a solution to the situation you are describing!

micahjr34
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Feb. 7, 2011 3:57 pm

Well, it's basic math, really. The 2010 GDP is estimated at like 14.7 trillion dollars. There are 308 million people in the US. So, divide it up.. 14.7 trillion divided by 308 million comes out to about $47,000 per person, so it's a little bit more then the figure I just kinda whipped out previously.

Just did a search on USA GDP and this is coming right from the wikipedia page:

"In 2009, consumer spending, coupled with government health care spending constituted 70% of the American economy."

For more reference, here's a link to the CIA World Factbook - you can read up on more of the details by selecting the "Economy" section, but here's a direct quote from there:

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

GDP - composition by sector:agriculture: 1.2% industry: 22.2%services: 76.7% (2010 est.)

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Cheesebone
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Sep. 1, 2010 8:18 am

When it comes to government healthcare, the required funds can be generated by a combination of three things: raising taxes, borrowing money, and/or printing up money. I know that deficits come and go, and I know that you are against a large scale government healthcare nationwide, Cheesebone. While it is very important to me that people get the healthcare they need (not necessarily the healthcare they want), I do acknowledge to you that if such a system is set up in a way that does not account for inflation, interest rates, and budget deficits, it could make things worse. I do not wish to alienate people, but as I have stated elsewhere, sometimes a person has to risk doing so in order to tell the truth as they see it.

micahjr34
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Feb. 7, 2011 3:57 pm

When it comes to potentential problems with such government healthcare, this is a situation where I actually hope that I am wrong!

micahjr34
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Feb. 7, 2011 3:57 pm

Well, regardless of whether or not the government spent money on health care, or the private sector spent the money on health care, the expenses are still there and it results in over 70% of our GDP being comprised of consumption. Other countries have health care expenses as well, and they manage GDP consumption rates MUCH closer to levels that are healthy for an economy.

Another thing to remember, is that when the government spends money on health care - where does that money come from? Well, like you said -it's either borrowed, or taxed (or printed). Either way, it's money that had to be earned elsewhere and essentially siphoned out of the private sector first.

You have to remember that the service sector would be virtually nonexistent without a productive sector first.. our 70+% service economy is dependent on the production of the rest of the world to survive. That's the real turd in the punchbowl.

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Cheesebone
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Sep. 1, 2010 8:18 am

My example in post #9 kinda helps clarity that too, I think..

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Cheesebone
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Sep. 1, 2010 8:18 am

If what you are saying is true, then people like me who do support government healthcare or at least government assistance for the poor, really need to "kick butt" against waste and inefficiency in healthcare so that healthcare expenses can get low enough with out hurting the rest of the economy.

micahjr34
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Feb. 7, 2011 3:57 pm

Well, lol this is going to turn into a debate for a different topic if the health care subject becomes the focus. But (and obviously the heavy-hitters here will disagree with me) I see the problem with exploding health care costs resulting from government interference and distortion in the market itself. People love to say "look how the health care industry has screwed us all over because of their manipulation of the free market", when the reality is that the US health care system is about as far from a free-market as ANYTHING ELSE in our economy.

An excellent couple of examples, is to look at the only two areas of health care where prices are continually dropping, while quality has consistently risen - Lasik eye surgery, and cosmetic surgery. Wonder why they have managed to provide better services at lower costs, while the rest of their industry sees prices going up by the day? It's because those service aren't covered by insurance. People shop around because it's THEIR money they're spending on the procedure. These businesses need to stay competitive, or else they will fail.

With so many tax incentives and essentially government subsidization of health insurance through the tax code, it's encouraged an abuse of the health insurance system and created an environment where nobody cares about procedure prices anymore - all they care about is coverage.

Waste and inefficiency are certainly problems in the health care field - but you have to wonder why they haven't had similar effects on the Lasik and Cosmetic surgery markets (and driven prices up in parallel) if these sectors would obviously be exposed to the same amounts of "waste & inefficiency".

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Cheesebone
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Sep. 1, 2010 8:18 am

When it comes to plastic surgery and Lazik, people can spend their own money. What I am talking about is that if a person has a problem with their eyesight they can receive help in buying eyeglasses if they don't have the money. Also, when it comes to plastic surgery, a person who thinks that they look old, ugly, or whatever can spend their own money. Ifa government healthcare system is to work, then there can be no fancy stuff. What is needed to stay alive, not stuff that adds to comfort.

micahjr34
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Feb. 7, 2011 3:57 pm

What I am saying is a dual healthcare system. There is public care that gives you what you need to stay alive. This is what will be paid for in taxes. Everything else would be "elective" and will have to be paid for by the person who wants it.

micahjr34
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Feb. 7, 2011 3:57 pm

Exactly, the point I make is that if people spend their own money, they care about the cost. When people flash an insurance card - they could care less how much anything costs. Someone else is paying for it and they just want service NOW. If government provides the funding, then you can guarantee prices will absolutely explode.

The way I would have things, health care costs would be so cheap that you wouldn't NEED insurance to cover things like basic medical checkups, minor emergencies (broken arms, the flu, etc..) primarily because there would be legitimate competition driving prices DOWN instead of UP.(Kind of like how things used to be)

And yes, of course I think that our government should be able to provide aid for the destitute & very financially strapped, but that's what welfare should be. There's no need to try and create different departments for all the different things that the poor need to spend money on.. just pool it into one big thing and call it welfare.

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Cheesebone
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Sep. 1, 2010 8:18 am

WOW!!!!!!!!!!!

If that is the case, then I have no argument with you! If you support a form of welfare where the poor and destitute are given money to pay for minimal medical needs such as eyeglasses, emergency surgery, minimal surgery to prevent emergency surgery, and stuff like that, then you are welcome to come to my house anyday for a picnic and barbecue. If I made myself more specific, then we could have settled this long ago! We have more similarities than differences!

micahjr34
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Feb. 7, 2011 3:57 pm

I think that we all have a lot of similarities in the grand scheme of things.

And, truth be told, when it comes to medical emergencies - people are very, very rarely turned away even in today's current system. I kind of dated a girl (and am still friends with her) in the end of 2009 who is an ER nurse in a suburb of Chicago, lots of mixed-race population in that area, as well as lots of diversity in incomes. There are million dollar houses and only a couple miles away, low-income housing buildings as well. She cannot recall a single time that she can think of where a person came in requiring immediate medical attention, and was turned away because they were uninsured and had no means of paying for it. (Believe it or not, this includes self-induced emergencies such as drug & alcohol overdoses and many of those are repeat-visitors, sometimes homeless people who end up there a few times a month!) People DO take care of other people in this country, republicans, democrats, anarchists, & libertarians alike.These petty differences get pushed aside when you realize someone actually depends on you for survival.

The services are administered and *then* the finances are examined - in many cases, there is simply no way to charge the patient because there is no chance at all that they have any means of paying even a small percentage of the bill. The idea that government is REQUIRED to cover these services is a farce, although I do believe that it's still in the benefit of the poor to allocate an amount of funds for that particular purpose.

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Cheesebone
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Sep. 1, 2010 8:18 am

Cheesebone, I have misjudged you and I guess I could have communicated myself better. When I said that people like me need to "kick butt" when it comes to waste in healthcare, I was refering to a "dual healthcare system." I was refering to having a no frills "plan" for the poor so that they could have eyeglasses, bad teeth pulled, etc. Even when it comes to my own family, which many are poor or borderline poor, I was refering to a "dual system."

PLAN A: Everything you need to stay alive. Any care you receive is designed to keep you out of the emergency room.

Plan B:If you have enough money to pay for your own care, why are you coming to the government for help?

micahjr34
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Feb. 7, 2011 3:57 pm

Dialog works wonders. No wonder people who refuse to communicate with each other eventually fight. I just figure that with out this dialog, you would not have understood me thoroughly, and I would not have thoroughly understood you. This is like a rosetta stone!

micahjr34
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Feb. 7, 2011 3:57 pm

Cheesebone, I've done some thinking, and while the scenario we discussed above seems to make some sense, I have come up with some problems. First of all, my goal is that everyone have some sort of basic healthcare. The problem is with creating a medical system that can handle that load of people and distribute medical resources in a way that will not make things worse. Another problem with government paying for the medical of the poor is that it leaves the middle class high and dry. I can possibly understand making the "rich" pay for their insurance, but if the lowest classes get their healthcare paid for in that situation, would it not be fair to pay for the care of the middleclass, too? If that is the case, then why not go full "universal healthcare?" Another problem arises when it comes to deciding who is poor and who is not poor in determining the allocation of resources. I mean if a person earns just a few hundred dollars more than the limit of being poor, they can lose thousands or more than that on their hospital bill! I know that you meanwell, Cheesebone, and what you say does make some sense, but I am going to reconsider because the situation is very, very messy.

micahjr34
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Feb. 7, 2011 3:57 pm

Cheesebone, I mean, when I talk about government money being used to help with the medical needs of a people, I mean no frills. If something isn't essential, that person can pay for it with their own money. No Lasik, or plastic surgery, and other stuff like that, because it is cosmetic in nature, except with the lasik it is for fixing your eyesight without glasses.

The philosophical defense I have for trying to find a way to get basic healthcare for all is as follows:

**When people go to the doctor on a regular basis, there is less need for them to go to an emergency room on an irregular basis. The doctor can notice small problems before they get sick. Also, if everyone was in the same system, it would reduce the administrative needs because they do not have to go to insurance after insurance after different insurance. Also, a competent government watches over the health of its citizens because sick citizens don't work, and citizens who do not work pay less in taxes because instead of working, they stayed home sick. Finally, if a person who is sick and goes to work because they have no care, then they risk spreading it to others. By insuring people, those with contagious disease can be intercepted early.

micahjr34
Joined:
Feb. 7, 2011 3:57 pm

A person might ask me if I think that healthcare is a "right." I would honestly have to say yes and no, that the matter is not that simple. Actually, it is in the self interest of a government to help take care of its citizens because:

**By pre-empting people from going to the emergency room, lots of money is saved. **By making sure that its citizens stay healthy, a government protects it revenue because sick people don't work. Also, when people are sick, they have a tendency to spread it to others, so it is within the self interest of a government to monitor the health of its citizens.

This is a repeat of what I said above, except I am stating it from the perspective of government.

micahjr34
Joined:
Feb. 7, 2011 3:57 pm

Cheesebone, however I can see a problem with universal healthcare, even if it is a modified dual care, and that is with the right to privacy. For example, I said that it is within the self interest of a government to help people with sickness. But what if that government actually tries to control behavior in the process? What if a government starts to send inspectors to everyone's home to inspect their kitchens and actually punishes people for a messy home? What if the government tries to sterilize people with cancer so that they don't have offspring with future cancer? Cheesebone, you could probably rip a big hole in government administrated medicine over the potential for privacy invasion by itself.

micahjr34
Joined:
Feb. 7, 2011 3:57 pm

The only scenario I see where disaster is avertied is where the labor-intensive fields of home renovation and small scale agriculture grow as employment sectors. I'm guessing that the bailouts served the purpose of insulating the banks against deflation for a long time, as is the creation of dollars as well as the raising of interest rates.

The question is whether those who are employed have an incentive to employ others because the "big" employers don't. A person who owns a home will want two things. First, to work less. Second, to increase the value of their property. The latter will often be in the form of "greening" a home, but also in simply upgrading it in various ways. The quantum of productivity represented by the number of fewer hours worked by the homeowner is represented as value in proportional relation to the number of dollars paid to the worker who renovates the home. The value of the dollars represented to the worker whose incentive to work is in the form of obtaining a home is however greater than that represented to the homeowner for whom these funds represent disposable assets. The difference has to be adjusted for through government action such as rent control and rezoning, and possibly the seizure of bank-owned assets where the price of housing is being maintained through vacancy. The homeowner will want to continue working if he/she can recieve a high value for the labor of the person he/she employs.

If things go our way, banks and capital will have less of an ability to take advantage of the waning days of dollar supremacy on the world market. They will be forced to insulate against their losses within the domestic economy. We will be stuck with high interest rates. The key to avoiding a collapse therefore is to prevent the emergence of a barter economy.

First, we have to tackle immigration reform in a fair manner. Second, we must gaurd against overregulation of organic agriculture. People must be able to grow and sell their own food. The profits from this activity will be deposited in the banks, helping to prevent deflation.

Am I right or am I right? I mean left.

nimblecivet
Joined:
Jul. 31, 2007 3:01 pm

You have a point in saying that we as a country need to start doing more "blue collar work" and not be afraid to do jobs that raise up a significant sweat, like what you are proposing. However, I see currency inflation as worse than deflation.

micahjr34
Joined:
Feb. 7, 2011 3:57 pm

Considering that there are 1.2 BILLION people in China and only 300 million in the USA. I don't think the American economic market will be missed in the world, when China becomes the world economic power.

Personally, I think it may be better for the planet as a whole if the American standard of living fell. I mean currently the USA is the largest polluting nation per capita in the world. I guess the one benefit of life becoming more expensive for most Americans, it will result in less waste and damage by the USA.

Of course, China is the BIGGEST polluter in the world. So their improved living standards may not be so great for the global environment.

PS. Regarding the never ending health care debate. Health insurance is a major reason why the US economy is not able to compete as well. Even China has had enough sense as to implement a socialized health care system for all its citizens!

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meljomur
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Jul. 31, 2007 3:01 pm
Quote meljomur:

Considering that there are 1.2 BILLION people in China and only 300 million in the USA. I don't think the American economic market will be missed in the world, when China becomes the world economic power.

Personally, I think it may be better for the planet as a whole if the American standard of living fell. I mean currently the USA is the largest polluting nation per capita in the world. I guess the one benefit of life becoming more expensive for most Americans, it will result in less waste and damage by the USA.

Of course, China is the BIGGEST polluter in the world. So their improved living standards may not be so great for the global environment.

And here's one of those rare moments where I grab your hand and we skip through a field of daisies, haha. Spot-on. I have some friends from your neck of the woods who will be visiting soon - they're quite pleased with the US Dollar Index right now, haha, they're getting a great exchange rate for their visit here!

As for the health-care thing, I can completely understand why people want to take the position that health care is a RIGHT. The problem I have with that, is that health care is a service. So, if a service becomes a right, then providing that particular service becomes an OBLIGATION for someone else.

THAT is not something I support, by any means.

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Cheesebone
Joined:
Sep. 1, 2010 8:18 am

Cheesebone says "The reason why our GDP looks so good (and keeps looking better, nominally) isn't because we're actually producing things and creating real economic growth. We're merely spending more borrowed dollars on goods that we didn't produce, and annually paying more for those goods as a result of rising prices due to inflation and a weaker dollar."

The trade deficit is 300 billion. It has fallen since 2008. At anyrate, we have a 14 trillion dollar economy. a 2% increase in GDP is roughly the size of the current trade deficit. In order for the economy to increase 2.5% each year, the trade deficit would have to double, which is ridiculous. Hence, the nations growth is not due to the increase in the trade deficit.

Mind you, continually borrowing money and seeling off US assets is a real long run problem but it is not responsible for the growth in GDP.

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Dr. Econ
Joined:
Jul. 31, 2007 3:01 pm

Cheesebone, there is one potential solution to the problem of healthcare being a service or being a right. I remember seeing a news story on the tv once, probably before you were born. There was a fairly big, but not huge church that many members with medical needs. All of the members were sick, literally or figuratively, with both government medicine and private health insurance. So, they formed their own church based insurance where all the members chipped in, whether they were sick or not. It was sort of like a joining a credit union instead of a bank, but it dealt only with medical care. I am not a church member, but if I could join an insurance group that acted more like a credit union instead of a bank, I just might join! For profit healthcare is nothing but trouble, but you are right Cheesebone about the potential problems of the other side exercising too much power.

micahjr34
Joined:
Feb. 7, 2011 3:57 pm

Wait a minute! Didn't I hear this from Schultz and TH before? Its funny how the memory works! I give both Shultz and TH credit, and the nameless others before them ... !

micahjr34
Joined:
Feb. 7, 2011 3:57 pm

At some point people should understand that the productive sectors of the economy support the service sectors.

Someone mills the lumber,, mines ore,, creates steel,and forms it into plumbing,. Someone creates copper wire for electric supply and builds the mechanical equipment to construct a house for a bankster., doctor or teacher in the service sector.. Productive agriculture feeds them..Someone builds the transport to haul their food to the market.

Until an economy generates the capability to provide for a service sector...there isn't any service sector. Historical fact.

Service sectors are totally reliant on the productive sectors..

Retired Monk - "Ideology is a disease"...

wire.

polycarp2
Joined:
Jul. 31, 2007 3:01 pm

Very true Polycarp2! Very true. Suggestions?

micahjr34
Joined:
Feb. 7, 2011 3:57 pm
Quote Thom Hartmann Administrator:

...“What will the world be like WITHOUT America the economic superpower?”

Who knows?- no one will have money to travel

nimblecivet
Joined:
Jul. 31, 2007 3:01 pm

Polycarp smashed the nail right on the head with that last post, and essentially mirrors a point I made in post #19.

There are a few rare instances where a service economy is a successful venture, but these are very small locations that are generally tourist hotspots, (like Hawaii, Las Vegas, or southern Florida, for example... these areas have such a natural appeal for vacation purposes that people simply visit and consume there, there is an influx of money not from the exchange of goods, but because people are willing to travel TO them FOR those services). It's a bit of a twist on words, but to a degree these areas "export" their services by "importing" their customers.

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Cheesebone
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Sep. 1, 2010 8:18 am

Just out of curiosity Poly. Where would all of that production go if the service sector were removed from the picture? I am wondering who would buy all that lumber, food, equipment, etc without all those teachers, doctors, etc. Perhaps the relationship between the service and labor sectors is symbiotic. Just as the service sector would fade away without labor, the labor sector would fade away without services. Without the banks, there would be no homes or markets for labor's products. Without teachers, labors would lack the people capable of doing the work. Without doctors, labor would lack people. I see the street as being two way, and I am not sure how defining one sector as more important than the other is helpful to the economy.

Cheesebone, the first service economies I thought of were Manhattan and Washington DC. Although they both have tourist attractions, tourism is not the main economic entity, nor are they small. How would you picture them fitting into your description? Personally, I would like to see them both diminish their "services" to the rest of the nation.

Paleo-con
Joined:
Jul. 31, 2007 3:01 pm

/keiser-report/gold-breakdown-finance-development/ if you ffw to about 18.00 minutes in Keiser discusses the coming collapse. Peter Schiff is mentioned.

There are other services than hamburgers & fries. Plumbers, electricians, toolmakers, and trades with apprenticeship are not being outsourced. Engineers are still in short supply because people want to go in to finance, the Madoff economy. [where theft is legal, and degreed learn fraud]

70-80% of the country want to raise the taxes on the rich, why is that so hard to understand. Get out of Iraq/Afghanistan, open part D medicare to international drug imports, raise the taxes to Clinton rates on the over 250K and slide the fica to cover 90% of income levels as Reagan did. IMF changes their ratings, US dollar keeps reserve status.

The foreclosed houses can be deeded to municipalities [eminent domain..the bank cannot produce the paper, it is the city's]. City owned houses can be given to teachers, policemen, firemen, on maintenance only rent fee for 25 year lease [or until they qualify for pension]. Churches, the real ones provided a parsonage for their pastors. H1B visas offered to the thousands of international doctors to practice in US would bring medical costs down [Iraq had a much higher number of doctors per capita than US, before we bombed their clinics, and hospitals] . Those same homes in fraudulent foreclosure could also be offered to doctors willing to practice medicine in rural territory.

But the likely result of foreclosed houses, they will be bulldozed to try to inflate the housing bubble. Some buses might make a charity roundtrip from the bridge overpasses to let the homeless, under supervision, pick through the rubble of the homes for insulation and drywall pieces for their tent cities.



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douglaslee
Joined:
Jul. 31, 2007 3:01 pm

There are other services than hamburgers & fries. Plumbers, electricians, toolmakers, and trades with apprenticeship are not being outsourced. Engineers are still in short supply because people want to go in to finance, the Madoff economy. [where theft is legal, and degreed learn fraud]

These trades aren't being outsourced because the products they service exist here. But that doesn't always mean that those products being serviced were manufactured here.

Plumbers fix pipes and water leaks that already exist in a household. Perhaps some of the materials used in these areas (pipes, PVC, valves, etc...) may have been manufactured here, but it's also very possible that they weren't. Along with many of the tools that they use to provide those repairs. Same with electricians (and A LOT of electrical components are manufactured outside of the states nowadays). Toolmakers - yeah, the USA manufactures tools, but not the kind that the average person needs anymore. Believe me, this is an area that I actually have experience in, lol, and I have friends who are tool distributors as well.

Auto mechanics fix cars, but the cars have to be built first before they can break. Jet mechanics fix jets, but they have to be built first. Roofers fix roofs, but the houses have to be built first. Much of our service sector is servicing the goods produced in the countries around us. When they decide that they are tired of working hard to make things for Americans, and simultaneously lend us the money to buy them - then what?

The service sector is almost entirely dependent on the productive sector. Service economies are a LUXURY. You can service PEOPLE, of course (serve food, drinks, back massages, etc...) but they have to spend their money on your services. Where did they get their money from? What kind of work do they do?

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Cheesebone
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Sep. 1, 2010 8:18 am

If you define government as the problem, the solutions go off the table. The reason Single Payer and other ownership of the Commons government programs work is that they deliver better products/services for the money invested collectively by the taxpayers than we would get as individual consumers. Public Power is always cheaper than paying off investors and the business plan of the latter does not favor conservation, co-generation or other collective savings.

The work available to be done in America is very great. The conservation savings in energy efficiency alone would be worth a WPA program now. If you want to go big picture, our whole social infrastructure is a mess. Suburbs don't work. They have no community center or feel. And the absurd waste of materials and energy inefficiencies in our public office spaces give us another "tear down" in the real world.

Ag reform to get us off the petro in fuel and fertilizers is essential for health; but it is also about getting real food back for Americans. Believe me, we will be eating a lot better when the franchises fold. And they will when the accounting is honest.

And that is the real issue. This system fails, and its failures will not be possible to avoid. The government and democracy are our ways of creating a new and better world before it all comes crashing down and we are dealing with chaos and no organizing. Corporate captive government is not democracy, but the answer is democracy, not the abandonment of government. And I want more than minimal charity and healthcare for my fellow Americans. Luxuries ought to be about luxuries and not better odds on living.

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DRC
Joined:
Jul. 31, 2007 3:01 pm

The whole thing with deregulation of the financial sector and the skewing of the tax system to favor megacorporations vs. small agriculture (including timber harvesters) in relation to natural resource extraction is that the bubbles of our economy are not merely manufactured (for lack of a better word) on paper and in computer databases. It requires the most rapid extraction of timber, minerals, etc. possible to maintain fantastic rates of productivity. This is not ecologically possible anymore.

What will the rest of the world look like? Depends on whether they are able to come up with a sustainable system or not. What will the U.S. look like? Who knows. Do we have enough natural resources to sustain ourselves? Not that I'm an autarkist. World peace requires a global economy in my opinion. Just not one that is controlled through the neoliberal agenda.

nimblecivet
Joined:
Jul. 31, 2007 3:01 pm

Polycarp says "At some point people should understand that the productive sectors of the economy support the service sectors."

Actually, the economy is a circular flow, every part either supplies or demands another part. To say that one part is better or more worthwhile than another is arbitrary. If I am Britanny Spears and convince millions to give me stuff, then I am worth precisely that amount.

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Dr. Econ
Joined:
Jul. 31, 2007 3:01 pm

True, but without the excesses created through production, the people wouldn't have anything to give Britney.

We could employ the entire country by making everyone either a massage therapist, or a Britney Spears. Full employment. But of course we'd all starve.

Or, you could have everyone be a farmer. Life would be boring, but at least we'd all live.

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Cheesebone
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Sep. 1, 2010 8:18 am

Currently Chatting

Can Democrats Set Out a New Path?

Democrats must embrace a pro-government platform, not run away from it.

Those were the sentiments of Senator Chuck Schumer today, in a speech given at the National Press Club. Talking about the reasons for Democrats’ losses on Election Day, Schumer said that those losses were proof that the American people and middle-class want a government that will work more effectively for them.

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