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So...is this current economical situation


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A. a downturn in the economy with imminent (or at least foreseeable) recovery?

 

B. the precursor to a deeper recession, possibly depression?

 

Wonder where all your thoughts are going regarding this. The last recession I remember was in 1991 and I was not thinking about it as much as I am now.

Perhaps because gasoline prices were not going up every day. :tongue_smilie:

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I think the first one.

 

During the great Depression, thousands of banks went under, taking peoples savings with them- not the same situation now.

 

we haven't covered the great depression yet in our schooling, I am sure someone else will have more thoughts on it....

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Someone very close to me seems to think that as soon as President Bush is out of office our economy will improve *snap* just like that.

 

Even though things are not optimal, I wouldn't say we're even close to a depression. Spending habits have not changed much, when the retail sector reports record lows and stores starting closing, you'll see it. There is a slow down right now and I'm grateful that I'm already at home instead of in the workforce.

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Guest Virginia Dawn
A. a downturn in the economy with imminent (or at least foreseeable) recovery?

 

B. the precursor the a deeper recession, possibly depression?

 

Wonder where all your thoughts are going regarding this. The last recession I remember was in 1991 and I was not thinking about it as much as I am now.

Perhaps because gasoline prices were not going up every day. :tongue_smilie:

 

I don't see it getting as bad as the former depression, and I think there is great potential for recovery, if the government doesn't try to "fix" every single economic problem that comes along. If the federal government begins to micro-manage the economy even more than it does now, we are in trouble.

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Someone very close to me seems to think that as soon as President Bush is out of office our economy will improve *snap* just like that.

 

Even though things are not optimal, I wouldn't say we're even close to a depression. Spending habits have not changed much, when the retail sector reports record lows and stores starting closing, you'll see it. There is a slow down right now and I'm grateful that I'm already at home instead of in the workforce.

 

the next president will actually make a difference or because it's an election year and the "powers that be" want us to think things are really bad right now. I tend to think the latter.

 

Although gas prices are soaring, having studied the great depression, we are not in the position for things to get that bad. There are way too many regulations and safety nets in place that weren't there 80 years ago.

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Good question. I heard Dave Ramsey the other day and I think he says there's no solid evidence that we are currently in a recession (the technical definition has to do with certain stats over a 6 month period, I think?) Of course he's also encouraging his listeners to take responsibility for their personal financial situation and not look to government policy for solutions/impact.

 

On the other hand.... When was the last time the dollar was so weak? I would think that the direction of the dollar would be really important in all this. Many of the govt's short-term fixes aren't helping the dollar. But politics are such that there is no incentive for them to consider long term effects of policy.

 

I think it's truly fascinating and I only know enough to be really dangerous - the relationship between economics and politics is really interesting.

 

I guess I didn't really answer your question :tongue_smilie: !

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Partly that and also this person also believes that Pres. Bush is responsible for the gas prices (he's getting rich off us, ya know) and Pres. Bush doesn't listen to the voice of America. I have to stay out of political conversations with this person b/c it evident that this person wants to blame Pres. Bush for everything when that is not the case, we have a system of government, not a dictatorship.

 

I don't know if everyone know about this:

http://www.votesmart.org/summary.php?can_id=9490 (Obama)

http://www.votesmart.org/bio.php?can_id=53270 (McCain)

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Generally I think if McCain is elected, it is one and if Obama is elected, it is 2.

 

I don't know about that but I have heard more than one older (than me) adult (I am currently 45yo) say that Obama sounds exactly like Jimmy Carter did when he was touting his political answers to society's needs. :-{

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I don't know about that but I have heard more than one older (than me) adult (I am currently 45yo) say that Obama sounds exactly like Jimmy Carter did when he was touting his political answers to society's needs. :-{

 

That's a depressing thought. The 1976 election was the first one that I was old enough to pay attention to the rhetoric and start having some political opinions. Towards the end of his term, I remember feeling so disappointed and let down.

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A couple of questions for your family member: If President Bush caused the oil price increases here, why is the UK/Europe having similar price increases? If today's leaders caused the price increases, what blame does the Congress hold? Aren't they the ones writing the laws and setting economic policy?

 

IMO, neither President Bush nor today's Congress caused the situation we have today. It's been coming for a long time.

 

It seems to me that oil prices are growing b/c environmental policies have been short-sighted. We stopped drilling for new oil, but no viable alternative has been implemented to use in place of oil. Nuclear energy was the alternative being developed in the 70s, when oil drilling began to be discouraged, but it has since fallen by the wayside. Food-based alternatives have been proposed, but they caused food prices to rise, and may not actually cost less (environmentally) than oil.

 

So, new sources are lacking, and we need more oil than we were allowed to drill for. This was coming to a head a few years ago, then Hurricane Katrina knocked out drilling rigs in the Gulf of Mexico. This means that (US) supply is even lower, and demand is still high.

 

B/c we need the energy, we end up buying oil from other countries, who will of course want a high price for an in-demand product that is in limited supply.

 

If the US had not stopped drilling for oil and/or looking for new sources of oil in the 70s, these conditions would not exist. GWB wasn't making policy in the 70s. How is this his fault?

 

Before someone flames me for being "anti-environmentalist," please realize that I'm all for a cheaper, renewable fuel source if/when it is developed. Until it's viable, though, we must be realistic about using the sources we have. If our environmental policy limits the supply by refusing to drill in the US, and we don't have an alternative source of energy readily available for consumers, low supply and high demand will cause prices will rise.

 

JMO,

 

Lisa (ready for the negative reps...)

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not so much because of the weak dollar, but the huge deficit, along with having a predominately service industry (less capital). I also think the large government, with all of its programs and regulations, will make it more difficult to recover from any economic downturn.

 

Of course, this is all just speculation. I hope for a speedy turn around to the economy. :001_smile:

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B/c we need the energy, we end up buying oil from other countries, who will of course want a high price for an in-demand product that is in limited supply.

 

If the US had not stopped drilling for oil and/or looking for new sources of oil in the 70s, these conditions would not exist. GWB wasn't making policy in the 70s. How is this his fault?

 

Before someone flames me for being "anti-environmentalist," please realize that I'm all for a cheaper, renewable fuel source if/when it is developed. Until it's viable, though, we must be realistic about using the sources we have. If our environmental policy limits the supply by refusing to drill in the US, and we don't have an alternative source of energy readily available for consumers, low supply and high demand will cause prices will rise.

 

 

Wow, where to start? The US "stopped drilling for oil and/or looking for new sources of oil in the 70s" because we used up all of our reserves. There are no more unexplored areas in the US (including Alaska) that can meet our energy needs. We reached "peak oil" in the early 70s. It's not a renewable resource and when you've pumped it out of the ground, it's gone. It's not a matter of protecting the environment. Yes, there's the ANWAR, but it's not THAT MUCH oil (the very best case scenario is that it would supply the US's current demand for 2 years). And that's it, the last major untapped field.

 

It's very possible we've reached "peak oil" globally now. We won't know for sure for a few years. That means that we're producing as much oil as we can and we are not adding to proven reserves at the same rate we are pumping oil out of the ground. It's the downward slope of the curve.

 

Here are some wikipedia links about oil reserves and ANWAR. It's wikipedia, so it's not the authoritative source, but it's not way out in left field either:

 

http://en.wikipedia.org/wiki/Oil_reserves

 

http://en.wikipedia.org/wiki/Arctic_Refuge_drilling_controversy#Technical_projections_and_estimates

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B, deeper recession/possible depression

 

What a terrifying thought, but several factors make me think this:

1. Severe droughts in CA and GA

2. major businesses (airlines, auto) having major cutbacks

3. weak dollar

4. rising oil prices

5. unpopular war, unpopular worldwide

6. following election taxes WILL increase, no matter which candidate wins

7. 1,000,000 homes currently in foreclosure

8. simple foods become too costly for many people to afford

 

 

I've often wondered if WWII was what truly pulled the USA out of the 1930's depression or if other factors would have returned it to a prosperous nation without the war? SHould we fall into a true depression in our generation, what needs to transpire in order for us to become a wealthy, revered nation once again? (Or has that ship sailed?)

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Part of the economic cycle and nothing to fuss about, unless our government intends to becomes more and more active in trying to "fix" the necessary downturns to appease the restless masses, in which case they may cause us serious economic issues.

 

Not really #1 or #2, LOL, but there's my $.02.

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B.

 

It's like a perfect economic storm:

(1) Unprecedented levels of national and personal debt. People in government and people in general think it's not a big deal because nothing bad has happened yet.

 

(2) The effects of globalization are keeping downward pressure on wages, increasing competition for natural resources in other countries, and outsourced jobs and manufacturing capacity.

 

(3) Baby boomers will be retiring soon and Social Security and Medicaid are not ready for them. Also, they will be taking money out of the stock market, which can't be good for the stock market.

 

(4) Peak oil. The easy-access oil is going, and oil demand (growing in other countries while it shrinks here) is already surpassing oil supply, which is one reason why the price is increasing dramatically. (Another reason is the falling dollar, which is the result of #1.) Oil is in everything (I read that even the little plastic grocery bags have doubled in price), and used to transport everything. This will affect globalization (#2), because shipping manufactured goods from overseas is going to become less economical. Our domestic manufacturing capacity is weak now.

 

(5) Entitlement attitude (see #3). In the Depression there wasn't social breakdown because people did not feel entitled. Now many people are willing to sit back and let the government take care of them, and the government is going to be increasingly less able to do so (see #1). This can't be good for the social fabric of the country. A lot of people are calling for nationalized health care, but we just don't have the money (see #1 and 3).

 

(6) Reduced savings Re: peak oil. We need to invest a lot of money into alternative fuels, but we haven't been saving money and the credit crunch is going to make credit much less available.

 

(7) Housing crisis, besides the obvious consequences (foreclosures, empty houses, squatters, reduced access to mortgages), is reducing property tax revenues, which could lead to municipal bankruptcies. Vallejo, California declared bankruptcy a few weeks ago. This could lead to less local services (and job cuts), including less police in drastic cases.

 

(8) Inflation: caused by decreasing power of dollar plus increasing cost of oil. In the 70s at least wages went up towards the end to cover the costs of inflation. This time, because of #2, this is less likely for many, especially those in the services sector.

 

(9) Consumers have less purchasing power, because of #1, #2, #7 and #8. The economy is now 70% based on the power of the consumer. This is going to lead to further job losses.

 

(10) Reduced investment in infrastructure in the past several years (remember that bridge that collapsed along the Mississippi?) Our infrastructure is going to continue to fall apart, but now it will be more difficult to fix now, because of #4, 6, 7, and 8.

 

(11) Climate change. I haven't done a lot of research on this, but if the climate change people are right and that leads to even more natural disaster weirdness, the effects of #10 are going to be worse.

 

I've probably forgotten something. :(

 

Yes, I think this is going to get bad, but this is just at the beginning. Life looked pretty good at the beginning of 1929. People look at government numbers for recession, but those numbers just aren't the same as they were in the 1970s. See this article from Harper's for details.

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......

It seems to me that oil prices are growing b/c environmental policies have been short-sighted. We stopped drilling for new oil, but no viable alternative has been implemented to use in place of oil. Nuclear energy was the alternative being developed in the 70s, when oil drilling began to be discouraged, but it has since fallen by the wayside. Food-based alternatives have been proposed, but they caused food prices to rise, and may not actually cost less (environmentally) than oil.

 

....

 

During the mid 80's the Western slopes of Colorado were undergoing their own depression because the oil companies had decided that processing the oil shales was not financially feasible give the price of gas at the time. Maybe someone can chime in if the oil companies are wanting to reactivate those oil shale operations and what problems they may be running into.

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I'm beginning to think #2.

 

First read this (this opinion piece blames the Federal Reserve for the Great Depression and says its up to its old tricks again) :

 

http://www.huffingtonpost.com/kevin-phillips/time-to-end-bernanke-pank_b_104769.html

 

Next, consider what a few Natural Disasters would do to this country.

 

I have to agree with the other poster that pointed to the historic droughts in CA and GA as major factors here-- we are about to have a civil war over water in this country. And if you look at the Great Depression, the dust bowl was a major factor. I believe that we are 1 major disaster away from another depression. Another Katrina or a big earthquake in California... that would be kind of a big deal.

 

The question is, how do you prepare for it???

Margaret

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Well, I worry about number two, but I keep watching market analysts who provide compelling reasons why they think we're not even in recession (CNBC, FOX, et al).

 

Gas prices in Europe have been many times our rates for years, but as I understand it, they are increasing at this time, too.

 

From the books we read this year on Middle Eastern and Southeast Asian countries, many of them are peaking out in their oil production in the next ten years and want to get as much money as they can from their remaining oil before it's gone. Southeast Asia has more untapped potential oil reserves, but getting those governments stabilized and able to drill and do business may take some doing.

 

Do we have the potential to switch over to other energy sources? I believe that we do, but no one is willing to do that so long as they think they can maintain the status quo. No companies want to completely overhaul their factories, parts, means of doing business to include a completely different product. And none of them are going to do that until they have to.

 

I remember about three to five years ago, we were talking to some folks here who are interested in fuel cells. Their contention was that big business in America did not want it. At about that time, I think it was 60 Minutes that aired a program on some Scandinavian country (Iceland, maybe) that had implemented fuel cell powered public transportation. I looked at the footage online at the time. So, in America "it can't be done", but elsewhere, it was already being done. Now, suddenly, since Christmas, we have about 4 major car makers running adds for their new, greener cars of the future, including fuel cell powered cars! The technology to do other things has been there for decades. American businesses simply did not want to make the switchover to a different system.

 

Have they now waited too late to make that switchover? I'm not willing to think that at this point, but we'll see soon enough.

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A couple of questions for your family member: If President Bush caused the oil price increases here, why is the UK/Europe having similar price increases? If today's leaders caused the price increases, what blame does the Congress hold? Aren't they the ones writing the laws and setting economic policy?

 

IMO, neither President Bush nor today's Congress caused the situation we have today. It's been coming for a long time.

 

It seems to me that oil prices are growing b/c environmental policies have been short-sighted. We stopped drilling for new oil, but no viable alternative has been implemented to use in place of oil. Nuclear energy was the alternative being developed in the 70s, when oil drilling began to be discouraged, but it has since fallen by the wayside. Food-based alternatives have been proposed, but they caused food prices to rise, and may not actually cost less (environmentally) than oil.

 

So, new sources are lacking, and we need more oil than we were allowed to drill for. This was coming to a head a few years ago, then Hurricane Katrina knocked out drilling rigs in the Gulf of Mexico. This means that (US) supply is even lower, and demand is still high.

 

B/c we need the energy, we end up buying oil from other countries, who will of course want a high price for an in-demand product that is in limited supply.

 

If the US had not stopped drilling for oil and/or looking for new sources of oil in the 70s, these conditions would not exist. GWB wasn't making policy in the 70s. How is this his fault?

 

Before someone flames me for being "anti-environmentalist," please realize that I'm all for a cheaper, renewable fuel source if/when it is developed. Until it's viable, though, we must be realistic about using the sources we have. If our environmental policy limits the supply by refusing to drill in the US, and we don't have an alternative source of energy readily available for consumers, low supply and high demand will cause prices will rise.

 

JMO,

 

Lisa (ready for the negative reps...)

 

:iagree:

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I don't know about that but I have heard more than one older (than me) adult (I am currently 45yo) say that Obama sounds exactly like Jimmy Carter did when he was touting his political answers to society's needs. :-{

 

I've heard that, too. And I'd never heard of gas shortages/rationings before. Whoa.

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I think the first one.

 

During the great Depression, thousands of banks went under, taking peoples savings with them- not the same situation now.

 

we haven't covered the great depression yet in our schooling, I am sure someone else will have more thoughts on it....

 

Hen Jen, is this a picture of a duck or goose in your avatar? Whatever it is I love it. I love everything that waddles and squawks! :001_smile:

Oh, and the lady next to it looks fantastic too!

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the next president will actually make a difference or because it's an election year and the "powers that be" want us to think things are really bad right now. I tend to think the latter.

 

Although gas prices are soaring, having studied the great depression, we are not in the position for things to get that bad. There are way too many regulations and safety nets in place that weren't there 80 years ago.

 

You are confirming what someone else mentioned to me. I am glad he was not the only one to say it. Obviously there must be something to it. That is encouraging!

I need to go back and study the events during the Depression or at the beginning of it. I know more or less what led up to it.

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Well, I worry about number two, but I keep watching market analysts who provide compelling reasons why they think we're not even in recession (CNBC, FOX, et al).

 

Gas prices in Europe have been many times our rates for years, but as I understand it, they are increasing at this time, too.

 

From the books we read this year on Middle Eastern and Southeast Asian countries, many of them are peaking out in their oil production in the next ten years and want to get as much money as they can from their remaining oil before it's gone. Southeast Asia has more untapped potential oil reserves, but getting those governments stabilized and able to drill and do business may take some doing.

 

Do we have the potential to switch over to other energy sources? I believe that we do, but no one is willing to do that so long as they think they can maintain the status quo. No companies want to completely overhaul their factories, parts, means of doing business to include a completely different product. And none of them are going to do that until they have to.

 

I remember about three to five years ago, we were talking to some folks here who are interested in fuel cells. Their contention was that big business in America did not want it. At about that time, I think it was 60 Minutes that aired a program on some Scandinavian country (Iceland, maybe) that had implemented fuel cell powered public transportation. I looked at the footage online at the time. So, in America "it can't be done", but elsewhere, it was already being done. Now, suddenly, since Christmas, we have about 4 major car makers running adds for their new, greener cars of the future, including fuel cell powered cars! The technology to do other things has been there for decades. American businesses simply did not want to make the switchover to a different system.

 

Have they now waited too late to make that switchover? I'm not willing to think that at this point, but we'll see soon enough.

 

I have been very interested in fuel cells but have not had the time to educate myself sufficiently to participate in an intelligent discussion about the pros and cons. I just mentiond this to my dh when I read your post and he says one of his friends is looking into it and it may not be more than a few hundred dollars to retrofit vehicles.

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It seems to me that oil prices are growing b/c environmental policies have been short-sighted.

 

Lisa (ready for the negative reps...)

 

I have also heard that one reason for the rising oil prices is increased demand from rapidly developing countries like India and China.

 

Of course, we in the U.S. do create plenty of demand ourselves. Interestingly, the rise in gas prices is already affecting sales of SUVs and other "gas guzzlers". Whether this will be a long-term change in driving habits remains to be seen.

 

Wendi

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Gas prices in Europe have been many times our rates for years, but as I understand it, they are increasing at this time, too.

 

Actually, Europe's gas prices are so high largely because of the taxes they pay. When we lived in Germany we paid less than *half* what the German civilians paid.

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Hen Jen, is this a picture of a duck or goose in your avatar? Whatever it is I love it. I love everything that waddles and squawks!

Oh, and the lady next to it looks fantastic too!

__________________

 

Liz, it's a duck- the statues of "Make way for duckling" in Boston.

 

and Liz...your my B.F.F. !!!

 

I do have 4 hens as pets.

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The problem with hydrogen powered vehicles (as it was told to me) was that it takes more power to produce the hydrogen than the hydrogen produces. That's a big problem, unless the engineers find some way around it.

 

There's another one that everyone ignores. The byproduct of hydrogen cells is water vapor.........and water vapor is a greenhouse gas!

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