Economy in freefall? 1Q revision shows shrinkage of 2.9%

originally posted by: MrSpad
They economy has been moving at a pretty quick pase but, it is going to hit bumps in the road on occsion. However have no fear the second quarter looks to be back on track with a 4% growth.

Of course.

Then they will "revise" again.

To -1%

originally posted by: xuenchen

originally posted by: MrSpad
They economy has been moving at a pretty quick pase but, it is going to hit bumps in the road on occsion. However have no fear the second quarter looks to be back on track with a 4% growth.

Of course.

Then they will "revise" again.

To -1%

The bigger the upward estimation the worse the truth is. If they predict 4% growth we're actually getting something along the lines of a 15% contraction.

Not sure what else you're supposed to expect though with a real unemployment rate of 30%.

originally posted by: charles1952
a reply to: Aazadan

As has been pointed out, our boom starting in '44-'45 coincided with most of our serious competitors being destroyed. We also has a suddenly expanded work force as soldiers came home.

But the 94% tax business? Naw, they didn't take that much. Actually, what they took was about 40%. Remember all those three-Martini lunches which could be written off? Try this article.

almostclassical.blogspot.com...

Yep, I replied before seeing the rest of the thread, my bad. I hate the current forum layout for replies. I can't hit quote and then remove it later if it's not relevant.

That was the top rate but it's a progressive tax just like now. If you pay 90% it's 90% on the value above a certain amount. Lets say there's 9 tax brackets each corresponding to a 10% tax, one at $10,000, $20,000, etc. Someone making $10,000 pays a 10% tax, someone making 20,000 pays 10% on earnings to $10,000 and then 20% on earnings to $20,000 for a total of a 15% tax. Scale that up to $100,000 and the person is paying $46,000 or 46%. I was hoping I wouldn't have to explain this but the concept of a progressive tax is lost on some people (not you obviously since you're pointing out the same thing).

Current taxes are still progressive and proposing increasing the top rate from 35% up to something like 40 to 45% still doesn't represent a real tax rate of 45% because of the system (throw in capital gains and the real tax rate is super low). As the article points out though, the real rate was around 40%, today people like Mitt Romney and Warren Buffet (since they've been public with their taxes) pay rates closer to 13%... 1/3 of that.

The excuse of us having the bulk of the worlds manufacturing works for the late 40's and into the 50's but the 60's were also quite profitable, real income peaked in 1967 (coincidentally the same year minimum wage got a 40% boost). Even most of the 70's despite a recession and oil crisis ended up rather profitable. It wasn't until the 80's that things started to really go downhill, and at that point we're well past the destructiveness of WW2.

originally posted by: xuenchen

originally posted by: MrSpad
They economy has been moving at a pretty quick pase but, it is going to hit bumps in the road on occsion. However have no fear the second quarter looks to be back on track with a 4% growth.

Of course.

Then they will "revise" again.

To -1%

Thats not the gov predition, it is however the expectation based on rash of money spending and new orders. Of couse the lack of spending in the first means extra money to spend in the second. So in the end it will even out at pretty much the same rate of growth we have seen.

Crazy thought here...

Why can't the US, as a unified hole, decrease the cost of all products and services by, lets say 40%(random percentage), while maintaining current wages?

I know it's not a complete wash, but if all your materials and manufacturing cost decrease by 40%(fuel, electric, raw materials, etc) and you decrease your product/service cost by 40%, your profits should be fairly closeAt the same time this would increase the value of the dollar and help bring in line minimum wage.

Seems like this would be a chain reaction in increasing/stabilizing the US economy. The major reason we are in this mess is because the cost of everything has drastically increased for whatever reason. Or am I completely missing something here?

a reply to: GoML15

You're missing that we're in a global marketplace. All that stuff about broadening the customer base, expanding markets, global economy, multinational corporations, and so on means the US economy isn't a self contained bubble.

By decreasing the value of our goods by 40% we must now work 40% harder to buy an import. Given the fact that we manufacture relatively little these days virtually everything other than food is imported.

In addition to this, the two most important costs that go into an item are electric and oil costs. Oil is a global market, electricity is multinational.

Basically all this does is reduce the buying power of people who participate mostly in local economies while raising the buying power of those who participate in global economies. Note that the opposite is true when you raise prices and peg the value of your currency to a global standard at whatever exchange rate you want to claim. This is what the Chinese do.

a reply to: xuenchen

Do not trust anything the government is trying to sell. Let your own eyes and heart be your guide. Would you trust someone in real life if they had lied to you this many times?



This is what my eyes and heart see............Prices are going up by the week. The average person can not afford to buy a new car unless they take out a 10 year loan. House prices are inflated beyond the realm of reality. Lower wage earners can not afford to live anymore. Roads are falling apart because towns can not afford to fix them.The stock market is a lie.



Everything I posted above is true but the thing that really scares me is.......HOPE. People do not have hope for the future anymore. This can not go on forever like this. Hope is the key and it is gone.

a reply to: SubTruth

I'm with ya

a reply to: SubTruth

Your last paragraph: Sounds like the second coming of Jimmy Carter.

Funny how this kind of feeling tends to follow certain liberal leaders....

originally posted by: bbracken677
a reply to: SubTruth

Your last paragraph: Sounds like the second coming of Jimmy Carter.

Funny how this kind of feeling tends to follow certain liberal leaders....

Oh the Carter years. That was a bad time in my memory. I worked under the table for $2 an hour digging ditches.

But I still had hope. Then again, I was much younger then.

a reply to: pl3bscheese

I'd love to help, but....

I work 13 hours a day or more, and barely make ends meet on the basics; rent, utilities, transportation, insurance, food and cable. I could cut the cable, but I have a disabled wife and two kids, and for some strange reason -- they like TV. At least in small doses.

Last Friday I was real low. I wrapped a 62 hour week and really wanted a few hot wings and a beer, but that was completely outside my budget.

I can't even imagine why more people aren't "spending."

CNN reported the economy shrinking also.Why this stupid game of politics they are playing is insane.CNN and Fox both reported it as 3% srinking.

Mark Cuban said the Bubble for student loan debt is gonna hit and collapse colleges.

Maybe they will admit what a shambles this economy actually is after marijuana legalization is more widespread, as it will be more common to take advantage of it's supposed calming effect legally....

A long range plan to keep people calm...Slave owners have always granted their chattel some means of calming themselves for the sake of efficiency.

even if Q2 is negative it will take until mid Q3 for the government analysts to revise the numbers and declare we are in Recession 'once again'

the scary thing for me is that any COLA retirement increase is limited to a mere 1.7% (less than $20 per month) which will allow me to by maybe 5 Store-Brand boxes of Soda Crackers to spread my protein rich peanut butter on
as the steady diet of my single 'big' meal daily

If your paying attention to politics you know it is real and is gonna happen in our lifetime and things are gonna realy get bad.


The Mexican border crisis is being under estimated as everything always is.Years from now there was be millions trying to get into the U.S.

If one would like to compare the value of money during the depression compared to the degree of self efficiency of the population, it becomes obvious that things are actually much worse than we are being led to believe.

Fiat currency had not completely taken hold during D1 as the Fed was only established a decade or so before, people were less dependent on others to get what they needed to live.

We are pretty much helpless now in a comparative sense to the past, and that is exactly what the banks and corporations like.

Go ahead and try to keep getting what you want and need without taking out a loan to get it.

originally posted by: bbracken677
a reply to: WhiteAlice

Yes...huge difference in the economy of the 50s and 60s that could support such stupid taxation.

1). Positive trade balance. Wealth coming into the country instead of leaving it
2). Manufacturing jobs: The US manufactured 25% of the world's manufactured goods (Today..meh: 5%?)
3). Private sector debt, personal debt and public debt. All significantly lower. People actually had savings accounts!.
4). I wasn't about to retire....
5). Politicians were not so creative in finding new ways to tax us back then. Even though income tax rates are lower, virtually every OTHER tax is higher now. Stealth taxes.
6). The baddest stealth tax of all was not killing us (inflation)

Perfect.

Totally agree and quoted for truth.

We are in a "Great Reversion" (as we lose our Manufacturing base, we are reverting back to an Agrarian Economy). We have been experiencing "Import Recessions" up to now that we borrowed/spent money to get out of, but now we have a full "Import Depression" that's just too big to fight with stimulus spending+low interest rates anymore. Clinton's NAFTA and Most-Favored Trade Status for China brought this on. If you vote for more Idiots; enjoy being "Globally Competitive" and a "Life-Impoverished Serf".
Every Dollar lost to Imports, takes $7 out of the economy. Think about how much money has been spent on imports for the last 20 years, and then multiply it by 7 plus times. That is how much poorer the United States is now due to out-of-control Imports.
The cure? Put a $2 per pound import tax(excluding raw materials and fuels)on everything Imported. Don't want to pay the tax? BUILD IT IN THE UNITED STATES!

originally posted by: MrSpad

originally posted by: xuenchen

originally posted by: MrSpad
They economy has been moving at a pretty quick pase but, it is going to hit bumps in the road on occsion. However have no fear the second quarter looks to be back on track with a 4% growth.

Of course.

Then they will "revise" again.

To -1%

Thats not the gov predition, it is however the expectation based on rash of money spending and new orders. Of couse the lack of spending in the first means extra money to spend in the second. So in the end it will even out at pretty much the same rate of growth we have seen.

I am sorry but.........REALLY. The whole system has become a lie from the top down. It is corrupt. Up is down left is right. The stock market and the financial indicators are all controlled by the PTB.



I see so many people demanding an end to capitalism......FOOLS. The system we are currently slaves under is not capitalism.

Want a little simple proof ? Look at the soda industry back in the 1980s we used to see price and advertising wars. In today's world it is all controlled by a few companies who fix the price between themselves. This is happening across most major industries. It is all a lie. They do not enforce the anti monopoly laws anymore.

originally posted by: bbracken677
a reply to: SubTruth

Your last paragraph: Sounds like the second coming of Jimmy Carter.

Funny how this kind of feeling tends to follow certain liberal leaders....

The liberal progressive mindset is the biggest roadblock to liberty and family this country.... dare I say he world has ever seen. Symptoms of this disease are apathy,weakness,desperation,fantasy,cowardice. It is ruining families,schooling,government,individual lives.




Never in history have populations as a whole been so weak of mind and body. PTB put this in place for that very reason, weak people are easy to lead.


Do I sound liberal now.........Brah.....Brah.....Brahhhhhhhhhh.

originally posted by: SubTruth
I see so many people demanding an end to capitalism......FOOLS. The system we are currently slaves under is not capitalism.

What we have now isn't the ideal of Capitalism but it's the result of applying Capitalism. We saw the same thing with Communism, it's a great system in theory but in practice it completely fails because of human nature. Capitalism does the exact same thing.

Lets look at Henry Fords three rules
1. Make the highest quality of goods possible.
2. Pay the highest wages possible.
3. Make goods at the lowest cost possible.

Two of those three rules are outright violated and the spirit of the third rule is gone. Those rules today aren't considered a Capitalist ideal, they're considered bad business.

Making the highest quality of goods is outright gone, it's inefficient. Planned Obsolescence is where it's at. If you can make 1 quality good for $100 or instead create a need for three inferior versions of the same good at $40 each why wouldn't you make the lower cost one? You get to market it as lower cost and you make more money. Virtually every physical item is made following this strategy these days.

Paying the highest wages possible also doesn't happen. Instead it's common practice to pay the least the employee will work for, and keep the rest for the company/owner. It's called profit margin and as the Republicans like to remind us, wealth gaps are a good thing according to them.

The last rule is the only one we haven't totally violated but we have destroyed the spirit of it. We take lowest cost to mean the fewest dollars spent total. Employee wages are looked at as a cost to be eliminated. Waste products (like all that extra waste we create from obsoleting goods) aren't seen as a cost.

I would say we have nothing even remotely resembling the ideal of capitalism and haven't for quite some time. The idea of free markets are equally absurd, they're unsustainable. In a free market one company will eventually dominate and become a monopoly or duopoly. At that point a small handful of people control the market, at which point it is no longer free. Ironically regulation is the way to prevent that but if you're regulating the market it's not free either is it?