So no need to tighten the belt. Free money for everybody! Right? Jesus, no wonder we've got problems.Originally Posted by JRT
Well in theory the federal money could be dispersed free of charge and the results in economy would be the same. That would however discourage work and entrepreneurialship and be thus negative. A better way is for the government to purchase domestic goods and services that open new possibilities, like highways or military gear or fund start-up businesses. Cut the Jesus stuff and try to prove me wrong.
I am sorry. I posted the wrong pic. Fully agree with the trade balance.
But interesting how close the account deficit follows the trade deficit.
BTW: Anyone can explain what happened around 1997 to the trade balance?
Asian Tigers went down...and Russia defaulted in the Aftermath.
@JRT
I am fully aware that growth with trade deficit has it's limit.
But what happened in 1997?
All 3 numbers exploded: Trade deficit, account deficit and private debt.
The change in trade deficit can be seen as the impetus. The latter two are reactions that enable growth while the negative trade imbalance sharpens. Someone else here can propably give a better insight to the reasons behind the change in foreign trade.
Seems Kotemore is right.
The massive devalue in Asia hit the US economy hard:
http://www.epi.org/publication/brief...s_asiancrisis/
1998 article
Can someone confirm this? 42% seems absurd (didnt know it was this high)
Quite the knee-jerk reaction there. It had a spike of improvement in 2008-2009. I was just wondering what caused it, not saying Obama or anybody else was responsible.
If this was your intention, then sry.
2008/2009 was the collapse of spending. This spike can be seen worldwide.
"IT Revolution" in action..
Fantastic for the economy of USA size 4+% GDP growth was achieved by impressive IT investments which later where supported by no less impressive business "fixed investments" and spectacular consumer spending boom. What is especially important that at the moment when american economists have found that consumer spending can pimp GDP up it is the easiest way to produce countable "achievements", CS became a sacred cow which assures father growth of US external debt no matter who will stay at the steering wheel.
Do americans really want to help their country? They have to stop buying crap they don't really need.
Of course there was also Walmart, there were impressive production transfers to China (Cummins comes to mind) which provided another 10+ bil to the trade deficit in 1998 (and much much higher rates next years), there were rounded up technology transfers to Mexico (auto industry etc.), there was Canada which in spite of expanding and normalizing export-import with USA still registered father growth of already 30+ bil trade surplus with US. There was Japan with slowly collapsing internal market and impressive trade surplus with USA (50+bil in 97). There was boom in steel market thanks to the construction boom. etc. (one could add reaching the next level of idiocy and mismanagement not only in steel industry but basically in all sectors of heavy industry in USA).
Korea, Malaysia, Thailand, Philippines and Indonesia contributed of course as well. Due to collapsed internal market they cut their imports by 30% while keeping exports to the USA on the same level (6% growth even). Their contribution to the growing american trade deficit was around 30%. Or ~20bil. But it was quite temporally, since these countries or recovered to pre 1997 levels or simply left top positions.
But even in this case the effect of Asian monetary crisis is not that strait forward: for example south koreans would finished by 1999 upgrading their machinery and by 2000 would cut respective imports anyway (which they did). These things like imports of airplanes, machinery etc. are cyclical, and it's a pity many economists forget that. (s. koreans are in the upgrade cycle now apparently). Indonesia had serious political and economical problems well beyond some monetary speculations and would go into crisis anyway. Which they did.
42% would be the Great Depression unemployment number. My father saw it first hand in Cleveland during the 1930s.
Our current rate is somewhere between 8 -14% depending if you count those who have not filed for unemployment.
Better: 42% of all unemployed are long-term recipients.
http://nowandfutures.com/key_stats.html
3rd chart down, left hand column.
Have a look at U7b including "discouraged" workers
Holy cow..........24%!
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