Mr. Chief, we have a problem.

[Lost In The Void]

Second this has killed any faith the world has had for pure capatalistic economies because Canada( I love using my country as an example) is far from perfect but the mixed economy we have allows many of our banks to be goverment controlled and if a company happens to go tits up we don't lose all our hard earned cash.

What defines a "pure capitalistic economy" in your eyes?

I don't really see how a nation with a complex regulatory system and deep government investment (e.g. the government-sponsored enterprises) qualifies as "pure" capitalism.

-- Alex

A Pure capatalistic economy is what you've based your economics off of. As the Philosapher John Locke said "People are most free when they are governed less." If you take a look through history, Yes it has worked to a degree. It's very short term because anything can go tits up in a second because a very large percentage of your business is privatized and exposed to the fluctuations of a volintile world economy all i'm saying is no systems perfect but the way you have yours set up this recession or "Second Depression" is going to get alot worse for you

 

[Alex_P]

Off to Europe! Hi-ho silver!

Haha. Read the news.

-- Alex

 

[Flunk]

Makes me glad I keep my money in the Bank of Nova Scotia.

By the way, for anyone interested in emigrating to Canada we rate our immigrants on a scale based on merit (country of origin does not matter) so get those College Degrees ready and if you can set up a job in advance your chances are even better.

 

[SilentHunter7]

Remember when Roosevelt said it was safer to keep your money in a reopened bank, rather than under your bed?

I don't think that applies anymore...

You know what, here's an idea;
Instead of spending up to half a trillion on bailouts, why don't we use that money to pay off people's debts? So now banks don't go under, and people get to keep their houses (Which aren't worth much in today's market anyway)

Or the government can declare a Bank Holiday, and evaluate the situation and only allow the stable banks to re-open. Of course this has the repercussions of no one being able to withdraw money for a few weeks, and the US (and possibly a good chunk of the world) economy will essentially stop for that period of time. But you figure it would allow the market to catch its breath, and stabilize, and no one would have to worry about their banks going under afterwards.

Not saying either of these are good solutions, but we just cant keep going on like this. Something needs to be done. In fact I don't think our country can survive until January. Whoever's the next president, needs to step in and be Roosevelt, or yes, Rome will burn, and the western world has a good chance of going with it.


-edit-
And the Dow has fallen 300 points so far today...

 

[Alex_P]

Banking fails because they are allowed to lend out 10X as much credit as they have assets, which means 90% of the money they loan is literally non-existent money, existing only as 1's and 0's in a computer, but with no real currency backing it. So when the bank lends out more than they truly have, and people default and/or an investment fails, the bank must still pay back the fictional currency with real-world money. So when banks give out a bunch of high-risk loans, and those loans fail, the bank is liable to its customers to return their money when asked, money they may no longer have. Therefore, bank goes tits up, customers lose their cash, and I dance around in a circle saying "I told you so".

Yeah, too bad we don't have some kind of government-owned corporation that can insure those deposits [fdic.gov]...

-- Alex

 

[Lost In The Void]

Remember when Roosevelt said it was safer to keep your money in a reopened bank, rather than under your bed?

I don't think that applies anymore...

You know what, here's an idea;
Instead of spending up to half a trillion on bailouts, why don't we use that money to pay off people's debts? So now banks don't go under, and people get to keep their houses (Which aren't worth much in today's market anyway)

Or the government can declare a Bank Holiday, and evaluate the situation and only allow the stable banks to re-open. Of course this has the repercussions of no one being able to withdraw money for a few weeks, and the US (and possibly a good chunk of the world) economy will essentially stop for that period of time. But you figure it would allow the market to catch its breath, and stabilize, and no one would have to worry about their banks going under afterwards.

Not saying either of these are good solutions, but we just cant keep going on like this. Something needs to be done. In fact I don't think our country can survive until January. Whoever's the next president, needs to step in and be Roosevelt, or yes, Rome will burn, and the western world has a good chance of going with it.


-edit-
And the Dow has fallen 300 points so far today...

I don't believe that just because the US economy crashes the whole world will stop turning i believe yes it'll slow but that is the natural economic process, you have assumed that US is king of the world and unfortuantly your not anymore. Russia have more millionaires per capita then US and China is catching up in industrial strength. In conclusion you may just have been replaced

 

[Imitation Saccharin]

Yeah, maybe before your dollar tanked,

Oh shit, what happened to the loonie?

 

[Lost In The Void]

I don't believe that just because the US economy crashes the whole world will stop turning i believe yes it'll slow but that is the natural economic process, you have assumed that US is king of the world and unfortuantly your not anymore. Russia have more millionaires per capita then US and China is catching up in industrial strength. In conclusion you may just have been replaced

More millionaries per capita can just mean a more unequal division of wealth.

Sure China is catching up in industrial strength. Of course, this being the information age and not the industrial age, I don't see why that matters all that much.

As for the size of the American economy: http://strangemaps.wordpress.com/2007/06/10/131-us-states-renamed-for-countries-with-similar-gdps/

Will This stay the same though this recession is coming at the worst time as other countries accelerate. Plus the "information age" will always have to rely on industry because...well it's common sense nobody's going to need information if they don't have houses, power, water information is important but we still need the basic needs which are provided by industry

Edit: Plus US has just as much enqual wealth distribution it's just not profiled as much

 

[Eldritch Warlord]

I love being debt free, sucks to be you America.

Which of the debt-free countries do you live in?

The one with the Dwarf craftsmen or the one on the Moon?

OK, now to be on-topic. This is what a Democrat controlled White House does to the economy, makes it bad.

And no, I'm not an idiot who thinks our current President is a Democrat. The economy poisoning Democratic policies take a few years to develop especially after some remarkable Republican-fueled growth (like what was happening during Clinton's Presidency, courtesy of G. Bush the first).

And a final point, Democrats and Republicans suck equally bad. The Asses promote social and scientific advancement while the Pacyderms promote political and economic growth. What a pack of morons to not do everything.

 

[Imitation Saccharin]

Snidely Whiplash
Highest it's been in years. Might even overtake the USD again.

So why'd you say it tanked?

 

[Alex_P]

OK, now to be on-topic. This is what a Democrat controlled White House does to the economy, makes it bad.

And no, I'm not an idiot who thinks our current President is a Democrat. The economy poisoning Democratic policies take a few years to develop especially after some remarkable Republican-fueled growth (like what was happening during Clinton's Presidency, courtesy of G. Bush the first).

And a final point, Democrats and Republicans suck equally bad. The Asses promote social and scientific advancement while the Pacyderms promote political and economic growth. What a pack of morons to not do everything.

I don't think it's nearly as clear-cut as you make it out to be.

Clinton's economic policies undoubtedly had mixed effects, some of them quite negative. Unsurprising, given that a while the tacit doctrine was something like "we should lay the groundwork for global economic growth even if it disadvantages the US, especially in the short term" (whether it actually helped foreign economies all that much is up for debate, too, in my opinion).

The principal changes that created the markets we see struggling today, however, can't really be attributed to him.

1999's Gramm-Leach-Bliley Act, which enabled banks to get into other "financial services" sectors, and the Commodity Futures Modernization Act of 2000, which permitted single-stock futures, were both spearheaded by Republicans. In the first case, the bill was actually veto-proof by the time it got to Clinton's desk (thanks to Congressional Democrat enthusiastically but foolishly jumping on board).

Likewise, Republicans like Gramm were principally responsible for the "Enron loophole," which prevents the effective regulation of energy markets, in the CMFA, and the party used its control of the legislature to keep that "loophole" open despite repeated attempts to correct it; when they lost their majority in 2006, Bush took up the mantle and continued to defend the "loophole" using his veto.

Given that the Republican party has been pushing legislation that promotes the current poorly-regulated, under-capitalized market situation for a decade or more (and the Democrats have been along for the ride, which is deplorable on their part, too), I think it's silly to say that Clinton is the source of our problems today.

-- Alex

 

[SenseOfTumour]

Yeah, Like I've admitted before I'm a dummy, when it comes to economics, but the pound is stronger than its ever been in my living memory, so why is our economy screwed, if you read the papers or turn on the TV? It seems everyone is bitching about the huge number of people in debt, yet also complaining about the impending crash in house prices and interest rates.

Surely a drop in interest rates would be the perfect thing to help the millions of people who are in debt, get cash flowing again, and revitalise the economy, sure it'll suck for anyone who's buying and selling houses, but if you're gambling with £300,000 poker chips called houses, you chose to gamble.

I also can't understand, if most of the 'civilised' countries have enough nukes to destroy the world 50 times over, why are we still spending more money on em? in case we miss 50 times? Would that money not be better spent on just about anything?
There again, if nukes start flying we're all screwed imo. Yes, I know there's gotta be some cost in maintaining the weapons we have, btw.

I'm still convinced all these things are just a case of what goes around comes around, things go up and up til the economy cant take it and crashes, and everything hits bottom, then starts going up again. A vastly simplistic view, but it seems to cover it.

 

[SenseOfTumour]

Also am I terribly lost on the idea that the stock market is just gambling for richer people?

How is it, that if you stick your bus money in a fruit machine and have to walk home, you're a dummy, but you lose 60 million dollars on a bad stock deal, you're a victim? Surely either way, you picked a bet, it didn't work out, bad luck, next round please. I actually oughta point out that I do feel sorry for anyone who has lost out seriously in these things, as I just bet its bad advice that they probably paid extra for, I'm not completely evil, and the guy that lost pretty much $2 million overnight, that's just horrible.

Ok, its been proved recently that even big banks aren't an entirely safe place to store your money, but... Isn't placing your savings in shares and stocks the equivalent of just leaving all your money on red on the roulette table and then coming back when you need it, hoping you've won?

 

[Alex_P]

Yeah, Like I've admitted before I'm a dummy, when it comes to economics, but the pound is stronger than its ever been in my living memory, so why is our economy screwed, if you read the papers or turn on the TV? It seems everyone is bitching about the huge number of people in debt, yet also complaining about the impending crash in house prices and interest rates.

Surely a drop in interest rates would be the perfect thing to help the millions of people who are in debt, get cash flowing again, and revitalise the economy, sure it'll suck for anyone who's buying and selling houses, but if you're gambling with £300,000 poker chips called houses, you chose to gamble.

You're talking about Britain's economy, right? I don't know the details, but I think the issue is that actual economic growth is pretty much flat despite your currency's high value in the money markets. That's a pretty bad situation.

For interests rates, the problem is that the "revitalizing" effect isn't automatic. It's all about faith. If you drop interest rates and people think there is going to be good growth in the short term, there will be some more activity as people take advantage of favorable conditions. However, if they think that the situation is going to keep slipping, they'll just take the lowered rates as a sign that the government is desperate because it knows things will get even worse.

-- Alex