Read more here.
Ignoring the tired “all Americans are fat and useless even though I’ve never met an American blah blah blah” mentality, we don’t determine how many “scraps” we give back to, for example, China. Their cheap labor is the reason that we buy from them- they’re free to raise their prices, we would switch to some other country offering cheap goods. If the next country raises its prices above China’s prices, then we’ll start buying from China again. For obvious reasons, we buy as low as we can. It only makes sense to save money. Anyone else- no matter what nation you’re part of- would do the same thing.
Don’t say we don’t benefit other countries, either. Do you enjoy your movies? Your software? Guess where 90 percent of these are from.
The United States depends on the rest of the world, yes, but you have many benefits from us as well. Don’t you think saying that we’re only giving scraps back is a bit of an understatement? We buy at your price. If you have a problem with it, charge more.
Quoted for agreement. In addition, I would point out Taiwanese companies purchase goods made in China to export to the US, and this relationship is not unique. It is a fair point to make that companies within the Asian market trading across their own borders have as much to do with the cost of labor as the end user/ customer in the west. Business is business, and it is global. Many factors determine wholesale cost, and funny how if the demand dissipates the competitive price drops to regain market share.
Interesting topic.
China doesn’t have a problem with that at all. But you have. That should be obvious by now.
The problem is not that Chinese products or workers are cheap. The problem is that you are consuming more than you can afford. The fact that you are building up a trade deficit of unprecedented proportions shows that you can’t even afford Chinese prices any more. You are living on debt. The Fed is printing money like there’s no tomorrow. Once foreign investors lose confidence in the value of dollar-denominated assets, the game is over. In fact they are already shifting portfolios as we speak.
The way you put it, it sounds like you have no choice but to buy Chinese stuff because it’s so cheap. What about reducing consumption and increasing production instead? So that other countries start buying your stuff again. For some reason countries such as Canada, Japan, or Germany consume Chinese products as well but somehow still manage to be competitive and run trade surpluses. At the same time they manage to maintain a standard of living similar to the US – sometimes even including public health care and six weeks of paid vacation.
You talk about Hollywood and software. Well, software is pretty much global these days. I’m sure there is not a single significant piece of code on my hard disc that is genuinely “American”. Blender certainly is not. Hollywood may still be going strong for mainstream audiences, but I’m afraid it’s not large enough to save the US economy. Or the dollar.
I’m not denying that the United States is at fault for its own problems, just disagreeing with the quote that doesn’t really apply to the core issue in the first place.
Lack of production is a big issue over here, with one of the main causes being “outsourcing jobs overseas”, as the politicians love to say. Right now, it’s more practical to run a business outside of the US because of the very high business tax we have compared to some of the production nations. Those who aren’t outsourcing are suffering, such as GM and Ford, who are having the worst sales in the history of their companies.
There isn’t really much that we can do to encourage production aside from lowering the business tax significantly so it’s actually worthwhile to work from the States- not that I can think of, at least.
Still, I don’t think those who have lived responsibly (aka debt free) really have a lot to worry about unless the crisis gets so bad that employers can’t pay their employees. Nothing has really changed for my parents (yes, I’m a teenager) as of now. We’ve never been in debt, have a perfect credit score, and still have room to buy some luxuries
A couple of my friends aren’t so lucky. There’s one or two kids out of the 600 people that live my small town who can’t afford lunch at school anymore- no big deal, any good friend is willing to loan money whenever they need it… Aside from that, no trace of the failing economy over here. Paychecks keep coming in, I’m not concerned.
Nice response Alden. You state the truth as how it is. When an American kid cannot afford lunch at school - do we wonder why we put so much effort in feeding the faceless folk offshore.
i wonder how this would affect peoples depending on SSI, Food Stamp, and other similiar benefits?
I’m unfortunately on SSI and food stamp right now (hoping to change that once I move to Washington DC thanks to my mom giving me a plane ticket out of this place with no available steady job)
Also, in the event we DO HAVE the second great depression, what is the best thing to do to prepare for such a situation in advance? stockpile on non-perishable foods? move out to a low cost living place in the country? hide out in the mountain and live off rabbits?
And this is the sort of information one would like the media to be commenting on, instead of “this is what happened”
I was quite impressed when a financial advisor who makes money upon transactions of clients with him as the middle man suddenly saying to everyone to keep money in their banks and avoid anything in the sharemarket, property market and other forms of speculation/gambling (I prefer that term interchangeably due to the current economic situation). There are still investors with money in the bank like myself, I pulled out of the sharemarket six months before the dips started, saving or earning roughly 33% of my life savings of eleven pounds and thirty two pence (just joking - it’s a little bit more than that - I’m a cautious generation X-er).
So basically, when the credit card crunch arrives - will the government step in to ease some of this pressure ? If so, then anyone can easily make a quick gain of 1% if they put their money in the sharemarket the day before the senate goes into debate, pull it out immediately the market hits the 1% mark, then wait for the politicians argue about it. Learnin’ from history!
Thanks, kbot.
And, this just in- The 700 billion dollar bailout bill was just rejected. Hope you guys liked having an economy.
Now can we go back to boat threads Alden? 
XD hahaha, yes. Somewhere that there isn’t an intellectual conversation.
And While the US population’s attention was focused on this $700B bailout, the congress is passing a one trillion dollar defense budget bill. We are truly blessed to live in such a wealthy country:eek:
If we didn’t piss off so many people we wouldn’t need $1 trillion in defense.
We would then actually have the money for a $700B bailout
If businesses weren’t so greedy then we wouldn’t need a $700B bailout
What could we do with 1.7 trillion… better education in areas that need it most? diet plans for our fat kids? a lot of things. If we gave out 1.7 trillion in foreign aid we could feed a lot of starving people
What we could do with 1.7 trillion dollars is pay off 1/5 of our current national debt.
i was driving home today and listening to some talk radio station, and the ignorant broad actually had the stones to defend Bush’s economic policies. She said that the crash today (in case you weren’t aware, the market dropped 700+ points today - the biggest drop in a single day of trading in history) was caused by the liberal media and the negative “gloom and doom” going on around the markets. That somehow the economic crisis was all just ‘in our heads’ and wouldn’t be this bad if people just stopped worrying about it.
If I could have reached through the radio and slapped her…
Anyway, even with it dropping, I don’t think it’s a HUGE crisis. The reason they’re all panicking on wall street is because they just got their safety net pulled out from under them by the house. If there was ever a better time to fix the unconstitutional BS that has existed in this country since the last depression then I can’t think of it. We need to get rid of the fed, the fiat monetary system and the fleecing of our citizens via the income tax.
Run for president, please?
The only people who would vote for me is you, my parents and the dude I carpool with.
And me. Yeah, I’d vote for me… That would make a great campaign ad, right?
It makes sense to vote for yourself. The way I see it, a third party candidate would be best in this election, but if i’m going to vote for someone who “has no chance of winning” it might as well be me.
How the System works,and pretty much how this all happened. read on 
Well you see, after 1945, the US emerged from war with the world’s gold reserves, the largest industrial base, and a surplus of dollars backed by gold. In the 1950’s into the 1960’s Cold War, the US could afford to be generous to key allies such as Germany and Japan, to allow the economies of Asia and Western Europe to flourish as a counter to communism.
That held up until the late 1960’s, when the costly Vietnam war led to a drain of US gold reserves. By 1968 the drain had reached crisis levels, as foreign central banks holding dollars feared the US deficits would make their dollars worthless, and preferred real gold instead.
Well, in August 1971, Nixon finally broke the Bretton Woods agreement, and refused to redeem dollars for gold. We didn’t have enough gold to give. So that in turn opened a most remarkable phase of world economic history. After 1971 the dollar was fixed not to an ounce of gold, something measurable. It was fixed only to the printing press of the Treasury and Federal Reserve. The dollar became a political currency. Pretty much the Fed literally creates money out of nothing. Expands or contracts its supply as it wishes with no government oversight or control. Backed by nothing except the faith of the issuing authority.
http://en.wikipedia.org/wiki/Bretton_Woods_system
The US Treasury and Federal Reserve circles after 1971 learned that they could exert more global influence via debt, US Treasury debt, than they ever did by running trade surpluses. Because all key commodities, above all, oil, were traded globally in dollars, demand for dollars would continue, even if the US created more dollars than its own economy justified.
What is little understood, is how the role of US trade deficits and the Dollar System are connected. The United States has followed a deliberate policy of trade deficits and budget deficits for most of the past couple of decades, really just benign neglect, in effect, it locks the rest of the world into dependence on a US money system. So long as the world accepts US dollars as money value, the US enjoys unique advantage as the sole printer of those dollars and the world will continue to accept inflated US dollars as payment for its goods.
Here is the devil of the system. The US economy is addicted to foreign borrowing, like a drug addict. It is able to enjoy a far higher living standard than were it to have to use its own savings to finance its consumption. America lives off the borrowed money of the rest of the world. Because the world capital markets—stocks, bonds, derivatives—are dollar markets, the dollar overwhelms all others. The European Central Bank could offer an alternative. So far it does not. It only reacts to a dollar world.
What is perverse about this system like a greasy child molester is the fact that Washington has succeeded in getting foreign surplus countries to invest their own savings, to be a creditor to the US, buying Treasury bonds. The US is pretty certain that its trade partners like china will be forced to always buy more US debt to prevent the global monetary system from collapsing, as it nearly did in 1998 with the Russia default and the LTCM hedge fund crisis. The central banks just keep on buying up new debt, roll the old debts over. The debts of the US are the assets of the rest of the world, the basis of their credit systems and which keeps the whole system rolling. It’s a debt paradox
http://en.wikipedia.org/wiki/Russian_financial_crisis
http://en.wikipedia.org/wiki/Long-Term_Capital_Management
Of course its a sham… $700 billion for the hamsters!