Full Version: Recession Ahead?
From: Harvey only (HARVEY-ONLY) [#12]
12 Aug 2005
To: RALLYGUY (RALLYGUY1) [#6] 12 Aug 2005
Housing sales=no viable counter argument.
Inflation is dropping=No one has the money to spend so prices have to be low. The middleman suffers the most.
Jobs are up=More people are looking for part time supplemental jobs at lower hourly wages.
Interest rates are going up=Thank the Federal Reserve Discount Rate, not growth. This bubble should burst soon.
General to the paragraph. Either someone trying to make people spend money to keep it going a bit longer, or someone who cannot see the forest for the trees.
If you have any money, excellent advice.
From: Cindy (CINDYM) [#13]
12 Aug 2005
To: Harvey only (HARVEY-ONLY) [#1] 12 Aug 2005
Harvey - I don't think I can counter your argument.
Prices for goods are increasing at a faster pace than wages. Our insurance premiums for everything from business insurance, auto, home and health insurance has gone out of site. I am cancelling my health insurance ($350 a month on my husband's policy through his work) and changing to a Health Savings Plan with a high deductible in order to be able to continue some kind of coverage.
Yesterday, I paid $37.50 for a 1/4 tank of gas. Last year, in checking my record book, I paid $12.20 for the same amount. Our gas here in OR is amoung the highest in the nation, except for CA I believe. We're at $2.59 a gallon (today - tomorrow it will go up)in my area, $2.76 in the southern part of the state and $2.40 in the Portland area. Ouch.
I literally can't afford to buy a piece of property in my town to build a building - prices are through the roof and if you aren't a developer, you can't even find a piece of property to buy. Our town has the lowest rate of properties for sale and the prices are astounding. Completely out of reach for the average business owner. I've found government grants and loan programs slanted towards favoring the non-profit organizations, and was even told by a city rep that I would be at the bottom of a long list because I was a privately owned business and non-profits would get a $250,000.00 grant before I would. This I just could not understand, as don't I bring tax dollars to the table???
And although we are busy here at work, I am not hiring to replace a worker who is leaving. Like you, I expect the economy to tank here in the next year or so.
With all the brilliant people in our country, why can we not get back on track and get some of these problems figured out? Beyond the fact that a few are getting very rich off the backs of many, surely we can turn this around. Insurance reform needs to be at the top of the list, with alternative fuel sources for our cars a high second. Although many would like us to all ride bikes everywhere (highly promoted in my area), that's not going to happen 100%. People like the freedom of having their own car. And transporting large goods on a bike just doesn't work:) I'm not sure how I would transport a load of 8' wood fence posts on my bike and then ride 20 miles home from the farm store. And what about when winter comes - am I suppose to ride my bike in the slashing rain and wind too?
I wish I could figure out a way to do without all that is going skyhigh - insurance, drugs, gas - opt out of the whole situation. But that isn't realistic, so what alternatives are there out there?
Cindy M
From: RALLYGUY (RALLYGUY1) [#14]
12 Aug 2005
To: Harvey only (HARVEY-ONLY) [#12] 12 Aug 2005
I think everyone has their own personal perspectives based on their own experiences. I think it's easy to get down on stuff, but I try to keep everything on an even keel.
I wonder when the last time you felt the economy was good was? The tech bubble was a real bubble that did burst. It wasn't sustainable. Was there ever a time that you really felt things were good, or is it that you are a glass half empty person when it comes to this type of topic?
The Fed's rate increases are a response to inflation dangers. If the economy is gaining too fast they bump the rate to cool it off. Your statement regarding what you think low Inflation does may be true, but the decisions by the Fed are based on the rate of economic growth, which means that people are spending money.
I don't know how you can specify where jobs are being lost or gained....Its funny how the people that say that the only jobs being gained are low tech jobs are the same people telling us that the high tech jobs are always the ones being lost when the reports are showing job losses. Everyone always tends to pad their own perspective I guess. Have you tried to hire lately? Hourly pay hasn't dropped around here at all.
I think your statement may be based on a negative viewpoint, instead of hard numbers. Most of the economic indicators over the last few months have been positive even with the high fuel costs. I consider that pretty awesome. Imagine if the fuel costs would be where they were in the past....the economy would be doing that much better. Don't blame forign oil for the problems. It's the refineries that are the bottleneck. There is far more than enough oil in the world, just not enough refineries.
The other side of that coin is that if someone is in a very profitable business, that money trickles down....meaning that if the refineries are having great times....that money gets taxed and spent just like you or I would if we were doing well. It means more jobs and flowing cash.
Brian G.
EDITED: 12 Aug 2005 by RALLYGUY1
From: Dee (DEENA-ONLY) [#15]
12 Aug 2005
To: RALLYGUY (RALLYGUY1) [#14] 12 Aug 2005
Brian,
Have you noticed how many large corporations are laying off large numbers of well paid highly skilled workers? Where will these people find jobs? Large corporations may be posting profits but they are doing it with much less staff. There was an article in our local paper saying that donations to charities from corporations and people making over 100,000.00 are down 40% this year.
While I won't go into the political issues surrounding Iraq I do know that we can't afford to layout that kind of money for years to come and not see a ripple effect across the board.
Dee
From: Harvey only (HARVEY-ONLY) [#16]
12 Aug 2005
To: RALLYGUY (RALLYGUY1) [#14] 12 Aug 2005
Good economic times, the 60's & 70's. A one worker family could afford a small house and still have some money left. You could actually have a savings account that grew. Taxes were far lower, Social Security taxes were far less than they are now. It was not used to balance the budget or pay for Medicaid.
I started engraving 20 years ago, Christmas sales have dropped dollar-wise about 10% a year, even with a much larger selection of products. I am talking about gross sales, not net. Rents have gone up greatly, in addition to all other costs.
As far as half full/empty. I get excited when sales go up 10% in a month over last year. Even though last year was stinko. But in the overall, I am a realist. I try to see what is really happening, rather than what I would like to be happening.
Refineries being the bottleneck is bogus when oil is $66 a barrel compared to what it used to be.
Trickle down theory is the dumbest theory that has been perpetrated on the public that I have ever heard. If there is more profit, it is skimmed by attempting to pay the least required to still produce. A little trickles down, the rest goes upward. Start it at the bottom and it is proved to trickle up.
EDITED: 12 Aug 2005 by HARVEY-ONLY
From: GBengraver [#17]
12 Aug 2005
To: RALLYGUY (RALLYGUY1) [#14] 12 Aug 2005
Trickle down??????????
The rich and the oil companies do NOT pay what you and I pay in taxes (as a percentage of income).
The newly passed energy bill:
The bill provides $14.5 billion in tax breaks and potentially billions more in loan guarantees and other subsidies to big oil to encourage oil and gas drilling, improve natural gas and electric transmission lines, build new nuclear power reactors and expand renewable energy sources, especially construction of wind turbines.
Yet fuel costs continue to rise unchecked. Why do they need tax breaks?
These tax breaks are going the the oil companies that are recording record profits quarter after quarter.
Our deficits are at record levels (but our children and grand children will pay for them), I guess that doesn't count. And these deficits don't even include the cost of this crazy war we are in (a cost of roughly 9 billion a month) and thousands of lives with no end in sight.
We at the bottom of the trickle down group continue to bear the brunt of our country's leader making it sound like it is so great to allow the rich to pay little or no taxes.
Trickle down, what a joke.
From: Stunt Engraver (DGL) [#18]
12 Aug 2005
To: RALLYGUY (RALLYGUY1) [#14] 12 Aug 2005
Remembering The Best of Times, I was employed as an engraver, making $4.50 per hour. circa 1974.
Furnished Apartment - $125 Mo.
8 Bags of Groceries, (filled to the brim) = $40.
Gasoline = .38 per gallon.
A lot of buying power with none of the responsibilities of running a business. It was great!
I'm not a pessimist - I'm an eternal optimist - The glass isn't half-full, it's overflowing!
Even with that optimism on my side, I feel that something's going to give before long.
Of course, for those prepared, the best opportunities present themselves when there's blood in the streets.
Not many people I know are prepared.
From: basehorawards [#19]
12 Aug 2005
To: GBengraver [#17] 12 Aug 2005
"The bill provides $14.5 billion in tax breaks and potentially billions more in loan guarantees and other subsidies to big oil to encourage oil and gas drilling, improve natural gas and electric transmission lines, build new nuclear power reactors and expand renewable energy sources, especially construction of wind turbines."
Who (what people) is going to do the drilling, improve the transmission lines and build the new reactors and other new sources? Last I checked with my friends in the construction industry the only time anyone in a suit shows up on a construction site they are there to look around not to work. Those construction guys going to work and getting paid and then paying taxes and buying stuff (food, cars, houses etc.) mean the businesses that sell those things will be busier and will need more help and will hire more people - after using all their currently available capacity. Those people will pay taxes and on and on.
Yes there is a need for changes in the insurance industry but an undeniable part of the problem is the fact that I can go to the doctor and he can run all sorts of tests and do all kinds of examinations even if they are not needed just to cover his .... with his malpractice insurer and I will pay $25 plus my deductible. My insurance company pays the rest. Is the solution to this socialized medicine (shudddder) or more out of pocket expenses for routine medical care combined with catastrophic coverage? I don’t know - I’m just an rookie engraver.
Trickle down does work. It worked when President Kennedy cut taxes in the sixties. It worked when President Reagan cut taxes in the eighties and it is working now with President Bush’s tax cuts today. I go back to what I said earlier about those tax cuts gave me the money to go into this business last year. How much worse off would we be with even higher taxes than we already have? If you want the price of oil to go back down stop the speculators from running up the price.
“The rich and the oil companies do NOT pay what you and I pay in taxes (as a percentage of income).â€ÂÂÂ
You are absolutely right. Eighty percent of the taxes paid to the federal government are paid by the top twenty percent of all taxpayers. The top fifty percent of all taxpayers pay 96.03% of the income taxes. Source: The IRS. Get rid of the high tax rates and the rich invest more into capital investments and people get jobs. Raise taxes and they hide the money in tax shelters and loopholes.
How about a flat tax with no deductions? Say 17% of all income with no deductions - across the board starting at an income level of say $20,000?
Whow it sure is high up here on my soapbox.
From: Cindy (CINDYM) [#20]
12 Aug 2005
To: Stunt Engraver (DGL) [#18] 12 Aug 2005
It's funny that this conversation showed up here because we've been having the same conversation at our house and trying to prepare the best we can for what is to come. It is not a matter of "the roof is falling" type of panic, but more a thoughtful look at what is going on in our country and planning for when the bubble bursts. Things simply can't continue along in the manner it has.
Some practical things we are doing at our house:
converting to solar power and solar hot water at our house.
Growing our own food as much as possible and preserving what we can.
Using human power instead of gas powered tools when possible, driving much less, planning our errands, car pooling when possible, streamlining all purchases (in the past I might go to three or different stores to pick up items where I liked one brand over another - now I find a brand that will work at the one store I'm shopping at), buying nothing extra, taking care to stay as healthy as possible, buying no junk food, cancelling subscriptions to the paper and unnecessary magazines and little changes like getting updated insurance quotes and changing to a Health Savings account instead of reg. insurance.
At work I'm:
running audits on phone services, long distance and cell phones to make sure I'm getting the best value. Buying bulk print cartridges to save money, not replacing aging equipment yet - making do with what I've already got and maintaining it, disposing of excess inventory, making sure my clients know what services we offer and encouraging them to add to what they usually order from us, increasing our community visibility by attending networking opportunities, packing my lunch, saving junk fax paper and printing my orders on the back of these pages, using fans instead of turning on the a/c, ship through USPS for non-urgent packages, and just being conscience of little things I, as one person, can do to save money.
Here in OR, minimum wage is $7.25 per hour. I always thought min. wage was suppose to be a training wage - what happened to that thought? Now people seem to think they should be able to live and live well on min. wage.
My first "real" job at 15 - $1.00 hr. at a hamburger stand. I didn't expect to buy a house on that money or even rent an apartment and pay real bills. I did pay for college and clothes on it though.
I'd like to change the world, and I support change, but until those in charge turn things around I feel I can only change my immediate surroundings. To not acknowledge that Big Oil rules this country would be to fool yourself. Until that changes, we can either get involved in the political arena and try to change it that way, or do the best we can on our own.
Cindy M
From: RALLYGUY (RALLYGUY1) [#21]
12 Aug 2005
To: basehorawards [#19] 12 Aug 2005
Couldn't have said it better myself James.
Brian.
From: gt350ed [#22]
12 Aug 2005
To: ALL
To all those of you who have generalized "somethings gotta give" at some point, or "the bubble has to burst" at some point..... why?
What are you basing it on? Example: the housing market is good to "hot" in virtually every market throughout the U.S. Why? Because of demand. Demand is not drying up. Ability to qualify for financing based on overheated prices, maybe, but "demand" is ever-increasing. Why?
Because people want to locate somewhere in the U.S.; they want to be here. Whether they are Hispanic, Asian or European or whatever. Inmigration is outpacing available housing.
If people cannot qualify for financing, and if that single factor slows demand, then prices will fall. Possibly to more realistic prices.
But demand will continue. So, why the "something's gotta give" attitude? Because nothing lasts forever? Okaaaay!!??.......
Fortunately, there's more to why things are the way they are (good and bad) than just "something's gotta give" or "the bubble has to burst sometime". You can choose to be a boat adrift on the river, or you can put a damn motor on it and control your course.
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As for us.....rates were down. So, we refinanced our home and took the money and 1) invested in new "money-making" equipment (capital spending), 2) paid off all of our credit card debt (high/exhorbitant interest rates) and 3) paid cash for a new Honda (40 MPG).
Oh yea, almost forgot...business is good....and getting better. It's not only how you look at the glass, it's also about what you DO with the glass.
How's that for pontificating? Now, you people down there....start rowing..."ramming speed"!!
From: Pete (AWARDMASTERS) [#23]
12 Aug 2005
To: RALLYGUY (RALLYGUY1) [#6] 12 Aug 2005
From: Harvey only (HARVEY-ONLY) [#24]
12 Aug 2005
To: Pete (AWARDMASTERS) [#23] 12 Aug 2005
Maybe I am an expert economist. I asked a question no one else did. It also seems that many professionals here have opinions also.
I respect the opinions of the people here very much. They are on the front lines.
From: UncleSteve [#25]
12 Aug 2005
To: Dee (DEENA-ONLY) [#15] 12 Aug 2005
Dee, anyone looking for a job can find one...
It may be off-shore or in India but until "we" stop patronizing companies that ship jobs off-shore including CREDIT CARD issuers (call for information and ask the person answering the phone where they are located IF you can understand them)!
From: Dee (DEENA-ONLY) [#26]
12 Aug 2005
To: UncleSteve [#25] 12 Aug 2005
Steve,
What? You and I agree! By the way I am running a help wanted ad. Last time I did that I got tons of people who called and asked the salary. When I told them they hung up. I hired a guy who was making 49,000.00 at his last job. He was there for 5 years. The company moved to Mexico. I am paying him 9.50 an hour. I fell guilty but I can't afford anymore. I am glad his wife works and has health insurance. I can't afford that either.
I recently got my July electric bill. Our house is about 2000 sq ft. We run the central air most of the time. There are 5 people here. Our bill $671.42.
I usually think the glass is more than half full. I am concerned it is getting emptier.
Dee
From: GBengraver [#27]
12 Aug 2005
To: basehorawards [#19] 12 Aug 2005
Let me get this straight.
We should be sooooooooooooo grateful to the huge oil companies (that have not been willing for 30 years to build one new major refinery to increase oil production) and are at the root of all of these gas price increases that we should give them 14 Billion dollars so they can drill for oil with no financial risk to themselves?
The 14 Billion dollars that came out of your paycheck and mine.
So they can create jobs that pay wages to more little guys that will pay taxes to finance more tax breaks for them.
I don't know about you but I think there must be a better, fairer way.
How many people could you put to work if the govt. gave you a few billion bucks?
EDITED: 12 Aug 2005 by GBENGRAVER
From: Dee (DEENA-ONLY) [#28]
12 Aug 2005
To: GBengraver [#27] 12 Aug 2005
Greg,
Once agin we are on the same page. Do you think it is the Bucks County air?
Dee
From: GBengraver [#29]
12 Aug 2005
To: basehorawards [#19] 12 Aug 2005
By the way, the record for deficits before dubya came around was during the Reagan admin. followed by George the first's record setting deficits.
The economy didn't turn around till Clinton took office, who by the time his two terms were up had the biggest paydown of government debt in the history of our great country, lowest unemployment, and debt was down to 31% of GDP the largest 4 year paydown in history.
By fiscal year 2001 we had a record setting $256 Billion surplus, the fourth consecutive year of surpluses.
All of which has since been squandered.
It seems like such a long time ago.
From: basehorawards [#30]
12 Aug 2005
To: GBengraver [#27] 12 Aug 2005
Welcome to the dark side. That is trickle down economics in a nutshell.
I say cut tax rates again and watch the economy really take off.
The big boys have always had their way as far back as you go in history. Raging against the wind will not make it stop blowing. Even the communists had big boys who got their way. If someone found another way to fuel our economy and put all the oil companies out of business tomorrow guess who would be the big boy then?
The oil companies have not built a new refinery in 30 years - in fact they have closed quite a few of them. They can not build new ones - where would they? In your neighborhood? Where do you volunteer for them to build? No one wants a plant near where they live and the rules and restrictions put in place by local governments make it all but impossible. As for increasing output at the existing refineries; there is a federal law on the books that says that if they want to improve a part of the plant and they cross a very low threshold they then have to comply with the current enviromental standards rather than the ones in effect at original time of construction. The end effect is that they can not afford to spend that kind of money on a fifty or sixty year old plant. So no improvements are made and the old plant continues to chug along on baling wire and chewing gum. Eventually they cost more to run than they produce in revenue and it is not feasible to keep them open. Improving the pollution controls is included in the rules so they can't even reduce their pollution output because it is cost prohibitive. Our government at work - aren't you glad they can give themselves a raise whenever they want?
The value to us as citizens of the tax break to the "evil" oil companies is that the oil and gas reserves that they find here in north america is oil and gas we do not have to buy from other countries that may decide - again - to just stop selling to us (remember the seventies?) Or, look at it this way - if there is only one store selling a neccesity then the owner of that shop can charge whatever he or she wants. If a second shop opens up selling the same product for less then the price must come down at the first store or it will loose business and revenue. If OPEC and the non-OPEC nations see us finding our own sources of oil they also see the demand for their product going down and that will mean less money to them and they will lower their prices. Then, if the speculators go along our gas prices will go down too. Lower prices for oil means lower prices for the plastics we all use everyday.
Alternative energy sources are great. Wind power is a natural here in Kansas. Oops - there are enviromentalists fighting it because the windmills are ugly, spoil the view and no one has figured out how to keep the birds from flying into them. In California there are acres of windmills sitting idle because of the bird issue. On the east coast offshore is a perfect place for wind farms but they are not allowed to build there either because the windmills will spoil the view. The energy bill also includes money for ethanol production from corn - a good alternative to petroleum but guess what? There are people upset with that too! Why should those farmers get tax breaks to grow a crop that if they did not get the tax break for they would not grow to be made into ethanol - a cleaner burning fuel than petroleum. Alternative fuels will work when people demand them rather than demand they not be produced where they might spoil the view.
BTW Would you rather we fought the terrorists on our soil or on theirs? They are going to fight us until they win or they lose. My vote is for using their soil for the battleground and the airwaves, newspapers and the internet to educate the citizens of the countries whose governments support these terrorists that we do not want war and that we do not hate them and that we will help them to build stable governments that will allow them to live free and to prosper. Just as soon as we finish with these guys who want to keep them poor, dumb and oppressed while they enrich themselves and their friends.
From: Harvey only (HARVEY-ONLY) [#31]
12 Aug 2005
To: basehorawards [#30] 12 Aug 2005
I think you mistook what she meant about providing jobs with the billion. Not being in the big leagues might actually produce some trickle down, if we could figure out what to produce.
As for the rest of the post. Whammo, right on the nose!
Now we need to get some of this forum into Congress and some idiots out of there.
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