If we put a trillion into job creation, this drives up the deficit. This is good

[jtuck004]

because it cheapens the dollar, which makes our exports look better, and helps our manufacturing base.

While it will eventually increase inflation as our debt becomes more expensive, we could eventually manage to bring that back down.

If we lower the deficit we make the dollar stronger, which makes imports (relatively) cheaper, and leads to unemployment, deflation, and a general lowering of living standards.

On top of that, people who owe money, largely the 85% people without the majority of the wealth in this country, get to pay back their fixed debts with cheaper dollars. It lowers the net worth of the 15% of the population that has 85% of the wealth.

Why lower the deficit?

[Chulanowa]

1. You answered your own question, sort of.

"If we lower the deficit we make the dollar stronger, <...> people who owe money, largely the 85% people without the majority of the wealth in this country, get to pay back their fixed debts with cheaper dollars."

Now, read between the lines there. What do you see?

The 1% of the nation that owns the majority of the wealth wants a strong dollar because it makes their bank accounts deeper. It also prevents debtors from paying off their debts on a cheap dollar, meaning that not only can more interest accrue but also in higher dollars.

These top wealthowners are the ones who determine America's economic policy.

That is why we are fighting the deficit.

[hansberrym]

6. Do you really think the top 1% has their wealth in cash under the matress? n/t

[Chulanowa]

7. No, they have it in overseas accounts

You don't think they keep their money in American banks, do you? Guffaw, guffaw

[Statistical]

2. There is no free lunch.

Deficits are paid for by borrowing.

The rate you can borrow at is determined by the lowest rate people are willing to lend to you.

US has best "credit rating" int he world right now but you can't borrow at the rate we have been borrowing lately forever. It simply isn't sustainable eventually lenders will balk and start demanding higher and higer interest rates to compensate for higher risk of default.

Interest on debt now (less than 100% of GDP and low interest rates) is 20% of the budget. What happens if either interest rates double or the amount of debt doubles. That right the share of budget paid to interest grows (roughly doubles to 40%). Now imagine that BOTH the amount of debt doubles AND the interest rate triples. Share of taxes going to interest on debt is suddenly the MAJORITY of the federal budget.

That is the debt trap. Once you are in that corner it is very hard to get out.

[jtuck004]

3. This is the argument that I find the most troubling. We will never default,

because we have a monopoly on the dollar. No matter what the interest rate goes to, we can just print (create more debt) more.

I do realize the limitations, but the problem has been created by corporations who have moved our means of production out of the country for the past 30 or 40 years, masked by bubbles in housing, dot coms, people not realizing their dollar is purchasing less, etc.

But I don't see an alternative. Either we sit with no engine for employment for the next 20 years or so, watching while more people lose their homes and lives, letting people that can afford to invest in emerging economies continue to amass wealth, hoping that some new technogology will come down the pike to reinvigorate everything, or we say screw the deficit for now and make the dollar cheaper which brings industry back to life, employs people, and begins to re-start the economy while hoping that some techno-fix comes down the pike to rescue us from financial woe.

[Statistical]

4. deficit spending is necessary and we should continue to do it until the economy recovers

however deficits in excess of 5% of GDP have historically been very bad. So once economy turns the corner and we have sustainable growth deficits need to come down either by spending cuts or raising taxes or most likely a combination of both.

As far as "print money forever" and inflate your way out.... well that has never worked for any nation on the planet. I mean if it did work and it was so easy why would any nation ever issue any debt, ever. Simply make unlimited amounts of money out of thin air to balance the budget.

The most striking example (but not the first and certainly not the last) is Zimbabwe



Inflation destroys all wealth equally. The idea that it won't affect the poor & middle class is not true.

Have a pension? It won't be able to keep up with inflation and while the notational amount (actual dollars & sense) may rise and rise a lot it won't keep up with purchasing power.

Say you have a $20,000 per year pension. In today's dollars it buys 20,000 in goods/services. Say we have 100x hyper inflation. Your pension is now $2 mil annually. Pretty sweet huh however likely purchase cost has risen by 300x. So in "real" terms (adjusted for purchasing power) your pension buys the equivalent of 7,000 in goods today.

Now apply that to SS, living wages, rent, etc. Inflation in small and controlled amounts can be used to trim the effects of debt around the edges but can't make it "go away" not without massive destruction on wealth.

[jtuck004]

5. You say that so much more eloquently, and with charts! ;)

thank you

[golfguru]

9. You are probably too young to recall hyper inflation era

during 1978-1982. When more dollars were printed than what the economy could
absorb, interest rates on mortgages and auto loans went well into double digits.

Result? Fewer and fewer people could afford to buy.

Study history of other nations which experienced high inflation and you will
find there was no jump in exports, just economic chaos, collapse and change
of regime.

[jtuck004]

10. No, I lived through that, would have been 24 in '78. I know the problems

we had then. But to call that hyperinflation puts it in the category of Zimbabwe's 100% where their currency dropped in value at a rate of 100% every 24 hours or Hungary's 200% + where it did that every 15 hours. Not since the Civil War have we even been close.

We did hit 11 and 13% inflation around that time but that wasn't exactly out of control hyperinflation. And while people didn't appreciate the prices of bread, milk, cars, and other things going up, most of the angst and misery I remember was caused by the rising oil prices we had been enduring. Then the Iranian Revolution took us into the gutter during the energy crisis, the beginning of Reagan's tax cuts and his increase of the deficit by 3 times. Yet we seemed to survive all that pretty well, so well that most people didn't really get all that upset that we were shipping the jobs that created wealth out of the country, and replacing them with service jobs, phone banks, health care, and employees of government and municipal works paid by the taxes of everyone. Now those chickens have come home to roost, (did I borrow that from Sue Lowden?), and we must do something.

And since we don't have a regime - we have an elected government that is hardly comparable with some of those nations outside of here, we have much more ability to manage our monetary policy. I'm not sure that is at all comparable.

But here we are today, the double digit rates are nearly history, yet again people aren't buying because many have no income and have spent their savings down. There are over 27 million people out of work, and after our little spurt of temporary jobs this summer from the census we are likely to see increases in unemployment, with a U6 rate perhaps as high as 24%, and almost certainly a U3 of 11 to 12%, as well as a jump in foreclosure filings as a large group of 5 year arms are due to reset.

What is your solution?

[golfguru]

14. My solution is not complicated

You are correct we did not have HYPER-inflation in late 70's. But I am sure
you know how even the 11-13% inflation caused stagflation.

Right now, we are in a situation where our national debt is accelerating.
Which means the interest payments on that debt are also accelerating. If
we stopped borrowing and instead printed the money, we will create excess
dollars floating in the system...a sure fire prerequisite to accelerating
inflation. I think we both should agree that is not desirable in the long run.

The only solution which will help in the LONG run is to create more wealth
in the country. The 4 primary wealth creators are 1. Agriculture, 2. mining
3. Manufacturing & 4. Intellectual products such as new inventions, software,
R&D to improve current products, new pharmaceuticals products etc.

Just printing money willy nilly and giving it the needy will certainly help
in the short term and make us feel good. But it will exacerbate future problems.
More inflation or more debt to be serviced.

IMHO long term solutions are better than short term solutions. So my solution
would be to encourage & help the real wealth creators. How that could be done,
I will leave it to the experts.

[jtuck004]

15. I think we are on the same page. I think we are going to need big

government investments in R&D, Manufacturing, Agriculture and mining to bring about wealth creation.

I agree about just printing money and giving it to the "needy" - it does nothing sustainable, and I think most people understand this.

thanks.

[golfguru]

18. That is where I beg to differ

I don't think most people understand it. You are in the minority
who seems to realize the right solutions.

[notesdev]

17. Depends on what the meaning of 'default' is

If you borrow X amount of dollars and promise to pay interest for the privilege, then turn around and devalue the dollar, that is the functional equivalent of a partial default. It makes no difference if you screw the lender out of actual dollars or just the value that the dollars they are owed represent; either way you've reneged on the deal you made, to pay back the debt in full with a little extra for the risk and time value of the loan.

[jtuck004]

20. I don't see that as default. I see that as part of the risk one takes when capital is invested

for a greater return. I only see it as a functional equivalent of a default if you devalue for the express purpose of paying back cheaper dollars. In this case it is devalued to become more competitive, and to avoid a real default which might happen if the economy completely tanks. But I do understand the argument.

thanks

[notesdev]

21. Default IS the risk

The basic premise of lending is that it is done to generate a return, that you get back what you lent plus a premium. The risk is that you might not get paid back in part or full. If we borrow valuable dollars and return cheaper ones, that doesn't give the lender a return - that loses him money.

This has two effects - first, any sane lender is going to consider that kind of action taken deliberately to be no different than a deliberate default. Second, those lenders will never lend us money again. There is no functional difference between paying back a loan halfway and paying it back with currency worth half of what it was when it was borrowed.

If we follow that route we may as well default it out in the open, the effect on our ability to borrow in the future will be the same and our financial position will be much improved relative to the stealth default through devaluation scenario.

[jtuck004]

22. Ok, sure. But we have a country in trouble. Our means of creating

wealth has been "disappeared". And unless we make the money cheaper, it is still much cheaper to buy products from the new manufacturers than it is to build and buy here.

Problem is we have 27 million people un or underemployed. Huge numbers of homes foreclosed or heading that way. Half of all kids must use food stamps during the year. Some don't eat except at school. Maybe as much as 50% of the population has burned through enough of their savings and wealth so as to make it nearly impossible to purchase higher-priced local items, even though it would be in their own best interest.

So do we reduce our deficit, make our dollar stronger, and continue like we are (or perhaps even watch their lives go downhill further) just so we can pay back dollars that have roughly the same value as when they were lent? Or do we put money into rebuilding the manufacturing, R&D, mining, and new technologies which might bring us jobs, even if it lowers the "value" of our dollars?.

I know my choice would be to invest the money here, raise the deficit, rebuild our means of creating wealth - with some changes to try and keep this all from happening again. I know it will lower the value of the dollar, but I will be happy to risk our ability to borrow in the future, because if we keep on like this there may not be anything to borrow for. It sounds like we would be beholden to someone either way, I would rather do that with full employment.

'Course if oil prices go up, it may make all this academic, since it will make our dollar weaker and we won't be able to afford the imports. We can then shiver as we go through yet another energy crisis while we figure out the replacment technologies that we should be working much harder on now.

But that's just me speculating ;)

[notesdev]

23. The root of the problem

All the things you note are indeed problems, but throwing another trillion at a system which is not working for the people of this country doesn't fix any of them. At best it kicks the can down the road a little (and less and less with each trillion). If you want a dramatic example of how ineffective this tactic really is, take a look at a comparison of the projected economic scenarios under which the stimulus was sold to us vs. the actual that we have experienced since.

To solve the problem we need to look at its root.

Let's step back a moment and look and the country as a whole and the ridiculousness of the situation. By any historical or contemporary standard of material wealth, the present day United States as a whole is the most prosperous and wealthy nation ever to exist. How did it come to pass that in such a nation can the great majority are economically strangulated at every turn?

The reason why things are this way is because for decades this nation has built embezzlement and fraud into every economically significant aspect of its life. Everyone may point the finger of blame at everyone else, but the truth is that one is hard pressed to honestly name a single institution in this country which has not embezzled its heart out:

- The atrocities now so plain in our banking system have been going on for decades, siphoning off productive wealth, diverting it to unproductive luxuries for a tiny few.

- A large chunk of our economy gets thrown in the toilet every year as unproductive military expenses, thanks to a cart-leading-the-horse foreign policy that both parties pursue with vigor.

- We imprison an insane percentage of our population - unheard of even in open dictatorships - at great expense and at a great detriment to our productive capacity.

- Our governments can't spend money without at least half of its spending consumed in political patronage, pointless bureaucracy, working at cross purposes with itself, and pursuing policies that have no benefit to the citizenry.

- We have huge industries that have no good reason to exist, like the health 'insurance' industry. Even a pure cash-and-charity based system would serve more people at an enormously reduced cost.

- This will tread on some sacred cows, but there is no avoiding facing up to the fact that public employee unions on all levels are basically robbing their governments blind, not only receiving far more in direct compensation than their private counterparts (from whom that compensation must necessarily be taken) but also benefits way beyond any reasonable level and without equivalent in the private sector. (I'll entertain the inevitable disputation of this point only to those who can answer the question "Who is Bruce Malkenhorst?")

I could go on and on with the list of corrupted institutions and wrongheaded policies which are causing wholesale misallocation of huge amounts of our national wealth, but I think the point is made. The problem is not one we can fix within the current system, because the current system is geared mostly towards diverting wealth to those with influence, not those who produce wealth and make us all better off. The bottom line is that there is no reasonable excuse for a nation as wealthy as ours is to be almost wholly geared towards the impoverishment of the great majority of the population.

Our current economic system cannot be fixed as it is inherently self-destructive. Only when these institutions of corruption collapse under the weight of their own arrogance and selfishness, and their malicious influence destroyed, can we hope to fix any of the problems that you have identified. Any attempt to do so while these institutions maintain their positions will be thwarted by the legions who stand in the way demanding to share what they do not deserve.

[jtuck004]

25. So now we get to how we exorcise or fix the black heart of

greedy and corrupt people. A little beyond a stimulus package, but more necessary. You are right, the system is the problem.

But what rises out of the ashes, if we actually implode, may be no better than what is left behind. And to let it all blow up in the hopes that those people won't resurrect themselves seems like taking an awful chance with the lives of vulnerable people, who will still be at the mercy of the greedy, avaricious, and hateful. (Wow, what a system that allows people like Malkenhorst to thrive - on the other hand, some of the CEO's and bankers make him look like a piker by getting their hands on the retirement and investment pools of public money).

It may be that the sytems we have will all collapse under their own weight. But it strikes me that we are almost as likely to have some religious - corporate - fascist hybrid "government" come back as a result, instead of the thoughtful and inclusive system you propose. There is no way to know which side of the coin we will get, though I think if you take a nation that was fat and happy and cause them to be miserable and scared the result might not be as pleasant as one might think.

But what started me thinking about this is the idea being floated by the WH that we need to cut the deficit and social security. No way in hell would I ever prefer that over a plan that would pour money into adult education, fixing infrastructure, starting up more R&D, increasing manufacturing, etc. I do think it is important to try and avoid enriching the "legions" you speak of above, and while it may not be possible it doesn't keep me from trying.

Thank you. More to think about...

[Statistical]

29. This is closer to the real problem.

US GDP per capita has increased roughly 50% (from $34K per capita to $46K per capita) in last decade.

http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_pcap_cd&idim=country:USA&dl=en&hl=en&q=chart+of+US+GDP+per+capita

Think about that. The propserity of this country has increased 50% in a DECADE. So when you look around this country why doesn't it look 50% more prosperous.

Simply the wealth exists. It was created. It simply moved ALL to the top. Thus for 99% of people there was no improvement (and for many there was a reduction in wealth). for the top 1% it has been an amazing decade.

Now the rich have always scooped some off the top but nothing like the last decade.

[Statistical]

28. However it WILL be considered a partial default by those lending money.

There is a reason the interest on our debt is low. It is low because we have controlled inflation and thus the post inflation return (only measure of wealth that matters) has been positive.

As soon as post inflation returns are negative lenders will demand higher interest on the debt. Given the United States revolves about $1.8 trillion a year that means rather rapidly a good "chunk" of our debt starts converting to 7%, 8%, 9%, 13% interest rates.

There is no free lunch. Deficits are a necessary evil in a recession but intentionally devaluing the dollar will slam future budgets.


I mean the interest on $14T @ ~4% makes up about 20% of the budget. What do you think $20T @ 16% interest would do?

[econoclast]

8. So inflation and currency debasement is good?

I'm old enough to recall the 15% inflation of the late 1970s. There was a comedic routine (SNL maybe?) where a comic did an impersonation of Jimmy Carter giving an imagined speech about inflation.....

"My fellow Americans. We have decided that our war against inflation is misguided. Instead of fighting inflation we have decided to embrace it. Foster it. Haven't you always wanted to smoke $50 cigars? Wear $5,000 suits? Drive a $200,000 car? Have a million dollar house? Inflation will make that possible!"

While inflation is good for debtors who owe FIXED RATE debt it hammers debtors who have FLOATING RATE debt and it kills savers and those on fixed incomes - the elderly and those nearing retirement. Not to mention consumers. Price increases ALWAYS outstrip most wage increases. Talk about a declining standard of living! Inflation is where it comes from!

[jtuck004]

11. I agree. On the other hand, the interest rates are low today,

and the prices of many goods have actually stayed the same or decreased. Yet with over 27 million people unemployed, and more coming, no one has any money to buy.

And jobs in service industries, health care, government, etc do not create wealth, they survive because wealth is created by underlying industries. There is an argument that because we have a fiat currency the government can just keep selling bonds and financing the work, but the finance end of the industry takes a percentage as regularly as any casino, so I think there comes an endpoint at which you must create wealth. That comes from manufacturing. And since we have given that up, we may have to endure some pain (spending which creates jobs and encourages manufacturing while watching out for inflation) to have any hope of keeping this country together.

So what other solution is there? We now have over 27 million people unemployed or underemployed, and that number is likely to increase to over 31 million by next year.

What is your suggestion?

[econoclast]

12. I've said it before in other threads

The single necessary ingredient is the desire by Americans to purchase goods and services produced by Americans.

Ask yourself...where was your car made? How about the computer you are reading this on? For that matter, how about the servers DU runs on? cell phone? Go to your closet and look at the labels in the garments and shoes. Bet not one item in ten was made in America. Look in the 'fridge. What's in there? Fruits and veggies from Mexico and Central America? Heineken and Corona or Sam Adams? White wine from France or Australia or from California? Mustard in there Dijon from France or yellow French's? The list is endless. Each decision about what we purchase is a small thing. But as Charlie Sheen once said about his annual expenditures on prostitutes .... "Hey, it adds up!"

Want to know why Americans are out of work? Because of US! Industry continues to offshore jobs BECAUSE WE CONTINUE TO BUY THE IMPORTED STUFF!!!! It takes two to tango as the saying goes.

We believe in Keynes, no? Demand drives the market says Lord Keryes. As long as WE continue to demand flat screen tv's from Taiwan and cars from Korea and video games programmed in India and iPhones made in China ...that's what will be supplied.

Stimulus projects do little good if the money spent makes one stop at Walmart or Best Buy or the Hyundai dealer and "poof" is gone overseas. WE have to change. Look for and buy something produced by Americans.

[jtuck004]

13. Sounds good and I agree. But would you

please tell me where I can buy American made computers? Not just assembled, but the parts created here? Cars not full of imported parts? Food from what farms? Most of those are conglomerates and monopolies, and their profits don't go to citizens here.

I buy French's Mustard as you suggested. "French's is currently owned by British listed company Reckitt Benckiser, a company best known for home care products such as Lysol." That's not much different from paying the workers at Walmart. At least those some of the profits go to Arkansas.

sigh...

Even if we know that it is in our best interest to purchase local goods, their prices are nearly always higher, sometimes a lot higher. Where does that money come from? Real wages have remained flat or declined for many people since 1970. Unemployment is much more severe for people who make less money. Where does a single parent, or a family with a couple of kids get the money? Half of all kids must use food stamps at some point during the year just to eat. Some of them cry when they leave schools on Friday, because they know that is the last meal they will see until Monday and the free breakfast\lunch program.

I don't say this to disagree with you, we have to educate people as to the wisdom in your post. But it is just as necessary to _invest_ a horrendous amount of money to put these industries back in the hands of the working men and women of this country while they build the economy back under us.

[girl gone mad]

24. We don't appear to be in any danger of inflation right now..

even if we were printing like crazy.

We've got deflation now and for the foreseeable future, just like Japan, a country that does print money like crazy.

[notesdev]

16. It doesn't work that way

If you hand out a trillion dollars it will be a massive misallocation of capital skewed towards those favored by those handing out the money.

And when that fails (like the trillion dollar stimulus we just had failed), your children and grandchildren will be another trillion dollars poorer, plus interest.

Playing economic games like this doesn't work. The way to create jobs is to create an environment where people will on their own start and grow businesses.

[jtuck004]

19. Absolutely. What I am thinking through is some way to invest

the money so that it doesn't go to the captains of industry that have driven this ship aground already.

It ahs to combine with education, and encourage business creation by people who won't simply work for the short-term profit. That's where the really hard part comes in. You can't legislate people into being moral, or patriotic, etc. You can force them to act a particular way (the recent Rand Paul episode comes to mind) but it is very difficult to change what is in their hearts. And if they won't stand up against the forces of evil, as it were, and insist that work be done for the good of the country, or if it just becomes a big effort to try and pay people to work until the economy magically comes back it is all going to be nothing but a big debt for someone else to pay. AS you said.

I have looked at Employee Stock Ownership models, and something like the participatory model used in Germany. Not every one wants to be an owner, but it might be enough to make sure that decisions continue to be made for the good of the country. It's going to take a large educational effort, which isn't going to be possible until life spins apart and people start looking for another solution, which may never happen. Probably nothing is perfect, but that keeps us struggling, which is probably a good thing.

[girl gone mad]

26. The replies have been interesting.

I think you're on the right track.

Here's something you might enjoy:

http://www.youtube.com/watch?v=8T29g4mibW0&feature=related

I would recommend watching through all of the following questions. I believe there are 10 or so.

You might also like L. Randall Wray's book: http://www.amazon.com/Understanding-Modern-Money-Employment-Stability/dp/1845429419/ref=ntt_at_ep_dpi_1

You just need to tighten up your understanding of economic and monetary theory a bit to be able to defend this argument. There is a valid debate to be had as to the appropriate role of government, the real effects of debt, how money works, etc. Very few in the world are actually having such conversations right now, unfortunately. Even on progressive Dem. Underground, the Austrian and Chicago boy logic often dominates.

[jtuck004]

27. I need to learn more, and I am trying. There is a push to drop the

deficit, and I think that is a bad approach. We have so many resources, and I think we need to figure out how to
use them to build wealth, and put the means to do that back in everyone's hands. Don't see the country surviving without it.

Thank you for the resources.

Let me amend that - SO much to learn ;)

[Statistical]

30. Well "we" (as a nation) have been building wealth.

GDP is a measure of economic power. The problem hasn't been an inability to create wealth. The problem is the "siphon class" the top 0.1% siphons off more and more and more of that wealth.

Progressive taxation is necessary to curb this inbalance. Simply put the country today has more combined wealth and higher net worth than it did 10 years ago, 20 years ago, and any point in the history of the nation.

The problem is the debt is concentrated in the bottom 90% and the assets are concentrated in the top 0.1%.

[jtuck004]

31. For a temporary solution I would agree, but that will eventually fail because

the financial sector is not creating wealth, it is sucking it up off the backs of workers and sectors of the economy that do. Government funding of hedge fund and derivative losses, propping up housing, bonuses paid to avaricious company employees, increases in service and health care jobs which must be sustained by other wealth - all those allowed financial companies to show profits that contribute to a higher GDP. There is a continuing downturn in the industries which produce goods. Taxing them could lead to an avoidance of the need to regulate them. (If you regulate that behavior out of existence there, eventually, won't be anything to tax)
allowing this trend to continue and depending on taxes to regulate it eventually results in the destruction of innovation and creation which builds wealth, much like hiding your money in a mattress instead of taking the risks to invest it, or enjoying the rewards of spending it. Hiding your money (or pushing finance over wealth creation) in a mattress is a bad strategy for conservation, because it either becomes worthless or is eaten by rats.

I should add that I am not dismissing the idea of taxing such profits. I think it is part of the re-regulation of this behavior, adn makes sense to vacuum up the excess dollars that would then be in just a few hands in the private sector.

But I think regulation is a bigger part of the answer, and a re-focus and education of the American people on what made this country powerful, things like innovation, manufacturing, removing barriers to civil rights, investing in people, etc. The financial sector used to provide a vehicle for investment into the country, and they need to be returned to their roots. (And maybe making Wall Street folks just a little bit afraid to walk down the street without being loudly accosted might not be such a bad idea either.


-----------------------
A succubus (plural succubi) is a female demonic legendary creature<1> who seduces men in their sleep. It's male counterpart is the incubus. Similar to a vampire, they draw energy from their victims to sustain themselves. Sometimes masquerades as an investement banker.
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[Statistical]

32. Financial sector is relatively small percentage of GDP.

Little know fact is that US industrial output is #1 in the world. Our industrial base today is so large it is roughly equal to China & Japan combined (#2 & #30.

Industrial output has increased 37% over last decade.

This rarely gets any play because the meme that US "doesn't make anything" is well entrenched. Imports only make up about 10% of economy. When you consider net imports it is <5%.


So I go back to the larger point. Wealth is being created in the US. It is being created today, it will tomorrow, and next year, and next decade. However we are on a path where the labor of the 90% gets siphoned off by the 0.1% at the very top.

Unless that changes we won't see broad based prosperity in the United States ever again. Hell we could run a trade surplus. It wouldn't matter if the top 1/1000th takes 90% of the gains.

[jtuck004]

33. Not to minimize what is important to you, but I'm not looking for who is #1

or what the "common wisdom" is about who is making things well or not. I drive a 15 year old GM car that works just fine, so perhaps you are thinking of someone elses' meme.

Sure wealth is being created, but it may not be enough. According to the BLS stats (which may be conservative) we have 27 million people either unemployed or underemployed and every indication that we will have double digit unemployment for at least the next couple of years. We may see unemployment of 9 or 10% as far out as 2020. The manufacturing sector lost _at least_ 1 of every 6 jobs from 2000 to 2007, and then we REALLY lost jobs. All the time that "little" financial sector grew. What crap.

Output may have increased, but at the cost of a lot of lives that no longer have an income. And a lot of the "wealth" is being shipped overseas in bullets and trucks and paychecks, both to our troops and other governments.

All the wealth that wall street has is not even close to that which evaporated from the housing markets (and from retiree's 401k's and people's pension funds). I seriously suspect that even if you took all the paychecks from all the CEO's and investment bankers and distributed it among the working folk it wouldn't touch what they used to spend when they were employed.

'Course, the finance folks have kind of screwed themselves, cause you can't siphon off 90% of the income from labor that is not, well, laboring.

So while we are creating wealth, we are not providing soul-sustaining work that helps people maintain their self respect.

And upping the taxes to 60, 80, 90% on financial gains that result from a lot of misery, while it might help a bit, isn't going to fix that. (As much as I would applaud ;))