[Green Energy Reports]

This should be no big surprise when our government is so damn polarized that nothing ever gets done. Congress and political parties spends its time blaming one another. In China they only have one political party and seem to avoid the problem of polarization quite well. The Chinese people work like dogs and save 38% of their income. Theirs is not a perfect world, but we should give them some credit for their achievements and blame ourselves for exporting all those jobs overseas in the 70s and 80s. All we have left now is the best technology and medical facilities. I honestly don't see how we can ever take back the momentum from China, unless they suffer an economic catastrophe as we did.

[Pops]

Capitalism and easy, new money blows bubbles, and China has a doozy going I'd think. Any time a new employer comes to the sticks and pays the subsistence farmers to come to town and work in the factory things look good, for a while.

As for inflation, we have it pretty bad now - it shows up in everything except the official number, I think Keynes said a global currency would eliminate exactly the kind of inflation we are seeing right now - but that could be wrong.

At any rate, I don't think there is not enough cheap energy left for it to make much difference. With cheap energy goes cheap everything, actually it will be the end of a great number of things altogether and so massive international trade will slow to a crawl.

In another 20-30 years I'm thinking there just won't be nearly the need for a global currency and Americans won't care either way.

[AgentR11]

Thought experiment...

Why shouldn't a 1 billion person economy become larger than a 300 million person economy. Where both are industrially based, with modern outlooks, and significant natural resources at their commands, I see no reason to expect anything less.

OTOH, I think the fear mongering about China hegemony is just that. China isn't an expansionist power; and the territorial disputes they do have, are legitimate disputes, over relatively small and/or obscure parcels, requiring no malevolent intent to support on either side of the issues. Much less obnoxious than some of the claims the US made and won during the 19th century.

China is not a threat to the United States. Its just not. Our own Federal system might be a threat to a continuing economic prosperity; our own inefficiencies in consumption might be threats; or perhaps our given sense of entitlement might be... but a thriving economy in China can only be an asset and stabilizing force.

[radon]

$this->bbcode_second_pass_quote('Carlhole', '
')Predict when peak Science will occur and then come and argue with me. So far, nothing gives any indication that progress in Science & Technology is slowing down whatsoever.

[Keith_McClary]

Also, it seems that superpowers can't get reliable stooges these days:
Washington on the Rocks -An Empire of Autocrats, Aristocrats, and Uniformed Thugs Begins to Totter
By Alfred W. McCoy and Brett Reilly
$this->bbcode_second_pass_quote('', 'A')cross the Greater Middle East from Tunisia and Egypt to Bahrain and Yemen, democratic protests are threatening to sweep away subordinate elites crucial to the wielding of American power. Of course, all modern empires have relied on dependable surrogates to translate their global power into local control -- and for most of them, the moment when those elites began to stir, talk back, and set their own agendas was also the moment when it became clear that imperial collapse was in the cards.
...
When civilian presidents proved insubordinate, the Central Intelligence Agency went to work, promoting coups that would install reliable military successors --replacing Iranian Prime Minister Mohammad Mossadeq, who tried to nationalize his country's oil, with General Fazlollah Zahedi (and then the young Shah) in 1953; President Sukarno with General Suharto in Indonesia during the next decade; and of course President Salvador Allende with General Augusto Pinochet in Chile in 1973, to name just three such moments.
...
As U.S. power and influence declined, Washington’s attempts to control its subordinate elites began to fail, often spectacularly -- including its efforts to topple bête noire Hugo Chavez of Venezuela in a badly bungled 2002 coup, to detach ally Mikheil Saakashvili of Georgia from Russia’s orbit in 2008, and to oust nemesis Mahmoud Ahmadinejad in the 2009 Iranian elections. Where a CIA coup or covert cash once sufficed to defeat an antagonist, the Bush administration needed a massive invasion to topple just one troublesome dictator, Saddam Hussein.
...
For more than 50 years, Washington has been served well by a system of global power based on subordinate elites. That system once facilitated the extension of American influence worldwide with a surprising efficiency and (relatively speaking) an economy of force. Now, however, those loyal allies increasingly look like an empire of failed or insubordinate states. Make no mistake: the degradation of, or ending of, half a century of such ties is likely to leave Washington on the rocks.

[AgentR11]

$this->bbcode_second_pass_quote('radon', 'T')he scientific progress does falter now, and very seriously, and the points above illustrate it. What is now perceived as a rapid advancement of the scientific development is in fact mostly restricted to the consumer-related fields: number of functions in your held hand device, broadband connection speed etc. And to some military applications. This is why some observers talk about the "law of diminishing returns of technological advance", quite justifiably.

[radon]

$this->bbcode_second_pass_quote('AgentR11', 'A') lot of what you suggest as measurements though, is just a question of economic priorities. More people want faster/better/more internet/media ...

[yeahbut]

$this->bbcode_second_pass_quote('americandream', 'W')ots the bet you're a Ad hom deleted ?

[wallythacker]

The chinese gov will simply round up the old people and dump them at sea. problem solved. do you really think old people are going to stand in the way of china becoming the economic superpower?

the US, on the other hand, being broke and destitute and reduced to a 3rd world economy will slowly strip medicare and medicaid provisions away from their aged and watch them die terrible slow lingering deaths.

the chinese way is ultimately more humane.

[kublikhan]

$this->bbcode_second_pass_quote('wallythacker', 'T')he chinese gov will simply round up the old people and dump them at sea. problem solved. do you really think old people are going to stand in the way of china becoming the economic superpower?

the US, on the other hand, being broke and destitute and reduced to a 3rd world economy will slowly strip medicare and medicaid provisions away from their aged and watch them die terrible slow lingering deaths.

the chinese way is ultimately more humane.

[Sixstrings]

Here's a link to the actual IMF report on the US:
http://www.imf.org/external/np/ms/2011/062011a.htm

An interesting passage:
$this->bbcode_second_pass_quote('', '5'). Our preferred adjustment strategy entails a reduction of the federal structural primary deficit at a uniform pace over the next five years, within a fully-specified and politically-backed consolidation plan. Fiscal adjustment should start in FY2012 to guard against the risk of a disruptive loss in fiscal credibility.

(snip) Consideration could also be given to a national VAT or sales tax and carbon taxes, consistent with past advice by Fund staff.
http://www.thenewamerican.com/economy/commentary-mainmenu-43/8051-imf-wants-us-debt-ceiling-raised-immediately

[careinke]

$this->bbcode_second_pass_quote('Sixstrings', '
')
You know what, I'm starting to realize that the Republican Party is important. All those Southern Bible thumping doomer wingnuts are very important. They're all that stand between us and a NATIONAL SALES TAX. And carbon taxes. The IMF needs to go have coffee in some Vienna cafe and bother Greece because there is NO WAY the Republican base will ever allow a national sales tax to pass.

[Outcast_Searcher]

Careinke, sounds great to me. IF you could get everybody beyond the prebate level to actually PAY the 23%.

However, I suspect you're going to see a tremendous amount of cheating on high end goods and things being bought offshore, etc. to avoid this by the rich. So then we find out the REAL rate is something north of 40%. That, I suspect would be pretty nasty to the middle class.

[Pretorian]

$this->bbcode_second_pass_quote('Sixstrings', '
')Founded in 1944 along with the World Bank, the IMF...

[Sixstrings]

$this->bbcode_second_pass_quote('careinke', 'A')ctually quite a few Republicans support a sales tax.

[Sixstrings]

$this->bbcode_second_pass_quote('GASMON', 'I')n what Treasury officials viewed as one of the most outrageous power grabs in recent memory, they demanded the right to raise a Europe-wide sales tax.

[pup55]

For every strategy there is an equal and opposite strategy.

The strategy above is designed for the least amount of pain possible, while at the same time, stringing the problem out for more decades.

1. Don’t cut spending too much — it might impede the economic recovery

Correct, but what spending we do should be an investment in productivity i.e. fixing up our highway and rail systems and not pouring it down a rathole in Iraq and Afghanistan. Why in the hell do we have a 6 billion dollar per year naval base 1200 miles from the nearest ocean? Why are we defending Germany and Japan and Korea, and of course Israel, while their middle classes have government-financed health care, and a higher standard of living than we do?

2. Keep interest rates low for a long time

Nope. Interest rates need to be much higher. Right now, holders of capital are not being compensated for their risk, as we all found out during the real estate collapse. Yes, it will be painful in the short run, but in the long run, when holders of capital are rewarded for lending their money out, there is more money available and it gets spent on the projects that have the highest likelihood of success.


3. Keep an eye on inflation

And if it shows up, do what? drop money from a helicopter? If you do (2) above there will be a lot less inflation.


4. Keep stimulating the housing market, it’ll eventually come back

Not until it is purged of the felons who perpetrated the fraud in the first place, starting with the public humiliation of the bond rating agencies, who gave the CDO's a AAA rating despite the fact they were printed on Charmin.


5. Enforce “cramdowns” by banks holding mortgages in order to clear the market more quickly

I absolutely agree with this. The first order of business is start telling the truth about what the nation's real estate is worth, and if the banks go under, let them and prosecute the managers for fraud, which is what they deserve.

6. Fully implement the Dodd-Frank financial reforms, with full funding to complete the bill’s potential to regulate further the financial markets

Nope. Chris Dodd should be locked up along with his banking buddies. The Dodd-Frank legislation basically lets the felons in (4) above off the hook in exchange for their cooperation.


7. Allocate more money for federal job training.

Training programs tend to be focused on the jobs that are soon going to be obsolete. The real problem is that aside from defense, we're living in an economy that no longer makes anything useful, because we exported all of that.

8. Consolidate the government’s present 50 different job programs into a single program

Hilarious. Single program to provide a workforce to do what? The problem is not the workforce, it is at the job creation end. Oh, and by the way, is there anything in these to stop the illegal importing of low wage labor across our southern border? Nope. They evidently want to keep that game going. We have a generation of young gentlemen (the 20 somethings) sitting around getting fat and/or loaded, playing Xbox right now, perfectly capable of doing some of this activity and developing a work ethic, but it suits us to be giving those jobs to immigrants. Until we sort all of that out no amount of training is going to help. We also have a generation of teen moms who have figured out that it is a cute game to pop out a couple of kids and live off the system, so it is quite likely to go on for another generation.


9. Institute a national sales tax, or value-added-tax (VAT)

Sadly this is inevitable. It allows taxation without representation. The cowards in congress will not need to honestly tell the public that they're going to raise taxes. All they need to do is sneak a VAT increase in one of those midnight spending bills, and we're paying another penny, and won't notice it or even worse, build in a little inflation and they get their tax increases by stealth. If the government wants to raise taxes, and has a legitimate reason for doing so, they need to come forward and ask the public directly, and maybe if we think we need it, we'll go along with it. The VAT allows them to avoid that.

The sad thing about taxes in this country is that no one is being honest. We want to fight two-plus wars, and pay to support the bottom third of the population, plus everybody over 65, plus give out a lot of other benefits to various groups, but no one wants to come forward and ask us to pay for it out of our own pockets. Much easier to borrow it from the future generations. We are looking at the tax system as a way to modify behavior, rather than raise money for the useful government activities, if any.

[Pops]

Good post pup.

$this->bbcode_second_pass_quote('pup55', 'I')f the government wants to raise taxes, and has a legitimate reason for doing so, they need to come forward and ask the public directly, and maybe if we think we need it, we'll go along with it.

[Fishman]

Ah, the wonders of the internet. Lets see, how much do we contribute to the IMF? Who has advocated giving more money to the IMF? If we don't give anything to the IMF will that appease Obama's private jet envy?
http://online.wsj.com/article/SB124294127775444875.html

"You know what, I'm starting to realize that the Republican Party is important. All those Southern Bible thumping doomer wingnuts are very important"

Six, reality can be painful, its not always pleasant, but it's best you confront it, welcome.
The borrower is slave to the lender. (Proverbs 22:7)