Originally posted by: Engineer
Originally posted by: sandorski
That can't be dude, everyone knows everyone will continue to prop up the US no matter what!
From the Federal Government down to your next door neighbour, a drastic change needs to occur before the US can safely avoid a reckoning. I don't see anything from the current Admin that even takes the threat seriously, nevermind attempts to address the issue. If the Democrats want an issue, oddly, Fiscal Conservatism is their's for the taking. The Republicans have totally abandoned any pretense of Fiscal Conservatism.
QFT.
Ah, what the hell am I talking about. Just print more money. Problem solved. Next! :roll:
The economy is very top-heavy and is about to fall over.WASHINGTON (MarketWatch) -- U.S. corporate profits have increased 21.3% in the past year and now account for the largest share of national income in 40 years, the Commerce Department said Thursday.
Strong productivity gains and subdued wage growth boosted before-tax profits to 11.6% of national income in the fourth quarter of 2005, the biggest share since the summer of 1966. See full story.
For all of 2005, before-tax profits totaled $1.35 trillion, up from $1.16 trillion in 2004 and just $767 billion in 2001.
Meanwhile, the share of national income going to wage and salary workers has fallen to 56.9%. Except for a brief period in 1997, that's the lowest share for labor income since 1966.
"It's a big puzzle," said Josh Bivens, an economist for the Economic Policy Institute. "If this is a knowledge economy, how come the brains aren't being compensated? Instead, the owners of physical capital are getting the rewards."
Despite the flood of cash coming in the door, corporations are investing comparatively little in expanding their operations. Capital spending has been below average, especially considering the strength of the economy, the level of profits and the special tax breaks given to boost investment.
In the fourth quarter, business fixed investment increased just 4.5%. In the past year, investment has risen 6.8%. The growth rate has been falling for the past four quarters.
Some economists are counting on the corporate sector to pick up their investments in the coming year, to replace the economic stimulus that will be lost as the housing market cools.
Profits have been so high because almost all of the benefits from productivity improvements are flowing to the owners of capital rather than to the workers.
While profits are up 21.3% in the past year, labor compensation is up just 5.5%. After adjusting for inflation, population growth and taxes, real disposable per capita incomes are up just 0.5% in the past year.
Competition, tight labor market may force rise in labor income
But as the labor market tightens, labor's share of income will likely rise, economists say.
"Capital spending will stay strong," said Gus Faucher, director of macroeconomic research at Moody's Economy.com. He theorizes that, to maintain productivity growth in a hypercompetitive world, companies will be forced to invest in capital as labor becomes relatively more expensive.
Corporations certainly have the means to invest, but they've been cautious, said Ken Goldstein, an economist for the Conference Board. In 2005, corporations retained $460 billion of their profits, while handing back $514 billion in dividends.
Consumers, as always, hold the key. If labor income rises enough, consumers could keep up a healthy pace of spending even if they lose ready access to their home equity as a source of purchasing power, Goldstein said.
But consumers are very wary of rising prices. So far, their incomes have not kept pace with inflation. Goldstein expects consumer spending to slow this year.
And if consumer spending slows, corporations will become more hesitant about expanding their productive capacity. Unless there's stronger demand from overseas markets.
Goldstein figures there's less than a 50-50 chance that business investment will rise significantly in the coming year. The Conference Board expects the U.S. economy to grow 2.5% in the next four quarters, after growing 3.5% in the past four quarters.
That's not horrible, but it's not a boom either
The happy scenario could still play out. But "there are a lot of 'ifs'," Bivens said.
Originally posted by: conjur
Meanwhile, the share of national income going to wage and salary workers has fallen to 56.9%. Except for a brief period in 1997, that's the lowest share for labor income since 1966.
"It's a big puzzle," said Josh Bivens, an economist for the Economic Policy Institute. "If this is a knowledge economy, how come the brains aren't being compensated? Instead, the owners of physical capital are getting the rewards."
We're both in the wrong line of work.Originally posted by: conjur
Topic Title: What's wrong with the economy?
Topic Summary: EPI report mirroring exactly what I've been saying for months
BTW, everything I've been saying that's wrong with our economy came out last month in an article by the Economic Policy Institute (I'm in the wrong line of work )
1. Profits are up, but the wages and the incomes of average Americans are down.
2. More and more people are deeper and deeper in debt.
3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.
4. Poverty is on the rise.
5. Rising health care costs are eroding families' already declining income.
Originally posted by: BlancoNino
If we would quit raising minimum wages and taxing/regulating businesses at the state and local level, small businesses would flourish and demand for jobs will increase and so will pay.
unionization is down and stupidity is up, your hypothesis is busted.Originally posted by: GTaudiophile
Too bad they don't teach kids valuable stuff in schools, like how to complete a 1040, how credit cards work, interest rates, and how to balance a checkbook.
So, yeah, the average American Joe and Jane needs to learn the concept of delayed gratification, save, and eliminate debt. Then we need politicians who believe in the same concepts...cutting back spending, savings more, paying off debts, and eventually collecting less.
But none of the above can happen until we have a society that cares about education again: eliminate the teacher's union, the DOE, and introduce a school uniform standard, and school vouchers. Force schools/teachers to compete, improve, or die. I recently visited an inner-city high school school in Atlanta: 90% minority, beautiful clean campus, laptops for all students, data projectors galore, WiFi networks galore, more money spent per child than any private school in Atlanta...yet the 9th graders I saw COULD NOT READ and COULD BARELY SPEAK the ENGLISH LANGUAGE! I have never been so depressed in my life after seeing what I saw with my own eyes and ears! Represents much of what is wrong in America today: affirmative action, political correctness, unions, lack of discipline, lowering of societal standards (dumbing down America), and throwing money at solutions that government KNOWS will not fix the true problem!
Originally posted by: conjur
Bump for updated report
http://www.epi.org/content.cfm/pm110
Also,
Buying power of minimum wage at 51-year low
Congress Could Break Record for Longest Period Without an Increase
http://www.epinet.org/content.cfm/ib224
But, hey, that's ok. As long as corporations are holding onto cash (along with the rich), the rest of America will be able to get along just fine with their lack of healthcare, lack of purchasing power, jobs being outsources, interest rates rising, debt level rising, etc.
You must be retarded if you think slashing the budget of the national endowment for the arts will have any real effect on the deficit. On the other hand you can slash 200-300 billion for the military budget and still have an overwhelming military.Originally posted by: GTaudiophile
The US government is going to have to slash and burn spending (the bulk of which savings could be had by cutting military spending and stop being so damned war-like in our foreign policy).
Agree with cutting spending. But all social welfare programs should be cut, not the military. DOE: Check! NEArts: Check! Prisoner benefits gone: Check!
intorducing fair tax will not end the irs, they will still be around to process the checks and make sure people are actuallly paying, even if it is under another name.Taxes are going to have to be raised, probably at least to the levels they were under Clinton.
BS! End the IRS. Introduce the FAIR TAX!
Originally posted by: GoPackGo
Originally posted by: conjur
Bump for updated report
http://www.epi.org/content.cfm/pm110
Also,
Buying power of minimum wage at 51-year low
Congress Could Break Record for Longest Period Without an Increase
http://www.epinet.org/content.cfm/ib224
But, hey, that's ok. As long as corporations are holding onto cash (along with the rich), the rest of America will be able to get along just fine with their lack of healthcare, lack of purchasing power, jobs being outsources, interest rates rising, debt level rising, etc.
I think everyones buying power has decreased.
A 50K a year job isnt nearly as much as one might think anymore. Housing has gone crazy and high fuel costs is pushing everything to be more and more expensive.
The oil barron are grabbing all the cash they can...but to do what with it? Its value shrinks more and more every day.
how do you expect to employ cometant teachers if you aren't going to pay them anything. payscale for a masters degree in teaching starts at like 25k and ends at MAYBE 70k if you have been working in the same district for 15 years.Originally posted by: UptheMiddle
Originally posted by: bamacre
Our economic woes are the direct result of inefficient and just plain poor education. The unemployment numbers are high, yet there are tons of jobs out there waiting to be filled. Teachers' salaries need to be raised, making the job more competitive. But without teachers' also being held accountable, throwing money at the problem won't work.
I don't know how many of you have had experience working with minimum-wage workers doing low-skilled jobs, but around here, most of them are horrible. They can barely read/write, they lack responsibilty and accountability. I blame their parents just as much as the education system.
This isn't an R or D issue, both have their share of blame for all of this. The current admin and past Republican admin's have been throwing hundreds of billions of dollars into "protecting" America from boogeymen, and the Democrats have spent more money and resources trying to parent our children rather than actually teach them a useful skill.
UP the salary of teachers? You're out of your mind. For the amount of time worked per year (7-8 months), benefits package, and the retirement packages, I'd say that the rate of pay is WAY out of line. And increase gov't spending, great idea.
The US education system has failed MISERABLY and you want to reward that?
Originally posted by: Ronstang
Originally posted by: smack Down
Originally posted by: BlancoNino
Originally posted by: sandorski
Originally posted by: BlancoNino
Originally posted by: Zebo
If we make the minimum wage high enough to where people can live off of it, people aren't going to push themselves to work harder and further their education to reach better paying and more rewarding jobs.
If they can't even live off it how are they going to live off it *and* pay for school to find more rewarding work? Not to mention find the time to attend. Anything "rewarding" (you mean financally) is intesive like premed/engineering etc requiring your full attention and usually daytime classes.
They don't - walk though the isles of walmart you'll see plenty of middle aged persons stuck in a rut. You think they like making minimum wage or being a walmart coolie?
Like I said. Minimum wage jobs are starter jobs. If these people can't apply for financial aid, work harder to make more money, or get a student loan because they screwed up their credit, then I'd say that's their problem. Of course socialist loonies would love to put the burden on the hard-working so that everyone can go to school for free and do whatever they want.
What if Free or affordable Education gets them a career where they make more money and pay more Taxes?
If they're making more money AND paying more taxes, where's the trade? What's the point of going to school for 4 years so that you can work at a job that makes you pay for some other losers schooling?
So anyones who parents aren't rich is a loser.
Why don't you pull that silver spoon out of your ass.
I do not think you understood what he was trying to convey. He was responding to the comment of "free or affordable education" which means the taxpayer would be footing the bill. I for one do not agree with this either. My parents are well off and were when I was in school yet I paid for my undergrad and grad school on my own without taking out any loans. If I can do that then why should I be punished through taxes to pay for people that do not want to be responsible for their own school expenses? It boils down to determination and dedication, unfortunately that is not all that common these days. People want the benefits while expecting someone else to make the sacrifices.
Originally posted by: BlancoNino
Give a student 2-3 years after high school to work and I'll bet anything they can land a job paying around 9 dollars an hour (sometimes more). I know plenty of people who do, and that's more than enough to pay the way through JC. Besides, nobody said students have to take a full load of courses every quarter.
Originally posted by: BlancoNino
Originally posted by: conjur
Because the increase in their salary is more than the increase in their taxes.Originally posted by: BlancoNino
If they're making more money AND paying more taxes, where's the trade? What's the point of going to school for 4 years so that you can work at a job that makes you pay for some other losers schooling?Originally posted by: sandorski
What if Free or affordable Education gets them a career where they make more money and pay more Taxes?
A progressive tax structure is the best way to implement taxation, at least while there's fewer workers than retirees causing the Social Security deficit looming on the economic horizon.
There's no way around increasing taxes (starting with rescinding all tax cuts the Propagandist has passed) and cutting spending (starting with the Military and a much less aggressive foreign policy) in order to keep us from turning into Argentina.
There is a way around increasing taxes. The liberals love to gut the military, tax the rich, and then claim how fiscally responsible they are, while conservatives have to throw funding back at it as soon as we need it and cut taxes to help out the economy. Any reason why Reagan collected the amount of taxes he did despite massive tax cuts?
Originally posted by: BlancoNino
Originally posted by: conjur
Wrong answer.
Go do your homework: read.
That's for balancing the budget in 2040 based on current rates.
I'm saying slash social spending NOW.
Originally posted by: Pabster
.
most (all) credible economic theories indicate that if discresionary income increases, as it would if you cut taxes, production will fall, since you need to work less to maintain the same standard of living. The specific theory is a bit more complicated than that, but the result in the end is the same, and it is an accurate summary.Originally posted by: LunarRay
edit: Some say tax cuts fuel Demand Side activity but I just don't agree ... Not unless other issues are addressed first. I just don't see an across the board tax cut as a fuel to increasing growth. It will reduce debt first cuz we live by our psychological fears...
Originally posted by: conjur
Bump for updated report
http://www.epi.org/content.cfm/pm110
Also,
Buying power of minimum wage at 51-year low
Congress Could Break Record for Longest Period Without an Increase
http://www.epinet.org/content.cfm/ib224
But, hey, that's ok. As long as corporations are holding onto cash (along with the rich), the rest of America will be able to get along just fine with their lack of healthcare, lack of purchasing power, jobs being outsources, interest rates rising, debt level rising, etc.
Originally posted by: miketheidiot
Originally posted by: BlancoNino
If we would quit raising minimum wages and taxing/regulating businesses at the state and local level, small businesses would flourish and demand for jobs will increase and so will pay.
garbage policy. Also inreasing taxes leads to increased gdp, contrrary to popular disinformation.