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kentuck Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:27 AM
Original message
Just how bad is it going to get ??
Yesterday, President Obama said it would get worse before it got better. How much worse? Even the Republicans are agreeing with the Democrats that we need a large stimulus package. Everyone is a Keynesian.

Last month, we lost 533,000 jobs. That was the most since the first oil shock in 1974 when Gerald Ford was President. That was a tough recession. Right at the end of the Watergate era. It was some tough times to find a job.

But this time seems to be much worse, judging from the reaction of all the politicians. The banks are hoarding all the money and refuse to lend to anyone. The car companies are going under and businesses are laying off workers all across the country.

Can anyone know how tough it will be 6 months from now? What good does it do to save a capitalist system that doesn't work for the people? Are we really saving the capitalist system or simply saving a few high-rollers that got caught with their pants down? I haven't heard many stories about our local community banks or credit unions having the same problems, although I am sure there will be a domino effect??

What will be the unemployment rate one year from now? How many people will be on food stamps? How many people will need help with heating their homes? How many jobs will be available to help people survive?
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Mon Dec-08-08 10:35 AM
Response to Original message
1. It will get a LOT worse.
Without the consumer returning to normal behavior we will continue the slide. More people will lose their jobs increasing the consumer pessimism. Our economy is 70% consumer based. Without the consumer we are dead in the water.
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Skink Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:48 AM
Response to Reply #1
5. Since when has the consumer been normal.
I'm glad people bought homes but the means to get there was unsustainable. Easy credit produced by all this home equity in turn made it easy for rampant inflation in every sector of society. Look at rents per square foot compared to a decade ago. Look at electric rates. Govenmental policies are as much to blame as easy credit.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Mon Dec-08-08 11:17 AM
Response to Reply #5
13. The consumer hasn't been normal since the 70's.
Easy credit modified spending behavior.
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tavalon Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:01 AM
Response to Reply #1
6. Is there any scenario where citizens are not required to return to an unsustainable
consumer status? I mean the consumer lifestyle has been unsustainable for some time so returning to that is a stop gap at best.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Mon Dec-08-08 11:12 AM
Response to Reply #6
10. That's right.
It was an unsustainable way of life. We will now enter a depression until we reach a level where it is sustainable. People will eventually have to live within their means.
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tavalon Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:19 AM
Response to Reply #10
14. So are you saying that if we go back en masse to being good little consumers,
we can stave off the coming depression. Sadly, I don't think you are saying that at all.
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wartrace Donating Member (920 posts) Send PM | Profile | Ignore Mon Dec-08-08 11:54 AM
Response to Reply #14
18. You are right, that IS NOT what I am saying.
I am saying a depression is unavoidable. Our economy will contract to the point where it is sustainable on current income without the use of consumer credit.
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closeupready Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:35 AM
Response to Original message
2. Things are going to get a lot worse. BUT,
given how the market reacted last Friday to news of 533,000 laid off in November, we may psychologically be past a point of denial, and coming to grips with the flaws in our economy/policies. That gives me hope that we can start to do REAL economic triage, and then think about change and recovery.
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gordianot Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:38 AM
Response to Original message
3. Fundamental primal crisis, beyond imagination may be around the corner.
I hope to hold on to property deeds for the farm. It may be all we have left.
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CoffeeCat Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 10:42 AM
Response to Original message
4. It's so important to have answers to these questions!
Edited on Mon Dec-08-08 10:45 AM by TwoSparkles
I applaud you for asking these questions.

WHAT is going to happen to our economy? Seriously, WHAT is going to happen???

I only have a minor in economics, so I'm no economics genius. Furthermore, the supposed "economics
geniuses" of our time, are giving mixed signals. A month ago, Paul Krugman said that unemployment
stats wouldn't worsen. Now, he sounds more like a doomsayer.

I seriously, find myself looking for answers--wondering how in the hell I can protect (or at least
somewhat insulate) my family from an economy that appears to be quickly spiralling down the drain.

Then, I think---am I being too pessimistic? Hell, the stock market is up today! There's no
guarantee that things will go to hell...think positive! :eyes:

Then, I look at what we've done in this country. We've artificially propped up our entire economy
on credit-card spending, looting our home equity and buying houses and cars that we could not afford.
That's just....'so ove'r now. Consumers can no longer hold up the facade anymore--because they're
paying off their debts, saving more and they're not spending

So, aggregate demand will adjust---fall. A major reset will happen--with our country's aggregate
demand curve shifting downward and to the left.

So, in my mind--less demand of everything, foreclosures, rising unemployment, our national debt--all
spell epic economic disaster to me.

But like I said, I'm no expert.

The MSM is a complete JOKE. They only started calling our current situation "a recession" a month ago.
They're under so much pressure from their corporate masters to keep us slaves using those credit cards
to buy stuff we can't afford. So, we get sunny forecasts when it's frickin hailing bowling balls.

I don't mean to be a pain in the ass, but does anyone have any straight answers? Are their any Web sites
out there that tell the truth?

How can we prepare if we don't have access to clear information about where this country's economy stands
or what is likely to happen?

What are the predictors that clearly demonstrate that economic disaster is likely?

Sorry for all of the questions...I'm just your average schlep hoping to protect her family and do the right things.
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tavalon Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:05 AM
Response to Reply #4
8. Even if someone out there really knows what comes after the chasm or
how deep that chasm will go they aren't going to talk. It would make it worse. But what is keeping me up nights is the thought that there really is no one out there who knows where this is going to end up. One of my hubbies wants to buy silver, the other just wants to bury his head and I'm stocking up on staples and canned goods and not a one of us knows if we have the right approach. I'm grateful that my job will not be first on the chopping block (nurse) but it is nervewracking nonetheless.
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CoffeeCat Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:30 AM
Response to Reply #8
16. I feel my blood pressure easing up...
...just reading your post.

I'm sorry that we're all in this predicament, and that we're worrying. However, it is comforting to
know that others are concerned with the same things. When you're experiencing hardship and worry, it
is helpful to talk with others--because that is how solutions are found. That is how you can best
prepare, when you're getting feedback and ideas from others. And listening to each other.

It sounds like you have a husband that is not on the same page as you, but you're plowing ahead and
preparing. I'm in the same predicament. My husband doesn't see the crisis as bad as I do. His heart
and head are in the right place. We just disagree on what is going to happen. I certainly don't have
a crystal ball or a Ph.D. in economics--so who am I to insist that I am right? I don't know that I am.

I don't know if this is true for your husband, but I feel somewhat that since my husband is the primary
breadwinner--that he has to remain somewhat positive, because there is a lot of pressure on him. I'm wanting
to do a lot of preparing, when he doesn't see the need to really prepare.

Like you, I'm stockpiling. I've also taken money out of bank accounts and we're keeping cash at home. My
husband sees no need for this. In fact, he's irritated by it. However, he respects that we have differing
opinions. We have enough cash at home for 3 months expenses. But then...is that smart? Am I being a "Chicken
Little."? I don't know. I just know that the possibility exists for a massive economic crisis and I want
to be prepared.

Like you said, no one has exactly figured out what is the appropriate approach. Good point. All we can
do is make educated guesses.

I'm glad you are in a stable profession. No job is safe, but you have somewhat insulated yourself in a high-demand
career that is essential in our economy.

I think threads like this are so important. We may not have definitive answers, but at least we can talk and
share--and know that we're not alone. :)
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tavalon Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:40 AM
Response to Reply #16
17. Ah, but I am actually in a triad so it's two of us worrying and
one sticking his head in the sand. He doesn't dispute that bad stuff is happening - heck, within the next month or so, they are cutting his hours at work. But that's his way of dealing with things he can't find a solution for. It's actually extra nice with three adults sharing the burden of survival, especially since we have a severely autistic child who has numerous special needs.

I don't understand at all how buying silver is going to help us but it will help the other hubby to feel safer and since we have a bit of nest egg, I told him to go ahead.
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Horse with no Name Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:22 AM
Response to Reply #4
15. I have very little debt
and it is manageable. I won't be making the cross country move I had long anticipated for the time being because they are worse off than we are here--that was evident several months ago when the housing bubble started bursting.
Right now, all of my cars are paid for, I have no credit card debt, I have one small bank loan I could feasibly pay off with half of one paycheck, and my profession (if not my job itself) is stable.
However, my best friend in the whole world is up to her ears in credit card debt. They have FOUR car loans and at least 10 cards that they use frequently.
The upside is that they paid their house off last year--and when she asked about a second mortgage, I strongly advised against it.
I sincerely hope she listened.
She and her husband both work--one for the war machine and the other is a teacher---so I suspect their jobs will be pretty secure, but I suspect people in the same straits as they are will be in massive trouble. :(
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Neshanic Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:04 AM
Response to Original message
7. Horrifying.
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:10 AM
Response to Original message
9. My crystal ball that has served me so well over the past 8 years
has gotten very hazy because Obama is an unknown quantity. Right now, he's echoing all the sage advice given to him by his cabinet of DLC experts. However, he's a very smart man and might realize they're all full of shit sooner than later.

The bottom line is that I have no idea how bad this is going to get. I wish I did, it would be easier to prepare for what's ahead.

This winter, a lot of people will be wearing coats and hats indoors, if they're lucky enough to have an indoors. More people will be going door to door asking for yard work, food to keep them going if there is no work to be done. Compassionate people will invent things for them to do and feed them as well as possible. Expect to see kids wearing last year's clothes and going barefoot in the summer.

I hope this winter will see the worst of it but I'm not confident about that.
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Coyote_Bandit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 11:13 AM
Response to Original message
11. I Think the Answer Varies
from person to person and situation to situation.

Someone with low/no debt, a little bit a cash, the discipline to be somewhat frugal and the ability to bring in some income working for themselves will probably be able to ride out the crisis - assuming they (and their family members) don't face a health crisis or other significant loss (fire, accident, theft, crime, etc.). It will probably be a bit more dicey for everyone else.

My personal opinion is that the national economy will not recover. Instead, it will be forced to make a painful transition to a more productive and sustainable model - and this will take some time to occur. An economy with consumer spending comprimising two thirds of GDP with increasing trade deficits, high debt levels, outsourced labor and low manufacturing capabilities is not sustainable.

The question isn't how bad it will get but what must occur to transition to a more sustainable model.
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lutherj Donating Member (788 posts) Send PM | Profile | Ignore Mon Dec-08-08 11:16 AM
Response to Original message
12. They are throwing phony money at a collapsing system, trying to keep it going for a few more
months, but with no idea what to do after that. I think we may get a little reprieve with the new administration coming in, but soon it will crash hard.

In my opinion, the bailouts are ultimately useless. If it didn't have such heartbreaking ramifications for everyday people in the real world, the spectacle of these stuffed-suit capitalists trying to redeem their souls by throwing all this meaningless paper at each other would be hilarious. In my opinion though, we should be doing the opposite of bailing out these financial institutions. I think we should shut down the entire credit industry. Tell them to turn off the lights, lock the doors, and go home - it's done. We tell everyone that debts are written off, that everyone owns the home they are living in, and we find homes for the homeless. Most of corporate culture would collapse, the monetary system would collapse. We start a massive public works program where everyone is involved in re-localizing our economy, rebuilding our communities, and transitioning to a sustainable lifestyle.
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Tierra_y_Libertad Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-08-08 12:09 PM
Response to Original message
19. The ripples are only starting to spread. A very long, very deep, recession is coming.
At the very least.

The danger, IMO, is that the politicians and corporations really don't know what to do except try to cover their sorry asses by appearing to be doing something. The repercussions of their panic driven "solutions" may, very likely, result in greater suffering than if they did nothing.

In times of great economic distress the people have historically looked to "strong" leaders who offer easy solutions which result catastrophic conflicts between nations each trying to achieve dominance to satisfy the "strong" leaders.

"May you live in interesting times." is a Chinese curse. And, we are approaching very interesting times.
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