Is the USA headed for economic collapse?

[screembloodymurder]

This article supports my view of our current situation. http://www.financialsense.com/fsu/editorials/willie/0912.htm
I do not see a sustainable recovery on the horizon, and I expect rising interest rates and soaring lumber prices to collapse the real estate market. The consumer seems tapped out (record foreclosures, bankruptcies, etc.) and a jobloss recovery isn't going to help the American worker. Investment spending is going into Asia and won't create jobs here. The war in Iraq is depleting resources both financial and real. Given that we can't do anything about President Bush for a year, how can we protect ourselves from financial ruin? Does anyone have any strategies? I would like to buy some silver or gold, but I am not sure how to go about purchasing metals.

[Brucey]

1. Maybe, it seems that the good ole USA

is circling the drain in so many areas... it's hard to see anything good happening any time soon. Environment, traffic, schools, jobs, warmongering, ... where are we headed?

[TNDemo]

2. And the question always is - What do we do on a personal level?

This article was posted earlier and I have been reading it (very long so I have not read it thoroughly yet). I don't think there is anything I can do on a personal level to change the course of the Bush economic train wreck but I do want to consider what to do on a personal financial level. We are making plans to build a house on land we have had. Makes me not want to start that. Also - money in the bank. If banks fail will the government have enough available to cover FDIC? If we take our money out and put it under our mattress will it be worth anything anyway? What to do, what to do...

[screembloodymurder]

5. I'm in exactly the same situation

have drawn up the plans, but sheet lumber prices have doubled since May. I'm holding off for now.

[kalian]

9. Look for alternative building techniques....

Like Earth-ships and other alternative passive solar homes.

[BiggJawn]

6. FDIC will be broke...

Hell, I bet it's broke right now, and what little money is available will indemmnify the Ken Lays and Bill Gates of the country first and by the time Auntie Sadie comes up to the window to get her 50 kilobucks it will be "sorry, we're out of money. Take this IOU instead..."

And currency will be worthless. A $100 bill is worth $100 only as long as people believe that the United States has $100 to back it with. Once the US has collapsed, you'll need wheelbarrows full of C-notes to buy a hamburger, and we'll be using Abe Lincoln for ass-wipe. An ounce of gold or silver, however, is worth something because it's real, and it's rare.

[Art_from_Ark]

12. Gold and, especially, silver, are not particularly rare

There are quite a few silver mines that would pick up production if the price of silver were to rise to a more attractive level. It should also be mentioned that the price of so-called "junk silver" (that is, 90% silver US coins issued before 1965 that have little numismatic value) is nearly the same now as it was in 1973, and the same as it was in 1991. The main attraction with silver is that you can buy about 70 (troy) ounces (that is, 31.1 grams/oz) for the price of about 1 ounce of gold, and silver has been considered a precious metal for thousands of years.

[kalian]

13. Yes...but...

the issue is if demand accelerates.
The arguement in favor of precious metals is that it takes a long time to revamp mining and production in order to meet up with demand.

I personally believe that precious metals (and land, food production) will be the commodities that everyone will look for once the economic situation turns the corner.
The US dollar WILL decline...and there's nothing that the US government can do about it without causing hyperinflation.

On a side note...everyone notice that the US is now printing funny money...? They claim its in order to prevent counterfeiting...
How nice.. Too bad the real reason is that they want to create TWO currencies for use within the US: one for internal transactions and the other, the good ole Greenback, for external (international) transactions.

Just wait and see...

[Art_from_Ark]

20. I can see your argument

But I have been hearing variations of it since 1971 or so, when the silver was completely removed from US coins.

Of course, the '70s were a period of hyper (for the US) inflation, and by the end of the decade, dealers were paying 13-16 times face value for junk silver that had been selling for 3 to 3.5 times face in 1973. But guess what-- the market was being manipulated by the Hunt Brothers. Once that little scheme was outed, the price fell dramatically, reaching 3.2 times face in 1985 or thereabouts. After that, it was up a bit, down a bit, but very little movement that would break through the "spread". Silver that I bought in 1986 and 1991 is still the same price today.

Of course, many things are different today, mostly for the worse. So it would probably be prudent to put a little away in silver and/or gold if 1) one knows what one is doing, 2) one purchases this with cash, and 3) one has the ability to "sit" on this investment for as along as it takes.

[twilight]

39. gold COINS

I bought some gold when it dropped to $319.00 an oz. in early April. Being they are "coins" they are worth more than the gold itself.

Coins are your best bet and you can always sell them at spot price on eBay or to local coin shops usually. I hold the coins in American, Austrian ( :hi: Arnuuuld :D ) , and Canadian Gold. I'll have to admit the Vienna Philharmonics are pretty cool! :D

I didn't get into it real heavy, but I have enough in gold to get out of the country! What a freaking reality huh? :scared:

:dem:

[BiggJawn]

63. (chuckle)....That's subjective, isn't it?

Gold is $300-something an ounce. Aluminium is what, 79 cents a pound? I have PLENTY of Aluminium around here, but not that much gold.
I think what i'm asking is if Gold is "not particularly rare", then why is it so expensive?

If the stuff was so common that Winos dug it out of trash cans to sell for wine, it wouldn't be "Precious" and that old biddy on CNN wouldn't be trying to get us to buy gold coins would she?

That's what I meant by "rare"

[Deja Q]

61. Frightning, but with a $7 trillion nat'l debt, why is it worth anything?

There is no $100 to back up that $100 note with!

[BiggJawn]

62. Hush! you want the Sheeple to STAMPEDE?

THEY think it's worth something...
There hasn't been $100 to back up that C-note for a long time. What backs our currency is "the Solvency of the United States", or faith in the USA's ability to cover that C-note or whatever.

The shit will hit the fan when those pretty new 20's ain't worth lighting your coffee-can heater in your cardboard box with.

[Patriot_Spear]

3. If you believe Princeton Economist Paul Krugman it is...

http://www.npr.org/dmg/dmg.php?prgCode=FA&showDate=10-Sep-2003&segNum=1&NPRMediaPref=WM

[AwareOne]

4. Look in your phone book for local coin shops

Most of them sell gold and silver as bullion, in coins or in bars from 10 to 100 ounces. Silver is on a tear right now. It was $4.40 an ounce about a month ago but closed yesterday at $5.18, a five year high.

[Art_from_Ark]

10. Be sure to ask about the dealer's "spread"

That is, the difference between his buy and sell prices. Also, ask if bullion/coin sales are taxed in your state. Taxes can take a big chunk out of your profit margin, so it is sometimes better to buy through the mail if you just want bullion.

You should also inform yourself about the markets. One of the best ways is to get coin weeklies like Coin World (http://www.coinworld.com/), or Numismatic News (http://www.collect.com/interest/periodical.asp), which can provide information but will not pressure you to buy anything.

[DemocratSinceBirth]

7. Don't Worry

The economy isn't going to collapse... A jobless recovery is not synonomous with economic ruin... The GDP is muddling along... Productivity is up.... Economists have a problem with *'s large defecits but I doubt you will find one classically trained liberal or conservative economist who says the economy is on the verge of "collapse."

I'm not endorsing * economics, not by a long shot but things could be alot worse....

[kalian]

11. Bull...and please refrain from believing these lies....

GDP is NOT muddling along...it has been skewed by massive military
spending.
Productivity is NOT up... Less people doing more work does not equate to a higher "productivity". It means that the select few who were luck enough to keep their jobs are working as slaves...

Liberal economists do have a serious issue with uncontrolled deficits. Note I have stated "uncontrolled" deficits.

The structural economic damage that this country has sustained during the past 15 years is unheard off. The levels of consumer and corporate debt are outrageous not to mention the ridiculous federal spending that is going on.

Whether or not there is a "collapse" is scheduled for the entire nation remains to be seen.
I personally foresee a series of regional crisises that will slowly (within the next 20 years) snowball into a major national economic situation that could bring the US to its knees.
This is all assuming that the US does not create a world war that brings us worse things...

[DemocratSinceBirth]

15. I'll Make This Very Easy...

Here's six mainstream classically trained economists, three of them liberal and three of them conservative.

Martin Feldstein-conservative

Milton Friedman-conservative

Lawrence Lindsey-conservative


Lester Thurrow- liberal

Paul Samuelson-liberal

Paul Krugman- liberal

If any of them will state for the record that we are heading for an "economic collapse"* I'll eat my computer.....

*Since "collapse" is such an amorphous word I'll just use the Great Depression model.... >25% unemployment.... a crashing stock market.... and a massively contracting GDP...

on edit (within the next twenty years) ..... twenty years is a long time in economic hisory and as Keynes opined "in the long run we're all be dead."

[Eloriel]

27. Well, do you want salt and pepper, or hot sauce with that?

When Tim Russert interviewed Krugman last week (Sat. night), he was very, very sober, and definitely talked about his concern about the path we're on. So concerned that he used words suggesting complete collapse.

Unfortunately, I don't think that show has transcripts. BUT, he has a new book out.

Eloriel

[Resistance Is Futile]

33. Krugman`s position

Krugman has stated that one of three things must happen in the medium term:

The neocon tax cuts must be undone. This will effectively mean a 15 percent tax increase. No way in hell this is going to happen unless Congress becomes fiscially responsible.

Government expenditures must be cut by at least 15 percent. This will mean gutting entitlement programs. Civil unrest is a possibility as millions of poor and seniors find themselves with no money for food or housing.

-or-

The US government will go bankrupt. This would be the largest soverign default in history and will have disasterous spillover effects for the broader US economy. Think Argentina. Expect civil unrest on a scale that will make the 1960s draft riots look like polite discussions.


IMO, the third option is most likely given the degree of fiscal irresponsibility exhibited by everyone in or near the circles of power.


Another factor which Krugman hasn`t mentioned but others have is the size of the trade deficit. Trade deficits act to reduce the value of a currency (supply & demand). The US dollar, however, hasn`t yet fallen anywhere near enough to compensate for the US trade deficit. There are fairly mainstream people in the bond market who are warning that the value of the US dollar could fall by several orders of magnitude by 2010 simply to compensate for the trade deficit. This issue alone would be enough to bring about economic collapse.

[DemocratSinceBirth]

36. Hirning *

as an economic steward makes as much sense as hiring Heidi Fleiss as an chastity counselor....


That being said, the * damage can be undone without the draconian steps noted above....


As bad as the defecits are now they are lower as a % of GDP than the Reagan defecits....

Repealing the * tax cuts on the highest earners would be a good first step to fiscal prudency...

[gristy]

37. You paraphrase his comments with Terry Gross, I think

The US government will go bankrupt. This would be the largest soverign default in history and will have disasterous spillover effects for the broader US economy. Think Argentina. Expect civil unrest on a scale that will make the 1960s draft riots look like polite discussions.

I was disappointed that he did not state clearly just what a bankrupt United States would look like. So I wrote him an email 3 days ago:


Prof. Krugman,

In your excellent interview today with Terry Gross, you said that with the deficits we are running now, at least one of three things HAVE to happen:

1) Taxes are raised (a lot)
2) Spending is cut (a lot)
3) The government's access to the bond markets dries up and it is forced to pay "usurious" (sp?) interest rates. The U.S. then finds itself in an "Argentina-like" meltdown.

I don't think you explained #3 very well, in that I didn't learn what such an event would look like to me, an AVERAGE AMERICAN. And I think because of the utter unreality of the scenario that #3 hints at, coupled with a general lack of quantification of what this will really look/FEEL like, Americans just don't understand the danger of neither #1 or #2 occurring. I don't believe they understand what #2 would look/FEEL like either.

Maybe you say in his book. I wish you'd said in your interview with Terry.

Would your NY Times editor even allow you to present in your column what an Argentina-like scenario would look like?

Regards,

[DemocratSinceBirth]

34. I Read The New York Times Every Day In Which Krug's Column

apppears twice a week and I have never seen him predict a collapse... Since there is no textbook definition of an economic collapse the only thing we have as a benchmark is the Great Depression...

I doubt Krug is predicting a 25% unemployment rate is in the cards for the United States not to mention a contracting econmomy and a broadly based stock market crash....

[gristy]

38. As far as I know, he has not laid out very many specifics

of what an "economic collapse" in the U.S. would look like. But he IS predicting one if the deficit is not brought under control.

[DemocratSinceBirth]

42. I Agree

The defecit has to be brought under control but to paraphase Herb Stein, an eminent economist" the deficit will run it's course until it has to stop..."

There are good defecits and bad defecits...

Running a defecit during a economic slowdown to stimulate spending is a good thing....

But as Keynes said the government should build up surpluses during economic expansions to have the reserves to use to stimulate spending during the next economic slowdown...

The problem with surpluses are that legislators, left or right will spend them...

P.S. As I understand Krug's position on *'s tax cuts is they are too small on the front end and too large on the back end...

[RainDog]

44. Krugman predicted a huge deficit

as long as Bush is in power when the tax cuts were under discussion. he told everyone to get a fixed rate on their mortgages because interest rates would rise.

Krugman thought America would face a long period of recession/deflation in his book The Return of Depression Economics.

A quote from him in the sept 15 New Yorker:

"This is hard for journalists to deal with," he writes. "They don't want to sound like crazy conspiracy theorists. But there's nothing crazy about ferreting out the real goals of the right wing; on the contrary, it's unrealistic to pretend that there ISN'T a sort of conspiracy here, albeit one whose organization and goals are pretty much in the open."

(as in PNAC)

Krugman notes that the federal govt has become a political action committee for the well-to-do--spending their time dividing the spoils among their wealthy backers.

(hello Halliburton, Clear Channel, the pharmaceutical industry, the oil industry...CEOs, not the people who do the work, of course.)

Krugman calls this a form of class warfare which the rich are waging against the rest of us.

Krugman is also quoted as saying "In fact, I think the United States is setting itself up for a Latin American-style financial crisis."

Joseph Stiglitz, a Nobel prize winning economist with more impressive credentials than Krugman, blames Clinton for deregulating telecommunications and finance and for enacting a regressive tax system.

With Bush, of course, we have much greater and much more of the same regressive policies.

[DemocratSinceBirth]

45. A Long Period Of Recession/Deflation Is Not A Collapse In My

book...

Japan has been in that predicament for the better part of fifteen years (since the Nikkei crash of 1990*) and they still have a decent standard of living and a relatively low unemployment rate....

When I think collapse I think of legions of unemployed white collar workers selling pencils...

As ignorant as some of our policy makers are I doubt they will commit the same mistakes as their predecessors in the 1920's and 1930's did. Most of the scholarship on the Great Depression point to an almost comic series of bad policy decisions including Hoover's desire to balance the budget in the midst of a monstrous economic contraction.

[camero]

52. Japan has 3 things that we don't

1. A maximum wage. The average bwtween the lowest and highest paid worker is 16 to 1. Here it is 212 to 1. Way too much inequality.

2. Loyalty and honor are paramount in thier society. Not so here.

3. Politicians that can get kicked out in a heartbeat. The Japenese would not tolerate any higher than 3% unemployment for long. We call our 6% full employment. Of course we all know it is higher than 6%, closer to 15% counting the underemployed and people scared out of the work force.

Which puts us much closer to economic collapse than most would have you believe.

[RainDog]

53. His comparison to what's going on now is Latin America

...not Japan.

The Return of Depression Economics was written a few years ago.

His new book is a compilation of his NYTimes editorials.

Bush was not prez when the first book was written.

Now he's talking about those sorts of countries who have had wild inflation rates and defaults on loans and political instability to match the economic instability, because of the huge disparities in income and repressive, undemocratic leadership, often serving as the the whore of foreign corporations.

That's a bit different than Japan.

[Eloriel]

69. I repeat:

What the heck do you call this:

Krugman is also quoted as saying "In fact, I think the United States is setting itself up for a Latin American-style financial crisis."

Eloriel

[Eloriel]

68. AFAIC, on the Russert interview

he was predicting worse than that. I can't remember his exact words, but the thought was along the lines of "the U.S. will cease to exist."

And if you don't think an Argentinian meltdown is a "collapse," then you just don't want to make good on your bet. :evilgrin:

It was an EXTREMELY sobering interview. I suggest you get his book.

And remember -- what the NYT lets him print and what he might say otherwise and other places might be two completely different things.

Hell, *I* know we're in deep trouble, and I ain't no way now how an economist.

Eloriel

[bearfan454]

16. I hope that you are right.

Really.

[DemocratSinceBirth]

18. I Despise Bush With A Passion

but I don't give him enough credit to screw up a ten trillion dollar economy...

But don't take my word for it....

Visit a college campus.... Ask any econ profressor, left or right....
And they will tell you we aren't heading for collapse...

As an aside, folks lost countless trillions in the NASDAQ crash and the macroeconomy chugged along...

[Patriot_Spear]

55. Look, I'm not trying to start some pissing contest, but...

Can you provide some sort of credentials to back up your opinion? Why should I believe you over Dr. Paul Krugman, Princeton Professor and NYT columnist? If you listen to his NPR interview, he's fairly clear that the economy is exactly on the path that you claim otherwise.

Unfortunately, I think like you, a lot of people have the same misguided sense of invulnerability surrounding the US economy. Your assertion is contrary to the facts and the appraissal of those who make it their business to know.

Nothing personal.

[Andy_Stephenson]

8. Gold and silver....

Develop a relationship with a local coin dealer. Do not buy antique coins...Buy American Eagles, Canadian Maple Leafs or Chineese Pandas. As for silver 1 oz silver rounds are the best buy and can be had for about $6.00 each.

[sendero]

17. yes....

.... and in that worse case scenario, don't forget that there are many kinds of currency. Guns and ammo come to mind :)

[InkAddict]

25. Question?

How then does one spend the silver and gold when it's time to cut and run. Cut off a chunk? Say, "keep the change?" Please don't flame, but I guess I'm just terribly naive about things like this as I still hoard pennies in a giant plastic Coke bottle. Atonement/punishment was "rolling" the damn things to pay for those unexpected gliches in life, you know, like traffic tickets for a mile over during law enforcement's big NIGHT OUT FOR REAL CRIMINALS "Speed Week," etc...

[Art_from_Ark]

28. You sell to dealers

You have to educate yourself if you want to go this route. The best way to do that is to read publications like those I mentioned in my post #10. Those are hobby publications that do not sell gold, silver or coins so they can be more objective because there is no pressure to buy.

[knight_of_the_star]

47. Being a jeweler is not going to hurt now

Make something in silver or gold, then sell it for more than you bought the silver or gold for in a stable currency. Gold and silver are universal in that sense, they are worth something just about anywhere.

[kalian]

14. Fantastic article. Thx for posting!

:toast:

[reprobate]

19. First of all, get out of personal debt.

I can't tell you how good it feels go have no more long term debt. It's what my father told me as a child, and he was bang on.

[DemocratSinceBirth]

21. I agree

I took a home equity loan to pay off my high interest credit card debt....

But there's "good" and "bad" debt...

Taking out a loan to put your kid through college or buy a home is generally "good" debt but taking out a loan to go on a vacation is generally "bad" debt...

Though people going into debt to meet their day to day living expenses is a problem...

[TNDemo]

23. Do you have a mortgage?

I have pondered the question of taking cash and paying off a mortgage vs. keeping the cash and making the mortgage payments. I tend to think keeping the cash is the more prudent thing but who knows.

[spooky3]

46. A lot depends on your personal situation

such as your age, your job security, how good your mortgage rate is, what other purposes might require cash (e.g., children's education), how easy it would be to sell your house if you had to do so to get cash, etc.

One factor for me is that I can't earn much interest (net of taxes) on cash now and I don't think that will change much in the near term. So I want to pay down as much of my mortgage as I can because for me it is otherwise as if I were borrowing money at a relatively high rate of interest in order to earn next to nothing to keep it in cash. I also want to buy a different house and pay it off before retirement.

So for each person, the answer is different.

[reprobate]

66. In my particular situation .........

I'm 62, retired, and have made some good investments over a long time. I looked at where I was financially, and decided to take some out of investments and pay off the mortgage, and particularly the credit cards.

This decision was as much psychological as financial. By paying off the debt, I needed much less income each month, but more important to me was the fact that I now owe NO ONE anything except for the ford focus I bought 18 months ago, and in another 18 months will be paid off.

This is my particular situation and won't hold for most, but my original point was (and I know I didn't spell it out nearly enough) that not owing any long term debt freed me from the worry of the "what ifs" that would always be in the back of the mind.

[FloridaPat]

22. In regards to productivity up - a lot of jobs went overseas to

contract workers. Plus there are a lot of wokers here that are contract workers. They are doing a lot of work, but are not considered employees. I haven't seen this anywhere yet, because no on is addressing it. But if you have a bunch of people who aren't employees doing a bunch of work, wouldn't your productivety per employee then be up?

[jburton]

26. Good Point

"Temps" are not considered employees, yet increase the "productivity" numbers.

[cosmicdot]

24. t'was nice of Poppy to help his friend Munk at Barrick's Gold

what luck - if they weren't honest men ~cough~ ya'd thunk they knew what was coming ... and, gosh knows how the likes of board/advisors, past or present, Vernon Jordan or Sam Nunn participated

"They could well afford it. In the final days of the Bush (Senior) administration, the Interior Department made an extraordinary but little noticed change in procedures under the 1872 Mining Law, the gold rush–era act that permitted those whiskered small-time prospectors with their tin pans and mules to stake claims on their tiny plots. The department initiated an expedited procedure for mining companies that allowed Barrick to swiftly lay claim to the largest gold find in America. In the terminology of the law, Barrick could "perfect its patent" on the estimated $10 billion in ore—for which Barrick paid the U.S. Treasury a little under $10,000. Eureka!"

http://www.democraticunderground.com/articles/03/07/p/09_gold.html

what happens to those without the means to do things like buy gold and/or silver? are we adoptable? we are loveable....

[LunaC]

29. Precious metals on the net.....

If you're interested in purchasing, go to www.ajpm.com. I can personally vouch for their competitive pricing and excellent customer service (and, no, I don't have a financial interest in the company and speak only as a satisfied customer.)

[screembloodymurder]

50. Thanks

I'll check it out.

[loudnclear]

30. Yes, as well as moral bankruptcy!

The Afghans, with our help, did it to the Soviet Union. Now the Afghans, with the help of Muslims everywhere, will do it to the US.
Americans should just stop lying about how much they care about their children. They are making the entire world unlivable for them.

[Dover]

31. This is probably a stupid question about gold and precious metals

but I'll ask anyway.

Let's say you bought a lot of gold or precious metals to stave off the collapse. And let's say it happens and your gold investments go sky high in value. What then? You can't really collect on that value by selling it off for worthless dollars can you? Yes it would be worth a LOT of worthless dollars...but still, doesn't that defeat the purpose?

[LunaC]

32. fuggedabout worthless dollars

Your precious metals will replace worthless dollars but you'll still retain purchasing power, hence the reason for holding precious metals in the first place.

[DemocratSinceBirth]

35. John Kenneth Galbreath Said Gold

was basically worthless if the entire economy collapses....

I hate this collapse terminology because it's so amorphous...

Do a google search on gold and John Kenneth Galbraith and see if anything comes up.

[LunaC]

40. Gold will

always be recognized as having tradeable value (at least that's been the case for thousands of years) an I personally find it to be a comfortable hedge. YMMV.

[DemocratSinceBirth]

48. If Things Get So Bad That We Need To Bring A Gold Chip To McDonalds

to get a Big Mac we have bigger things to worry about...

[Dover]

41. So you don't trade them for dollars, but use it like any other currency?

So you can theoretically go down to your local grocer and purchase some milk and bread with a gold coin? And then they give you back what for change?

I know this is silly, but I'm trying to understand the logic.

I always though people bought gold bars/coins and treated them just like stocks. Buy low, sell high. I'm not referring to precious metal stocks. I'm talking about the bullion (coins/bars).

[LunaC]

49. Pretty much

but there are inherent problems inasmuch as you and the seller have to agree on the value of the precious metal to begin with. The price is generally pegged to the "markets" but that can fluctuate wildly. But don't expect to get change back if you use a gold coin for a purchase that isn't equal to the coin's value (unless the seller is also holding gold coins, which isn't likely.) This is why smaller denomination coins - 1/10 oz as opposed to 1 oz - would be a better bet if you think you may need to purchase smaller items in an economic collapse. Even better would be some silver coins which aren't worth as much as the gold.

On a larger scale, the coins may be helpful to purchase big ticket items on the cheap (houses, land) or pay a bribe to get your family to safety if things fall apart to that extent. I'm not saying they will, I'm just one of those anal-retentives who likes to have all the bases covered just in case Murphy's becomes the law of the land. I blame my parents for this predisposition. :tinfoilhat:

[Deja Q]

43. Not just that

More people out of work means the rich have to spend more to keep the current economic system going.

More companies are trying to engineer circumstances to get rid of unions, which in turn lowers the quality of life for workers while those who "run" the place get more and more into their pockets (depending on what happens, I'm going to go to the media with what I know about my employer - and that's going to piss a lot of people off. Not because that I'm getting a cut, but because others aren't - oh, the situation is big enough that it would get media attention...)

It costs much more to buy a house, which means I'll never be able to buy one.

Apartment costs are going up.

Our dependence on oil as being the only "profitable" resource.

I've forecasted I will have to declare bankruptcy or go to debt arbitration (with the resultant "forgiven" debt being translated into taxable income, that will kill me) thanks to the pay cuts I will be getting.

Eliminating GOOD jobs in America and replacing them overseas won't help the GDP.

Creating a nation of "Wal mart employees" so the rich can go shop there won't help in the long run.

As it happens, a "jobless" or "jobloss" recovery won't help either. Indeed, how can wal-mart sustain itself when far fewer people are buying from them, there aren't enough of the wealthy to compensate for us (thank God)...

Don't foget the national debt, up 1/2 trillion $ this year and how much next year? Those recurring tax cuts for the wealthy are showing how wrong, ineffective, and just plain stupid shrubya* is. But he's inb power and the wealthy are getting more greenbacks. That's all that matters in America, hadn't you noticed? :-(

I think the wealthy and the pukes know America's time is up. They're going to reap all they can from the rest of us until the end. Their pleasure while we suffer.

That proves how wrong America's economic system is. When it helps a few and shafts the rest of us, it creates an unsustainable imbalance.

[aquart]

51. Bush bankrupts a business and looks for a bailout.

That's his MO. He has ALWAYS been bailed out. Not only bailed out, but further enriched and promoted in power. Every time.

He's expecting that now. But never has it been shown that he cares who else might be hurt.

He has NO experience with a bad action yielding a bad result. All his bad actions have delightful results. For him.

Would you trust such a man NOT to default on treasury obligations?

Yes. He's going to destroy us.

[EDT]

54. I am dumping nearly all my savings into a new and bigger home-

as no one saw the Tech collapse coming, I am concerned about the
complicated economic process still churning, and want to have
something material to hang onto if everything collapses, so I've
sold my pretty crappy current home and am buying a new one in
Oct.

I'm no expert- we could have low unemployment and a recovering
econonmy next year, or be one further loop down in the downward
spiral.

Material things you can touch are always better than electronically
refreshed 1's and 0's on a bank computer somewhere.

[JCMach1]

59. Yeah, but if the real estate bubble collapses

Which is far more likely than a 'general economic meltdown...

[BiggJawn]

64. You're paying CASH? You'll own it scot-free?

Because tha's the ONLY way you'll be sitting pretty when the "Pocky-Lips" comes.
And then, only because while the county sheriff is executing a ga-jillion foreclosures and nailing the doors shut on millions of homes that nobody can afford anymore, you'll still have a place to live.

Won't be worth jack-shit, but at least it's a roof over your head. Hope you don't have to try and sell the bathroom fixtures for food.

[PROGRESSIVE1]

56. No it is not, but.....

the recovery without jobs may turn back to recession if we do not get the deficit under control and reverse the Bush Tax Cuts!

[DemocratSinceBirth]

58. I'm With You

Bush is a lousy economic steward but I don't see a return to the Great Depression era...

[Yavin4]

57. We're Headed For A Major Collapse

There are three forces bringing on this collapse:

1.) The deficits are draining the government of funds to keep the American middle class afloat.

2.) Bush's tax cuts make raising the necessary funds to correct the deficits politically unpopular and impossible given the makeup of the government.

3.) Mis-managed, unregulated globalization which has destroyed millions of private sector jobs here in America. The government has no plan to deal with people formerly employed in mfg and IT.

4.) Massive health crisis which will occur over the next ten years because of our rapidly aging population.

I'm not an alarmist by nature, but there are indeed serious problems on the horizon and our government and our media is not preparing Americans for these serious problems. They just want us all to believe that everything is fine and rosy, so go out shopping.

As for an economic expert's opinion, I can formulate my own opinion on matters without waiting for an "expert". I read a variety of opinions and apply my own life lessons to form my opinions. I agree with Krugman on many issues, but he's wrong about globalization being this great thing. It's not.

[KittyWampus]

60. Regarding Solutions To Extreme Economic Duress

There seems to be a fourth solution to the problem of an economic collapse.

Besides raising taxes, cutting programs or defaulting...

WHY COULDN'T ASSETS BE SEIZED FROM THOSE WHO HAVE IMPROPERLY BENEFITTED FROM THE BUSH TAX CUTS AND THE IRAQ WAR?

In other words, why couldn't the government claim possession to Ken Lays properties and take a large chunk of Bill Gates fortunes?

Or perhaps write into law a way to cap wealth and a certain amount over say 10 million automatically reverts back to the state where the person lives/files taxes.

For instance, why don't we nationalize the Energy Industry? We'd then have the material assets.

[Resistance Is Futile]

65. Look at the numbers

On an annual basis, the US government is spending close to half a trillion dollars more than its revenues. In contrast, Gates is worth on the order of 50 billion. That's an order of magnitude less.

The only way to raise the kind of money the US government needs to survive--yes, that's right survive--is through taxation.

[sushi]

67. Surplus money is

a nice problem to have! I heard on the news that gold is expected to be $400/oz. by Christmas! Don't buy only coins. That's not much fun. Have your partner wear gold jewellery too! Plain gold jewellery and nuggets as pendants, because you don't get money back for workmanship when you sell. One of my favorite presents is a "Credit Suisse" pendant. Women shouldn't waste money on custom jewellery.

In gold souqs in the Middle East I've seen Arab women with gold bracelets from wrists to elbows under their black abayas.

[wabeewoman]

70. A word of caution about gold.

It is seldom smart to buy on the upswing of anything and gold and silver are both quite high now. So if you invest in gold and the price of gold drops (as it likely will at some point) you will lose money just as easily as in the stock market. According to this link gold has varied from under 50 (not since the 70's) to over 600 $ an ounce. Gold has been up for quite a while. I'm not saying it's not a good idea to have some gold but you can also diversify into other currancys besides dollars.
http://www.gold.org/value/stats/statistics/avprices1900.html

[sushi]

71. That's true

but if you have surplus 'eggs' you have to put them somewhere as long as they're not in one basket. I'm also for enjoying things, and you can't wear shares but you can wear gold!