The more you hear about the extraordinary efforts that governments around the world are taking to promote economic growth, the less confident you can be in the result.
With the clock ticking on a Greek default, members of the European Monetary Union are considering sweetening their bail out pot for a second time since the summer. The problem, however, is a bigger bail out pot in Europe is not going to save Greece, whose economy is expected to contract at about 5% for a second consecutive year. It is just going to make the write offs that much bigger for German taxpayers and French banks when the inevitable default finally occurs.
Nor is the U.S. Federal Reserve Board's latest policy gimmick, 'the twist', likely to prove any more effective in breathing new life into a stagnating economy than the measures to prevent a Greek default. The move, a throwback to an earlier attempt in 1961, has the Federal Reserve Board selling short-term securities to buy ones with longer dates up the yield curve. The goal, much like that of the Fed's earlier tranches of quantitative easing, is aimed at bringing down long-term interest rates to resuscitate a moribund housing market.
But with long dated Treasury yields already near record lows, it is not the cost of mortgages but the lack of jobs that stands in the way of Americans buying more homes. Without jobs, U.S. households are no more likely to buy homes than Greek households are to pay taxes. Other than potentially weakening the U.S. dollar, it is a classic case of a central bank trying to push on a string. And in this particular case, the greenback perversely strengthened, most notably against gold, leaving the Federal Reserve Board with nothing for its efforts.
With government deficits at record highs and interest rates already held to record lows, it is becoming increasingly obvious that European or North American governments have run out of policy options to sustain growth. Our economies appear to be heading inexorably into another recession, and there doesn't seem to be anything our governments can do anymore to prevent it.
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What if a large percentage of the Greek GDP is just government expenses that do not generate any NATIONAL WEALTH for Greece?
Why should the citizens of Germany work hard and then pay for the Greek Government activities?
These actions destroyed the opportunities for US citizens to be employed, unless they were willing to work for the equivalent of Asian Wages, or maybe less than Asian wages so that US labor costs can compensate for the US EPA compliance costs of having jobs in the USA.
NAFTA was signed into law by President Bill Clinton on December 8, 1993 and he then started enforcing NAFTA on January 1, 1994.
To be fair, George Bush and most all of the elected Republican (and Democratic) US Congressmen and Senators were also in favor of NAFTA, so I guess the US workers were just sold out for lower cost consumer products.
The Democrats and Republicans want to continue NAFTA, WTO involvement, and (MFN) Most Favored Nation status for China.
President Obama's proposed new South Korea Free Trade Agreement (KORUS FTA) treaty will cause further relocation of more existing US jobs to South Korea?
President Obama is now proposing more Free Trade Agreements with Brazil, Columbia, and other recently industrialized that will export more manufacturing jobs from the USA to foreign countries.
I guess another few more million unemployed US citizens will not matter to President Obama!
The US government must stop creating new legislation that drives US businesses and US jobs to foreign countries.
The US government should repeal those laws that they created that caused US businesses and US jobs to relocate to foreign nations.
This might be too late, because it will also take years to rebuild our STEM educated human manufacturing technology database that was also destroyed along with our industrial base.
Other economic factors will also require that the USA reduce the US labor costs and environmental costs of manufacturing things in the USA.
Most of the people who knew how to operate the US basic industries and factories were discharged, laid off, or fired decades ago, and might now be long gone, dead and buried.
There are no books that completely tell everything about how to do most of the things that we knew how to do many decades ago when we created the industries that won WWII and then gave us a bountiful way of life for a couple of decades after WWII. (steel, wire, etc.)
The USA needs more technical and science oriented citizens that will be able to create many innovative new products and services that we can sell or exchange worldwide in return for foreign owned currency and/or Gold.
We need to get back foreign owned US dollars, foreign owned foreign currency, and foreign owned gold in return for purchase of new US produced products and services that future US manufacturers might export, instead of exporting our dollars and gold earned by previous generations before de-industrialization of the USA in payment for foreign manufactured (imported) products.
When the time comes that people in foreign nations no longer accept our freshly printed paper US dollars and freshly printed paper US Treasury Bonds to pay for our imported products and our government activities, we will then be in deep trouble.
The US government does not really borrow money from banks. It raises money for bureaucratic tax paid salaries, government contracts and other federal government expenses that are in excess of tax revenues by printing and selling freshly printed paper US Treasury Bonds (and other US paper debt instruments) that promise that our children and our unborn grandchildren will pay off these debt instruments on the date of the bond maturity with US dollars that they will have to earn mostly from foreign trade revenue by making and exporting consumer products to foreign countries for money.
Present US citizens have placed these burdens of re-paying our debts onto our children and future unborn generations of US citizens that will have to work hard in some factory to earn enough money to pay for our non-productive non-industrial lifestyles when these US Treasury Bonds mature.
The US economic situation is similar to the USA selling our own body parts to keep from working to make the things that we consume. We are selling the privately owned assets that were created by previous generations of US citizens to purchase the things that we consume today and to spend for today's government services that are in excess of our tax collections.
The US government needs to accomplish the following things to reverse this situation:
Educate the public to understand basic economic principals. No technology or science knowledge is required. Only elementary school mathematics is required.
We must reverse the foreign trade deficit before we have sold all of the privately owned assets created by previous generations of US citizens and foreigners will no longer accept US dollars to purchase the necessities (food, shelter, clothing) required to support the lives of the US citizens.
We must re-industrialize in order to reverse the foreign trade deficit.
This must be done before we have sold all of the privately owned assets created by previous generations of US citizens and foreigners will no longer accept US dollars to purchase the equipment, materials, and land to re-create our US industrial base.
The technical innovation, product development and design capabilities and those associated jobs went overseas along with the US manufacturing capabilities.
The USA must create superior engineers, medical doctors, dentists, and scientists if we want to regain the technological edge that the USA has lost and purposefully destroyed in the last few decades. This will not be easy, but it must be accomplished immediately before it is too late.
We must drastically cut Federal, State, and Local government spending. Maybe we cannot afford all or those services.
Maybe we can eliminate and/or drastically reduce the number of employees and the expenses for many the US Government Departments. An 85% to 95% reduction in forces and expenses should be the goal. Maybe we should entirely eliminate the Departments of Homeland Security (including FEMA), Housing and Urban Development, Interior, Labor, Health and Human Services, and Commerce.
Maybe the Departments of Transportation, Energy, Agriculture, Education, Treasury, Post Office, NASA, and other similar departments could be completely and only financially supported by the industries and businesses that they serve.
We should stop funding all foreign wars and minimize military expenses, unless the USA is attacked. Maybe we should cut the costs of the Armed Forces by 75%.
Maybe we could create a National sales tax and eliminate most of the IRS employee positions.
Local governments should reduce services and only provide as much police, fire, and other services as they desire to tax themselves to pay for. Local governments should totally eliminate all of the expenses for the arts and other similar entertainment, and let those who care to be entertained by those forums pay for those entertainment venues.
Welfare, SSI, Unemployment benefits, National Healthcare, National Endowment for the Arts, and other similar expenses should be eliminated NOW.
The USA is approaching complete de-industrialization and many industrial companies have already fired all of their US employees and relocated their factories and the associated jobs overseas rather than comply with the expensive EPA regulations and expensive US labor costs.
The basic industries such as manufacturing steel, copper, lead, petrochemicals, aluminum, plastics, chemicals, refining, cement, and etc. are not environment friendly, so I guess that you want some other jobs. Manufacturing of materials such as Pipe, Wire, Cement
Or maybe we can get along without any (industrial) jobs that make the things that we consume!
The raised costs of electricity and fuel will cause the US citizens to practice energy conservation, as the "Cap and Trade" legislation enriches the speculators and dealers of these "Carbon Permits".
US electricity costs ten times as much as Asian electricity, due to EPA regulations.
Existing environmental laws, and the anticipated costs of future environmental legislation that will be "piled onto" our remaining US located industries (that stay in the USA) will cause the remainder of our US industries and US jobs to relocate to overseas locations.
US citizens will have cleaner air to breathe after the current administration has closed down (most) all of our remaining basic industry factories and terminated the employment of most of those US citizens that were employed there! Foreigners will be employed in those relocated foreign factories as they make the things that US citizens were/are consuming.
I do not like it when a few of us would die or get sick from polluted air, but this is better than the majority of us starving to death from economic chaos or being a crime victim when the US economy disintegrates.
Some percentage of US citizens are/were harmed each year by our industrial pollution, but when US environmental regulations cause total collapse of our US economy, most all of our US citizens will be unemployed, homeless, hungry, starving to death, without any medical care, angry, hopeless and otherwise more seriously harmed.
The EPA, if it is not disbanded, must be re-organized with orders not to hamper any re-industrialization of the USA.
If the EPA had been created in 1865, the USA would be a third world country of unemployed beggars today, or maybe a part of Germany or Japan.
If the US economy implodes, the USA will probably resemble India, Mexico, China, etc., as these countries were in the decades before they industrialized.
I do not believe that any of these foreign countries will help the US citizens if we are in distress.
Taxes on profits are a small factor compared to the other costs.
The congress of the USA instituted (extremely) high import tariffs to encourage the industrialization of the USA, and it was successful in establishing a positive balance of trade, accumulating Gold reserves, creating a manufacturing base, creating a technical data base, and making the USA independent from England for technology.
One way or another we must stop the exchanging title to everything of value that is privately owned in America as required to get US dollars back from industrious foreigners in foreign countries to pay for government expenditures, and also to pay for the things that we import with US dollars shipped to foreigners.
We must create a positive balance of trade by any means possible.
If not, we will destroy the purchasing power of the US dollar with the negative trade balance.
Without import tariffs, most all products will continue to be available for less US dollars if they are manufactured in foreign countries where labor costs are minimized than if the same products are manufactured in the USA with higher paid US labor and higher environmental compliance costs.
The US labor force has no future without high import tariffs to prohibit foreign imported products.
That would create a condition to post WWI Germany, where it took a wheelbarrow full of german Marks to buy a loaf of bread!
How did they earn that money to buy things???
We must also realize that PRIVATELY HELD NATIONAL WEALTH is made, created, and/or acquired mainly (maybe only) when the members of a family (or the citizen businessmen of a nation, city-state, island, tribe, etc.) perform one or more of the following tasks:
1. plant, grow and/or harvest something of commercial value from the earth;
2. extract something of commercial value from the earth;
3. manufacture something of commercial value that is consumable;
4. construct permanently useful for rental income;
5. provide professional services (medical, legal, dental, engineering, architecture, land surveying, technology, accounting, etc.);
and then trade, sell, lease or rent these items and/or services to parties outside of their family, in return for a net transfer of gold, currency or commodities from other parties outside of their family into their own family.
The members of that family (tribe, state, nation) can then reflect their real NATIONAL WEALTH and financial security with the net positive accumulation of grain, gold, cattle, jewels, land, buildings, hotels, casinos, factories, commodities and/or other marketable products that are then available to be used for economic security for reserve use in times of emergency and/or also to raise the standard of living for the members of that family and also accumulate redeemable products and/or commodities any printed currency that they might care to issue.
There are limits to the amount of NATIONAL WEALTH that can be taken from the wealth creators in the form of taxes and paid to the government for various expenses, no matter how much these government expenses are deemed as being "necessary" (usually by the elite government bureaucrats).
If/when those limits are exceeded, then that nations economy will self destruct!
The Trade Deficit is the basic structural economic foundation problem that will destroy the US economic miracle because title to US located assets are also leaving the USA to pay for the things that we import in addition to US government expenses.
Brazil, Pakistan, India, China, South Korea, and other industrialized countries of the world with a positive net foreign trade balance are net creators of the NATIONAL WEALTH for their nations and the de-industrialized USA with a negative net trade balance is a net consumer (destroyer) of the existing NATIONAL WEALTH in the USA.
All of these greedy men created new technology, benefits and employment for many US citizens who benefited with the employment created by the greed for wealth that these men exhibited.
If new technology is created by US citizens today, those jobs to manufacture those products would/will be created in foreign countries as ECONOMICALLY REQUIRED by the US FREE TRADE AGREEMENTS in order to tahe advantage of lower labor, lower electricity, lower payroll taxes, and lower environmental manufacturing costs.
The alternate is for the US businesses to utilize US labor, electricity, payroll taxes, EPA compliance, and then go into bankruptcy if their competitors operate in foreign environments.
These individuals gave other individuals jobs.
The employer-employee relationship can be voided by either party, at any time.
Would you prefer a communist form of government?
That business activity generates NATIONAL WEALTH as business profits, private personal income, inventory, foreign product exports, and real property so that this newly created (and the existing) NATIONAL WEALTH is then available to be CONFISCATED through taxation TO PAY FOR GOVERNMENT bureaucratic employee payrolls, infrastructure improvement contracts and other government expenses.
This NATIONAL WEALTH is then also available as security redeemable for any US Treasury Bonds that come due, and also to pay off any existing government bonds when they become due at maturity.
Federal, state, county, municipal, school district and other various government taxing authorities CONSUME (or destroy) the NATIONAL WEALTH that was created by the GREEDY private sector and then spent by the tax supported activities provided by government employees. Without taxes, the public sector jobs would not exist.
If Federal Government deficit spending destroys the US economy, then the WEALTH CREATING GREEDY businesses and the GREEDY corporations will disappear. Without GREEDY business activity to generate NATIONAL WEALTH to be taxed to pay for government activities, then all of those government jobs, government services, government benefits, government contracts, Tax Supported Non Government Organizations and other government programs at every level will disappear for lack of funding because there might/will not be any NATIONAL WEALTH left in the GREEDY private sector to be confiscated to pay for government spending activities.
The jobs for US citizens in the basic industries such as manufacturing steel, copper, lead, petrochemicals, aluminum, plastics, chemicals, refining, cement, and etc. have been also relocated overseas to escape the cost of EPA regulations. Manufacturing of other products such as pipe, wire, cement, reinforcing bars, plate steel, appliances, automobiles, transformers and many other items have been also relocated overseas to escape the cost of EPA regulations.