20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover

[andrew]

You are right Canuck. This is why the Reserve is not panicking over the depreciation of the dollar. There couldn't be a better time to allow a depreciation of the dollar than now when the world is in recession. Besides, this also help reduce trade deficity.

Falling dollar = rising commodities.
Not sure this is what the US needs.

[JAD_333]

No!!! No more government programs which only increase the deficit.

It's essentially a tax cut that acts as a stimulus. You spend, say, $5000 replacing your old single pane windows with double or triple pane replacement windows rated 3.0 or more for your region and you get to deduct up to 30% of the cost from your taxes up to a total of $1,500.

Jobs created: glass companies, vinyl molders, window manufacturers, shippers, window installers, window distributors, contractors, advertising firms, metal cladding workers, caulk makers, trash haulers.

Value of house increases 2-3%. Energy saved: 2-3 times previous heat loss from single pane windows (more if glass is coated).

That's just the tip of the iceberg. It also applies to energy saving insulation, solar panels, appliances, HVAC equipment, reflective roofing, etc. etc.

All of the above folks pay income taxes on their earnings, buy tools, buy hardware, buy consumer products...multiplier effect.

Yeah, just another program...

[Parihaka]

An annecdote as to what may be a problem for America's economy.

There's a friend of mine who was the regional manager for an American based multinational IT company which specialises in providing services for large companies and governments.
That company's American management suprised my friend one Monday morning with an email telling him that the contracts for his local employees were no longer valid. They worked for a base retainer and had bonuses written into their contracts, the amount of which depended on performance.
The email stated that any form of bonus was hereby cancelled.
When my friend told them that was contrary to NZ employment law they said tough, just do it. When he insisted on a meeting, six of the top managers agreed to meet him in Singapore (NZ was too far away and had too poor facilities for them to come all the way).
When he arrived at the hotel he and the other NZ managers were staying at he hurt himself in the shower and arrived at the US managers hotel limping. One of the US managers told him to have his injury seen to by that managers nurse, in a suite of the hotel.
It turned out all six US managers had arrived in seperate personal jets, each had brought their own doctor and nurse, and each of those doctors and nurses had their own executive suite. This at a time when they were telling him that their NZ employees should work solely for a base rate less than the minimum wage in NZ.
They spent ten minutes telling him that what they had said in the email stood, that if he didn't like it he could find work elsewhere, and went to play golf.
Two years later he runs his own company, employing the best of those who worked for the original company, and has picked up every contract the US company had in NZ.

[JAD_333]

Pari:

Whatever made you think of that anecdote? I mean what in this thread makes it relevant? Do you see that as a symptom or contributing cause of US decline?

The practice of f**king over contractors is fairly common. Big companies that do it don't care about the legality even though they know they would lose in court. They depend on the aggrieved being unable to afford the legal battle.

But companies that are getting value from contractors don't act that way for obvious reasons. It happens when management comes to realize that the cost of honoring a contract is more than the profit to be gained. In short, management made a bad call, and to save its ass it chucks the deal. Bad form.

That's why most contractor agreements these days have an arbitration clause. Obviously your friends didn't have one, but maybe that's for the best, now that they have extracted their pound of flesh by taking over all the big companies former customers. Good on them.:)

[Parihaka]

Pari:

Whatever made you think of that anecdote? I mean what in this thread makes it relevant? Do you see that as a symptom or contributing cause of US decline?

The practice of f**king over contractors is fairly common. Big companies that do it don't care about the legality even though they know they would lose in court. They depend on the aggrieved being unable to afford the legal battle.

But companies that are getting value from contractors don't act that way for obvious reasons. It happens when management comes to realize that the cost of honoring a contract is more than the profit to be gained. In short, management made a bad call, and to save its ass it chucks the deal. Bad form.

That's why most contractor agreements these days have an arbitration clause. Obviously your friends didn't have one, but maybe that's for the best, now that they have extracted their pound of flesh by taking over all the big companies former customers. Good on them.:)

They did have an arbitration clause, and the company lost. It also lost their staff and their revenue stream from New Zealand. This wasn't a small company, and if their senior management are symptomatic of senior management within your other large multinationals, your major companies are on the way out.

[JAD_333]

They did have an arbitration clause, and the company lost. It also lost their staff and their revenue stream from New Zealand. This wasn't a small company, and if their senior management are symptomatic of senior management within your other large multinationals, your major companies are on the way out.

ah...well then I suppose they got what was coming to them. I don't know if
this is SOP for all US multinationals. Bad policy, if it is.

[Zinja]

Falling dollar = rising commodities.
Not sure this is what the US needs.

Falling dollar = reduced trade deficit = increased exports = increased production = more jobs for everyone.

Im sure this is what the US needs :).

[Zinja]

It's essentially a tax cut that acts as a stimulus. You spend, say, $5000 replacing your old single pane windows with double or triple pane replacement windows rated 3.0 or more for your region and you get to deduct up to 30% of the cost from your taxes up to a total of $1,500.

Jobs created: glass companies, vinyl molders, window manufacturers, shippers, window installers, window distributors, contractors, advertising firms, metal cladding workers, caulk makers, trash haulers.

Value of house increases 2-3%. Energy saved: 2-3 times previous heat loss from single pane windows (more if glass is coated).

That's just the tip of the iceberg. It also applies to energy saving insulation, solar panels, appliances, HVAC equipment, reflective roofing, etc. etc.

All of the above folks pay income taxes on their earnings, buy tools, buy hardware, buy consumer products...multiplier effect.

Yeah, just another program...

These such programs mean lesser tax revenues for an already overdrawn budget. The result is closing the hole with more debt.

GDP grew by more than 5% in Dec, about 3% in Jan and Feb i say this is fine. The strange thing about the Obama administration is they have not even given it a chance to see the full effect of the already rolled out efforts, and they already want to churn out another program - crazy you ask me!

The US should not rush trying to get 6-9% GDP growth, thats unsustainable. 3% is good enough for the US, keep it there. This whole idea of getting back to where things were is just crazy. Isn't what things were that got the US in this mess in the first place? The second largest economy is about a third of US's economy, a 3% GDP growth is equivalent to 9% of US's closest rival in absolute terms. The US is asured of a $10T gap between itself and the nearest rival perpertually at 3% annual growth.

[andrew]

Falling dollar = reduced trade deficit = increased exports = increased production = more jobs for everyone.

Im sure this is what the US needs :).

That’s not so straightforward.

There is not any discernible correlation between dollar index and trade deficit.
But there is obvious negative correlation between dollar and oil.

[tphuang]

Falling dollar = reduced trade deficit = increased exports = increased production = more jobs for everyone.

Im sure this is what the US needs :).

hmmm, let's see. falling dollar = lower net worth = less money = less purchasing power = lower living standard
US would rather not have it, but it simply can't be productive at the current exchange rate. US can't be competitive with the high corporate tax, all the unions and such. It's a real problem in Manhattan when you have to hire unionized workers to do construction -> 8x higher expense when it comes to building real estate compared to the other boroughs. You can't fire teachers after 2 years in New York, because it cost more to fire them than keeping them to do nothing. I can go on and on. The unions are killing the competitiveness of America.

[RollingWave]

hmmm, let's see. falling dollar = lower net worth = less money = less purchasing power = lower living standard
US would rather not have it, but it simply can't be productive at the current exchange rate. US can't be competitive with the high corporate tax, all the unions and such. It's a real problem in Manhattan when you have to hire unionized workers to do construction -> 8x higher expense when it comes to building real estate compared to the other boroughs. You can't fire teachers after 2 years in New York, because it cost more to fire them than keeping them to do nothing. I can go on and on. The unions are killing the competitiveness of America.

I agree with that, the background for the union's rise is no longer valid, today's workers' living and pay standards are nothing like the late 19th early 20th centuries, and with the extreme coverage of the press and generally sound information passing, the need for the union simply seems outdated.

Still, reforming the laws neccesary to take the union aspect out would seem like something that would be harder than landing on Mars.

[Shek]

Falling dollar = reduced trade deficit = increased exports = increased production = more jobs for everyone.

Im sure this is what the US needs :).

Yes and no. Falling dollar = less importation = higher consumer goods prices = money doesn't go as far = less jobs for importers and businesses that depend on imports.

Bottomline, there are winners and losers, and unless the shift is slow and sustained, then losers tend to outweigh winners.

[Shek]

That’s not so straightforward.

There is not any discernible correlation between dollar index and trade deficit.
But there is obvious negative correlation between dollar and oil.

Your sample is tainted because it is so small. What you are seeing is correlation due to the financial crisis because that's all that your sample captures. Thus, always be careful of the fact that correlation doesn't equal causation. I always see a lot of fat people drinking diet soda. Diet soda must cause obesity.

[tankie]

I dont know if this has been posted before , but its scarrrrrrrrry how accurate it is i dont rightly know , i got it sent by a friend in Mexico , maybe they are playing mind games


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[NUS]

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