How about no recovery for a decade?
By Daniel at 7 February, 2010, 2:08 pm
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We have debt to GDP (total debt) of almost 400% and that will take a decade to work out of. How about the ex-comptroller general, David Walker stating this week that even double digit GDP growth for decades won’t get us out of this crisis that has been building for decades.
How about the charts on this page that show a clear trend in global economics.
http://www.financialsense.com/fsn/presentations/2010/images/0206.WorldGDP.png
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In ten years we have dropped in nominal GDP from 30.4% in the world to 24.9% while emerging markets rose from 21.5% to 31.1% and that trend is growing as we lose more jobs. China now gets more patents than we do as the major companies have moved much of their R&D to China and other places in Asia.
Not one policy we have that got us in this crisis has been reformed and they continue to use many of the worst ones even more. Cities and States are just now getting serious about layoffs and spending cuts and that will cause pain for years in the private sector.
So, expect the federal government to continue to try and paint the crisis over with more debt based spending as in a $3.8 trillion budget. For those who say we have to or we collapse, sorry, but we will collapse anyway.
For a two decades now, bubbles are the only way we can create increased tax revenues and an illusion of growth. Even the “boom years” of Clinton that appeared to lead to a balance budget was built on an illusion caused by huge tax revenues from the tech bubble that was based on nothing sound fundamentally. Every sector in non-durable and durable manufacturing job growth rates (not the number hired but the rate of increase in hiring) peaked from 1995 to 2000 before Bush ever took office. That was not Clinton’s fault. That was the result of 60 years, at that time, of bad policies based on flawed economic and monetary theories. Now we have 70 + years of bad policies and people wonder why things continue to get worse?
Cities and states are raising taxes and yet, tax revenues continue to fall. The increase in taxes is driving people and business from some of those states.
quote:
N.J. loses $70B in wealth during five years as residents depart
By Leslie Kwoh/The Star-Ledger
February 04, 2010, 5:15AM
……“This study makes it crystal clear that New Jersey’s tax policies are resulting in a significant decline in the state’s wealth,” said Dennis Bone, chairman of the New Jersey Chamber of Commerce and president of Verizon New Jersey.
http://www.nj.com/business/index.ssf/2010/02/nj_loses_70b_in_wealth_over_fo.html
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Some leave for another state and some leave the nation.
For many states, it isn’t even their fault. They are drained by the Federal Government and no matter what they do in the state, the burden of an out of control federal government makes them uncompetitive globally. State after state is looking to reform how they spend and do business and yet, as long as the federal government is like it is, they have almost no chance of more than short term success if even that.
- JanPaul
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