Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Ripsnort on July 08, 2004, 09:47:13 AM
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WASHINGTON — The economy appears headed for a banner year despite a springtime spike in energy prices (search) and a recent increase in interest rates.
In fact, many analysts are forecasting that the overall economy, as measured by the gross domestic product (search), will grow by 4.6 percent or better this year, the fastest in two decades.
There were strong 4.5 percent growth rates in 1997 and 1999, when Bill Clinton was president and the country was in the midst of a record 10-year expansion.
But if this year's growth ends up a bit faster than that, it will be the best since the economy roared ahead at a 7.2 percent rate in 1984, a year when another Republican president -- Ronald Reagan -- was running for re-election.
"We are moving into a sweet spot for the economy with interest rates not too high, jobs coming back and business investment providing strength," said Diane Swonk, chief economist at Bank One (search) in Chicago, who is predicting GDP growth of 4.8 percent this year.
President Bush is highlighting the improving economy at every opportunity while Democratic challenger John Kerry has focused on what he calls a middle class squeeze of rising health and tuition costs and laid-off workers forced to take lower-paying jobs.
more to the story here.... (http://www.foxnews.com/story/0,2933,124890,00.html)
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We are set to have our 2nd straight record month in terms of sales dollars. We're talking big ticket disposable income toys here. The economy must be OK.
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Originally posted by midnight Target
We are set to have our 2nd straight record month in terms of sales dollars. We're talking big ticket disposable income toys here. The economy must be OK.
Boat sales are doing good too, record sales in the last quarter.
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I sold my house in 8 hours. My economy is doing good.
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But, but,......Mr. President, where are those weapons of mass destruction?
:)
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My economist has a different opinion... (note economist; not faux reporter.) And be advised he isn't the only one claiming what he's saying. He's just the most stinging / published.
http://www.nytimes.com/2004/07/06/opinion/06KRUG.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fPaul%20Krugman
For those who dont have registration access, Im sorry to hear that.. Times gets poohy when you repost their stuff..
So you have to goto:
http://www.pkarchive.org/
under the columns section all his articles are archived. (I suggest Tuesdays (Bye Bye, Bush Boom) and mid Aprils (One Good Month) articles for reference to your Faux story..)
I really hope his and my opinion are wrong with the economy.. I really do.. But statistics show otherwise..
"On another note Fauxnews... News at eleven.. "
(Faux.news is as credible as the "The Kentucky Fried Movie" )(No offence Zucker Brothers, More like a compliment to your satire..)
:p
DoctorYo
Job growth dictates the economy not boat sales.. You need jobs to buy the boats which in turn supplies more jobs. Ft. Lauderdale sells more boats than any other location on the planet; care to wager...I should know..I live here..Get a refresher in macroeconomics.. you need it..
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Deficits on track to set galaxy high record!
Hope your kids like your truck and camper Rip. If they ever have to start paying back the money your "conservative" leader is spending on his buddies in the defence industry and oil contracting industry they will be paying 70% taxes and will not be able to afford thier own.
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(Faux.news is as credible as the "The Kentucky Fried Movie" )(No offence Zucker Brothers, More like a compliment to your satire..)
Paul Krugman ain't exactly known for his crediblility either. And neither is the NYT.
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Booming!
For the first time since 1932, employment is lower in the summer of a presidential election year than it was on the previous Inauguration Day.
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the economy can't be good - the war hero just said it was bad and he said he'd fix it - LOL
(http://www.evote.com/evotepix/satire/parody/kerry_john_as_karloff.jpg)
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I dont think our economy is bad.. Its shaky... One enron scandal / terror attack could shift us back into deep recession.. record deficits while at **war are not positive either.. Shrimp tariffs against china might set off a trade war against an emerging ally and trading partner and global energy is erratic to say the least.. IF you consider that as good precursors of a booming economy your either ******* ignorant or have some biased agenda..
In regards to realestate, boatsales, car sales due to interest rates your going to have strong proformance in those sectors.. This isn't rocket science this is rudimentry economics.
On to Paul Krugman, he isn't perfect and he acknowledges this... He errors but you noitce he clearly points out his errors which is far more to say than the biased agenda of Faux.. (O factor, no spin.. hypocrisy abound..) That guy is always wrong.. and he doesn't own up to his statements..) (I remember a bet he lost to that Geni Garfunk(whateverr her name is..)in regards to WMD... He's been a clam / welcher ever since.. Credible indeed..
Like I said I hope im wrong.. I don't want doom and gloom economy (it indirectly affects me to) but these deficits are not going to go away on their own..
DoctorYO
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Our high sales figures are partially due to low interest rates, and partially due to the shift in the overall demographics of the Country. Some figures I've heard say we get about 400,000 new potential customers per year. (Americans achieving retirement age.)
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Is this where we say it's because of the president?
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Originally posted by DoctorYO
My economist has a different opinion... (note economist; not faux reporter.)
Sorry, this was an AP story reported on Fox, nice try, and thanks for playing. Consolation gifts at the door as you leave (Life size Monica blow up doll with real cigar)
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The Krugman Truth Squad (http://www.nationalreview.com/nrof_luskin/kts200406170833.asp)
I’ve seen Paul Krugman make lousy predictions about the economy before — lots of times (actually, every time). But until I read this memo, I had no idea that he could be so thoroughly, spectacularly, awesomely, shockingly wrong. And this is no mere Krugman jeremiad on the op-ed pages of the New York Times. This is a document on United States Government letterhead, written in order to guide national economic policy. Thank God Ronald Reagan was smart enough not to believe one word of it.
This September 9, 1982, memo addressed to CEA chair Martin Feldstein and member William Poole must have been among the first Krugman wrote upon arriving at the CEA. In it, Krugman warns that the dramatic drop in consumer price inflation from its double-digit levels in 1979, 1980, and 1981 was a temporary aberration, and that inflation would soon come back with a vengeance. He wrote,
We believe that it is reasonable to expect a significant reacceleration of inflation in the near future. Much of the apparent progress against inflation has resulted from the temporary side effects of tight money and high real interest rates. These side effects must be expected to reverse themselves as real interest rates decline and the economy expands. … Our very rough guess is that correction of … distorted relative prices will add at least 5 percentage points to future increases in consumer prices … This estimate is conservative …
Before we drill down to understand exactly how and why Krugman was wrong, let’s look at the sheer magnitude of his wrongness. In the top panel of the chart below, you can see the history of consumer price inflation in the years before Krugman wrote his memo, and for the rest of the Reagan presidency. When Krugman wrote his memo, inflation was running at an annual rate of 5.97 percent — “at least 5 percentage points” higher would be a minimum of 10.97 percent. Krugman wasn’t even close. In fact, if anything, the right number was closer to 5 percent in the other direction.
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Originally posted by Sixpence
Is this where we say it's because of the president?
Nah, we don't play those games the Dems did during the Tech boom in the 90's, and give Clinton credit for it.
Personally, I think its good for all of us if the economy is doing well, regardless of who is sitting in the white house, don't you agree?
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Originally posted by Sixpence
Is this where we say it's because of the president?
some libs want it both ways; they blame Bush for the jobs lost and the economy and gas prices, but now that everything looks great, it has nothing to do with Bush or his policies sand tax cuts.
well, at least now Kerry can't blabber on about how chity our economy. Heck, even gas prices are down. Kerry's "the sky is falling" mentality was true, only the sky is falling on him. Many of his campaign's issues have evaporated, just as he is going to evaporate and go away.
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Originally posted by NUKE
. Heck, even gas prices are down.
Lol, it goes up seventy cents, comes down 10 cents, and gas prices are down.
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i havent commented on a political thread in over 2 weeks! :aok
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Originally posted by Nilsen
i havent commented on a political thread in over 2 weeks! :aok
This was an economic thread, originally, so your record is still intact.
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Originally posted by Ripsnort
This was an economic thread, originally, so your record is still intact.
it would have been anyway :p
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Originally posted by Sixpence
Lol, it goes up seventy cents, comes down 10 cents, and gas prices are down.
Gore would have levied a "Toilet Tax" for everytime you pissed or chit. Guess what, gas prices would STILL be where they are at.
Karaya
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Dune your argument is moot.. Luskin has his opinion good for him, too bad its disected on the Paul Krugman Unofficial homepage.
I'll let the reader decide which side of the story they want to believe..
Rule one all economists are wrong at one point or another.. If you dont understand that you dont understand economics.. If it was so easy everyone would be a Billionare.. In this case IMO Luskin is wrong as he was clearly rebuttaled on The PK site.. That is if your intelligent/educated enough to understand what they are describing..
view for yourself..
NRO's... http://www.nationalreview.com/nrof_luskin/kts200406170833.asp
PK...
http://www.pkarchive.org/ the front page...
do your homework folks and you decide.. not me, not dune, not ripsnort, you decide who's fibbing or not.. You decide if were in a booming economy..
Shouldn't take you too long to deduct the answer..
DoctorYO
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Originally posted by Sixpence
Is this where we say it's because of the president?
his tax cuts and other measures did stop a willie spawned tech bubble pop with a 9/11 topping recession from slipping into a full blown 30's style depression but pls believe what you want ...
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Excellent post DoctorYO... I believe your comments and posted articles need nothing more for most folk to understand the original posted article is nothing but smoke and mirrors..
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Multiple choice question: With regards to the office of the presidency,
A. The buck always stops here
B. The buck doesn't stop here
C. The buck stops here when it's convenient to John Q. Public when John wants to further his own arguments.
I wish John would stop changing his answer. What a fickle fellow.
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Heh it's not long time ago when Dollar was quite equal with Euro; Now it's 20% cheaper (And For Oct's pleasure...) :aok :aok :aok
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Originally posted by Staga
Heh it's not long time ago when Dollar was quite equal with Euro; Now it's 20% cheaper (And For Oct's pleasure...) :aok :aok :aok
Which is good for the US when concerning trade deficit as far as the US is concerned. Our exports are cheaper. China, SE Asian countries like to artificially inflate the value of the US dollar to make our exports more expensive to buy.
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I'm on layoff 3 of the next 6 weeks..Auto sector still slow.
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I still can't find work as a siding carpenter, over half the carpenters I know are still out of work. Economy cant be that great yet...
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Do they use carpenters to build RVs? ;)
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Originally posted by Ripsnort
Which is good for the US when concerning trade deficit as far as the US is concerned. Our exports are cheaper. China, SE Asian countries like to artificially inflate the value of the US dollar to make our exports more expensive to buy.
Yeah it's all good; even if USD has lost 30% of its value in 1,5 years... Guess it's time to say bye to USD as a world-wide currency and welcome the new king; € :)
(http://www.kolumbus.fi/staga/xchangerates.gif)
(source X-Rates.com)
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Originally posted by Staga
Yeah it's all good; even if USD has lost 30% of its value in 1,5 years... Guess it's time to say bye to USD as a world-wide currency and welcome the new king; € :)
(http://www.kolumbus.fi/staga/xchangerates.gif)
(source X-Rates.com)
Good for us, bad for you. Your exports will cost more, supply and demand, consumer will choose less expensive products (All this from a consumer/trade deficit point of view) When your products cost more, less get consumed, and lay-offs follow shortly.
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LOL, that's just pure genius Rip. Hell, we should do whatever it takes to make the dollar completely worthless, that way our exports will sell like hotcakes! We could even get the kiddies involved like in Asia!
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Originally posted by SOB
LOL, that's just pure genius Rip. Hell, we should do whatever it takes to make the dollar completely worthless, that way our exports will sell like hotcakes! We could even get the kiddies involved like in Asia!
Again, China artificially inflates the dollar, which creates the trade deficit we have. Believe me, Europe does NOT want the US dollar to be valued lower. :)
The overvalued U.S. dollar is putting the squeeze on American manufacturers and farmers. An overvalued dollar has cost American manufacturers and farmers billions of dollars and hundreds of thousands of jobs the last few years, and it is being corrected as we speak, thankfully.
We (The USA) must ensure foreign leaders that the USA will no longer tolerate actions that keep our dollar artificially inflated.
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The dollar losing value is NOT a good thing Rip.
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Originally posted by Ripsnort
We (The USA) must ensure foreign leaders that the USA will no longer tolerate actions that keep our dollar artificially inflated.
You might want to tell that to Bush you dolt. He keeps asking the G8 to keep the USD proped up.
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Originally posted by Elfie
I still can't find work as a siding carpenter, over half the carpenters I know are still out of work. Economy cant be that great yet...
Get your lilly white a22 down here and get some sun, we can't get enough folks with a heart beat here in the construction industry. Jobs are sitting for weeks waiting on workers. It's boom times here and you are laying around?
GET DOWN HERE we need carpenters bad, the local paper has over 30 adds just for carpenters.
sheese... man, show me someone who says he wants to work not working, I'll show you a layabout Oprah watcher whinner
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Lol, it goes up seventy cents, comes down 10 cents, and gas prices are down.
This is a "Republican" point of view. It's nice that some of us can see through the "smoke and mirrors".
:rolleyes:
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Originally posted by Eagler
his tax cuts and other measures did stop a willie spawned tech bubble pop with a 9/11 topping recession from slipping into a full blown 30's style depression but pls believe what you want ...
Ahh, so the president does control the economy, got it:aok
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Rip,
Did you find some LSD while you were gone?
If the US dollar is worth less, it takes more US dollars to buy US products. Devaluing the dollar is NOT a good thing.. But rest assured it is coming.. The dollar will take a major down turn. The Euro will most likely be the next world currency if trends continue.
China holds billions of dollars in US currency. If they were to dump that money on the world markey in favor of say the Euro, that would be devestating to the US economy. Japan holds billions of US currency too.
Oil being traded in US dollars is another thing that holds the dollar value high on the world market. If OPEC countries suddenly decided to trade their oil for say Euros, that would be a HUGH impact on America's economy as well.
Funny, SH was in the process of changing their oil currency dollars for Euros before his over throw.. Just saying is all.. Im sure that had nothing to do with the war on terror for which we invaded..
Just curious though, What makes you believe devaluing the dollar is good for Americans??
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They would never switch to the euro, Toad told me so.
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Originally posted by TheDudeDVant
Rip,
Did you find some LSD while you were gone?
If the US dollar is worth less, it takes more US dollars to buy US products. Devaluing the dollar is NOT a good thing.. But rest assured it is coming.. The dollar will take a major down turn. The Euro will most likely be the next world currency if trends continue.
China holds billions of dollars in US currency. If they were to dump that money on the world markey in favor of say the Euro, that would be devestating to the US economy. Japan holds billions of US currency too.
Oil being traded in US dollars is another thing that holds the dollar value high on the world market. If OPEC countries suddenly decided to trade their oil for say Euros, that would be a HUGH impact on America's economy as well.
Funny, SH was in the process of changing their oil currency dollars for Euros before his over throw.. Just saying is all.. Im sure that had nothing to do with the war on terror for which we invaded..
Just curious though, What makes you believe devaluing the dollar is good for Americans??
Nope, just basic economics, though I am no economist, I do know that a devaluated dollar makes our goods cheaper for foreign countries to purchase. This is why the trade deficit and China artifically inflating the dollar is a concern for any president in office. Correct me if I am wrong, but thats what I thought was the big concern with a over-inflated dollar and trade deficits.
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We're not seeing an increase in spending on TV products yet... but this our worst season of the year anyways.
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none of this really matters... it matters not who is responsible..
if the economy is percieved to be good then it will add 2-6 % points to the voting numbers for Bush... If it is bad it will do the reverse.
If Bush is better looking than the other candidates that will add 4-8 points.
lazs
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Originally posted by lazs2
none of this really matters... it matters not who is responsible..if the economy is percieved to be good then it will add 2-6 % points to the voting numbers for Bush... If it is bad it will do the reverse.If Bush is better looking than the other candidates that will add 4-8 points.
lazs
Don't forget he dropped his dog, minus 10 points
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Originally posted by DoctorYO
Job growth dictates the economy not boat sales..
Get a refresher in macroeconomics.. you need it..
The mind boggles.
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Don't forget he dropped his dog, minus 10 points
Bush dropped a lot more than just his dog.
:rolleyes:
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Originally posted by FUNKED1
The mind boggles.
agreed. Job growth dictates economy? Uhhh, okay.
Maybe we should simplify it for Mr.Yo.
Farmer Brown works alone on a farm with one cow. Cow produces enough milk for family and then some. He sells the excess milk. There is a consumer willing to pay for it. Farmer brown buys another cow and now doubles his output, but two cows are alot of work...so he hires a hired hand to help out on the farm. I don't think Job growth dictated Mr.Brown's expansion of his business, and subsequent hiring after he sold the excess milk and made a profit.
Of course, this scenario disregards these (http://www.economicindicators.gov/) economic indicators just as Dr.Yo's statement that "Jobs dictate economy" did. ;) But since we're on the subject of macroeconomics, check out these stats from April and May 2004 on job growth and income growth:
Wages and salaries --Monthly--2004
Private wage and salary disbursements increased $39.6 billion in May, compared with an increase of $25.9 billion in April. Goods-producing industries' payrolls increased $7.7 billion,
compared with an increase of $4.1 billion; manufacturing payrolls increased $5.0 billion, compared with an increase of $2.4 billion. Services-producing industries' payrolls increased $31.8 billion,
compared with an increase of $21.8 billion.
Other personal income
Supplements to wages and salaries increased $8.2 billion in May, compared with an increase of $7.2 billion in April. Proprietors' income increased $10.8 billion, compared with an increase of
$13.9 billion. Farm proprietors' income increased $2.6 billion, compared with an increase of $4.8 billion. Nonfarm proprietors' income increased $8.1 billion, compared with an increase of $9.2
billion.
Rental income of persons increased $2.3 billion in May, compared with an increase of $2.5 billion in April. Personal income receipts on assets (personal interest income plus personal dividend
income) increased $3.5 billion, compared with an increase of $3.4 billion. Personal current transfer receipts increased $1.3 billion, compared with an increase of $5.6 billion.
Contributions for government social insurance -- a subtraction in calculating personal income -- increased $5.5 billion in May, compared with an increase of $3.7 billion in April.
Personal current taxes and disposable personal income
Personal current taxes increased $8.2 billion in May, compared with an increase of $8.7 billion in April. Disposable personal income (DPI) -- personal income less personal current taxes --
increased $47.8 billion, or 0.6 percent, in May, compared with an increase of $52.3 billion, or 0.6 percent, in April.
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Originally posted by 2stony
This is a "Republican" point of view. It's nice that some of us can see through the "smoke and mirrors".
:rolleyes:
Curious, is the "smoke" from Clinton's joint? Is the "mirror" the one all of his adultresses cracked upon looking into them?
Again, Under Gore the prices for Gasoline would STILL BE THE SAME. But under the Democrats love of Confiscatory Taxation, our titties would be twisted more. Thank god a REpublican is in office.
Karaya
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Originally posted by Masherbrum:
Curious, is the "smoke" from Clinton's joint? Is the "mirror" the one all of his adultresses cracked upon looking into them?
This horse is dead. The Republicans are probably going to being bringing up the cigar and girlfriend story for generations. I'm sure we could bring up some Republican dirt if we wanted to, but the past is past and we need to move forward.
GET OVER IT!
:rolleyes: :rolleyes: :rolleyes:
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Originally posted by 2stony
Originally posted by Masherbrum:
This horse is dead. The Republicans are probably going to being bringing up the cigar and girlfriend story for generations. I'm sure we could bring up some Republican dirt if we wanted to, but the past is past and we need to move forward.
GET OVER IT!
:rolleyes: :rolleyes: :rolleyes:
Hey, he was searching for a legacy in the white house, he found it...perjury and subsequent impeachment.
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Originally posted by Ripsnort:
Hey, he was searching for a legacy in the white house, he found it...perjury and subsequent impeachment.
Well, I guess it's time to bring up Nixon. He avoided impeachment because he cut and ran.
;)
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Originally posted by 2stony
Originally posted by Ripsnort:
Well, I guess it's time to bring up Nixon. He avoided impeachment because he cut and ran.
;)
He was smarter than clinton! ;) Nixons only true downfall was trying to protect those who lied while serving under him, and he knew it. Clinton's was a "Center of the noodle Universe" downfall and lying to a grand jury! :D
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I never said I approved of what Clinton did, but you all need to move on. They both screwed up and it's over.
I'm sure there's some Republicans that were screwing around while in office, but didn't get caught at it. Look at Eisenhower. He was reputed to have had an affair with Kate Summersby, but it was never proven. That doesn't mean it didn't happen. I know, he wasn't president at the time, but that doesn't make it right. Adultry is still what it is whether you're president or not.
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Rip,
You need Econ101 again I think. If the dollar devalues, we have to pay more dollars for the goods we import. We import far more goods than we export. I do not understand how you consider this to be a good thing..
And guys, DoctorYO is right. Job growth is one of the, if not the biggest, leading indicators of a strong economy. Buying boats, houses, or SUVs does not mean the economy is strengthing. People borrow money to do such things. It is not a real indicator of the economy as it is not a real number as far as GDP goes.. Production from jobs is real.......
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It must really burn you to know that if the economy is percieved to be doing well (most voters think so) then Bush will get about a 7% boost at the polls. Happens every election.
that is the reason kerry has dropped back so far.
lazs
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Thanks for the concern Lazs.. But no.. I wont feel any burning until November 8)
Actually I might this weekend.. Going paddling/camping ... 8)
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Originally posted by lazs2
It must really burn you to know that if the economy is percieved to be doing well (most voters think so) then Bush will get about a 7% boost at the polls. Happens every election.
that is the reason kerry has dropped back so far.
lazs
Its just the saudis helping their owned get elected again. No change.
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Originally posted by TheDudeDVant
Rip,
You need Econ101 again I think. If the dollar devalues, we have to pay more dollars for the goods we import. We import far more goods than we export. I do not understand how you consider this to be a good thing..
For Boeing it is, in the short run.
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NUKE send the crack pipe over this way, it is Friday you know. "Even gas prices are down." That is one of the funniest and stupidest things I have read today.:aok
Same thing goes for everyone getting behind the job growth. Yeah the few hundred thousand jobs added are nice, but you have to ask in what sectors and what kind of jobs. Not until we get back to numbers close to that before all the jobs we lost between 2000 and 2003 will the economy be doing well.
Right now it is not as ****ty, but it is still ****ty. I hope it comes around and soon. We are on a slippery slope and anything could derail the little bit of recovery that we have seen.
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Originally posted by TheDudeDVant
Rip,
You need Econ101 again I think. If the dollar devalues, we have to pay more dollars for the goods we import. We import far more goods than we export. I do not understand how you consider this to be a good thing..
Because it causes us to import less. Thereby creating more jobs, teh gratest ecanmicul incidnator EVAR!!!!
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N.Y Times:
January 8, 2004
I.M.F. Says U.S. Debts Threaten World Economy
By ELIZABETH BECKER
and EDMUND L. ANDREWS
WASHINGTON, Jan. 7 — With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report released Wednesday by the International Monetary Fund.
Prepared by a team of I.M.F. economists, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration's tax cuts and warning that large budget deficits pose "significant risks" not just for the United States but for the rest of the world.
The report warns that the United States' net financial obligations to the rest of the world could be equal to 40 percent of its total economy within a few years — "an unprecedented level of external debt for a large industrial country," according to the fund, that could play havoc with the value of the dollar and international exchange rates.
The danger, according to the report, is that the United States' voracious appetite for borrowing could push up global interest rates and thus slow global investment and economic growth.
"Higher borrowing costs abroad would mean that the adverse effects of U.S. fiscal deficits would spill over into global investment and output," the report said.
White House officials dismissed the report as alarmist, saying that President Bush has already vowed to reduce the budget deficit by half over the next five years. The deficit reached $374 billion last year, a record in dollar terms but not as a share of the total economy, and it is expected to exceed $400 billion this year.
But many international economists said they were pleased that the report raised the issue.
"The I.M.F. is right," said C. Fred Bergsten, director of the Institute for International Economics in Washington. "If those twin deficits — of the federal budget and the trade deficit — continue to grow you are increasing the risk of a day of reckoning when things can get pretty nasty."
Administration officials have made it clear they are not alarmed about the United States' burgeoning external debt or the declining value of the dollar, which has lost more than one-quarter of its value against the euro in the last 18 months and which hit new lows earlier this week.
"Without those tax cuts I do not believe the downturn would have been one of the shortest and shallowest in U.S. history," said John B. Taylor, under secretary of the Treasury for international affairs.
Though the International Monetary Fund has criticized the United States on its budget and trade deficits repeatedly in the last few years, this report was unusually lengthy and pointed. And the I.M.F. went to lengths to publicize the report and seemed intent on getting American attention.
"I think it's encouraging that these are issues that are now at play in the presidential campaign that's just now getting under way," said Charles Collyns, deputy director of the I.M.F.'s Western Hemisphere department. "We're trying to contribute to persuade the climate of public opinion that this is an important issue that has to be dealt with, and political capital will need to be expended."
The I.M.F. has often been accused of being an adjunct of the United States, its largest shareholder.
But in the report, fund economists warned that the long-term fiscal outlook was far grimmer, predicting that underfunding for Social Security and Medicare will lead to shortages as high as $47 trillion over the next 70 years or nearly 500 percent of the current gross domestic product in the coming decades.
Some outside economists remain sanguine, noting that the United States is hardly the only country to run big budget deficits and that the nation's underlying economic conditions continue to be robust.
"Is the U.S. fiscal position unique? Probably not," said Kermit L. Schoenholtz, chief economist at Citigroup Global Markets. Japan's budget deficit is much higher than that of the United States, Mr. Schoenholtz said, and those of Germany and France are climbing rapidly.
In a paper presented last weekend, Robert E. Rubin, the former secretary of the Treasury, said that the federal budget was "on an unsustainable path" and that the "scale of the nation's projected budgetary imbalance is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur."
Other economists said they were afraid that this was a replay of the 1980's when the United States went from the world's largest creditor nation to its biggest debtor nation following tax cuts and a large military build-up under President Ronald Reagan.
John Vail, senior strategist for Mizuho Securities USA, said the I.M.F. report reflected the concerns of many foreign investors.
"I would say they reflect the majority of international opinion about the United States," he said. And he added, "The currency doesn't have the safe-haven status that it has had in recent years."
Many economists predict that the dollar will continue to decline for some time, and that the declining dollar will help lift American industry by making American products cheaper in countries with strengthening currencies.
"In the short term, it is probably helping the United States," said Robert D. Hormats, vice chairman of Goldman Sachs International.
Fund officials and most economists agreed that the short-term impact of deficit spending has helped pull the economy through a succession of crisis. And unlike Argentina and other developing nations that suffered through debt crises, the United States remains a magnet for foreign investment.
Treasury Secretary John W. Snow did not address the fund's report directly. But in a speech to the United States Chamber of Commerce on Wednesday, he said Mr. Bush's tax cuts were central to spurring growth and reiterated the administration's pledge to reduce the deficit in half within five years.
"The deficit's important," Mr. Snow said. "It's going to be addressed. We're going to cut it in half. You're going to see the administration committed to it. But we need that growth in the economy. We had an obligation to the American work force and the American businesses to get the economy on a stronger path. We've done it and we have time to deal with the deficit."
But the report said that even if the administration succeeded it would not be enough to address the long-term problems posed by retiring baby boomers.
Moreover, the fund economists said that the administration's tax cuts could eventually lower United States productivity and the budget deficits could raise interest rates by as much as one percentage point in the industrialized world.
"An abrupt weakening of investor sentiments vis-à-vis the dollar could possibly lead to adverse consequences both domestically and abroad," the report said.
Quite often companies have been borrowing money from international bankers and investors and when dollar goes down they need to pay more so weak dollar isn't the best option for them.
Same happened in here few years ago; results were horrible for small/medium corporations which took loans in foreign currency when FIM was rated high and loans were cheap. When FIM lost its value the corporations collapsed like card castles.
I don't know if US foreign debt is tied to gold or what but when your currency loses its value it has good and bad aspects thought usually the bad are more notable.
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yawn. Poor ripsnort full of crap as usual.
Is this clintons fault? (http://www.msnbc.msn.com/id/5558380/)