Question for conservatives who still think the economy is "good" ?

Question

Please explain the following...

Trade deficit.
Federal deficit.
What about the housing market ?

What about the fact that most households have to have both parents working these days to make ends meet...i'm talking middle class here.., when 10 years ago....you only needed one breadwinner for a 3/2 home 1.5 children and two auto's ?

Also, many of you claim that inflation doesn't exist....however that is the ONLY reason that the fed hasn't began to lower rates again.... Inflation hasn't leveled off yet according to fed chairman Bernake. Cost of living up, average income down = inflation.

Also, I keep hearing about this tax cut that I supposedly got....but i'm looking at my pay stubs from years prior...and i'm just not seeing it here.

If you could explain all of that...that would be great.

oh thanks...forgot about the weak dollar too.... Wonder when that will rebound again...

MrOrph - If I was telling you what needed to be done..it wouldn't be a question...it would be a statement DUDE !

But since you asked....

How about we get rid of income tax and go with a federal sales tax system....then nobody could avoid paying tax including immigrants.. and everyone would pay their fair share ?

Most of the economic potential of each dollar, is lost when the government takes your money before you get a chance to spend it.

Uh...the war doesn't explain the deficit...
For those who don't know, we are financing this war mostly from China, and we havn't even begun to pay for it yet. The deficit is purely domestic related.

Answer 1

I'm sure you weren't complaining about the housing market a few months ago. People in my area were buying and selling like crazy.
Where do you get your info on households? I'm curious, because my wife stays home with our 3 children.
And let's not talk about taxes. Dems are notorious taxers...please.

Answer 2

Trade deficit: cause of free trade market and outsourcing, not the fault of policy makers
federal deficit: when hasn't there been one...
Housing market: Mortgage rates up for inflation as you said.

It is a life style choice that forces couples to work to make ends meet, it would be perfectly possible to live on one income.

Inflation is expected between 2-3% per year, so inflation will always be there regardless of who is running the economy.

Tax cuts might not necessarily effect everyone. There are more federal taxes than just income taxes. Perhaps federal income tax rates went down yes. But Fica taxes most likely remained the same, and a 300 million dollar tax cut is significant, but with 300 million ppl in the country that is a 1 dollar cut per person, thats why it isnt noticable...

Answer 3

It seems you are not the sharpest tool in the shed when it comes to economics are you?...
Deficit-
2004----$413 billion
2005----$318 billion
2006----$248 billion
2007----$205 billion

gdp%---2004----3.6%
2005---2.6%
2006---1.9%
2007---1.5%

As the mid-session review released yesterday by President Bush's Office of Management and Budget says, the 1.5% of GDP figure is well below the 40-year average of 2.4%. It's also smaller than the deficit was in the first three years of the Clinton administration. The deficit numbers would be even better but for the war, though it is costing only $12 billion a month.

Now is not the moment to become complacent about the deficit. The Democrats who control Congress are readying to spend with abandon on everything from government-funded health care for the children of the upper-middle-class to pork gussied up as "homeland security" grants. Not to mention that the Democrats are obstacles to confronting longer-term threats to budget balance, such as spending on Medicare and Social Security. The current surpluses in those entitlement programs mask the red ink that will start to flow once baby boomers retire and fail to be replaced in the workforce by the new immigrants that Congress is refusing to allow in and by the dangerously low rate of reproduction.

But neither is it the moment to panic about the deficit and do what Democrats want, which is to roll back President Bush's tax cuts. Those tax cuts have increased tax receipts, especially on capital gains, and the economic growth that they spurred has led to growth in tax receipts, and a shrinkage in the deficit as a percentage of GDP. The bottom line is that those like Mr. Krugman and Mrs. Clinton who accused the Bush administration of fiscal recklessness and plunging America into deep deficits were just plain wrong.

Answer 4

Incomes are rising - - - - - the "ends" of today versus a generation ago aren't the same ends - - people want better "ends" and have them. What about the fact that, yes, while since the 1970s about 1/3 of the population joined the workforce, unemployment has been cut in half? Sorry, real household income is about 1/3 higher than it was when Reagan was elected, you're just wrong on that one.

Everyone got a tax cut. You might not have changed your withholding but everyone got a tax cut. More importantly your employer and its customers got one and so did everyone else's employer and their customers which is WHY unemployment is 4.5% even after a record-long series of interest rate hikes.

GDP is reasonable, inflation is low, unemployment is low, incomes are rising, the deficit is falling because of higher than projected tax revenues - - the economy is doing well and if BOTH parties would find a MODICUM of discipline on spending we could have a surplus.

Lastly, the trade deficit - - - - - US consumers have a greater choice of goods, that is not bad.

Answer 5

You cannot use the deficit or the housing market to make a connection to the economy. The reason households have two parents working is because of the luxuries we have in our society. If you buy a $300,000 house, two $25,000 cars, and a $6,000 plasma TV, yes you will need two parents working. If they bought a $75,000 house, two $10,000 cars, and a $70 TV most families could get by with one parent working.

Answer 6

You have too pay taxes to get a tax cut, get a better job loser.

Awww, both parents have to work too. Life is so unfair. Cry me a river, I'm doing great just like everyone else i know.

looks like some people around here know more economic facts than the doom and gloom guy asking the question. Funny.

Answer 7

i, by the government's definition, am poor.

i live in a 200k house (3/2)--2 kids, only one car (sold one when i got laid off and realized i didn't need it). my wife is the bread-winner. no benefits from her job, but our lovely governor just socialized our state health care, so the kids and wife are covered (not me, go figure-i must not be entitled).

she winds up paying no tax at all, as she makes about 35k/yr.

before i got laid off, i DID notice a difference in my stubs.

defecits, are a proportion of gdp, no? last i heard it was in the 8-10 % range. economically speaking-not terrible. (28-32% are housing rules of thumb.)

i been banging the inflation drum for years, but Mr. Greenspan wouldn't listen. Bernanke ain't taking my calls either.

hope i helped. i got where i am by being thrifty, and eliminating "mindless consumerism" from my life. i think mindless consumerism is part of the worlds biggest ills.

if people would actually pay attention to who they are paying, our dollars could make a huge difference, when they ain't going into the fatcats pockets anymore.

Answer 8

Um...yeah....something about head....sand....

Wall Street looked pretty good to me yesterday dude....

Funny though, rather than whine, how about YOU TELLING US what you think should be done besides more friggin programs to help seperate me from MY money?

EDIT:

I am all for a fair tax and elimination of the IRS system as it is today; however, that point wasn't evident in your question. The economy is indeed strong. It is also evident by the responses you received, mine included, that you argue using cherry picked indicators for determining the state of the economy. Try using ALL of what makes up the economy in your argument and then see what you have. You question sound more like whining to me.

Answer 9

Trade deficits mean American buy more stuff than we sell to other countries. It's not our fault they can't afford to buy as much as we do.

Federal deficit in time of war, with Katrina, etc. hmmm...

I have a house.

Nobody claims inflation doesn't exist.

We have all gotten tax cuts, except for the poor. They don't pay any taxes to cut.

Got that OK?

Answer 10

Ok, as far as the tax cuts, look at your paycheck from 2000 and you will probably see a cut. It is there, I had about 23% coming out of the my paycheck back in 2000, and now it is around 20% even though I am making more money.

Trade deficit, we have always had a trade deficit, all that means is we are importing more than we are exporting. One reason is, we have the largest economy in the world, and we just cannot make everything we need in this country so we must import to fill the gaps. And since we have largest economy in the world (equal to the entire EU) we don't export as much as some countires since most of what we make is used in America.

The housing market was hurt for 2 reasons. 1st, subprime mortgages, banks were giving mortgages to people who had no business getting one. 10-15 years ago these people would've been turned down, or asked for 20% down payments. Now they get 3% down payments, intrest only loans that expire after 7-10 years. All these things lead to people getting in over their head. Is that wrong, yes, but it is more to blame on banks rather than the economy as a whole.

The 2nd reason is, there was too much new housing too fast. For years in the mid-late 90's and into the 2000's people were building new houses rather than buying existing houses. So people were moving from one house into a new house, and the people who would normally bad the used home would also buy an inexpensive home. In the past it was cheaper to buy an exisiting home rather than build, especially around cities. So now there is a surplus of housing, and people are selling for less than before because they need to entice people from building new homes and buying their existing home. This causes the overall price to drop and people are now having a negative flip on their home rather than a positive flip. This is part of the economy, but mainly the housing market being too good for about 10 years from 1994-2004. Like the old saying, what goes up, must come down.

As far as needing both parents to work. 10 years ago and today have about the same number of household where both parents work. You need to go back about 20 years to see a big difference in those numbers. Part of the reason you need 2 parents to work is because our standard of living has increase. We have many more conviences today than 20 years ago, or even 10. Just look 2 weeks ago 3/4 of a million people bought the Apple iPhone, that is a $500-$600 luxury. To be able to afford that you need to people working. There was nothing like the iPhone 20 years ago (I mean in terms of hype and luxury need not technology). There are more cellphones than people in the US, more household have cable, internet, more TVs in homes, other things such as GPS, iPods, ect ect. These cost money. 20 years ago you paid your mortgage and property taxes, utilities bills, and maybe cable. Now you pay for those plus more expensive cable(even adjusted for inflation), cell phones, internet access, movie rentals, ect. Also more families today are taking more vacations further away than 20 years ago. These cost money. More kids are going to college today than before, so parents need to pay for that. When in 1987 and you didn't expect your kid to go to college because you didn't you didn't save for it. Now every parent expects their kid to go to college and starts saving from day 1, and many have a 529 account. The another main factor is 401k, 15 times as many people has a 401k in 2003, than in 1993. The average person takes 5% out of every payheck and put it into their 401k, this money needs to come from somewhere, and that needs to be made up somehow. Would you rather have one person work, and have no iPod, no cable TV, take less vacations, have your kids take out loans to pay for college, or not even go because you can't afford it? Yes we need more money to live today, but we have more than 10-20 years ago. These luxuries come at a price, and we all have choices to make.