One Nation, Under Debt.

It's been a while coming. The start of welfare which was a long time ago, getting prayer and God out of the schools. From there, we have been declining. We have been on a sharper decline in the 21st century.

Why don't you throw in civil rights, banning smoking in most places, advanced health care, and fuel efficient cars. Those are all of the things that have ruined your grandfather's America.
 
Why don't you throw in civil rights, banning smoking in most places, advanced health care, and fuel efficient cars. Those are all of the things that have ruined your grandfather's America.

There are some good things about society currently. However, we cannot maintain what we have going because of the way we are doing things.

And yes our society could learn a lot from my Grandfather's America.
 
There are some good things about society currently. However, we cannot maintain what we have going because of the way we are doing things.

And yes our society could learn a lot from my Grandfather's America.

What years do you considered to have been great for America?

You do realize that your grandfather's america (when the US entered WW2 - I'm guessing) was 70% agrarian. Don't forget stuff like polio.

or how about this inconvenient fact for the "gee i wish things were the way they were before!" crowd:

In the 1940s, around a third of homes in the U.S. had no flushing toilet. In some States, up to 70 per cent of people did not have a flushing toilet in their own home, instead most people went to use an outside toilet or privy.

On a state-by-state basis, around 80 per cent of homes in Mississippi were without a flushing toilet in 1940 but by the 1990s just 4 per cent were without a public sewer, septic tank, or cesspool.

In succeeding decades, the proportion of homes lacking complete plumbing dropped dramatically, falling to about one-third in 1950 and one- sixth in 1960.
 
What years do you considered to have been great for America?

You do realize that your grandfather's america (when the US entered WW2 - I'm guessing) was 70% agrarian. Don't forget stuff like polio.

Not to mention that some people benefited heavily from other people's free labor all the way up until WWII (even after the 13th Amendment passed banning de facto slavery, you still had people convicted for things like loitering--basically being black in public--and sentence to work fields). The racial caste system isn't something that can be neatly separated from the rest of American society in the sense of "let's have everything good about those days without the caste system," because it's an essential part of it. That also relates to wealth accumulation in the post-war boom.
 
Not to mention that some people benefited heavily from other people's free labor all the way up until WWII (even after the 13th Amendment passed banning de facto slavery, you still had people convicted for things like loitering--basically being black in public--and sentence to work fields). The racial caste system isn't something that can be neatly separated from the rest of American society in the sense of "let's have everything good about those days without the caste system," because it's an essential part of it. That also relates to wealth accumulation in the post-war boom.

What I find absurd is when people wish for the days of post-WW2 america -> 1970's oil crisis "when things were made in America!" era to return. Ok, so let's not forget that every fucking place in the world that manufactured stuff had just been blown to smithereens. Then of course it follows that nearly EVERYTHING was made in America for a span of approx. 25yrs. That time will never return, it's done, gone. Be thankful that the US was clever enough to invest in science and research in order to dominate technology.
 
Lack of savings fueled partially by foreign investment funneled into real estate through the mutualization of mortgages. Lot of institutional / corruption factors but personal debt lay at the heart of the r/e bubble. The idea that personal debt levels should be monitored because the are a measure of economic health is a pretty simple one, not sure where you are getting tripped up.

Thanks. I'm just asking why in and of itself it's a concern, or if other necessary forces (as you pointed out) are in play to suggest some actual problem.

This has a pretty good overall take on how the credit crisis came to be. The GFC is not just because banks made bad loans and some people lost their jobs in America. There's also the rise of shadow banking and the attempt to satisfy an asset demand that inspired the expansion of mortgage debt. Banking makes my head spin. The first 6-7 pages give an overall perspective on how credit collapsed.

https://economics.barnard.edu/sites.../global_credit_crisis_and_policy_response.pdf


It is important, for the argument that follows, to understand where the financial engineering came from and how it was supposed to work.

Suppose that a bank has a pool of business loans, which it is happy to hold, but it is
concerned about capping its exposure to default risk on those loans. In an efficient
market, the value of the risky loan portfolio should be equal to the value of a similarly sized riskfree loan portfolio plus the value of an insurance contract that guarantees the risky loan portfolio. If the bank buys the insurance, then its net position becomes completely riskfree. This insurance is a credit default swap (CDS).

On the other side of the swap contract, the seller of insurance now owns a risky asset. If he combines that risky asset with just the right amount of riskfree debt, he can recreate exactly the risk exposure of the original pool of business loans. If he funds this position by issuing pass-through notes, then whoever buys the notes will have exactly the risk exposure of the original pool of business loans. This combination of insurance plus riskfree debt is known as a
 
What I find absurd is when people wish for the days of post-WW2 america -> 1970's oil crisis "when things were made in America!" era to return. Ok, so let's not forget that every fucking place in the world that manufactured stuff had just been blown to smithereens. Then of course it follows that nearly EVERYTHING was made in America for a span of approx. 25yrs. That time will never return, it's done, gone. Be thankful that the US was clever enough to invest in science and research in order to dominate technology.

Sort of. The U.S. was importing a lot less in the post-WWII era, but it was also exporting a lot less. We're making more stuff in America than we ever have (and selling more to other countries than we ever have), even relative to GDP. The difference is that it takes fewer of us to make that stuff. So the change is similar to the move away from farming employment (which also caused a lot of changes in America). It's progress, though, and I think now is the best time ever to be alive for Americans.
 
Yeah, the earth region. Apparently he has a mortgage on Mars.

Cyberspace actually.

You seem frustrated over not being able to discuss it in greater detail (such as Gandhi is). Go ahead and stare at that stat though. I'm sure it'll predict the next crisis all by its lonesome. Never mind the other people in this thread also pointing out that more context is needed to draw any conclusions. :)
 
Cyberspace actually.

You seem frustrated over not being able to discuss it in greater detail (such as Gandhi is). Go ahead and stare at that stat though. I'm sure it'll predict the next crisis all by its lonesome. Never mind the other people in this thread also pointing out that more context is needed to draw any conclusions. :)

The link you posted shows exactly what i was talking about. YOu are just being a troll.
 
The link you posted shows exactly what i was talking about.

Where did you "talk about" anything but mortgages? The link I provided talks about the dynamic that lead to the GFC, which of course included mortgage debt. If all you got out of that was household debt increase equals systemic concern then you didn't understand what you were reading.

Can you currently point to anything that, in conjunction with rising household debt, would lead anyone to further concern? Have you even ruled out that the increase is the result of growing consumer confidence, which could be a good sign?
 
Where did you "talk about" anything but mortgages? The link I provided talks about the dynamic that lead to the GFC, which of course included mortgage debt. If all you got out of that was household debt increase equals systemic concern then you didn't understand what you were reading.

Can you currently point to anything that, in conjunction with rising household debt, would lead anyone to further concern? Have you even ruled out that the increase is the result of growing consumer confidence, which could be a good sign?

I havent ruled that out. I take issue with this.

Is there a reason for a person to worry about other people's personal debt?

You see how the highlighted part is important to people's personal debt right? How a mortgage is personal debt?
 
I havent ruled that out. I take issue with this.



You see how the highlighted part is important to people's personal debt right? How a mortgage is personal debt?

It's been acknowledged that mortgage debt was involved. You need a disclaimer? :)

Maybe you should scrutinize your own posting a bit more. In an effort to get you to speak with any insight I asked "Personal debt caused the GFC?" and your answer was "do you know what a mortgage is?".

Since that point all you've done is piss & moan and call me a troll, in spite of my attempts to get some informed discussion out of you. I'm sorry to confess that my assessment of your contribution here amounts to "herp derp mortgage debt". You thought you'd be condescending with your first post and it didn't work out like you planned is what I'm seeing.


5-True-Romance-quotes.png
 
This is a pointless argument. Personal debt can't really be said to have caused the *crisis*, but the increase in personal debt (and resulting decline in spending as people paid that debt down) was the main cause of persistently high unemployment in the aftermath of the crisis, as it led to a huge demand for savings and cash, which could not be met in the usual way (lowering rates--because we lowered them all the way, and there was still an excessive demand for savings and cash).
 
It's been acknowledged that mortgage debt was involved. You need a disclaimer? :)

Maybe you should scrutinize your own posting a bit more. In an effort to get you to speak with any insight I asked "Personal debt caused the GFC?" and your answer was "do you know what a mortgage is?".

Since that point all you've done is piss & moan and call me a troll, in spite of my attempts to get some informed discussion out of you. I'm sorry to confess that my assessment of your contribution here amounts to "herp derp mortgage debt". You thought you'd be condescending with your first post and it didn't work out like you planned is what I'm seeing.


5-True-Romance-quotes.png

you are right, i concede. An increase in the average personal debt should not concern us at all. It has no broader influence on anything. it should be ignored.
 
Not to mention that some people benefited heavily from other people's free labor all the way up until WWII (even after the 13th Amendment passed banning de facto slavery, you still had people convicted for things like loitering--basically being black in public--and sentence to work fields). The racial caste system isn't something that can be neatly separated from the rest of American society in the sense of "let's have everything good about those days without the caste system," because it's an essential part of it. That also relates to wealth accumulation in the post-war boom.

Yeah slavery did exist until the 40s in many places in the south via the prison system, but yeah those good old days.....
 
Thanks. I'm just asking why in and of itself it's a concern, or if other necessary forces (as you pointed out) are in play to suggest some actual problem.

This has a pretty good overall take on how the credit crisis came to be. The GFC is not just because banks made bad loans and some people lost their jobs in America. There's also the rise of shadow banking and the attempt to satisfy an asset demand that inspired the expansion of mortgage debt. Banking makes my head spin. The first 6-7 pages give an overall perspective on how credit collapsed.

https://economics.barnard.edu/sites.../global_credit_crisis_and_policy_response.pdf

Sure mutualization of mortgage securities meant they were sold as A rated but were actually junk. This is because the underlying mortgages were sub prime and the bank guarantees were void in the case of an overall market correction. The result, financing was provided at close to risk free rates but was directed to high risk situations, to much supply bubble and boom.

Tease rates, and many other finance scams were also a big part of it.

That does not change the fact that it resulted in personal debt levels that were way to high. Personal debt in the context of assets and income is always important in evaluation the sustainability of economic growth. The GFC is just an example of why it should be monitored in the same way employment, inflation, GDP should be.
 
Just to be clear my position is that we should monitor personal debt levels and that an increase may or may not be an issue. Large increases over time would raise my concerns but they would be alleviated if we saw similar increases in income.
 
Sort of. The U.S. was importing a lot less in the post-WWII era, but it was also exporting a lot less.

And people purchased/consumed a lot less back then too, but that's unrelated to any of the points made.

We're making more stuff in America than we ever have (and selling more to other countries than we ever have), even relative to GDP.

Well of course more is produced and traded as a result of population growth, automation, transportation logistics, trade relationships, and general efficiencies. The BOLDED part is just not true.

worldmfg.jpg



Manufacturing
 
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