How Strategic Defaults Are Reshaping Economy [View article]
Rick, this is a great article, but you did not mention another change, which perhaps is more social than economic.
This is the stress building up within society between those who have consumed beyond their means, and those that have acted responsibly.
As the over-consumers walk away from debts, and as government acts as an intermediary to charge their debts to the responsible members of society, a breakdown of long-established social norms is underway. This is tempting responsible people to act irresponsibly, and left unchecked, is a return to rule of the jungle, wherein each simply grabs what he wishes to consume. The effect on civic society cannot be ignored, and it all started with bailouts to pay bankers' bonuses!
Consumer Spending Has Held Up Because People Aren't Paying Their Mortgages [View article]
Your notion of French socialism is out of date.
In socialist France, unemployment payments begin to decline after a few months of collecting them, and terminate after one year. In the US, it remains in full for 99 weeks in many states, eliminating the incentive to work, and overburdening the productive taxpayers.
Those seeking socialism will do much better in USA than France.
Why I'm Negative on Equities Despite Good Earnings Season [View article]
David, You make many valid points in clearly written terms. You did not mention one factor, perhaps because you don't see it as a negative This is excessive govt control of the economy.
In the US, the govt has basically taken over the housing and financial sectors, and may yet take over the health care sector. It has also largely taken over the domestic automotive sector. If these were truly socialist takeovers, they would be bad enough, but in reality, these takeover are much worse than purely socialist as the losses, costs, and subsidies are being socialised, whilst the profits, lavish pay, and bonuses, remain privatised; especially for finance. This makes these quasi-socialised sectors far more costly than they would have been, had they been truly nationalised. To subsidise them, govt needs to egregiously tax the dwindling number of truly productive members of the economy, in addition to monetise debt, create inflation, and fleece savers.
In the long-term, the risk of misguided policy that decimates productivity and prudence, to subsidise bloated, inefficient and unproductive sectors is the greatest negative of all.
How Strategic Defaults Are Reshaping Economy [View article]
This is the stress building up within society between those who have consumed beyond their means, and those that have acted responsibly.
As the over-consumers walk away from debts, and as government acts as an intermediary to charge their debts to the responsible members of society, a breakdown of long-established social norms is underway. This is tempting responsible people to act irresponsibly, and left unchecked, is a return to rule of the jungle, wherein each simply grabs what he wishes to consume. The effect on civic society cannot be ignored, and it all started with bailouts to pay bankers' bonuses!
Consumer Spending Has Held Up Because People Aren't Paying Their Mortgages [View article]
Consumer Spending Has Held Up Because People Aren't Paying Their Mortgages [View article]
In socialist France, unemployment payments begin to decline after a few months of collecting them, and terminate after one year. In the US, it remains in full for 99 weeks in many states, eliminating the incentive to work, and overburdening the productive taxpayers.
Those seeking socialism will do much better in USA than France.
Why I'm Negative on Equities Despite Good Earnings Season [View article]
In the US, the govt has basically taken over the housing and financial sectors, and may yet take over the health care sector. It has also largely taken over the domestic automotive sector. If these were truly socialist takeovers, they would be bad enough, but in reality, these takeover are much worse than purely socialist as the losses, costs, and subsidies are being socialised, whilst the profits, lavish pay, and bonuses, remain privatised; especially for finance. This makes these quasi-socialised sectors far more costly than they would have been, had they been truly nationalised. To subsidise them, govt needs to egregiously tax the dwindling number of truly productive members of the economy, in addition to monetise debt, create inflation, and fleece savers.
In the long-term, the risk of misguided policy that decimates productivity and prudence, to subsidise bloated, inefficient and unproductive sectors is the greatest negative of all.