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ORIGINAL: vincentML

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That all depends on what you want and what lifestyle you want. My sister and sister-in-law are both stay-at-home Moms. My brother makes very good money while my brother-in-law makes okay money. Their lifestyles are very different. Granted, my brother is 9 years older than my BIL, so it's no real surprise he's making better money and they have a much different lifestyle. But, both are happy with their lifestyles and both have their needs met and still have some wants not met.

Good for them, and better if they have no credit card debt. But you are generalizing from two particular cases and projecting upon several generations of two worker families who have gone into credit card debt to get their needs met.

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I understand taxes are necessary. But, GE played by the rules when they paid no US taxes, and even got a credit here. They profited outside the US, but that's not the same thing. But, you do know what happens when taxes are raised on business, right? They find a way to pay less. Tax revenues are near all-time highs, and government wants to increase them so they can spend more. spending is at an all time high, too. why would anyone want to pay more taxes when we are already at near record highs?

Ah, no. GE used the loses in their GE Capital Division to offset the income gains in their manufacturing divisions. Played by the rules? Not really. Bust the trusts, as Teddy said.

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Federal tax revenues have been steadily in a range of 15 - 20% of GDP since 1950.

So what? What does it matter what % GDP tax revenues or spending are? When the US Government goes out to make a purchase, do they look at the % GDP of the cost or do they look at the dollar amount of the cost? And, when we owe other Nations, do we owe them dollars or %GDP? As a % of GDP, we are way down in revenues and way up in spending. Even looking solely at dollars, we are way up in spending, and way up in revenues. That's just a manipulation of data to make a point. I got into an argument with a liberal on Facebook over the "War on Poverty." He got blue in the face arguing that the % of people living under the poverty level has decreased greatly (it has), even though my argument was that the number of people who are living under the poverty level is higher than when the program was started (also true). So, what's the important thing in all that? I think it's people. He thought it was % of the population.

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It's a cycle that's out of control. The more government gives people "stuff," the more stuff people (and corporations, etc.) want. The more demand for "stuff" there, is, the more power government gets.

On corporate welfare we agree.
But, what stuff are people demanding? We have a welfare to work system. We pay social security taxes all our lives, and then we are taxed on the benefits. We pay healthcare taxes but costs have been out of control. So, what stuff are people demanding? Police, firemen, first responders, nurses, teachers, street cleaners? Privatizing public services seems alluring but it only works when labor costs are reduced. And when labor costs are reduced aggregate demand is supported only by credit risk. . . another vicious cycle.

Aggregate demand?!? Fuck aggregate demand. We don't aggregate supply, do we? Are we to go out and buy, buy, buy regardless of what it is? What does that do, other than skew data, leading to market breakdowns? If I want to spend $1000 on a TV, I'm not going to go out and spend $1000 on strap ons. I'm going to spend $1000 on a damn TV. It's not aggregate demand, it's specific demand. That's the point. If I buy the strapons, I'm giving indicators that manufacturing more strapons would be good. If I buy the TV, it gives the sign that more TV's may be needed. Since I'm looking for a TV and not strapons, isn't it a better idea to specify my demands? What are the odds that my wants and demands are going to be met if I give you $1000 and tell you to spend it, without telling you what I'm looking for? Maybe if Obama would have spent $787B on paper clips, we'd be in a much better situation, right?

What are people demanding? Shifting the costs of women's contraceptives. Shifting the costs of abortions. Mo money, mo money, mo money. The Federal Government went into NawLeans after Katrina, and tried to help. Though they fucked it up, it was still something. But, it wasn't good enough.

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What I support:

• A Conservative interpretation of the US Constitution
  
• Personal Responsibility
  
• Help for the truly needy
  
• Limited Government
  
• Consumption Tax (non-profit charities and food exempt)
  

(in reply to vincentML)

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ORIGINAL: tweakabelle

In an intriguing paper, Canadian diplomat author and academic Peter Dale Scott analyses some of the issues thrown up by the decline in US power and prestige, the end of the “Pax Americana”.
http://www.informationclearinghouse.info/article32315.htm

Scott argues that the origins of World Wars I & II lie in the decline of the “Pax Britannia”, and that similar factors are at play in today’s world. He focuses on today's self-generating wars (such as the Wars on Drugs and Terror), decline in democratic institutions in the USA and the increasing militarization of the world. Scott’s solution involves re-asserting democratic control over the ‘war machines’, de-militarising the ‘War on Terror’ and a strengthening of democratic institutions in the US.

While I don’t necessarily agree with either the analysis or the solution Scott presents, I found his paper thought provoking. The issues he raises are well worth examining.

What do other posters think?

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I don't know about my sister's credit debt (if any), though they are underwater in their mortgage (no problem paying it, but can't refi to a lower % because they are underwater). I have to wonder why people can't meet their needs on two incomes. Seriously. Just needs, not wants. Huge difference and I can see how two income families can't get all their wants met. I lived that.

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GE's Capital Division is still part of GE. GE lost money in it's Capital Division. GE gained money in it's Manufacturing Division. GE is GE, so their domestic income, regardless of division all goes into the tax paperwork. Does GM get to separate vehicle lines for tax purposes? Would they have been able to, say, pay taxes on their Chevy Division even if the profits in Chevy didn't outweigh the losses in Saturn or Pontiac?

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ORIGINAL: vincentML

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I don't know about my sister's credit debt (if any), though they are underwater in their mortgage (no problem paying it, but can't refi to a lower % because they are underwater). I have to wonder why people can't meet their needs on two incomes. Seriously. Just needs, not wants. Huge difference and I can see how two income families can't get all their wants met. I lived that.

Yanno, you and I do not walk in everyone's shoes. Undoubtably, there are a lot of folks who are financially reckless. I won't disagree with you on that. But quite a lot has changed since the 50s. June and Ward Cleaver are no longer the norm.

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GE's Capital Division is still part of GE. GE lost money in it's Capital Division. GE gained money in it's Manufacturing Division. GE is GE, so their domestic income, regardless of division all goes into the tax paperwork. Does GM get to separate vehicle lines for tax purposes? Would they have been able to, say, pay taxes on their Chevy Division even if the profits in Chevy didn't outweigh the losses in Saturn or Pontiac?

Doesn't it strike you that GE Jet engines and GE Capital are totally different businesses, while Chevy and Pontiac are the same?

• A Conservative interpretation of the US Constitution
  
• Personal Responsibility
  
• Help for the truly needy
  
• Limited Government
  
• Consumption Tax (non-profit charities and food exempt)
  

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Our consumptive lifestyle in the US is what is truly eroding our society.

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Totally different business types, but not necessarily different businesses. GM - GMAC? And, does it matter? Are you pushing for companies to only reside within one type of business? I'm not a corporate CPA, so I don't know if large, multi-sector companies file taxes separately for each of their holdings, or if they file one that includes all their holdings.

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ORIGINAL: tweakabelle

I must say that I find it odd that no one has brought up the status of China and India, and other emerging powers.

With their huge population base, and rapidly developing economies both of these nations stand poised to rival the US as 'superpowers' in the future. The US is already up to its eyeballs in debt to China, not a good omen for the future. Both have made remarkable strides in eradicating poverty, and nurturing emerging middle class development. While it's not going to happen today or tomorrow, it is only a matter of time before both economies overtake the US's. International political clout will inevitably follow. The US has reacted by realigning its military to give it more focus on the Pacific region.

A widely held view is that the great shift of our times is the movement of wealth and power towards the East. Surely this deserves some recognition.

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Clearly, China and India need to be taken into consideration. Especially troublesome are China's expansionist glances southward, their economic relationships in Africa and South America, and their success in gathering natural resources. Additionally, as history tells, no empire is eternal. I will not argue the possibility but there are barriers. China's middle class is developing along the coast, isn't it? A peasant from the interior still retains a rural passport and second class citizenship when she moves to Shanghai, I think. It seems there are massive internal economic and political problems. Likewise for India. And is population necessarily a marker for empire? Britain had a scant population when it went off on its imperialist adventures. As for our debt to China, there is the addage: when you owe the bank a little money the bank owns you; when you owe the bank a lot of money you own the bank. But, you are closer to China and more aware than we are. You can probably see China from your back yard What have I got wrong?

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I'm not sure why you describe "China's expansionist glances southward, their economic relationships in Africa and South America, and their success in gathering natural resources" as "troublesome". With the exception of Tibet, China doesn't appear to be expansionist, though this could always change in the future. There are some spats with neighbouring countries over a few rocks in the seas, but most observers feel these are more about exploitation rights for undersea energy sources. China's attitude towards Taiwan and Hong Kong are the best evidence we have, and it showed no expansionist or belligerent tendencies there.

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There are huge gaps inside China between urban and rural standards of living, which are disappearing as China becomes increasingly urbanised. Some 3-400 million people have been lifted from below the poverty line to the middle classes in the past few decades - an astonishing feat.

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The US economy is dependent upon ongoing Chinese T-Bond purchases and there is a massive trade imbalance in China's favour. This may be the first time that an empire has financed the rise of its eventual replacement. It's worth remembering that the Chinese hold a permanent option of cutting off or suspending the credit line, which may in future times sharply limit the US's wriggle room on certain issues.

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ORIGINAL: vincentML

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ORIGINAL: Tweakabelle
There are huge gaps inside China between urban and rural standards of living, which are disappearing as China becomes increasingly urbanised. Some 3-400 million people have been lifted from below the poverty line to the middle classes in the past few decades - an astonishing feat.

True, but hardly enough, as you say, and dependent upon an export economy which is facing competition from other emerging nations. China's leaders have acknowledged that they need to develop a larger consumer society.

• A Conservative interpretation of the US Constitution
  
• Personal Responsibility
  
• Help for the truly needy
  
• Limited Government
  
• Consumption Tax (non-profit charities and food exempt)
  

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****vincentML: What does it matter if your economy is based on exports instead of consumption? I mean, we have such an incredible consumption in the US that it drives our imports and is what is really driving outsourcing.

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ORIGINAL: tweakabelle

A widely held view is that the great shift of our times is the movement of wealth and power towards the East. Surely this deserves some recognition.

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ORIGINAL: vincentML

Made In China is not a label that inspires a lotta confidence.

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Another point that raises skepticism is they recently purchased an aircraft carrier form the Ukraine (!!) for scrap metal . . . and then decided to equip it as their first military carrier. They have a long way to go to be a world power, as tweakabell suggested.

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Most of the MRI machines out there are from China, for instance.

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They already are a world power. You need them. We all do. Because of natural resources. [SNIP] They don't need to engage you elsewhere, as they can simply cut you off.

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ORIGINAL: vincentML

Right. Designed by American and German engineers.

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Not so easy as you imagine . . . China actually has only 30% of rare earth metals in their ground. They had a near monopoly on processing.

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Perhaps too much is made of China's seeming advantage in this area. The Chinese are heavily dependent on our corporations, such as Apple and Nike among others. Maybe I have this wrong but much of that trade imbalance favors our own corporations. China is a labor pool for us.

Secondly, the debt may not be so much of a problem. Most of it is inter-agency debt and t-bills/bonds held by our own banks, money market funds, pension funds, foundations, etc.

Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.

Read more: http://www.foxnews.com/politics/2012/09/04/who-do-owe-most-that-16-trillion-to-hint-it-isnt-china/#ixzz25ykgDumY

My understanding of the debt markets is they are based upon confidence that we can pay our bills. Our Federal debt has held fairly steady since 1950 at 15%-20% of GDP, and we will not run out of money because the Treasury Dept issues new bonds and the Federal Reserve buys them. New money is created. In the long run inflation diminishes the value of that debt. But of course as Keynes said, in the long run we are all dead. That is not to say that some political event could not shake that confidence. We are coming up to such a potential crisis late December. Although it will seem catastrophic it will be temporary, I think. Bottom line is China does not have as much of a hold on us as rumoured.

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Yeah. Unless you buy the Chinese models. They actually do have their own designs, which are lower cost and about as capable. But in a free market you build what you get paid to build, and people around these parts still have prejudices about the "Made in China" thing, so we pick known brands. The known brands outsource the production, but not the design. Part of this is because the brand related trust we have would be weakened by the brand owners reducing themselves to middle men.

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ORIGINAL: vincentML
I doubt your postulate that China could choke us off from rare earth metals. In the face of such a posture a cost benefit decision for creating a new industry here would come down on the side of the benefit, and the cost be damned. The threat of such an action would lead to dire consequences, don't you think? Do you believe America would sit back and play the hapless supplicant? I don't think so.
Be well.

• A Conservative interpretation of the US Constitution
  
• Personal Responsibility
  
• Help for the truly needy
  
• Limited Government
  
• Consumption Tax (non-profit charities and food exempt)
  

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I read an article several years ago that pointed at China amassing rare earth minerals that could be used in the manufacturing of batteries. It was said they were responsible for well over half of all purchases of the stuff. Since we are not yet extremely reliant on batteries, it may have passed under the radar, but we are quickly increasing our reliance. Once you start wide scale mass production of battery-powered vehicles, this may become more of an issue. But, it may not have gone under the radar and there may already be people researching the battery's replacement.