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The Real Reason the Economy Might Collapse
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Oct 12, 2021 22:41:15   #
Milosia2 Loc: Cleveland Ohio
 
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am




Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy.

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing.

This means that over the long term their incomes need to keep pace with their productivity.

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared.

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.



Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing.

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap.

None of this is sustainable. At some point, widening inequality causes the economy to collapse.

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing.

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand.

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform.

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end

Reply
Oct 12, 2021 23:06:18   #
microphor
 
Milosia2 wrote:
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am




Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy.

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing.

This means that over the long term their incomes need to keep pace with their productivity.

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared.

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.



Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing.

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap.

None of this is sustainable. At some point, widening inequality causes the economy to collapse.

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing.

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand.

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform.

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end
The Real Reason the Economy Might Collapse br Robe... (show quote)


BS

Reply
Oct 12, 2021 23:10:24   #
JFlorio Loc: Seminole Florida
 
microphor wrote:
BS


As soon as you see it’s that idiot Robert Reich read no further. He’s been wrong his entire life of predictions.

Reply
 
 
Oct 12, 2021 23:27:39   #
LogicallyRight Loc: Chicago
 
Milosia2 wrote:
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am




Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy.

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing.

This means that over the long term their incomes need to keep pace with their productivity.

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared.

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.



Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing.

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap.

None of this is sustainable. At some point, widening inequality causes the economy to collapse.

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing.

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand.

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform.

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end
The Real Reason the Economy Might Collapse br Robe... (show quote)


***The Real Reason the Economy Might Collapse
>>>Jor biden

Reply
Oct 12, 2021 23:52:49   #
JFlorio Loc: Seminole Florida
 
LogicallyRight wrote:
***The Real Reason the Economy Might Collapse
>>>Jor biden


Now that was easy, and true.

Reply
Oct 13, 2021 00:01:38   #
microphor
 
LogicallyRight wrote:
***The Real Reason the Economy Might Collapse
>>>Jor biden



Reply
Oct 13, 2021 00:32:10   #
Weasel Loc: In the Great State Of Indiana!!
 
JFlorio wrote:
Now that was easy, and true.


YES it can



Reply
 
 
Oct 13, 2021 01:12:18   #
Milosia2 Loc: Cleveland Ohio
 
LogicallyRight wrote:
***The Real Reason the Economy Might Collapse
>>>Jor biden



Reply
Oct 13, 2021 01:17:56   #
dtucker300 Loc: Vista, CA
 
Milosia2 wrote:
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am


"Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy."

Why is it wrong? How?

"70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing."
The economy depends not on consumerism, it depends on product production. If products are not produced they can't be bought. Right now, inflation is increasing because there are more dollars (thanks to the Democrats giveaways) than there are goods to meet the demand.

This means that over the long term their incomes need to keep pace with their productivity. As productivity becomes more efficient, goods become less expensive. Case in point, Computers.

"But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared."

Democrat Party policies have been responsible for most of this. They've demolished the middle class, destroyed union jobs, and sent industrial production to foreign countries. The largest unions are now Public Employees. College degrees are worthless because you can now get your degree in Gay Gender Studies in the Medieval Period. They destroyed energy production and stifled business with overreaching environmental regulations instead of common sense solutions. One other note; people live longer and more comfortably than ever. Today's citizen lives better than the Kings and Queens or the wealthiest person of 100 years ago.

"Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s."

Economic gain didn't go to the wealthy. The wealthy put money back into businesses and R&D. Much of the gains he speaks of went to the government in the form of more taxes to support more Democratic Party pipe dream giveaway programs. In other words, wasted, due to central planning like a socialist state.



"Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning."
What does he think the wealthy do with the rest of their wealth? Hide it under their mattress like a Silas Mariner? Consumer demand does not drive the economy nearly as much as the Production and Development of new products to make life better. We export less than we import. Obviously, there is a demand for imported products

"Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing."

They do, however, live better than any generation before them and have a better standard of living. healthcare, and life expectancy than the wealthiest people had 100 years ago. Why should workers be able to buy everything the economy produces. Economics involves trade-offs because resources are limited. As Mick Jagger said, "You can't always get what you want, but you just might get what you need."

"The result is a gap between potential output and potential consumption."

That's a pretty dumb statement. There's a real gap between Robert Reich's potential intelligence and real intelligence. Why do you read his nonsense? Because you can't discern between leftist garbage and how the real world works." Leftists think they can devise a system in which they can alter Human Nature. They can't! The framers of our Constitution understood this better than anyone.

"To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs."

No, it doesn't. Live within your means. The government needs to learn this lesson because they have amassed greater debt than all the consumer debt combined. Politicians must really hate children to leave this crushing debt burden to them. Now, I'll admit that there are some people who through no fault of their own (Usually it's the result of government policies), who can't make ends meet and need help. WE have hundreds of government programs to assist these people. However, there are givers and takers and the takers have figured out how to use and loot the system for their own selfish ends. Why is it that every poor person I see, (not the mentally ill living on the streets) has a cell phone? Is a cell phone a basic household necessity? Okay, how about cable TV? And many other examples. Most people need a car to go to and from work but the Biden economic and energy program has caused gasoline prices to skyrocket. Who gets hurt the most by this? The working poor. Their situation improved better with Trump's policies than with any other administration in the past 60 years. Even LBJ's 'Great Society' which started the disintegration of the nuclear family and began making people dependent on the government.

"The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap."

The Federal Reserve answers to no one. All of its' members come from banking and Wall Street financial institutions. As I mentioned earlier, because of quantitative easing there are more dollars chasing fewer goods because people were unwilling to go back to work when they could stay at home and get free money from the government. There is no such thing as a free lunch. Every industry has labor shortages, not due to a decrease in the labor force but because of unavailable workers, 5 million people, who stopped working since the covid pandemic started and decided to stay home to collect government benefits. They could fill these jobs. Even McDonald's can't fill positions and are offering bonuses for just coming in for a job interview.

'None of this is sustainable. At some point, widening inequality causes the economy to collapse."

Reich throws around all these conventional wisdom statements that are not wisdom at all. He never explains why he believes this to be true. He says it, you're supposed to believe it because he is the mighty and powerful OZ.


"We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing."

The great depression was caused because of the over-extension of easy credit and lending without collateral. The buying power was curtailed because businesses dried up when there was no money left to fuel the speculative boom. We did the same thing in 2008 with the housing because the leaders in the Democratic Party thought everyone should be able to buy a house. Easy money makes people lazy and they speculate on potential future gains. Government policies were the problem. Unintended outcomes from these policies were the problem. Then the Politicians come and say "Vote for us and we can save you." Only, they make it worse with more unintended and unforeseen consequences

"He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”"

Why would any sane person join a high stakes poker game without an adequate bankroll to back them?

"While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked."

Speculation and borrowing on margin by greedy people made the system collapse. That takes down the innocent bystanders also.

"Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression."

Yes, we see the same pattern but the reasons are all wrong as I have already stated

"The result has been an economy whose underlying structure is far more fragile than it may seem."

Absolutely. So why should we trust the government to fix this when they are at the root of most problems and then only make them worse? The federal debt is the highest it has ever been in peacetime, only surpassed by the debt after the end of WWII. Increasing the debt is insanity and will destroy this country. Exactly what the left wants to do.

"Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic."

2008 resulted in a lot of people losing their homes and leaving more people worse off than before the housing bubble. All of that could have been avoided if common fiscal and monetary sense had been practiced. Idiots like Barney Frank and the Democrats were largely responsible because they don't understand economics.

"The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary."

And the current administration have no basic understanding of economics. I can't think of one person in the Biden Administration, including Schumer and Pelosi, who have ever been in private enterprise. Biden had 47 years to fix this when he was in the Senate. Schumer went straight from law school to elected office. These clowns have never had to build anything. They live off the sweet of hard working Americans and leave government richer that what they could possibly have earned from their salaries.

"Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand."

Currently, the problem is too much demand. Too many plentiful dollars chasing after too few goods because of production and supply problems that cheap government money created. Next, the problem will become too much debt and high taxes.

"America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile."

It will remain perilously fragile as long as the Democrats keep promising more and more benefits without any way to pay for it. George W. Bush was just as responsible for putting us in military conflicts without having the American people sacrifice something in order to fund it.

"It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform."

That's exactly what we have in the Biden Admin. A stooge for the American Marxists who want to destroy this country by fundamentally changing it.

"Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy."

Yes, it is. However, he hasn't a clue as to what works and what doesn't. He's a theoretician. We may as well have Karl Marx advising us what to do. od as Forrest Gump says, "Stupid is as stupid does."

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end
The Real Reason the Economy Might Collapse br Robe... (show quote)

Reply
Oct 13, 2021 01:19:59   #
dtucker300 Loc: Vista, CA
 
Milosia2 wrote:
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am



"Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy."

Why is it wrong? How?

"70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing."
The economy depends not on consumerism, it depends on product production. If products are not produced they can't be bought. Right now, inflation is increasing because there are more dollars (thanks to the Democrats giveaways) than there are goods to meet the demand.

This means that over the long term their incomes need to keep pace with their productivity. As productivity becomes more efficient, goods become less expensive. Case in point, Computers.

"But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared."

Democrat Party policies have been responsible for most of this. They've demolished the middle class, destroyed union jobs, and sent industrial production to foreign countries. The largest unions are now Public Employees. College degrees are worthless because you can now get your degree in Gay Gender Studies in the Medieval Period. They destroyed energy production and stifled business with overreaching environmental regulations instead of common sense solutions. One other note; people live longer and more comfortably than ever. Today's citizen lives better than the Kings and Queens or the wealthiest person of 100 years ago.

"Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s."

Economic gain didn't go to the wealthy. The wealthy put money back into businesses, charity, investments, entrepreneurial ventures, and R&D. Much of the gains he speaks of went to the government in the form of more taxes to support more Democratic Party pipe dream giveaway programs. In other words, wasted, due to central planning, like a socialist state.

"Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning."

What does he think the wealthy do with the rest of their wealth? Hide it under their mattress like a Silas Mariner? Consumer demand does not drive the economy nearly as much as the Production and Development of new products to make life better. We export less than we import. Obviously, there is a demand for imported products

"Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing."

They do, however, live better than any generation before them and have a better standard of living. healthcare, and life expectancy than the wealthiest people had 100 years ago. Why should workers be able to buy 'everything' the economy produces. Economics involves trade-offs because resources are limited. As Mick Jagger said, "You can't always get what you want, but you just might get what you need."

"The result is a gap between potential output and potential consumption."

That's a pretty dumb statement. There's a real gap between Robert Reich's potential intelligence and real intelligence. Why do you read his nonsense? Because you can't discern between leftist garbage and how the real world works." Leftists think they can devise a system in which they can alter Human Nature. They can't! The framers of our Constitution understood this better than anyone.

"To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs."

No, it doesn't. Live within your means. The government needs to learn this lesson also because they have amassed greater debt than all the consumer debt combined. Politicians must really hate children to leave this crushing debt burden to them. Now, I'll admit that there are some people who through no fault of their own (Usually it's the result of government policies), who can't make ends meet and need help. We have hundreds of government programs to assist these people. However, there are givers and takers and the takers have figured out how to use and loot the system for their own selfish ends. Why is it that every poor person I see, (not the mentally ill living on the streets) has a cell phone? Is a cell phone a basic household necessity? Okay, how about cable TV? And there are many other examples. Most people need a car to go to and from work but the Biden economic and energy program has caused gasoline prices to skyrocket. Who gets hurt the most by this? The working poor. Their situation improved better with Trump's policies than with any other administration in the past 60 years. Even LBJ's 'Great Society' started the disintegration of the nuclear family and began making people dependent on the government.

"The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap."

The Federal Reserve answers to no one. All of its' members come from banking and Wall Street financial institutions. As I mentioned earlier, because of quantitative easing there are more dollars chasing fewer goods because people were unwilling to go back to work when they could stay at home and get free money from the government. There is no such thing as a free lunch. Every industry has labor shortages, not due to a decrease in the labor force but because of unavailable workers, 5 million people, who stopped working since the covid pandemic started and decided to stay home to collect government benefits. They could fill these jobs. Even McDonald's can't fill positions and is offering bonuses for just coming in for a job interview.

'None of this is sustainable. At some point, widening inequality causes the economy to collapse."

Reich throws around all these nuggets of what he thinks is conventional wisdom. His statements are not wisdom at all. He never explains why he believes this to be true. He says it, you're supposed to believe it, because he is the mighty and powerful OZ.


"We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing."

The great depression was caused because of the over-extension of easy credit and lending without secure collateral. The buying power was curtailed because businesses dried up when there was no money left to fuel the speculative boom. We did the same thing in 2008 with the housing because the leaders in the Democratic Party thought everyone should be able to buy a house, just as in the 1920s people believed everyone could become rich. Easy money makes people lazy and they speculate on potential future gains. Government policies were the problem. Unintended outcomes from these policies were the problem. Then the Politicians come and say "Vote for us and we can save you." Only, they make it worse with more unintended and unforeseen consequences

"He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”"

Why would any sane person join a high-stakes poker game without an adequate bankroll to back them? Getting and giving credit is a risk. Why would anyone want to borrow on credit for such a foolish risk?

"While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked."

Speculation and borrowing on margin by greedy people made the system collapse. That takes down the innocent bystanders also.

"Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression."

Yes, we see the same pattern but the reasons are all wrong as I have already stated

"The result has been an economy whose underlying structure is far more fragile than it may seem."

Absolutely. So why should we trust the government to fix this when they are at the root of most problems and then only make them worse? The federal debt is the highest it has ever been in peacetime, only surpassed by the debt after the end of WWII. Increasing the debt is insanity and will destroy this country. Exactly what the left wants to do.

"Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic."

2008 resulted in a lot of people losing their homes and leaving more people worse off than before the housing bubble. All of that could have been avoided if common fiscal and monetary sense had been practiced. Idiots like Barney Frank and the Democrats were largely responsible because they don't understand economics.

"The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary."

And the current administration have no basic understanding of economics. I can't think of one person in the Biden Administration, including Schumer and Pelosi, who have ever been in private enterprise. Biden had 47 years to fix this when he was in the Senate. Schumer went straight from law school to elected office. These clowns have never had to build anything. They live off the sweet of hard-working Americans and leave the government richer than what they could possibly have earned from their salaries.

"Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand."

Currently, the problem is too much demand. Too many plentiful dollars chasing after too few goods because of production and supply problems that cheap government money created. Next, the problem will become too much inflation, debt, and high taxes.

"America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile."

It will remain perilously fragile as long as the Democrats keep promising more and more benefits without any way to pay for it. George W. Bush was just as responsible for putting us in military conflicts without having the American people sacrifice something in order to fund it. Higher taxes are not the solution to the problem of a government and administrative state that has grown exponentially since the Marxist Progressives have tried to change our Constitutional republic into a welfare state

"It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform."

That's exactly what we have in the Biden Admin. A stooge for the American Marxists who want to destroy this country by fundamentally changing it. The left and their BLM and Antifa allies are the demagogue racists.

"Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy."

Yes, it is. However, he hasn't a clue as to what works and what doesn't. He's a theoretician. We may as well have Karl Marx advising us what to do. As Forrest Gump says, "Stupid is as stupid does."

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end

Reply
Oct 13, 2021 09:02:59   #
Ronald Hatt Loc: Lansing, Mich
 
Milosia2 wrote:
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am




Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy.

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing.

This means that over the long term their incomes need to keep pace with their productivity.

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared.

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.



Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing.

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap.

None of this is sustainable. At some point, widening inequality causes the economy to collapse.

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing.

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand.

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform.

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end
The Real Reason the Economy Might Collapse br Robe... (show quote)


The real reason our Economy might collapse: Demoncrat party mishandling of "EVERYTHING"!

*DEMONCRATS are putting more money in their pockets, than the national Treasury!...{ FACT!!!! {

Reply
 
 
Oct 13, 2021 09:30:57   #
Milosia2 Loc: Cleveland Ohio
 
dtucker300 wrote:
"Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy."

Why is it wrong? How?

"70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing."
The economy depends not on consumerism, it depends on product production. If products are not produced they can't be bought. Right now, inflation is increasing because there are more dollars (thanks to the Democrats giveaways) than there are goods to meet the demand.

This means that over the long term their incomes need to keep pace with their productivity. As productivity becomes more efficient, goods become less expensive. Case in point, Computers.

"But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared."

Democrat Party policies have been responsible for most of this. They've demolished the middle class, destroyed union jobs, and sent industrial production to foreign countries. The largest unions are now Public Employees. College degrees are worthless because you can now get your degree in Gay Gender Studies in the Medieval Period. They destroyed energy production and stifled business with overreaching environmental regulations instead of common sense solutions. One other note; people live longer and more comfortably than ever. Today's citizen lives better than the Kings and Queens or the wealthiest person of 100 years ago.

"Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s."

Economic gain didn't go to the wealthy. The wealthy put money back into businesses, charity, investments, entrepreneurial ventures, and R&D. Much of the gains he speaks of went to the government in the form of more taxes to support more Democratic Party pipe dream giveaway programs. In other words, wasted, due to central planning, like a socialist state.

"Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning."

What does he think the wealthy do with the rest of their wealth? Hide it under their mattress like a Silas Mariner? Consumer demand does not drive the economy nearly as much as the Production and Development of new products to make life better. We export less than we import. Obviously, there is a demand for imported products

"Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing."

They do, however, live better than any generation before them and have a better standard of living. healthcare, and life expectancy than the wealthiest people had 100 years ago. Why should workers be able to buy 'everything' the economy produces. Economics involves trade-offs because resources are limited. As Mick Jagger said, "You can't always get what you want, but you just might get what you need."

"The result is a gap between potential output and potential consumption."

That's a pretty dumb statement. There's a real gap between Robert Reich's potential intelligence and real intelligence. Why do you read his nonsense? Because you can't discern between leftist garbage and how the real world works." Leftists think they can devise a system in which they can alter Human Nature. They can't! The framers of our Constitution understood this better than anyone.

"To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs."

No, it doesn't. Live within your means. The government needs to learn this lesson also because they have amassed greater debt than all the consumer debt combined. Politicians must really hate children to leave this crushing debt burden to them. Now, I'll admit that there are some people who through no fault of their own (Usually it's the result of government policies), who can't make ends meet and need help. We have hundreds of government programs to assist these people. However, there are givers and takers and the takers have figured out how to use and loot the system for their own selfish ends. Why is it that every poor person I see, (not the mentally ill living on the streets) has a cell phone? Is a cell phone a basic household necessity? Okay, how about cable TV? And there are many other examples. Most people need a car to go to and from work but the Biden economic and energy program has caused gasoline prices to skyrocket. Who gets hurt the most by this? The working poor. Their situation improved better with Trump's policies than with any other administration in the past 60 years. Even LBJ's 'Great Society' started the disintegration of the nuclear family and began making people dependent on the government.

"The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap."

The Federal Reserve answers to no one. All of its' members come from banking and Wall Street financial institutions. As I mentioned earlier, because of quantitative easing there are more dollars chasing fewer goods because people were unwilling to go back to work when they could stay at home and get free money from the government. There is no such thing as a free lunch. Every industry has labor shortages, not due to a decrease in the labor force but because of unavailable workers, 5 million people, who stopped working since the covid pandemic started and decided to stay home to collect government benefits. They could fill these jobs. Even McDonald's can't fill positions and is offering bonuses for just coming in for a job interview.

'None of this is sustainable. At some point, widening inequality causes the economy to collapse."

Reich throws around all these nuggets of what he thinks is conventional wisdom. His statements are not wisdom at all. He never explains why he believes this to be true. He says it, you're supposed to believe it, because he is the mighty and powerful OZ.


"We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing."

The great depression was caused because of the over-extension of easy credit and lending without secure collateral. The buying power was curtailed because businesses dried up when there was no money left to fuel the speculative boom. We did the same thing in 2008 with the housing because the leaders in the Democratic Party thought everyone should be able to buy a house, just as in the 1920s people believed everyone could become rich. Easy money makes people lazy and they speculate on potential future gains. Government policies were the problem. Unintended outcomes from these policies were the problem. Then the Politicians come and say "Vote for us and we can save you." Only, they make it worse with more unintended and unforeseen consequences

"He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”"

Why would any sane person join a high-stakes poker game without an adequate bankroll to back them? Getting and giving credit is a risk. Why would anyone want to borrow on credit for such a foolish risk?

"While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked."

Speculation and borrowing on margin by greedy people made the system collapse. That takes down the innocent bystanders also.

"Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression."

Yes, we see the same pattern but the reasons are all wrong as I have already stated

"The result has been an economy whose underlying structure is far more fragile than it may seem."

Absolutely. So why should we trust the government to fix this when they are at the root of most problems and then only make them worse? The federal debt is the highest it has ever been in peacetime, only surpassed by the debt after the end of WWII. Increasing the debt is insanity and will destroy this country. Exactly what the left wants to do.

"Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic."

2008 resulted in a lot of people losing their homes and leaving more people worse off than before the housing bubble. All of that could have been avoided if common fiscal and monetary sense had been practiced. Idiots like Barney Frank and the Democrats were largely responsible because they don't understand economics.

"The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary."

And the current administration have no basic understanding of economics. I can't think of one person in the Biden Administration, including Schumer and Pelosi, who have ever been in private enterprise. Biden had 47 years to fix this when he was in the Senate. Schumer went straight from law school to elected office. These clowns have never had to build anything. They live off the sweet of hard-working Americans and leave the government richer than what they could possibly have earned from their salaries.

"Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand."

Currently, the problem is too much demand. Too many plentiful dollars chasing after too few goods because of production and supply problems that cheap government money created. Next, the problem will become too much inflation, debt, and high taxes.

"America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile."

It will remain perilously fragile as long as the Democrats keep promising more and more benefits without any way to pay for it. George W. Bush was just as responsible for putting us in military conflicts without having the American people sacrifice something in order to fund it. Higher taxes are not the solution to the problem of a government and administrative state that has grown exponentially since the Marxist Progressives have tried to change our Constitutional republic into a welfare state

"It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform."

That's exactly what we have in the Biden Admin. A stooge for the American Marxists who want to destroy this country by fundamentally changing it. The left and their BLM and Antifa allies are the demagogue racists.

"Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy."

Yes, it is. However, he hasn't a clue as to what works and what doesn't. He's a theoretician. We may as well have Karl Marx advising us what to do. As Forrest Gump says, "Stupid is as stupid does."

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end
"Skyrocketing wealth inequality isn’t just wr... (show quote)


How does Forrest Gump plan to fix the things listed that you just explained away ?
I might be able to agree with what you say but it’s mostly rhetoric and hyperbole.
There were no answers for any of it.
This is the proper representation of the so called Republican Party, no answers for anything.
Just Nein ! Nein ! Nein ! Nein ! Nein ! Nein !
Nein !!!!!!!!!
After which they say,
They are Patriots, they love America , they support everything to make this country better, the American people were stupid for not electing a past president who was impeached twice, has numerous violations on file ready for court time,
lied over 30,000 times to the American People, tried to install his sister wife Ivanka as the head of the Treasury,
I’m stopping here , but, you get the picture, right ?
Who would want trump back, even for dinner ?

Reply
Oct 13, 2021 09:35:34   #
Milosia2 Loc: Cleveland Ohio
 
Ronald Hatt wrote:
The real reason our Economy might collapse: Demoncrat party mishandling of "EVERYTHING"!

*DEMONCRATS are putting more money in their pockets, than the national Treasury!...{ FACT!!!! {


Jude Waniskey-
The 2 Santa Claus Theory .
Read it on Google.
It explains to a tee everything youz keep trying to sell.
The republicans are not the fiscally responsible party. They can’t even vote yes on paying their own bills from the last failed presidency by raising the debt ceiling.
That is Not being Fiscally responsible .

Reply
Oct 13, 2021 11:55:56   #
donho50
 
Milosia2 wrote:
The Real Reason the Economy Might Collapse
Robert Reich

Economic Policy | Wealth Inequality
by Robert Reich | October 11, 2021 - 6:49am




Skyrocketing wealth inequality isn’t just wrong. It’s also weakening our economy.

70 percent of the US economy depends on consumer spending. So American consumers need to spend enough money to buy most of the goods and services Americans are capable of producing.

This means that over the long term their incomes need to keep pace with their productivity.

But their incomes haven’t. Over the past 40 years, most people’s wages have basically stagnated , while worker productivity has soared.

Where did the economic gains go? Mostly to the top. The wealthy now own more of the economy than at any time since the 1920s.



Here’s the economic problem: The wealthy spend only a small percentage of their income and wealth. Their spending is not enough to fulfill the consumer demand that keeps the economy churning.

Lower-income people, on the other hand, spend almost everything they have – which is becoming very little. Most workers aren’t earning nearly enough to buy what the economy is capable of producing.

The result is a gap between potential output and potential consumption.

To fill the gap, the economy depends on people going deeper and deeper into debt so they can buy. Even in 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The Fed has had to keep short-term interest rates lower and lower to accommodate this buying. And the government has to spend more and more to fill the remaining gap.

None of this is sustainable. At some point, widening inequality causes the economy to collapse.

We’ve seen this before. Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of most Americans fell far short of what the economy was producing.

He blamed the increasing concentration of wealth at the top: “A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

While the wealthy of the 1920s didn’t know what to do with all their money, most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy tanked.

Fast forward 100 years and we see the same pattern. While the typical Americans’ wages have barely budged for decades, adjusted for inflation, most economic gains have gone to the top, just as Eccles’s so-called “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been an economy whose underlying structure is far more fragile than it may seem.

Remember the housing and financial bubbles that burst in 2008? We avoided another Great Depression then only because the government pumped enough money into the economy to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The Fed has had to keep interest rates near zero. And the government has had to pump even more money into the economy. While these programs have been crucial to staving off a pandemic-induced depression, they’re only temporary.

Over the long term, the real worry continues to be on the demand side. Widening inequality means not enough demand.

America’s wealth gap is now more extreme than it’s been in over a century. Until this structural problem is remedied, the American economy will remain perilously fragile.

It will also be vulnerable to the next demagogue wielding anger, racism, and resentment as substitutes for real reform.

Closing our staggering wealth gap is crucial to the survival of both our economy and our democracy.

https://www.youtube.com/watch?v=iNLOdRMgaDY&feature=emb_rel_end
The Real Reason the Economy Might Collapse br Robe... (show quote)


More editorial drivel from a polictical hack. Hasn't the slightest grasp on the impact of the poor fiscal policy from the Fed and this administration.

Reply
Oct 13, 2021 12:28:55   #
Rose42
 
Milosia2 wrote:
How does Forrest Gump plan to fix the things listed that you just explained away ?
I might be able to agree with what you say but it’s mostly rhetoric and hyperbole.
There were no answers for any of it.
This is the proper representation of the so called Republican Party, no answers for anything.
Just Nein ! Nein ! Nein ! Nein ! Nein ! Nein !
Nein !!!!!!!!!
After which they say,
They are Patriots, they love America , they support everything to make this country better, the American people were stupid for not electing a past president who was impeached twice, has numerous violations on file ready for court time,
lied over 30,000 times to the American People, tried to install his sister wife Ivanka as the head of the Treasury,
I’m stopping here , but, you get the picture, right ?
Who would want trump back, even for dinner ?
How does Forrest Gump plan to fix the things liste... (show quote)


You say that as if the democrat party were capble of fixing anything. They aren’t. The country is just continuing to disintegrate.

Yes the American people were stupid for electing one of the worst the democrat party had to offer. But voters are asleep mired in the garbage the two parties keep feeding them

Reply
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