[Mr 5 0]

Originally Posted by Unit 5302

The jobs being created are low paying. More people work than ever before, taking jobs they don't want because they don't have a choice.

Really, now? Then how do you account for the rise in household income and the increase in sales of durable goods as well as homes, being that all the new jobs are so lousy? You are free to cling to the myth that the millions of newly created jobs in America are all low-pay and dead-end but that position, while faithfully trumpeted by many, is simply not congruent with reality.

Arguing home sales as a legitimate benchmark of the economy's situation is pretty weak. The fact is interest rates were ridiculously low, resulting in the ability to afford a more expensive house with less income. This in turn created a huge inflation in house prices, and just like stocks in the late 90's, people have become obsessed with getting on board the real estate gravy train. The same low interest rates spurred a huge balloon in household debt as people have been relying more than ever on credit to buy the things they want, rather than the things they can truly afford. Many people took advantage of the low interest rates and refinanced, stripping the equity out of their houses to buy these "durable goods."

Granted, the low interest rates are a major factor and some new home buyers are overextended, but why are the interest rates so low to begin with? Are banks just being generous? Of course not.

The economy is sound and the yield on the 10-year Treasury Note is 4 times the Feds benchmark of 1%. People see a sound economy, the Bush tax cuts put more money in our collective pockets and, despite the protestations of you and others, jobs are paying well and people are feeling more secure with their jobs, considering the almost record-low unemployment rate. That, and the fact that everybody wants to own their own home, for obvious emotional as well as financial reasons.

Foreclosures are up, and they will be increasing drastically in the next 2-3 years as people that purchased all they could afford and a little more will have to refinance their 3 year ARMs. This will result in a decline, yes decline, in housing prices across many metropolitan areas in the United States. As Greenspan has indicated, people are way too obsessed with the idea real estate will guarantee them a huge paycheck.

All that may be valid, Kell, but your also assuming that a lot of people buy homes for resale and very few actually do that. Their homes market value may well decline but if you intend to live in your home for at least 5 or more years, that is not a major concern, as it is only a 'paper' loss, not a tangible one. Foreclosures may go up some, as you claim, but with so many new homeowners and the vast array of mortgages available, that is almost inevitable. It will balance out.

Debt consolodation has become big business, and credit card lobbiests have succeded in getting favorable legislation passed to remove the lender's responsibility to only lend appropriate amounts of money to people in this country.

True. However, 'appropriate' is a relative term when you are telling someone how much he/she can borrow. Credit card companies routinely write off about 7% of their 'bad debts' each year and include that calculation in their financial decisions that give us usurious 24% APR's for some folks with less than perfect credit, making up the card companies (actually, banks) losses on bad debts. Caveat emptor remains a truism that too many people do not know, much less, heed...to their financial sorrow.

All this in the face of a huge and continually growing budget deficit which hurts the value of the money people in this country are actually earning. The increase in per capita GDP over the past few years is largely attributable to the double digit increases in executive compensation.

CEO's now make 500x more than the base workers wage in the company. That's 10x more than any other nation in the world. With executive pay usually based on CEO payscales, it's a wonder average GDP is increasing.

Actually, the projected federal budget deficit is shrinking by about a third. Inflation is still quite low at near 3% and the executive compensation issue is a red herring. Increased productivity is the driver behind the increase in GDP. Executives at big corporations have always received huge comp packages because they are usually responsible for thousands of people and millions of dollars of company money, as well as the ultimate success of the company. That hardly compares to a worker who has about 1/500th or less of the same kind of responsibility.

Corporations that pay their executives tens of millions in compensation and do not perform well will eventually go out of business, in most cases. As almost all major corporations are owned by shareholders, which tend to be 'working people', the executive raises are no secret and are also subject to questioning and eventual approval - or disapproval - by a corporate board - that can also be voted out by disgruntled shareholders who feel their stock is underperforming due to executive or board mismanagement.

To claim that a few thousand people (corporate executives) getting big salaries and perks somehow raise the annual GDP is a bit farfetched, to be kind about it. The comparison of executive to worker pay is an old one that anti-business people like to use because the numbers look startling. However, the fact that a guy doing an average job today for less than 8 hours and making the average pay of around $40,000. per year and a corporate executive running a major company and putting in 60 or 70 hours a week with enormous pressures makes the comparison a poor one, albeit handy to use for shock value to the uninformed.

Basically, the US economy IS screwed right now, but ridiculously low interest rates and tax breaks are artificially painting a pretty picture. Just like traditional value indicators in the stock market have been thrown to the wind, the traditional indicators for the economic status are void.

Sorry, Kell, but I find that dire analysis to be almost totally false. I have already given a lot of reasons why so I won't bother to repeat them.

Bush has done a horrible job, and it's painfully obvious at this point. Only a fool would be so stubborn and arrogant to continue defending him. Even so, it's not like there were viable options to vote for in the last election anyway. It's six of one, and a half dozen of the other.

Careful who you call 'fool', Kell. Simply disputing your conclusions on the state of the economy does not render anyone in this world a 'fool'. It simply means that we see the U.S. economy differently. I see the many positive indicators and are pleased while you see it being, metaphorically, two days before October 28, 1929. That kind of pessimistic view, claiming that President Bush has done 'a horrible job' and ignoring the many safeguards and protections now built-in to our economic system as you spout economic gloom-and-doom is simply nott supportable. You are welcome to your negative outlook but disagreement with it does not make me anyone' s fool, Kell. Please get that straight.

As for President Bush, he has done an outstanding job of bringing us back from a recession not of his making (but for which the left constantly blamed him). The 2002 tax bill that lowered the tax rates was necessary and just in time. It is showing it's benefits now as the economy expands, investors invest and the federal budget deficit shrinks due to increased tax revenues coming in from the increased wealth being generated. That you wave all this away as a 'bubble' is your option but I think it is wholly mistaken.

The republican party has become every bit as worthless as the democrats. Together, they have run this country, and the hopes and dreams of millions of American citizens straight into the ground, betraying the trust of the citizens at every turn. Whether it's the partisan bullshit keeping progress out of the capital or simply catering to each party's personal special interests, our representatives has become the most corrupt and sickening force in the world.

While I don't share your all-too familiar bitterness, I can agree that our political system is bascially corrupted and does not generally help the average guy, much less the small businessman. However, we prosper anyway, thanks to the hard work and ingenuity of Americans, few of whom would consider their 'hopes and dreams were run into the ground', as you so dramatically state it. America is still the land of opportunity and success stories abound, every single day. That you seem to see only the negative and so, carry a cynical and pessmistic attitude into your conclusions of the U.S. and it's free market, capitalist economy is your choice and, as I see it, your loss.

Tens of millions of Americans would disagree with that assessment - and they would be right. Any economy is fragile - as we saw after 9/11 - and subject to many alterations and swings but ours is healthy and doing well. That you can't agree is fine...the economy will surge along with or without your approval, but your gloom-and-doom outlook is based on a lot of false asumptions and conclusions, in my opinion. However, that's why we have these boards...so people can express their opinions. I'll let others decided who's opinion they prefer but I'm very confident with my mine.