OT: 2015 Recession?

[FlyerInHi]

As poorgrad pointed out, GPD is a snapshot and growth is ongoing, so allocation is important to the rate of growth. Allocation is fiscal policy.

The Fed controls monetary policy. They are focused on employment(productivity) because it’s better that being idle. They don’t want GDP to shrink. The Fed makes more money available, but people still have to do work to generate GPD.

On a worldwide basis, total debt can grow forever as long as GDP keeps on growing. In the big picture, debts are savings. They are a wash and don’t affect productivity.

CAr, if you and your husband could live forever, you could take on ever increasing amounts of debt as long as your income keeps on growing. You can move up to a better house every few years, buy nicer cars, take more vacations, thus always improving your standard of living.
Debts actually leverage your earnings and help you live better. Debts don’t negatively impact your productivity, they increase your productivity because an increasing standard of living makes you more productive. You don’t need savings if you can be productive forever.

[spdrun]

Why would you want to be productive all of the time? Best way to live is to be as only productive as necessary while being as comfortable as possible.

Work to live, not live to work. Take the vacations, but live in the same house you’ve owned for years, and keep your cars for 10-20 years.

Speaking of allocation, we’re already fully employed. White-collar labor in the US is just badly allocated, with some people working 50 hr per week, others zero. Changing the max downwards could well fix this.

Idleness is only bad if people who don’t WANT to be idle are idle. And before someone starts yammering about how Americans WANT to only have a week off per year, the same argument was used to support slavery in the 1860s. “But they wouldn’t know what to do with their freedom, they WANT to work for a benevolent master.” Riiiiight.

[CA renter]

[quote=FlyerInHi]As poorgrad pointed out, GPD is a snapshot and growth is ongoing, so allocation is important to the rate of growth. Allocation is fiscal policy.

The Fed controls monetary policy. They are focused on employment(productivity) because it’s better that being idle. They don’t want GDP to shrink. The Fed makes more money available, but people still have to do work to generate GPD.

On a worldwide basis, total debt can grow forever as long as GDP keeps on growing. In the big picture, debts are savings. They are a wash and don’t affect productivity.

CAr, if you and your husband could live forever, you could take on ever increasing amounts of debt as long as your income keeps on growing. You can move up to a better house every few years, buy nicer cars, take more vacations, thus always improving your standard of living.
Debts actually leverage your earnings and help you live better. Debts don’t negatively impact your productivity, they increase your productivity because an increasing standard of living makes you more productive. You don’t need savings if you can be productive forever.[/quote]

You’re assuming that incomes would rise along with asset prices; for many people over the past 10-30 years, that hasn’t happened. That’s why so many Americans believe that we have been in a very long-term recession/depression.

Why do you think a person’s productivity goes up with an increased standard of living? Once people get to the point where their basic needs are met and they have a sense of security — along with a few extras — improving their standard of living isn’t necessarily going to make them any more productive. It might even have the opposite effect as people don’t feel the need to strive for much more — without our consumption culture, most people in the US would probably be pretty happy with what they have. Does having a sleek, Euro-design washing machine (what you might claim is an increased standard of living) make a person more productive than someone who has an old-school machine that’s been working well for 20 years?

Most people who go into debt for consumption are doing so because their wages won’t sustain their way of life. This debt will pull consumption forward, but will leave even less money for future consumption because this household will have to maintain the same expenses that are already too much for them (the reason for the debt in the first place), along with additional debt servicing costs in the future. How is this good?

[FlyerInHi]

CAr, I’m talking theoretically about the economy as a whole. The Fed is concerned about the big picture.

Revenues and debts as they affect people who get sick and eventually die, don’t affect the economy the same way.

My point was that the economy as a whole can be productive and grow forever. Debts don’t affect productivity in the economy. They are just a way to allocate savings to the most productive uses.

In the economy as a whole, we cannot borrow from the future or “pull consumption forward” as you put it. We, as a whole, can only consume what we produce (on a worldwide basis).

We are now an interlinked world economy. Central banks and governments work together to keep the world economy growing.

sdp, the unemployment rate represents people who are idle but want to work.

[spdrun]

The average full-time work week is now 47 hours. That represents a misallocation of working hours between people who want to work and people who are worked like fuckin slaves.

Solution to unemployment would be to socialize costs of hiring and require less working time so that more employees need be hired.

[FlyerInHi]

Perhaps, spd. But that has nothing to do with the “evil Fed.” Feel free to petition your representatives in Congress for different social policies.

CAr and spd, both of you like the relaxed lifestyle with more time for family and friends. But you cannot impose that lifestyle on people, just so you can keep up.

Of course, you can consciously decide to live with less and be happy. The Amish have decided to live with less.

[spdrun]

And what the HELL gives American bosses to impose THEIR ideal lifestyle on everyone? It’s a shame that white-collar workers who are constantly browbeaten don’t resort to old-school union tactics. i.e. bad bosses have an “accident” or make “mistakes” that get them fired.

Under 20% of Americans claim to be happy with their jobs. Therefore, it’s not what we want. It’s what the scum running Big Corp want. We did fine with a de-facto 30-hour work week (average between spouses) through the 1980s, and were significantly happier with it.

As far as Congress, I’ve lost all hope after this election. The average American mouth-breather is too brainwashed and uneducated to know that a bit of socialism is good for him or her, so they vote for corporate whores. They’ve eaten the Faux Noose propaganda hook, line, and sinker.

[FlyerInHi]

Sure, the corporate bosses have a social agenda and they are masters at marketing.

But we influence each other in small perverse ways. A housewife may join the workforce so that the family can afford a new SUV, or remodel the kitchen, like the neighbors. Then one thing leads to another because well-being is relative to our peers.

I just read an article about how people used to honeymoon in the Poconos. But now the area is depressed because newlyweds prefer cruises to the Caribbean. Newlyweds now have higher expectations (higher standard of living).

spd, look at it on the bright side. A culture of consumption actually allows you to chart your own way easier. You won’t have many friends who share your values but you can do it. Lots of things are cheaper than they were in the 80s because things that were upscale products have been commoditized.

That’s why I live in a 700sf condo. I work less then my peers so I can do other things. My lifestyle is different, but I don’t really care.

When you look at the big picture, such as Fed policies, you have to detach yourself, be dispassionate and objective.

[spdrun]

Not sure if you’re right about the Poconos — Poconos used to also be a major coal-mining region till all of the anthracite was mined out. That industry, along with steelworks in Bethlehem, went the way of the dodo in the 1980s. That’s more of why the region is depressed, not because of lack of vacation traffic.

A lot of people still go to the Poconos from NY to ski, hike, and fish on weekends, by the way.

[FlyerInHi]

It was a resort in the Poconos that closed and reopened as a casino but is not doing well. Anyway, people have higher expectations now. That’s the reason why they have to work more than before. Maybe they are somewhat influenced to think this way, but it is what it is.

[spdrun]

I think it’s down to transportation patterns. You either own a house there or go for the day, since it’s about 2.5 hr each way from the NY area. Plus every state and its momma has a casino now.

[FlyerInHi]

That’s exactly it.

When things become common and available (such as casinos), they become ordinary commodities. Then people are in search for the next exclusive thing that costs more money, of course.

If you’re content to live a few steps behind, then you’re OK.

spd, you’re one of the few people who’s happy with a used $3,000 car. Other people would probably answer “extremely unhappy” or “worse off than before” on a survey.

[Author]

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