It's the Economy, Stupid

The great American economy is getting tougher to ignore. Pessimists are having a harder time finding things to complain about. The declining economy the President inherited was a good target for a while, but the economy has grown an average of 4.1% since the Bush tax cuts and policies began to take effect in 2003. Not to worry, jobs lag economic growth. Complain about that. But this year the economy produced 2 million jobs and brought the unemployment rate down to 4.9%. Okay, we are spending ourselves into debt. Well … no. As any accountant knows debt alone tells you nothing. Net worth - assets minus liabilities - is the key measure. Household net worth is at an all time high, 27% higher than during the high point of the Clinton boom and twice as high as in 1995.

What about the basis of our prosperity? What about productivity? For the last five years productivity has been growing at 3.5% a year. American workers are now 17% more productive than they were in 2001. That is one reason why inflation remains low and why tax revenues from income have jumped 17% since the tax cuts and tax revenues from dividends and capital gains have gone up by 50% despite the lower rates.

Credit for this great economy goes to all Americans. The boom started back in 1982 and the brief recessions of 1991 and 2001 didn't make much of a dent. But the President's policies have clearly given us a boost.

So my Democratic friends give the complaining about the economy a rest and join us in enjoying the fruits of our robust and adaptive American system you helped create. WE (and I mean all of us) have won this round. You can find other avenues of attack and excuses to explain why we keep giving you such an ignominious whippin' at the polls. After all, us cognitively challenged red state rubes can't keep getting the better of you smart guys forever. But maybe for a little longer.

You know that if Kerry had won the election you would be praising this economy from the roofs of your condos.

We can fight about entitlements soon enough.

Economic Fact Sheet

Posted by Jack at January 7, 2006 12:21 AM
Comment #110848

You neglected to mention the inverting yield curve. Bonds dwarf stocks in the size of market and ifluence on the economy. In the past, an inverting yield curve has been a reliable leading indicator of recession. Why is this time different? Why is this time so utterly unique and exceptional that we should ignore this reliable indicator?

Hey, didn’t the non-farm payroll numbers come out today? Wait a minute! Where is this number in the article. After all, ‘It’s the Economy, Stupid.’ Why, Jack. You neglected to mention them! Tsk, tsk. 108,000. Pretty crappy employment numbers. Jack, Jack, Jack. That’s just a trifle dishonest, isn’t it, neglecting to mention such an important economic number?

Two million non-farm payroll jobs created this year. Well, let’s put that number in perspective, shall we? The population of the country was smaller during Jimmy Carter’s administration. Hard times back then, right?

Did you know Carter created 10 million non-farm payroll jobs during his administration? Four years, 10 million jobs. So, how did Bush stack up?


Well! Surely the stock market will prove just how great Bush is doing. How did this leading indicator do last year, with all those great economic numbers?



Posted by: phx8 at January 7, 2006 1:18 AM
Comment #110849


What about the deficit? Or the fact that on the news tonight there was a long report on baby boomers with a major credit card debt - rising the minimum payment due to 3% or higher will certainly not help our economy. And unfortunately the lay-offs continue.

Posted by: Linda H. at January 7, 2006 1:18 AM
Comment #110854

phx8 and Linda H.,

May I ask? How are the two of you doing? Have you filed for food stamps yet? Are you on welfare? Social Security Disabitlity?

What I don’t get … Why is it that no matter how good we are doing as a nation …

Take a look around. France - Germany - Europe as a whole.
What exactly does President Bush have to do to make anyone on the ‘left’ happy? Put a gun to his head and pull the trigger?
Is it the fact that he isn’t a Democrat?
If he had started the ‘No Child Left Behind’ as a Dem would you be for it?
Do you have a problem with his wanting the American people to be well educated and to fend for themselves?
Just what is it?
I know the ‘left’ has a problem with the Invasion of Iraq because they could have dealt with it without going to war … I know the ‘left’ believes Bush caused the hurricane that destroyed New Orleans … I know the ‘left’ believes Bush doesn’t give a hoot about the poor - I Know the ‘left’ is WAY OUT in left field and exaggerates just about everything when it comes to Bush … BUT

What is YOUR personal problem. Do you really have one OR are you just repeating talking points?

Posted by: bugcrazy at January 7, 2006 1:36 AM
Comment #110857


Presidents don’t create jobs except to the exent that they directly hire them into the government at the expense of taxpayer. Presidents can help create conditions.

As I wrote, “credit for this great economy goes to all Americans. The boom started back in 1982 and the brief recessions of 1991 and 2001 didn’t make much of a dent. But the President’s policies have clearly given us a boost.”

You remember the misery index which was inflation plus unemployment. It was bad during Carter’s time. Unemployment never dropped as low as it is now.

Predicting the financial future is tricky. I prefer to look at the record. We can always find things not to like among the details, but the overall economy is clearly very good.


Lay offs continue and so does job creation. 4.9% is the unemployment rate. People take out debt and the acquire assets. Net worth is at an all time high. We can look at either side of the balance sheets, but only by looking at both sides do we see the whole picture.

Posted by: Jack at January 7, 2006 1:43 AM
Comment #110859

I have lost tens of thousands of dollars in opportunity costs due to the incompetent policies of the Bush administration, in particular, job outsourcing.

Tens of thousands of dollars. That’s a lot of money, Bug. It didn’t have to be that way.

During the recession, my wife was laid off. Last hired, first fired, big salary there lost for one year.

We’re getting up towards a six figure number, Bug. Yeah, I have a problem with that. It will take not just years, but maybe two decades, for the tax cuts to make up for the losses in my household. We’re doing ok now. But no thanks to Bush.

My household is not the same as your household. Bush administration policies affect various people in different ways. Personally, I believe it’s more useful to look at macroeconomic numbers, because they apply to a large number of people. But since you asked…

My wife and I intended to celebrate our anniversary in New Orleans. We evacuated because of Katrina, but we were very fortunate. I won’t go into the story, though it is kind of interesting, just will summarize and say that Bush really sucks, because Bush and FEMA did nothing for days while people in NO suffered, and that was unforgivable. A person I was connected with ended up stranded due to miscommunications. She ended up in the Superdome with her daughters. Yeah, it was as bad as you’ve heard, Bug. So I have a pretty big problem with Bush. I haven’t even started with other topics, but I’ll leave it at that.

Posted by: phx8 at January 7, 2006 1:58 AM
Comment #110863

Shit! I’m losing tens of thousands of dollars per year because of Bush administration policies & the Bush economy.

I’m in an economically sensitive job, no doubt. I’m fortunate enough to be at the top of my field. My wife and I do well, for which we’re thankful. But give me a healthy economy & job creation, and you can hike my taxes ten percent tomorrow. It’s chickenfeed compared to what a truly healthy economy means for my paycheck. Does that answer your question, Bug?

Posted by: phx8 at January 7, 2006 2:11 AM
Comment #110866

‘….because Bush and FEMA did nothing for days while people in NO suffered, and that was unforgivable. A person I was connected with ended up stranded due to miscommunications. She ended up in the Superdome with her daughters. Yeah, it was as bad as you’ve heard, Bug. So I have a pretty big problem with Bush. I haven’t even started with other topics, but I’ll leave it at that.’

See… that is where you and I differ. It was Nagen - then Blanco - then FEMA - then Bush.
Nagen is most at fault because it is HIS city. Blanco is next because it is HER state.

We were shown pictures of buses that were surrounded by water - was Bush supposed to order those buses to be loaded with citizens and moved? - I don’t think so.
Was Bush supposed to order food sent to the dome? I don’t think so.
If Bush had stepped on toes he would be receiving grief for that also.
Nagen is the one who deserves blame followed by Blanco and then on up to FEMA and Bush.
Bush was blamed for being racist … bull … you are talking about a city which has a majority of black citizens that voted in a BLACK mayor …
Their mayor was as money and big business hungry as any other mayor in our nation. He was NOT looking out for the ‘folks’ - he was looking out for big business. Don’t blame that on Bush.

Stop using Bush as a scapegoat. It’s pathetic.

Posted by: bugcrazy at January 7, 2006 2:19 AM
Comment #110868

Spare me your talking points. I was there.

Posted by: phx8 at January 7, 2006 2:21 AM
Comment #110869


yes, I guess it does.
We are doing better because of the tax changes.
Maybe that has to do with the way we have chosen to invest or the fact that we are self-employed.

Personally, I need for something to be done about the rising health insurance premiums.

I had to switch ours in August - same company - dropped one person - and I received a notice my premium was going up $80/mth in Feb.
An $80/mth increase in less than 6 months. Can anyone explain that? Same coverage - same deductible.
It can’t ALL be blamed on a nursing shortage.

Posted by: bugcrazy at January 7, 2006 2:29 AM
Comment #110870


You are such a cheerleader for the Bush economy. Methinks thou dost protest too much.

Don’t call me stupid.

Posted by: womanmarine at January 7, 2006 2:34 AM
Comment #110871

NO was the largest evacuation of an American city in our history. My wife and I participated in it. Most people successfully made it out, thanks to the city and the state. My decision to evacuate was based upon newscasts, and beat the announcement by the Mayor by thirty minutes. The state set up the evacuation routes, and turned higheways into one-way thoroughfares. It really was pretty impressive.

The biggest problems came after the evacuation. It was awful, because communicating was so difficult; for example, cel phones didn’t work. It’s difficult for me to describe just what a mess the lack of communiction infrastructure caused. Anyway, once the levees gave way, the resources of the city and the state were completely overwhelmed. There was only one organization entity with both the resources and the positioning outside of the disaster area that could help, namely, the federal government, and specifically, FEMA.

They took four days.


Btw, I don’t believe Bush is rascist. I believe his policies harm the poor, and for that reason, fall disproportionately upon racial groups.

Posted by: phx8 at January 7, 2006 2:35 AM
Comment #110875

“Personally, I need for something to be done about the rising health insurance premiums.”

I’m with you here. One of my biggest economic fears is that, if I lose my job, my family will be vulnerable. The biggest cause of bankruptcy is due to medical problems. I watched a relative go through a brutal experience this past summer. It was awful. It ended in death. This is a topic for other threads, but I’ll just note that the current crop of politians seem incapable of addressing the issue.

Posted by: phx8 at January 7, 2006 2:40 AM
Comment #110878

‘Btw, I don’t believe Bush is rascist. I believe his policies harm the poor, and for that reason, fall disproportionately upon racial groups’

I have heard everything from Bush discriminates against the poor, to he does so against those living in rural communities to those that live in the city but are of a certain race or ethnic background ….
He wants ALL of us - Americans - to get the best education. He wants ALL of us to know that their is still the ‘AMERICAN DREAM’ for those who can achieve it.
Anyone can come up with the next ‘Hula Hoop’ or the next ‘Rubik’s cube’.
We have to believe. That is what Bush wants.

It is no different than anyone who wants to achieve the highest goal in sports.
He is trying to get us to see that there are achievements that benefit ALL of us that may not make the headlines but are most likely MORE important. George W. Bush and Laura Bush want American children to be the best when it comes to education.
I do not know why anyone would fight against that.

Posted by: bugcrazy at January 7, 2006 2:54 AM
Comment #110880

But that’s just the problem! Bush talks a good story. Like some other recent presidents, he reads the speeches written for him, and declares himself a compassionate conservative. That sounds good to me. The problem is when the rubber hits the road. Bush cuts funds for states, and then gives them unfunded mandates and requires them to produce. Bug, if Bush did what he says, I’d be with him- or at least, not particularly vocal against him! But again and again, he sticks it to us. It’s not out of some compelled propensity to side with the prince of darkness. Bush thinks the best way to help the poor is to help the rich first, and then leave it up to the rich to pay it forward. Bush thinks the best way to solve the energy crisis & address Global Warming is to heed the advice of Exxon lobbyists. That doesn’t work. In fact, it’s a formula for disaster. That philosophy, when applied to the economy or the environment or disaster relief, spells disaster for both you and me.

Posted by: phx8 at January 7, 2006 3:04 AM
Comment #110882

thanks jack for spreading the good news that most media outlets will not send.

i heard on the radio today that “bush touted” 110,000 jobs were created in december, but the announcer said, “that was below expectations”. such crap, bush can’t win for nothing, the announcer didn’t talk about the last four years since 9/11 and how we are not only surviving, but thriving economically at a pace not seen since the 50’s.

Posted by: andy at January 7, 2006 3:33 AM
Comment #110883

Ok, we’re “thriving” economically, according to your point of view. How wonderful! Please fill me in- you see, economists say that it takes at least 150,000 nonf-farm payroll jobs/month to keep pace with the growing population. So please- I’m begging you- tell me why 108,000 means we’re “thriving,” “at a pace not seen since the 50’s.”

That’s pretty damn funny. Go for it. While you’re at it, compare that number to Clinton’s average of over 200,000/month, or Jimmy Carter’s average of roughly the same.

Boy, this will be great! Andy, I just can’t wait to hear your explanation. Damn those foolish announcers! Imagine, suggesting that number was below expectations. The bastards! But you’ll help us out, I just know it. Dude, you’re the man! We’ve been waiting for you! Please please please tell us why everything is actually going so well. I’m waiting with baited breath,



Posted by: phx8 at January 7, 2006 3:47 AM
Comment #110887

“Presidents don’t create jobs except to the exent that they directly hire them into the government at the expense of taxpayer. Presidents can help create conditions.”

Care to inform folks just how many government jobs the Bush administation has created, and what proportion that represents of the total non-farm payroll jobs created in 2005? It’s a pretty ugly number, because, as dismal as the Bush administations’s job creation numbers are to date- and we’re talking Hooverian dismalness- it’s even uglier, because so many of the jobs created are government jobs. But Andy could probably use some help. Seriously. A lot of help. Help Andy, Jack. He needs it. A Jesus Christ Rapture/Ascension to heaven amount of help, asap. Pray for Andy, Jack. Pray for Mojo. We’re talking large amounts, and we’re talking today.

Dismalness. Fun word. Only the Bush administation could inspire that one. Jack, I don’t want to scare the children, but the Bush White House… oh, never mind. Good night.

Posted by: phx8 at January 7, 2006 4:06 AM
Comment #110896


Well! Surely the stock market will prove just how great Bush is doing. How did this leading indicator do last year, with all those great economic numbers?

Energetic jump sends Dow, S&P 500, Nasdaq to highest levels since 9/11 Associated Press Headline from today.

A three year view of the stock market shows it growing from around 8700 to today’s level just under 11,000. The 3 year view is important because it incorporates the time following the tax cut implementation.

I hope that answers your question, Phx8. Though of course the stock market is only one of many economic indicators, it does happen to be a very visible one, so it affects consumer confidence, which also happens to be up.

Posted by: joebagodonuts at January 7, 2006 4:46 AM
Comment #110940

Nope, Jack, you are right. The sky is not going to fall this year. Well, not in the first half, anyway.

The wording of your facts are correct. But, your wording hides a lot. For example, Household net worth at an all time high. That is total household wealth divided by number of households. What it hides is that huge gains in household wealth were achieved by the very wealthy. And not so much real gain by the middle class whose gains rest much in the inflation of their home values. And of course the homeless, the unemployed, and the renters in America saw net cash losses or paring down of consummables due to higher rents, energy costs, and health care costs.

But, its perfectly fair for you to claim that Bush’s and Congress’s 2.5 Trillion dollars of borrowing and huge tax cuts, much of them for the very wealthy, have made the economic numbers appear like a glass half full. But, putting a $26,000 tax debt on my 15 year old daughter’s future earnings, I find irresponsible as hell. Every income earning person present and future in America has this debt attached to their earnings, which does not include the earner’s share of the 2.63 Billion dollars PER DAY of interest on that 8.1 Trillion dollar national debt, that they must shoulder out of their current paychecks in payroll taxes.

Created 2 million jobs? Yep. And took in two million illegal immigrants to fill them.

Your statistics are all correct as carefully worded, Jack. But, the glass is still half empty if one looks closely at the data and takes not a moment in time snapshot view, but, a moving picture of the economy over two decades to come. That moving picture shows a nation like a plane flying over a planet burning its fuel while ignoring rising oceans of debt which are shrinking the land mass upon which to land safely. Landing a plane on Mt. McKinley is perilous indeed.

Posted by: David R. Remer at January 7, 2006 9:01 AM
Comment #110943

Interesting how some want to “downplay” the good news by looking at the Jobs Report and how it’s under what was expected. Well, if you look each month, they always revise the reports when the true numbers come in. Take a look at this:

“Employers added 215,000 jobs to payrolls last month, the Labor Department reported, up from a revised 44,000 in October.”

They revise these things every month; however, the “naysayers” are going to jump on the bad news and then just find something else to say when they’re proven wrong later on. And on and on it goes…

Posted by: rahdigly at January 7, 2006 9:08 AM
Comment #110948

Jack, this is surely good news for my family as we are in a very nice income bracket. Now we will be able to afford the concrete security wall and hire high dollar security guards who are less likely to take bribes. Just like living in Rio! Your financial picture doesn’t indicate that the vast majority of the growth rate will be concentrated in the upper 50% of the population and really concentrated in the top 5%.

What is our nation going to do with the bottom 20% of our population who continue to work hard and teeter on the verge of bankruptcy? If you follow the trends over the last 20 years, the rich are claiming more ownership of our economy and the lower middle class and poor are claiming less and less of our econony - AT EXPONENTIAL RATES! This means in another 20-30 years we will have something that is akin to the feudal system here in the US with a relative handful of ‘landowners’ and a great population of poor. Go visit a South American country and see how the wealthy live. Brick walls, security guards, and fear of kidnapping is daily fare.

Posted by: Rick at January 7, 2006 10:03 AM
Comment #110959

If you are saying that Bush did everything right with Katrina, when he was the one that made the decision to hire Brown and downsize Fema….

If you are going to say that Bush has created lots of jobs when he has created historically less jobs than any president since Hoover…

If you are going to say there’s nothing to worry about with the debt we’ve incurred…

Then your minds are made up. Nothing I say is going to change them. For reasons I do not understand, you have decided to believe that Bush is the Messiah.

If you’re sick of the negativity from us, think about how we feel. Anytime we point out that there are serious issues that need to be addressed we get:

- It doesn’t exist. You’re making it up.
- It doesn’t matter.
- It’s a good thing really.
- You should be crediting him for that!
- How bout that $100 bucks we got in the mail?
- The liberal media invented that.
- That was Clinton’s fault.
- You just want to make Bush look bad.

Sorry folks. There’s no media cabal. Those are just educated peeps. Problems can’t just be wished away. Bush is actually responsible for how he decided to solve the problems presented to him. Bush looks bad all on his own.

Posted by: Max at January 7, 2006 10:48 AM
Comment #110970

On the whole “I have a different truth” Thing. Why do you people mess around with safe “truth”?. Instead of, for instance, saying, It’s impossable to know what the Founders really ment for the country when they said this or that.( Um… John Adams wrote over a dozen pages in his journal daily. By the way, did you see Rosie O’ on Seasme Street a few years ago when she changed Fathers to Mothers in Lincoln’s Gettysburg Address? Wasn’t that C.U.T.E !…… Oh, she couldn’t mean that! ) Why don’t you, say…. start messing with science truth? Jump off a building or step in front of a train! Go ahead you can out run that cheeta. we’re pullin’ for ya’. It’s allllllll relative after all,
It’s allllllll good! Smiley Face.

Posted by: USMC bratt at January 7, 2006 12:58 PM
Comment #110971


I protest because I really can’t understand all the gnashing of teeth. The Economy is good. It is very good.

One of the good things about having Clinton as president was that liberal opinion makers could welcome a good economy. If Kerry had been elected and we had exactly the same economy we have today, it would be hailed.


You can always find downsides and opportunity costs. I like to talk about the opportunity cost and how much money I would have made under ideal conditons, BUT I am not sure I really would have made that much money. Probably not, a bird in the hand etc.

To everyone

What economic results would make you happy?

Unemployment is 4.9%. What is the acceptable unemployment rate?

Economic growth is 4.1%. What is an acceptable rate of growth?

Household net worth is 27% higher than it was at the highest point of the Clinton administration (when everybody said things were great). How much higher does it need to be?

Federal Debt as a percentage of GNP was 37.2% in 2004 and is estimated to be 38.6 in 2005. For comparison it was 49.2% in 1995, 43.9% in 1985, 36.4% in 1975 25.3%, 38.0 in 1965, 57.4% in 1955 and 106.2% in 1945. You will notice a few things about these numbers. The debt today is in the low average range. Debt is not related to prosperity. It was low in 1975, which was a bad year. It was higher in 1965, 1985 and 1995, which were good years. What level of debt would be acceptable?

The economy will never be perfect. Half of all Americans will always earn less than the median income. Some years will be better than others. The president’s policies work to create the conditions of prosperity over time. They all build on the policies of the others.

I recognize that Clinton was a good economic manger not perfect, but good (although presidents in general get too much praise or blame for the economy. It is much like the rooster claiming credit for the sunrise.) I wish you guys would recognize the same good management about Bush because the results are very similar.

Just take the economy off the complaining table for three reasons.

1.The economy is good
2.The economy is much bigger than the policies of this or any other president.
3.We should all be happy to have good times.

Posted by: Jack at January 7, 2006 1:00 PM
Comment #110978

Jack said: “If Kerry had been elected and we had exactly the same economy we have today, it would be hailed.”

That is simply not true, all the way around, Jack. First, if it was Clinton with this economy, Republicans would be screaming bloody murder about the national debt and what it will do to our children. Also, Republicans would seize the opportunity to steal poor votes away from Clinton by slamming Clinton for what is happening to the poor and lower middle classes and even middle class, who are in part, feeling less pain because they are raising many less children.

And I for one, would be arguing the same issues to Clinton that I now argue toward the Republicans. So, don’t try to tell me if the shoe were on the other foot, we wouldn’t have just as big a stink, it would just be coming from SOME different folks and a some of the same, who can see all these numbers for the strength and weakness, snapshot and long term.

Posted by: David R. Remer at January 7, 2006 2:16 PM
Comment #110979

I mentioned opportunity cost, among other things, because Bugcrazy asked how Bush policies affected me, on a personal level.

We are in a recovery, that’s a fact. Like all economic recoveries, this one contains the seeds of its own destruction. Because of Bush policies, this recovery will probably be unusually short. It has been great for multinational corporations, but terrible for working people. The recovery has been fueled by debt, and the bill will inevitably come due.

Nice use of a selective statistic about stock market performance. Under Hoover, the stock market went up before it went down, right? So what was the fuss? The Democrats of 1930 were so negative.

Posted by: phx8 at January 7, 2006 2:20 PM
Comment #110980

P.S., I just listened to Gingrich on C-Span where he said AMerica faces a huge competition from China in the near future, next few decades, and this kind of debt is a very weak position from which to approach that competition. He too said he can’t wait for Pres. Bush to find that damned veto pen who through out the window in 2000, as I have been saying for years now.

The criticism of this economy is not just coming from the left, Jack, there are a number of conservatives expressing concern as well about the lack of answers and political will of Republicans to take on the looming threat to our economic future. And you know well, I think, that a snapshot of an economy is like looking for elephant with a microscope. The economy is a dynamic engine whose performance is measured over time, NOT, on a single day, month, or even year.

As I have said before many times, allow me to spend 2.5 Trillion Dollars on the taxpayers credit cards, and I too can make the economy look good for a short while, until the creditors and interest payments catch up with me.

Posted by: David R. Remer at January 7, 2006 2:23 PM
Comment #110984


You are right that many Republicans would be complaining about the economy if Kerry were president.

I am Republican for many reasons. One is that I perceive the pragmatic wing of the party (where I sit) to be the most optimistic group of people in America. For every problem, we see opportunities. We don’t allow ourselves to be victims. The Clinton times, especially 1994-8, were very good. I didn’t complain about economy then and I don’t now. There were plenty of opportunities - just like today.

I think we need to separate economics from politics a little more. A president’s policies can HELP create the conditions for growth, but they can’t create growth. Beyond that, the effects are long term. A plant can last a generation. Infrastructure investments made today won’t be on line for years.

I often take things back to my forest. I have 100 acres of pine plantation that is now three years old and the trees are about six feet tall. The big decision (what to plant) was made four years ago. The choice of species, genetic heritage, site preparation etc will determine much of what we have thirty years from now. I have to fertilize in about five years and pulp in about ten, thin in twenty. If someone takes over after that and claims his policies created the timber he cuts is he right? If you blame him because he has pine instead of oak are you right.

The economy is a lot like that. We blame or praise in four year intervals for things that are generations in the making. Each president does his part, some more than others.

Bush has done his part and he has done it well so far. The capital gains tax changes have stimulated economic growth. His pro-business policies are setting the stage for innovation in the future. I look back on the Reagan or Thatcher policies that saved our countries from the malaise of France or Germany. Twenty-five years later we are still reaping the benefits.

Posted by: Jack at January 7, 2006 2:42 PM
Comment #110985


BTW - the only thing to “blame” the president for so far is his inability to pass entitlement and SS reform. But Dems get a lot of credit for stopping that.

Posted by: Jack at January 7, 2006 2:46 PM
Comment #110987

Sorry for three in a row but I am reading the comments that were written while I was posting.


You are right that we should cut the size of the Federal government. There are lots of details of the Bush performace that I would change. My point is that the economy now is good. The future can always be made to look bad. You and I are both old enough to remember the whole industry in gloom and doom books in the 1970s and 1980s. Remember you were supposed to buy gold.

I guess they had a point. It you bought gold in 1980 you have only lost about 30% of your money and it looks like you may break even in a few years. Those fools who didn’t believe in the dooms day scenario saw their stock porfolios increase about ten times, but their time will come - eventually.

Posted by: Jack at January 7, 2006 2:55 PM
Comment #110989


How frustrating that not everyone agrees with you on the economy.

NYTimes Op Ed piece “An Anemic Jobs Recovery

For the past two years, average hourly wages and weekly salaries have been flat or falling. Americans’ borrowing binge has masked the decline in earning power, but good jobs and rising wages are essential for widespread prosperity. Without them, economic growth has become increasingly concentrated among corporations, shareholders and the top 20 percent or so of earners. The holiday shopping season illustrates this situation: retailers that cater to lower- and middle-income shoppers, like Wal-Mart, Sears and Kohl’s had disappointing results, while higher-end chains, like Neiman Marcus and Nordstrom, thrived.

There’s more, just didn’t want to quote the whole thing.

Of course, it’s just that damn liberal press again.

Posted by: womanmarine at January 7, 2006 3:08 PM
Comment #110992


You evil person. How can you possibly give evidence against the grain!!! You are absolutely correct!!

Here is a few more. The reason for the large increase in consumer debt is the record home ownership numbers!! Homeownership is at a record high as a percentage of amricans. That FACT will be anathama as well because it shows that it is not just the rich that are doing well in the current economy.

You made a huge mistake. You gave Bush credit for something. Bush haters are extremely intolerant, and will not stand for facts that counter their hatred. You messed up big time.

As for the inverted yield curve which was pounced on above, take a closer look at how long the curve was inverted, and also the market reaction. The curve was inverted only for a brief time. The stock market reacted by falling, and then rising. The last time we had a recession the stock market began the process in March of 2000. (That was Bush’s fault as well).

The economy is doing fine, and will continue to do fine. There will be recessions because there always have been and always will do. We need to keep borrowing low enough so that the debt grows at rates less than nominal GDP, (5.0—5%).

Bush’s tax cuts help stimulate the economy. They were the right medicine at the right time. Now that the economy is not in need of stimulation (as per Federal Reserve statements) I am no so sure the economy needs the tax cuts.

Could you please apologize for saying someting positive about the economy while Bush is in office? As a moderate Republican why in the world would I switch parties? Who wants to be negative, angry and hateful?


Posted by: Craig Holmes at January 7, 2006 3:14 PM
Comment #110993

No, I have not filed for food stamps, I am not on welfare. And fortunately I am not disabled, nor do I receive Social Sercutiy.

I even live in a house, own a car, and have use of the internet. High-speed, no less.

I do,however, have 3 college educated daughters who, while all work and receive a decent salary, can not afford to buy a home, buy cars (payments are too high), do not have cable TV or high-speed internet,let alone health insurance,etc. They also have not fallen for the credit card companies gimmicks and only have one card each which they seldom use. I suspect that comes from watching their father struggle to get out of a $40,000 debt he ran up right after we divorced. (he still can’t keep a job) He left me in debt over $60,000. Fortunately after almost 20 years, I have managed to pay it off, and I won’t go into the things I did without (including food) to do so.

They are also the ones who will suffer as baby boomers age,(social security just ain’t going cut it you folks) the deficit increases, and at this point in their lives worry about being the first to be layed off, (new hires).

And my kids are the lucky ones. They have a college education, and are employed.

What about all the kids, young adults, who can’t find a job that actually pays something. Why are so many kids moving back home - maybe it’s because they can’t afford to move out. And even worse what about the high school drop-outs, the uneducated, the lower to poor classes? Many join gangs, and then all H@LL breaks lose…

Why is our crime rate so high?

And I am still very skeptical about this so-called good economy. Maybe it’s because gas prices are so high, and it is a reasonable assumption that with higher gas prices, materials from oil, or those that must be shipped will get more expesives. And, maybe it’s because I clearly remember the 70’s when interests rates sky-rocketed.

As for the “Leave no child behind” all I can say to that is go into any average school, spend the entire day, and talk to the teachers about the program, and check on funding. From what I’ve heard about Texas, Paige’s policy there is rapidly failing - although I really would need someone from Texas to speak to that.

Posted by: Linda H. at January 7, 2006 3:16 PM
Comment #110996


You paint a terrific picture of the economy. And the economy is good - for the wealthy. They have gotten big tax cuts. Corporations have gotten big earmarks from Congress. Regulations have been reduced. The Dow is way up there.

Great for the rich. The poor and middle class are not doing so well. You say the unemployment rate is 4.9%; however, many people are discouraged from looking. It is estimated that the real unemployment rate is twice as much. There is no company loyalty. Wages have been stagnant. Healthcare is being taken away. Forty five million have no healthcare insurance. Now even IBM is reducing pension benefits. Outsourcing is growing.

The poor and middle class are worried. They see the whole economy going to pot. They are scared stiff that companies will transfer jobs - even high-tech jobs - overseas.

Bush takes care of the rich. We need somebody to take care of the rest of us.

Posted by: Paul Siegel at January 7, 2006 3:20 PM
Comment #111004

It’s the WAR, stupid!

Posted by: elgringo at January 7, 2006 4:03 PM
Comment #111005

Linda H

Why is our crime rate so high? It is so low. Another pessimism. The crime rate has been dropping for a decade. Violent crime has especially dropped. You can check this out or google your own. “>Crime.

When people keep on talking about how bad things are, I just have to wonder about their points of comparison. Compared to a perfect world, we are really doing poorly. Compared to anything real, it is very good.


The middle class is doing fine. I wrote a whole post about that. Most people know that too. That is why when they are asked about the economy they say they are well off themselves, but think the general economy is bad. In other words, what they know from experience they think is good; what they hear from the media they think is bad.

The poor are a different problem. You can always make more money, but you can’t make less than zero. Those that have little or no income always have to remain in the same place.

If your goal is equal economic outcomes you will have trouble getting it from a free market. If you create wealth, you create inequality. If you encourage opportunity, you create inequality. If you allow personal choice, you create inequality. If you let people have a diversity of cultures, you create inequality. If you permit different educational methods, you create inequality. I think DYNAMIC inequality is a sign of heath and vigor in a society. If I had complete power I would NOT eliminate inequality, I would just make sure it was changing.

Posted by: Jack at January 7, 2006 4:03 PM
Comment #111007

Sorry - hopes this works better.


Prefer Saddam, do we?

Linda H

Why is our crime rate so high? It is so low. Another pessimism. The crime rate has been dropping for a decade. Violent crime has especially dropped. You can check this out or google your own. Crime.

When people keep on talking about how bad things are, I just have to wonder about their points of comparison. Compared to a perfect world, we are really doing poorly. Compared to anything real, it is very good.


The middle class is doing fine. I wrote a whole post about that. Most people know that too. That is why when they are asked about the economy they say they are well off themselves, but think the general economy is bad. In other words, what they know from experience they think is good; what they hear from the media they think is bad.

The poor are a different problem. You can always make more money, but you can’t make less than zero. Those that have little or no income always have to remain in the same place.

If your goal is equal economic outcomes you will have trouble getting it from a free market. If you create wealth, you create inequality. If you encourage opportunity, you create inequality. If you allow personal choice, you create inequality. If you let people have a diversity of cultures, you create inequality. If you permit different educational methods, you create inequality. I think DYNAMIC inequality is a sign of heath and vigor in a society. If I had complete power I would NOT eliminate inequality, I would just make sure it was changing.

Posted by: Jack at January 7, 2006 4:07 PM
Comment #111012

Craig, enjoy the homeownership while you can. Elderly on fixed incomes are losing their homes to escalating property taxes, and baby boomers are just about to retire. With or without Medicare and Soc. Sec., there are going to be huge losses in home ownership over the next decade and possible decades depending on what Republicans fail to do with Medicare and Medicaid and Soc. Sec.

Posted by: David R. Remer at January 7, 2006 4:20 PM
Comment #111013

Jack, sorry, can’t agree with you about Bush. Any president that throws his veto pen out the window upon entering office is Buddhadamned fool and incompetent president to boot. He bears as much or more responsibility for our national debt than Congress. Remember Congress gave him carte blanche on his budgets. I recognize that is changing as of the last few months, but, can’t help also notice that we are in another election cycle. Looks like window dressing by incumbents to me.

Posted by: David R. Remer at January 7, 2006 4:25 PM
Comment #111034

The yield curve will likely invert even further. Most people are guessing the Fed will raise the rate one or two more times, from the current 4.25% to 4.5%, or perhaps even 4.75%. The 10 year T-Notes are @ 4.37%. Best guess? I’ll stick with the prediction I’ve been making for some time: recession this fall/early winter. The first half on my prediction called for an inversion of the yield curve, which we are seeing.

Several factors will make the next downturn… interesting. The economy shed a large number of jobs during the First Bush Recession, and created remarkably few during the recovery. The Second Bush Recession will not feature lay-offs so much as bankrupticies. Companies trimmed the fat in the First Bush Recession. The companies themselves will collapse in the Second Bush Recession.

The federal government will lack the ability to stimulate the economy out of recession through fiscal policy. Spending increases and tax cuts will not be an option. The Fed has reloaded by raising lates, so they will be able to provide monetary stimulus. Unfortunately, the Republicans failed to raise taxes and/or cut spending during the recovery. Those chickens are coming home to roost. Kiss fiscal stimulus goodbye.

Currently, bonds offer low returns, yet they have consistently outperformed the stock market. What the long-term bonds are telling us is that growth will not be a problem for the next decade, and for that reason, neither will inflation.

I’m not sure about housing markets. Don’t know enough about it to comment or predict.

Posted by: phx8 at January 7, 2006 5:50 PM
Comment #111058


Bush recession? You are an investor I know that you know, but I will fill it for some others. When did the S&P start down? March 2000. The Dow high began to fall in January of the same year. When did Bush take office? A year LATER. When did the first fiscal year of the Bush presidency begin? October 2001. About how long does it take for economic policy to have an effect? A very least it takes about a year. Some things take years. Could Bush have caused the recession? No.


This is ironic. REPUBLICANS and Social Security, you say. We tried. We tried hard. The Democrats and their allies killed everything and danced on the graves. Yes, we are to blame that we did not have the power to defeat the vested interests of the liberals and the Democrats. It will be much harder to fix it now. So when liberals and Dems complain about SS it is a lot like the miscreant complaining that the cops allowed him to steal or kill.

Posted by: Jack at January 7, 2006 6:51 PM
Comment #111079

The decisions made by a president affect the economy more than any other individual in our country.

Is there such a thing as an economic cycle? I think so. Most people believe there’s an inherent wave, an oscillation, that ups & downs are unavoidable. However, the frequency of the waves can be influenced. In addition, the intensity and duration can also be influenced. This can make the difference between a boom and bust. This influence originates several places, but primarily it starts with the president.

Was the First Bush Recession avoidable? Probably not. The downturn started under Clinton. However, an argument could be made that targeting tax cuts towards working people, rather than the wealthy, would have been a more effective fiscal stimulus, and ended the downturn by late 2001. Instead, Bush pushed through additional tax cuts, and misled the country into invading Iraq.

The big percentage drop came over a year into Bush’s administration. I would argue it was in reaction to the second round of tax cuts and Iraq.

In other words, Bush owns it. Referring to the First Bush Recession as such is both fair and accurate. It will also be necessary, to differentiate between that and the Second Bush Recession.

Posted by: phx8 at January 7, 2006 8:26 PM
Comment #111083


The first round of tax cuts were the ones that were less effective because they were not targeted.

The second round (capital gains) came in 2003 and that is when the economy picked up. Since 2003 (when Bush policies reasonably started to take effect) the economy has been good and growing.

When you talk about the downturn of 2001 you forget 9/11. That was a tremendous blow to American confidence and imposed high costs. It effectively made us pay back the “peace dividend” that we got at the end of the Cold War. If you have been to the airport recently, you know that it takes an extra hour to get through. How much is an hour of your time worth to the economy? Add that for each business traveler. Now add in the extra cost of security. Now add in the extra cost of security in other transportation. You can keep this up for a long time and see how much 9/11 slowed the economy. DESPITE the bursting of the bubble, 9/11 and just an aging recovery, we still are doing really well.

As I wrote, we can’t give the President all the credit, but there certainly is no cause for blame.

Posted by: Jack at January 7, 2006 8:52 PM
Comment #111089

On the first day of the Bush administration, the markets stood like so:
Dow Jones Industrial Average: 10,578.24
Standard & Poor’s 500: 1342.9
NASDAQ Composite: 2757.91

With 9/11, the DJIA dropped from @ 9604 to 8920. It continued to fall for a week to @ 8235.

The DJIA recovered, and by early 2002, stood at roughly 10,500.

So much for the effect of 9/11.

The real drop occurred from early 2002 through early 2003. This drop is owned by Bush.

(Here is a chart of the DJIA performance. For anyone interested, Wikipedia can be a handy resource for economic numbers).

Once again, Bush administration policies result in actions such as the invasion of Iraq and The War on Terror. These are choices made by Bush which directly affect the economy. The Occupation of Iraq costs @ $1 billion per week. I’d argue that the greatest cost of The War on Terror isn’t the TSA & airline inefficiencies, but the depressing atmosphere of fear which the Bush administration has chosen to cultivate.

Posted by: phx8 at January 7, 2006 9:23 PM
Comment #111099


What exactly are we arguing here? The economy went through hard times that started at the end of the Clinton Administration and ended in 2003. A big jump of more than 7% came in the quarter after the second round of tax cuts and has remained an average of 4.1% since.

The reason I object to calling it a Bush recession is because the downturn started before he even took office and began to end at about the time the Administration’s policies could reasonably have been expected to take effect. Your chart coincides with that.

The stock market, of course, is not perfectly correlated with other parts of the economy. If anyone can really predict the stock market, he is not telling anyone. Household net worth increased even as the market went down because home equity went up. Since more Americans own homes than own stock, that should make everyone happier. With economic growth high, unemployment low and productivity good, the good times should continue. You are more pessimistic about the future.

If you can reliably predict a downturn next year, you will probably take steps to avoid being hurt by it or even benefit. I expect real estate should be a good deal if a big sell off occurs. If you lock in what you have now, you should be able to parlay that into a big gain.

I am not an investor as you are, but I expect that anyone with income to save an invest should have much of his money in his own home (real estate) with the rest divided into large cap, small cap and international stocks. If you are older, you can have some bonds. This advice is the same almost no matter what.

You just really want to blame Bush for something. That’s it. There are plenty of legitimate policy disagreements, but the economy is not among them.

If Gore had been inaugurated president in January 2001, do you really think the economy would be better today? I am afraid it would be worse.

Posted by: Jack at January 7, 2006 10:21 PM
Comment #111102


You wrote: What exactly does President Bush have to do to make anyone on the ‘left’ happy? Put a gun to his head and pull the trigger?
Is it the fact that he isn’t a Democrat?

Guess what? Over 5 years ago, this could have applied to Clinton. I think that it is no longer that Bush is a republican, but that he is irresponsible. Non-thinking, lazy, wants only yes man around him, out of touch with the common american. I could care less if he is a republican as I cannot see a difference between the two parties anymore.

You wrote:If he had started the ‘No Child Left Behind’ as a Dem would you be for it?
Do you have a problem with his wanting the American people to be well educated and to fend for themselves?

“No child left behind” is a misnomer. It does nothing really to allieviate our stupidity in our school systems. we all need to as community members become involved in our nearest PTAs, that is the only thing that will start changing the stupidity of our public school systems. “No Child Left Behind” did not work in Texas and is a bigger failure in the country. But it sounds so good, don’t it? ha!

YOu wrote: Just what is it?
I know the ‘left’ has a problem with the Invasion of Iraq because they could have dealt with it without going to war …

And now there is no solution but to stay in Iraq to clean up the mess that was created by who?

YOu wrote: I know the ‘left’ believes Bush caused the hurricane that destroyed New Orleans …

No, I personally don’t believe that Bush has that much power, and I do not know of even ONE leftie that thinks that Bush created a situation of making Katrina happen. Oh but you were EXAGGERATING, weren’t you? That makes the dialogue so much simpler…..

YOU wrote: I know the ‘left’ believes Bush doesn’t give a hoot about the poor - I Know the ‘left’ is WAY OUT in left field and exaggerates just about everything when it comes to Bush … BUT

You know what is wrong with the country right now? It’s the polarization of the right and the left. And remarks like you are making only make it worse. Come on now! Let’s stop exaggerating to make our points and really start a true dialogue.

Amazingly enough, my family has not been affected by Bush’s policies…but the climate of anything goes in big corporations and the gov’t will be the downfall of this country. Bush seems to be encouraging this greed and the outright lying that is going on right now. he is doing nothing to encourage personal responsibility and accountability. That is his biggest sin, the way I see it.

And wasn’t his admin. going to come in and wipe out all the sleaziness from the Clintonites? Well, seems like politics as usual.


Posted by: Antonia Reed at January 7, 2006 10:38 PM
Comment #111105

Democrats are negitive thinkers.
They choose to live in misery.
They refuse reality.


Keep up the great posts.
You tell it like it is.

Posted by: rick at January 7, 2006 11:12 PM
Comment #111106

in the media, i heard accusations for days accusing Bush of creating Katrina to get at the Black population. global warming my ass. no way was Bush in office anywhere near long enough to even think about e-mailing global warming.

calling global warming, calling global warming, will you please attack the Black population in New Orleans. try not to hit the whites, if you have to, be easy on them, but get the Black’s.

what kind of reality is this?

Posted by: rick at January 7, 2006 11:30 PM
Comment #111109

What are you talking about? Do you know of any particular Democrat choosing to live in misery? Or “refusing reality,” whatever that means?

Bush created Katrina? I’ve heard some crazy conspiracy theories, but I’ve never heard that one presented “in the media.” Who said it? Can you cite a source?

“They refuse reality.” lol.

Posted by: phx8 at January 7, 2006 11:54 PM
Comment #111112

The Republicans have made a bad habit of being perpetual contrarians, always wanting to bring on great big revelations to shatter the myths of the mainstream media.

Time and time again, though, your mythbusting seems to be little more than the glorification of spin, and worse, it’s entrenchment.

There’s plenty of reasonable evidence to suggest that the economic recovery is more in the numbers than in the reality.

You folks won’t admit your tax cuts are putting us in the hole, regardless of where the economy is going. You won’t admit that unemployment numbers indicate something else than just outright, simple people who are full-time employed vs. people not employed. There are plenty of people doing no better than part time, and plenty of people who simply no longer collect unemployment, and therefore aren’t counted among the numbers.

This has been the problem with Republican government over the last decade. It’s been sunk in a swamp of groupthink. Nothing ever really gets through until its much too late. Even then, y’all sometimes even persist in denial.

It’s time for people to step up, regardless of party, who aren’t going to lock themselves away in Washington and just mindlessly push agendas while the rest of the country falls apart.

Posted by: Stephen Daugherty at January 8, 2006 12:04 AM
Comment #111113


The German Environmental Minister blamed Bush. Sure we consider the source (he is a Green) but it was a major topic in many Euro papers.

Evidently you don’t have to put up with those crazy lefty Europeans. I read their stuff a lot. You wouldn’t believe the crap they fall for. They often are associated with universities. There is nothing worse than an educated fool.

Posted by: Jack at January 8, 2006 12:12 AM
Comment #111114

“If Gore had been inaugurated president in January 2001, do you really think the economy would be better today? I am afraid it would be worse.”

I think it would be better. We’ll never know. We wouldn’t be in Iraq. We would be participating in Kyoto, and addressing the biggest problem of our time, Global Warming.

“I am not an investor as you are…”

Maybe, maybe not. I just do mutual funds. I don’t follow any individual stocks, and I certainly don’t do crazy stuff like day trading options. Left that behind a long time ago. Like you, I’m long the market, just equity funds. I keep thinking the markets will challenge the Clinton highs… maybe oil prices will collapse… who knows? I’m looking for something to happen which will create broad-based market optimism. I’m looking for articles to declare an end to the economic cycle. I’m looking for Bush supporters to celebrate, and dance in the street because they think the economy is really, really fantastic… sort of an economic rapture, if you will. Maybe it won’t happen this time.

But I do trust the predictive capabilities of the bond markets far more than the stock markets. That is why I keep bringing up the yield curve. When it comes to economics and markets, blind optimism & pessimism are recipes for disaster.

These kinds of discussions usually bring up stock markets, because more people are familiar with them. But bonds are where it’s at, and the inverting yield curve is a warning sign.

“You just really want to blame Bush for something. That’s it.”

Well, I hold him responsible, yes. As I said earlier, the president has more impact upon the economy than any other person. While Bush may only get partial credit for the First Bush Recession- partial, because the Republican domestic agenda and foreign policy decisions worsened what should have been a mild downturn- Bush will certainly get full credit for the Second Bush Recession.

Posted by: phx8 at January 8, 2006 12:19 AM
Comment #111115

reality is we are winning in Iraq.
the economy is great.
negative thinking creates misery.
Bete Midler is one of the many that went on for days saying Bush created Katrina to get the Black population of New Orleans. I heard them, Jack heard them. even politicians said it. it was all over the news.

Posted by: rick at January 8, 2006 12:26 AM
Comment #111118

Thanks for the link. According to the link, no one says Bush created Katrina. They do seem to think Katrina is a warning sign of the dangers that will come with Global Warming, and they do blame Bush for doing so little about Global Warming.

According to predictions, Global Warming won’t necessarily cause more hurricanes; it will cause the hurricanes which occur to be more severe.

“Bete Midler is one of the many that went on for days saying Bush created Katrina to get the Black population of New Orleans.”

I’m sorry. I don’t believe you. Prove me wrong by providing a link. If you google it, her name is spelled ‘Bette Midler.’

Posted by: phx8 at January 8, 2006 12:47 AM
Comment #111119

I understand now. Bush created the downturn in the econemy that started before he took office so he could get credit fot the recovery. Then Bush created 911 after Clinton refused the offer to get osama so he could finish his dad’s work and get husein. Then Bush created Katrina to hit New Orleans to get the Black population that he doesn’t like. Then Bush created Rita to hit his home state of Texas to make it look like he didn’t create Katrina. That Bush is pretty slick. Bush missed his calling. He should have been God. Then again, maybe Bush is God, and we humans havent figured it out yet.

Posted by: rick at January 8, 2006 12:54 AM
Comment #111120

Oh, and the oil refineries being out of commission puts alot of money into Bush’s pocket from the high gas prices. I wonder if Kennedy is a secret player in Katrina?

Posted by: rick at January 8, 2006 1:00 AM
Comment #111123


I heard it in the news. I don’t have cable so I have to rely on the main channels and cnn radio. I do not know how to do research to find links.
Just like Kennedy and other liberal politions said Bush created 911 for political gain. What kind of political gain can that create? The media said it so it must be true.

Posted by: rick at January 8, 2006 1:12 AM
Comment #111124


We don’t know about Gore.

I agree that we would not have been in Iraq, but I also suspect we would not have been in Afghanistan either and the bad guys would have more initiative in the war on terror. That would not be good for the economy.

I think that our chances of being part of Kyoto would be zero no matter what. It won’t actually work and the Senate never would have ratified it. That is why Clinton never submitted the treaty. Besides, the U.S. is doing as well as the signers. The only ones meeting their goals are those that were closing down industries.

In the years since Kyoto was negotiated, western Europe increased its carbon emissions by 5.4%. The U.S. increased too, but only by 4.7%. Of course that extra .7% is probably just the hot air generated by the Greens feeling better than everyone else.

The Euros were being silly. Global warming may cause more or worse storms, but it has not yet done so. It was irresponsible and stupid for them to bring it up anyway even if it was true. It is like saying “I told you to shovel the snow” as a friend lays on the ground with a broken leg.

Posted by: Jack at January 8, 2006 1:19 AM
Comment #111128

“I do not know how to do research to find links.”

To do research, simply type on the address line. When it comes up, you might want to add this to your “Favorites” on your tool bar at the top of the screen. To google a topic, simply type in a few relevant words, such as ‘Bette Midler Katrina.’

To give someone else a link, you can use the HTML formatting tips above. It might be easier to do this- right click on the address bar, which will highlight a site address. Click on ‘Copy,’ and then, if you’re posting here, right click again to ‘paste’ the address into your comment. Hopefully that makes sense…

Hope this is helpful-

Posted by: phx8 at January 8, 2006 1:47 AM
Comment #111131

Is the real estate boom the reason for the increase in net worth that is being quoted here? I was just wondering if that had an effect overall and what will happen when the real estate market slows down?

Posted by: Independence at January 8, 2006 2:08 AM
Comment #111148

Just a note to make sure anyone who has read a post in the past from Rick (with a capital R) does not confuse me with ‘rick’ without the capital R. Henceforth, I will post as ‘LibRick’. I am definitely a liberal, which means I am (according to the Merriam-Webster dictionary) “generous… tolerant… not narrow in opinion or judgement”

I refuse to give up on the title ‘liberal’. Conservative media, religious fanatics, and pols have worked hard to make ‘liberal’ synonymous with ‘wacko’,’traitor’, ‘evil’, ‘selfish’, ‘communist’, ‘socialist’, etc.

Beware people who claim to know what others are thinking. It most often is a clear insight into the way THEY are thinking. Example: when talking heads or opposition pols used to go on TV and claim that Bill Clinton was only out for himself, you can be sure the speaker was the kind of person who felt that way because THEY THEMSELVES would be out for themselves if they were in the position.

So, let’s discuss, argue, or debate over issues using facts, experiences, or one’s subscription to a political or economic school of thought. Getting personal, accusing the opposition of aiming toward unspoken goals, and attributing personality flaws to the opposition only tells us what how you yourself would act and lets us in on all your particular personality traits.

Posted by: LibRick at January 8, 2006 9:24 AM
Comment #111154

Dude why? Global warming is a myth and so is your boy Algore. Damn, you probably think Islam is a peacefull faith. Ill put it to you like this; talking points will not help solve any thing, nor will a pure hatred for President Bush.
If you think a myth like “global warming” is the biggest problem facing us, you might want to check the facts, we have been in the early stages of WW IV since the “great” Clinton was in office (WW III was won by the “useless” Repulicans through force and power with barely a shot being fired). Now that we’ve cleared that up, the economy is fueled by supply and demand as it always will be. Not by any president and especially not by any group of whining detractors. Hope this clarifies things for you and perhaps gives you a few things to think about. Yours truly, G.A. Phillips

Posted by: G A PHILLIPS at January 8, 2006 10:35 AM
Comment #111156


Real estate drove wealth creation since about 1998 and made up for the losses in the stock market. Real estate appreciation, however, has been the has driven American prosperity since before the first English settler set foot in Virginia and forms an important basis of almost every fortune ever made in our country. The recent boom (which is worldwide, BTW) has been going on for a longer time than most. Experts have been predicting the end of this boom since 2001. They will be right eventually.

But what happens when/if it does? First, you are unlikely to see real declines except in some particular markets. What happens at the end of a broad based real estate boom is the prices stop going up. Since there is some inflation, this means real declines, but people don’t behave rationally and they don’t feel so bad about that.

Homes are also not very liquid investments. I know my house is worth more than I paid for it, but I have no firm idea how much I could sell it for tomorrow. Homes are also more than an ordinary investment, since people live in them.

So who gets burned? People who recently bought homes will have paid too much. The practical effect may not be noticeable if they live in their homes for 5-7 years. People who bought houses as investors or flippers may actually lose money. This will generally be a slow motion retreat.

We went through a similar process in the late 1980s and then it was coupled with the savings and loan crisis. I bet that many of you didn’t remember until I reminded you. It was a screaming national disaters at the time, according to the pundits. That shows the type of crisis we face today. If it happens, it will be serious, but we will get over it.

The thing that we have to keep in mind is that we are becoming a very rich nation. If you look at what people really have, we have more than doubled our wealth in my lifetime. Even the poor own cars, DVD players etc. Our houses are much bigger. Most homes have more than one bathroom. This is not the work of the current president only. It has been going on for a long time.

We actually need to adjust our paradigms. When we think about thinks like wealth and poverty, gender or race relations or the structure of our workforce, in our minds we still have a picture from the 1950s.

I am sure you are familiar with Maslow’s hierarchy of needs. As a society, we have now satisfied the basic needs. The challenge of the 21st Century will be how to manage our wealth.

Posted by: Jack at January 8, 2006 10:48 AM
Comment #111157


Thanks verry much for the help. Now I can find some info about things that interest me. Only good intentions come from a helping hand, or word. I am a humanitarian myself, and help others as often as I can. It’s the American way. And thank’s again to the others in these blogs that have given me tips.


Good post. I know from our post’s that everyone knows we are Dem. and Rep. Still the same name can be confusing to some. I agree with each party on isues. I lean tward the right. More so since 911.
Does your post mean that we can stop calling Bush a liar, that he created, and or could have prevented 911? Does it mean that what the media reports is not liable, or does it have to have a link to prove it? Many readers in here use conversation to prove their point, and are accepted. Many post are based on opinion. My post have been based on opinion and media reports. Nothing more. Thanks to phx8, I can try to research info.
I mention Dems are negitive thinkers that choose to live in misery because almost everything Dems have to say is negative and hatred for our president. I understand there is a battle over power in politics, but it doesn’t have to be taken too far. I voted for Perot instead of Bush Sr. in hopes that a 3’rd party would be valid. Current politics seme to have a monoply that can’t be penitrated. Only dented.
The two things that got me into these blogs are my intrest in learning about politics,and the Bush haters. I also have comunication problems and I think this has helped. Being self employed, I need better comunication skills. Being in here, I need the help of phx8, yourself, and others to learn as much as I can so my child will not be illerate like myself.
I am also trying to learn better school of thought. I’m not an abstract thinker and cannot understand riddles and poems. I am more straight to the point. However, I am striving to learn about school of thought.
I have been privaleged to learn from heroes from each party in these blogs. I refer to heroes as exceptional individuals and military.

Posted by: rick at January 8, 2006 10:58 AM
Comment #111163


Thanks for the post. Nice to know one is here to learn more not just condemn others. I understand your emotional ire at what seems to be ‘Bush haters’. Being a proponent of many of the sensible and middle of the road political policies of Bill Clinton, I never understood the seemingly pathological hatred of Clinton by many on the right. It certainly seemed to me to go beyond political issues and policies. The Conservative right wing’s demonization of Bill Clinton did much to help them gain their current majority hold on all three branches of government.

That’s a sad indication of the state of politics in America. It certainly must seem like a similar ploy is being used to gain political power now at the expense of George W. Bush, Cheney, et. al.

I don’t think of Bush as evil and I certainly don’t hate him, but I am against the majority of his policy positions. I know he believes his policies will make America stronger. I just think he is dead wrong. Seems much of what has transpired over the last 5 years is bearing out the fact that his policies are not working.

There are some in his administration that I do truly fear. Dick Cheney for one. I think his ideas for running our government are dangerous. He doesn’t like debate and doesn’t want to hear opposition. He takes a position and throttles any opposition when it is possible. We are not a dictatorship, but there are some in the current administration who would prefer that we were… as long as they are the dictators.

Posted by: LibRick at January 8, 2006 11:31 AM
Comment #111164

Dear LibRick,
Hey buddy, you can stop calling Bush a liar. 17 resolutions, and the fact that we never ceased being at war with Iraq, justifies the Presidents use of military power. As to the question of 9/11, evil will find a way to do evil. It doesn’t matter what anyone thinks or says, it is only the actions you take to confront it that will have any effect at all. ie. good vs. evil. I could tell you what the Bible says, but I don’t want to end up in jail so you will have to read that for yourself. Maybe you would try thinking instead of “It’s the economy, stupid”. It’s good vs. evil my friend. I hope this helps you in a new train of thought. Yours truly, G.A. Phillips

Posted by: G A Phillips at January 8, 2006 11:31 AM
Comment #111171

GA Phillips,

First, I don’t recall calling Bush a liar.

Second, why would you end up in jail telling me what the Bible says?

Third, the problem with good vs. evil is who is deciding the definition of evil? What if someone in power decides it is YOU who are evil? Is that OK? or are YOU the person who decides who or what is evil? And don’t give me the Bible definition of what is evil and what is good. My guess is (just based on your speech and attitude - don’t know you for sure) that you’ll need to go back to the Old Testament to support your sense of good and evil. We’re living in the New Covenant now, right?

Fourth, if we do agree on what you believe to be good and evil, are all others negated? Are their lives worthless and liable for forfeit? Seems I can recall a few monstrous leaders from recent history who had clear sense of good and evil and felt very comfortable acting on eliminating the evil: Mao Tse Tung, Hitler, Milosevic, Pol Pot, Stalin, Osama Bin Laden, Khomenei, etc. The world has had its share of misery at the hands of those who understood the definitions of what/who is good and what/who is evil.

Forgive me for not trusting you or any religious or politically based group to run our country based on what you think is good and what you think is evil.

Posted by: LibRick at January 8, 2006 11:58 AM
Comment #111177

“We blame or praise in four year intervals for things that are generations in the making. Each president does his part, some more than others.”
This is one of the wisest comments I have ever heard. If you dont agree with this then you havent done your research.
As far as your back and forth debate on Bush being a racist vs. him just wanting a better America for Americans, who doesnt. Is there anyone (including all of you responding to this article) willing to take blame for the people out there that choose to be gang bangers and addicts instead of getting an education? Because if your willing to I am willing to hold you accountable for the theft and crime in the country. It surely is not Bush’s fault that the less educated are accounted for by their race. Thats the fault of each race.
Ms. Linda,
Your comment regarding your 3 college educated daughters that “receive a decent salary, can not afford to buy a home, buy cars (payments are too high), do not have cable TV or high-speed internet,let alone health insurance,etc.” My question is why not? I myself am 26 years old. I attend college. (not completely college educated, yet!) I also work a part time job. There is really only one solid income that comes into our house and my boyfriend is the one that brings it in. (and BTW he is only a H.S. graduate) and we have a house and 3 cars and a television in each room and oh yeah, even high speed internet.
I do agree about the health insurance issues. We do not have health insurance, but neither of us have taken it upon our selves to shop for it. Shame on US not anyone else.
Since I have done several papers on SS reform v. not to reform, your big concern for your daughters should be “will there even be SS when my daughters retire?” Because thats my biggest worry and Im only 26.

Posted by: Mia at January 8, 2006 12:09 PM
Comment #111184

It’s amazing how people see the same things so differently. My wife is a psycologist and, on rare ocasion, she will give me a test. one test was a series of folded sheets of paper that had ink splatered onto it and then folded, creating a shape or design if some kind. Open the folded sheets and describe what it looks like. There were 10 or so sheets. the tests has been given so many times that they know what the shapes are supposed to look like. My choices for every shape were not even in the logs for what they were supposed to look like. She told me that my answers were wrong, and that I had to retake the test. Again all answers were wrong. No documentation for my answers. I said,” How can you prove that they are not right?” Each answer is my answer, my opinion. To me, each answer is correct. She had no information to evaluate me on the test, and refused to present the findings to anywone that could create a change to the somewhat perfected test. Talk about differences in vision.

I look at things with an open mind, simple aproach. Black and white. I see a problem on the job, and I fix it or I don’t. I don’t if the homeowner says don’t. No bandaid on it. I don’t want to see a bandaid put on politics. Too much room for disaster. I wish we could lock our leaders in a room and say stop fighting with each other and find the best solution’s. So much for wishful thinking. The differences are so far apart, no wonder they think about their own power to get their interests in order. How do we know we wouldn’t be the same way in their shoes?


You said so many of the Bush policies are proving to be wrong. I am curious to know what the policies are.

Posted by: rick at January 8, 2006 12:30 PM
Comment #111194

Name a policie that is working.
To believe that we are doing
a single possitive thing for
America is to admit you are
one of the many willingly
wearing blinders. Unplug
Fox news, Rush, oreally,
and the gop spin docters.
Open your eyes to the real
agenda and the loss of
intelligent leadership.
We are to busy picking the
sand from the eyes of other
countrys. We are blinded by
the boulder in our own.

Posted by: Honey P at January 8, 2006 12:58 PM
Comment #111195

Let’s try Iraq, for example. These people actually thought we were going to be out by August, that we were going to find enthusiastic support, and that after three decades of totalitarian oppression that people were going to have the mindset ready, without any education or guidance, to deal with their newfound freedoms. They believe that invading with fewer troops was going to not be a problem. In fact, though officially the brass and the the Bush administration say they have enough troops, nearly every message from ground level troops says that they are stretched way too thin. They failed to bring in money to reconstruct Iraq, believing that the Iraqis would take care of that, and on top of that, they brought in huge multinationals to do the work, instead of employing Iraqis themselves. They disbanded the Army, leaving hundreds of thousands of trained soldiers out of work, and instead of vetting out Baathists who only pledged loyalty to the party for career advancement, they banned them wholesale, gutting the ranks of trained bureaucrats.

Let’s try the economy, now. Despite advice from conservatives with business experience and knowledge of the consequences of fiscal policy, Bush push tax cuts in a time of war and incipient deficit. He said he was giving us back our money, putting it in hands of Americans, and trusting them to know how best to spend it. In reality, he’s putting us all in debt to our foreign competition, and ensuring a future where tax hikes will no longer be a matter of choice. We will have to pay back the money we owe to our creditors, and there is likely no chance we will grow out of it. We will either see a period of prosperity smother, or a period of recession worsened. There is historical evidence that such as this occurs- it was what Vietnam’s and the Great Society’s deficits did to our economy in the Seventies.

I think the irony in all this is that Bush and his folks have more or less been imitating the pattern of behavior of the Democrats in the Seventies, at the beginning of my party’s decline. Looking at this, I can’t help but feel that Bush is the price the Republicans are paying for refusing to learn the lessons of history.

Posted by: Stephen Daugherty at January 8, 2006 1:24 PM
Comment #111197

My first question is for Linda H.
Why is it, that baby boomers credit debt is the president’s (be they Repub or Dem) problem? If the people live outside their means (which I believe most will say is a growing number in the US today) then why should the federal government be at fault?
Okay, how is this then. IT’S ABOUT FINANCIAL RESPONSIBILITY, STUPID! The government can only enact polices to help get us started. The people on the other hand, have to take this opportunity and finish the job.
But people have a tendency to overspend. Instead of buying what they NEED, they buy what they WANT, then complain how the government is screwing them. If you cannot afford your current lifestyle, maybe you just simply need to make your lifestyle fit your budget! Don’t blame it on the gvernment!
As far as “potential earnings” phx8, ANYONE could use possible figures to explain why they aren’t where they *could* be under another administration. Hell, I could be a winner of the Publishers Clearing House this month or I could hit the Power Ball Lottery next week, but I won’t use that are grounds for blaming Bush’s policies when it doesn’t happen.
Everyone in the middle and lower classes will always be trying to make ends meet. Because when you make more, you spend more and are right back where you were before the raise. So to simply say that I’m worse off because I’m still struggling, or because I missed out on $10k a year isn’t really accurate. Unless you have a crystal ball and can prove to all of us that the alternatives would have been better, don’t try to sell me on “what could have been”.

Posted by: thomas at January 8, 2006 1:37 PM
Comment #111208

Thanks for addressing my question, Jack! I was mostly wondering what determined some of these economic numbers put forth in this debate and I always want to know how I can personally work within the limits of any current government, president, administration, etc. It is beginning to sound like sticking money under a mattress is the only SAFE thing anybody can do. I know that I often forget I am not really poor. I have a great house, food, all the wonderful electronic gadgets anyone could want but like everyone else, I worry that a bad economy could take those things away. So I can see why the economy is such a heated debate. Only a catastrophe such as Katrina or the tsunami or the Pakistan earthquake tends to shake the ordinary American out of feeling broke and/or poor.

Posted by: Independence at January 8, 2006 2:25 PM
Comment #111209

Honey P,

I just moved from Abilene, Tx. back to my home town in Tx. I lived in Abilene for 4 1/2 yrs. Abilene’s economy lives by the national economy. Abilene in doing verry well. New housing has been non stop. Remodeling is constant. New business is growing rapidly. Major chains are moving in like never before. Dyes AFB is doing well. All of this is happening with a big loss of public school enrollment. Abilene’s economy is doing great, that means the National economy is doing great.

Look at how the people in Iraq have supported the elections. So many positive things are happening for the people. Sure their are death’s. How many people died for the survival of our country. My native indians were at a major loss in that one. Look at how Germany, and Japan etc. recovered from their wars. Many years, and many deaths. I would say Iraq is having a record fast recovery, with a fraction of deaths compared to the others. At least so far, no successful attacks on US soil since 911.

Now, I do agree that we ignore too many problems in our back yard. Border control is a huge one. All presidents are guily of this one. Welfare was a gonner from the start by allowing able bodied people to receive benefits for too many years. Carter started doing what Bush is being accused of with the phone taps. this list can go on and on.

Jack is the best person to ask about Bush’s accomplishments. Much more info there, although, I am learning more about Bush.

What are the policies that are not working?

Posted by: rick at January 8, 2006 2:26 PM
Comment #111217


How many wars have gone according to the plan? The Iraq war was changed on the first day. How many football games are ended with the same strategy as when the game began? Bush is going by what the experts in the military are telling him. Bush isn’t a military expert. No president has been for some time now. I am hearing reports that the military would have problems with too many soldiers in the same place by adding more troops. Maybe some areas need more, and some do not.

I am deffinately not a military or economy expert. Texas has had a strong economy since Reagan’s policies took over. With a few bumps. Abilene, Tx. is strong. that means the nation is strong. I haven’t comprehended the debt stuff yet.I have alot to learn about these things.
Explain how we are getting into debt to foreign creditors. I would like to know.

Posted by: rick at January 8, 2006 3:05 PM
Comment #111218

“As far as “potential earnings” phx8, ANYONE could use possible figures to explain why they aren’t where they *could* be under another administration.”

I agree. I don’t think it’s very useful to project my personal situation onto the economy as a whole. However, earlier in the thread, Bugcrazy asked if Bush economic policies affected anyone on a personal basis, as if any conmplaints were merely unjustifiable whining by liberals. As I said before, I’m in a job which is very sensitive to the economy, and the issue of outsourcing in particular. As it happens the opportunity costs are pretty easy to measure for what I do. But once again, I think it’s more useful to move the discussion from the personal to statistics applying top the country as a whole.

Posted by: phx8 at January 8, 2006 3:11 PM
Comment #111228


The best bet for ordinary people is their own home. Buy a home that fits the needs of your family in a decent neighborhood and you can weather most of the inevitable vicissitudes of fortune.

My own free advice (maybe worth the price charged) is that inflation will pick up next year. Even in the rotten times of the stagflation seventies, homes were good investments.

Success is not hard if you have self discipline and do things in moderation. I always remember the old saying that some people have too much money, but few have enough. You are right that people feel poor, but sometimes they are not.


I generally don’t bring up Bush problems, since others do such a good job, but since you ask. I think the Administration made a serious mistake when it underestimated the resistance in post war Iraq. I also agree with Stephen that it was a bad idea to disband the Iraqi army. Beyond that, the first round of tax cuts was largely a waste, but the targeted ones of 2003 were very good.

Bush’s biggest problem is that he doesn’t properly consult others who don’t agree with him. I understand that MBA mindset, but running a government is different than running a business. Sometimes people don’t really care if you take their advice if you listen to it. And sometimes their advice changes your opinion in ways you may not even notice.

Posted by: Jack at January 8, 2006 4:22 PM
Comment #111230

Dear LibRick,

I’m sorry, maybe I have you confused with someone else. I am new at blogging. The comment about the Bible was meant as a little joke; it does however seem that there is a group in our country that is so affraid of the Bible (which they don’t believe in anyway) that they are trying to lable it “hate speech”. It is starting to feel as though I could find myself jailed for even owning one.(lol)

Regarding the definition of good and evil. if you dont have un understanding that there is a truth and that there is a difference between the truth and someone’s opinion. I fear that all your questions will only lead to more questions. I am not faulting you, I am also guilty of this.
Knowing the feeling of knowing good from evil is something we all gain from the age of reason,(which I believe to be a gift from our God) now what we do with this gift is a choice. I hope this helps you, this was my intention(and yes I do understand circumstance). Sorry, I didn’t mean to imply that this was what you would try to hit me with next. You see what I meant by questions, questions,questions, please grant me this light heartedness and a belief in you, that you are unerstanding enough to understand me. Point four, I will explain why I belive in and hope for you, the leaders you named and reasons you have put against my statments are all a search for the truth, and a sign to me that you do know that there is a truth out there and your looking for it. All of those leaders where evil and you knew, but why, by books of history, by word of mouth of their acts, or by what someone’s interpretation of good and evil is , or could it be from the knowing that
comes from the use of our most sacred chioce…the choice to choose between good and evil. And I’m sorry to say I belive it is as simple as that. So I can’t say much to you withuot refering to my bible and the truth I find within it but then agian I find a truth in you. Please forgive me if this does not clear things up for you. Look how far we have come from “Its the Economy Stupid”. But once again I’ll have to say its the good vs. the evil my friend. Yours sincerely, G.A. Phillips p.s. all life is sacred but opinions are not and only trust the truth.

Posted by: G.A. Phillips at January 8, 2006 4:28 PM
Comment #111236

It’s easy to make the economy appear good while you’re creating huge debt that will take over 127 years to pay off.

As much as I’d like to agree that things are rosy, the math just doesn’t add up. The fact sheet is mostly short term indicators. And the net worth angle isn’t convincing, because a lot of it is in over-priced real-estate. It’s just not believable.

Why? Because you would have to ignore the consequences of all of this, how long it has already been ignored, too much fiscal irresponsibility for the last 25 years, median incomes have fallen for the last 4 years, the middle income class is shrinking, government is FOR SALE, and we’ve got some serious debt issues.

It’s just too much to ignore. I don’t agree when people say the National Debt is not too high and $32 trillion in personal debt is not too high. Especially, if you consider that all of those problems that have been ignored for so long are all about to culminate nearly simultaneously.
Also, our energy vulnerability is extremely difficult to ignore. If we have energy shortages, the economy will be immediately affected.

But, I wish I had a pair of those rose-colored sun glasses to wear, so I too could ignore our pressing problems that bought-and-paid-for politicians won’t tackle for fear of risking re-election by angering their their big-money-donor-puppeteers.

So things are great? If so, we mush say Congress must be doing a great job, or is it just luck? Does any of this strike you as being responsible and accountable?

I used to be Republican, but no more.
Republicans had better start wondering how they’re going to keep from losing the executive branch, house, and senate, because the Republicans are looking awful bad, with all the corruption we’re finding out about these days. And, that’s probably just the tip of the iceberg. I can see pardons in the works now. No one in D.C. is accountable, so why be responsible?

Posted by: d.a.n at January 8, 2006 4:44 PM
Comment #111251

I just re-read both my posts. No where in either of them did I say that the problems are Mr. Bush’s fault. As a matter of fact, I never mentioned his name, the Republican or the Democrat Parties. I never mentioned the federal, or state governments at all. Please don’t put words in my mouth. I can only guess that you assumed I blame them, which makes me wonder why your thoughts went in that direction. So please don’t accuse me of that. Frankly I blame Clinton and Reagan for a great deal of our economic situations. I hated NAFTA when Clinton agreed to it, and I am frankly still waiting to for the “Trickle down” theory to work.

Your comment about living above their means is quiet correct. However, some, if not most of them had/have little choice. I remember when my 3 children were born in the 80’s, literally having to buy food for them with the two credit cards I had - and neither of the cards had ever been used. Eventually we had used both of them up. To this day I have no idea what my husband and I ate. We were not financially prepared to be presented with twins. (or car accidents, homes burning down, children needing clothes and wanting to eat, root canals, etc.)

I wish I had the numerical data about how many of the new ‘baby-boomers’ are now faced with decisions such as food vs. Medication, or heat vs. Food, etc. Frankly I can’t seem to do a search for the exact figures.

Yes, many of them do live above their means, but as my ex-mother in law (85 and not a baby boomer)) mentioned over the holidays, her heating bill rose from an average of $373. To $ 777.00 just this past month. No she does not live in a big house. It is merely old, and needs much repair. However she not only can’t afford to repair it, she can’t pay for heat. (It snows where she is).

I finally managed to convince her to let me help pay for her heating bill. We will cross that next month when it gets here - I don’t normally have over extra money to hand over. I sold some stuff that belonged to my family, and raised the money. None of her 3 sons would dream of helping her. Frankly I believe helping her out is more important than a bunch of antiques.

As for the crime rate - maybe in your area the rate is dropping - but I live in a small town, and we now have gangs, drive-by shootings, domestic violence has increased, as well as most other violent crime. Where as in 2000 we had only one homicide, 3 robberies, and only knew ( I use the word KNEW very carefully) of 8 cases of Domestic violence.

The statistics now show that just in the the year of 2004 we had 19 murders, 22 robberies,
(homes and businesses), 8 gang violence act ivies, and a whopping increase of 137 calls and arrests for domestic Violence. (heaven only knows how many weren’t called in) It may be getting better in the bigger cities, but it’s not all that great around here. Oh, and our unemployment rate has increased to from under 4 % in 1998, to 7.1 as of November, 2005. Check out S.C. If you don’t believe me.

All three of my girls in major debt now because of the loans they had to take out to get through school. They also worked a minimum of 40 (full time) hours to try to pay for their schooling. Financial Aid was also very helpful. Fortunately they had numerous scholarships that helped. They lived in the dorms while earning their 4 year degrees, did not have cars, and I frequently bought food for them to eat, so they could avoid the cafeterias, paid as much as I could for tution, books, etc. I was over $20, 000 dollars in debt, thanks to their father, and was determined to pay it off - other people have to eat as well, worked 3 jobs, (one went totally toward the unknown debts) while one was divided between me and them, for their health insurance, and the extras they needed.

How did you managed to get into college with no health insurance? In NC it is required for all students to have some form of health insurance, in case they are injured or something.. My third (part time) went to savings and later to investments so I would never be in that situation again. Oh, and by the way, their father never gave them a penny. I wish you luck in your career. Go for it girl! And hang on to that boyfriend - he sounds very nice and stable.

My point was to get the people on this blog to start thinking of others before making major pronouncements. I would guess that we are all relatively well academically educated, either through school or the school of hard knocks. We all seem to have a grasp of the world, as well as our own nation’s politics. And fortunately we can and do have a wonderful discussions exchanging information.

Few here however seems to really look at the situations of the next generation. I have bought up the young people in our world on frequent occasions. We still have too many drop-outs, pregnant teenagers, gang members, drug users, etc. These young people appear to be looking ahead at fast food, Wal-mart type futures, and that can not be good for our econmony. Many are desparate to better themselves, only to have parents laid off or be laid off themselves. Their parents might as well not exist - those who have least one parent because they are working to try to make ends met - not using credit cards because no one would give them one (thank heavens).

Many of these young people will become adults shortly, or maybe already have. They are the ones I worry about. I have pulled many things offf in my life, but I usually had someone to help. Maybe now is the time we start thinking ahead, insted of the past.

I apologize for the length of this post - I guess I had a lot to say.

Posted by: Linda H. at January 8, 2006 7:05 PM
Comment #111253

In terms of improving and stimulating the economy, would restoring the tax deduction on personal credit card interest help? I know everybody refinances and refinances their houses to “consolidate debt” and then can deduct the interest on the new loan, but would there be a real downside to giving that tax deduction back? The government might lose in revenue, but they seem to have creative ways to find more ways to sneak taxes out of us anyway. Not everybody can refinance their houses if their credit gets seriously damaged by credit card debt.

Posted by: Independence at January 8, 2006 7:19 PM
Comment #111262

We’re in deep debt.
But don’t worry.
Get some of those rose coloered sun glasses,
and everything will be OK.

Posted by: d.a.n at January 8, 2006 9:37 PM
Comment #111263

The young people in America are getting screwed royally.
They’d better get off their asses and start voting.
78 million voters don’t vote.
Young Americans don’t have a clue.
They don’t realize 127 years of debt is being piled upon their shoulders.
They’d better start paying attention.

Posted by: d.a.n at January 8, 2006 9:44 PM
Comment #111323


I’ve now seen the silliest of all exchanges from you—-you successfully argued that your own point had no merit in the discussion whatsoever.

You asked:

Well! Surely the stock market will prove just how great Bush is doing. How did this leading indicator do last year, with all those great economic numbers?

I answered with by providing an Associated Press Headline: “Energetic jump sends Dow, S&P 500, Nasdaq to highest levels since 9/11”

To which you responded:

Nice use of a selective statistic about stock market performance.

Well done Phx8—you just defeated yourself in your debate. Congratulations!!

Posted by: joebagodonuts at January 9, 2006 8:50 AM
Comment #111331

David wrote: Created 2 million jobs? Yep. And took in two million illegal immigrants to fill them.

I agree that we need to do something about the illegal immigrants, but then find 2 million Americans that will build homes for the wages the home builders pay. No wait, let’s pay the really higher wages to American laborers so I can pay $600,000 for that house instead of $300,000. How about those illegals digging ditches, mowing lawns? Let’s take a vote! How many Americans want to dig ditches or mow lawns everyday to make a living at minimum wage? Hummm. none is it?

The fact is, these illegals are taking jobs that most Americans won’t take or are too fat and lazy to do….

I see people on the street corners with signs begging for money saying they’ll work for money or food. Well I’m sure the local McDonalds is hiring. You need to start somewhere.

Americans need to get off of their fat asses and go to work. There are all kinds of jobs out there, you just have to be willing to do them until something better comes along.

We need to stop shelling out money to those living on welfare forever. The one good thing Clinton signed was the welfare reform act, which limited people to the time they could stay on welfare. I’m sure they have found ways to get around it by now.

I work very hard to earn my six-figure salary and I think I am worth every penny. And I pay one hell of a large tax bill every year too. I grew up poor, but once I started working, I never looked back and never forgot where I came from.

Wow….I need my morning caffene..

Posted by: Jim at January 9, 2006 10:16 AM
Comment #111384


can you explain the debt situation in a simple way to me? How is America selling itself to foreign countries, and or getting into debt to them? And explain our debt from this war, and the 127 yrs. to get out of it. I think alot of us need to be better informed. I know you wrote about some of this in a post, but I didn’t understand it.


Mowing lawns is a minimum wage job if you make it one. I have seen college students make 30,000 in a summer mowing season. Full time can make over 60,000. It’s hard work, and alot of evening working. I mow lawns, cut down or trim trees, handyman and remodeling. I probably should figure out how much I make on each seperate thing I do. I haven’t, but I sometimes make more per hour mowing than on the other stuff. It depends on the job.I usually give the elderly and low income families a break. That might be the humanitarian in me, but I feel good about it.
Good tools are very expensive. A commercial mower is 1,300 for a regular style mower. It will last years. Being uneducated, I can make a liveng doing this stuff. I also love to do it.
And yes, More people should get off of their cans and find a job. A strong cheap mower is only 200.00 . Like the garbage truck man, our jobs are as important as anyones. And we appreciate the people that have the money to pay us to work.
I am verry concerned about immigration. Sometimes I lose a job to illegals. Their isn’t a 300,000 difference in the price of a house that was built with these people, but you have a point. A builder can save $ by employing them, or employing a subcontractor that employs them. Usually in concrete, roofing, drywall, and clean-up. Their is alot more skill involved in these occupations than they get credit for. That doesn’t mean all of these workers can do a good job. But then, some say the president isn’t doing a good job.
A plumber makes alot of money and they dig ditches an a regular basis. Alot of Americans make a living doing these jobs, and yes the illegals are doing them also. A person like me can go into your house and translate your ideas into reality, and start doing your neighbors yard too. Maybe this will help you understand my side of it.

Posted by: rick at January 9, 2006 12:45 PM
Comment #111430

Rick, I totally agree with what you’re saying. Maybe my examples weren’t the best, but I think I got the point across. Americans in general have gotten used to govt hand-outs, thank to the Dems, so they’re too lazy to find a job.

We need to stem the tide of illegals in this country. Even more, we need to stop the number of H-1 Visas. I see it all the time being in the IT industry. AMERICAN companies are hiring these cheap workers instead of hiring American citizens.

We need to get Congress off of their padded asses and devise legislation to curb the hiring of H-1 Visa people…..

Posted by: Jim at January 9, 2006 2:44 PM
Comment #111438

Both sides of the arguement I have read are incorrect as far as I can tell. Both filled with misleading and/or just plain wrong facts. First, Bush is probably bankrupting the US(at least moving us into a much worse financial position). Since Bush took office he has increased the US debt from about $5tril to $8tril, this will continue to grow as many of Bushes tax cuts and pork will last for the forseable future. To determine the affect of this $3tril increase in debt one needs to look at the increase in GDP, which i believe to under a 4% growth rate during his tenure and the economy is expected to slow from current rates to about 3% (or a little more). You need only look at the present value of $3tril and you can determine that this is substantially more than the growth in the economy is bringing in. Additionally the $3tril carries substantial interest risk, vs. no risk of no additional debt.

Anyone looking objectively(let me know when you find someone) at the financials will tell you Bush’s economic policy is a hand out to the rich with little concern to the “financials” or the the long term effects. The one arguement to this is if all of the “hand outs” were to be reinvested in faster growing investments, then we may be able to grow out of the debt trap Bush has created.

As to net worths increasing. This is true, primarily due to a housing bubble, this will also have a corresponding cost in property taxes, heating, interest payments etc… We will also see overall equity inflation(inflation is bad remember) and normal inflation due to $3tril trying to find a new home, so no one really gained relative to one another(well except for the richest Americans).

Concerning some of the responses. There has not been an inversion of the yield curve. All studies of the yield curve use the 3mo tbill not the 2yr note. The 2yr note just inverted, not the 3mo tbill. Any stories about this are BS from the press, not anything to do with economic study.

Long story short, I have heard rights who know nothing and lefts that know nothing, and none of you appear very objective to the reality of the numbers. What will happen in the future; the richest one percent will continue to concentrate wealth at one of the highest rates of increase in US history and the poor will get poorer. Bushes policies do not stimulate the economy at a rate anywhere near their costs. Anyone who tries to raise the taxes will commit political suicide. Sucks to be poor in Bushes America (or middle class).


Posted by: Capntrps at January 9, 2006 2:58 PM
Comment #111851

There is no improvement in the economy. This is another Bush falsehood. Net worth is up solely because of the real estate bubble, which is already bursting. The stock market, invested in by many Americans, liberal and conservative alike, was essentially flat in 2005. How much did we make on average? Zero, zip, nada, nothing. Who got a decent pay raise? Not me. A 33 cents an hour raise is an insult. Real wages have gone down. Energy costs have skyrocketed, thanks to collusion between big oil and the Bush-Cheney criminal cabal. How many more Americans have fallen into poverty under Bush 2nd? Four million a year, every year. Yeah, ain’t the GOP and conservatism great?

Posted by: Limo Liberal at January 10, 2006 11:18 AM
Comment #111879

127 years is how long it would take to pay off the $8.1 trillion National Debt if you started paying back enough each day to keep the national debt from growing larger every day.
That would require that we pay more than the $1 billion in interest that we have to pay each day.
That would also require that we stop borrowing $1 billion per day to pay that interest.
Thus, it will cost approximately $2 billion per day (in a sense).
Thus, if the federal government ever had the discipline to do this (which is doubtful), stopped borrowing, and started paying $1.01 billion per day on the $8.1 trillion national debt, it would take 127 years to pay it all off, and the total interest paid would be $38 trillion (in 2005 U.S. dollars). But, that’s only possible if nothing bad happens along the way. It could be that the problem is now too large to ever be resolved. If so, some terrible economic times await us in the not too distant future. Many respected economists, with sophisticated computer models, vast amounts of data, and history, are now starting to draw the same conclusion: we’ve got a serious debt problem.

It is immoral to be heaping so much massive debt onto future generations. Also, it’s highly unlikely they will ever be able to absorb that much debt. Especially, with 77 million baby boomers that will soon begin to earn less, pay less tax, spend less, and want to draw Social Security and Medicare entitlements that have already been plundered (and still are being plundered, and are underfunded). And, there’s also a pension problem in this country, in which the PGBC and pensions are $1.6 trillion in the hole. Like the S&L scandal/bailout, tax payers will get stuck with that debt too. And, China, yesterday announced that they are going to start reducing their exposure to our irrresponsible debt situation. It’s a Catch-22. It probably spells more trouble for the falling U.S. dollar.

But, it’s not just the $8.1 trillion national debt that poses a serious problem.

It is the potential culmination of many pressing problems simultaneously.

In fact, a energy shortage, alone, could be the catalyst for an economic disaster.

But, don’t worry about it.
Do like many do.
Get yourself some of those nice rose-colored glasses and repeat after me:
[] Everything is hunkey-dorey.
[] There is nothing to worry about.
[] The $8.1 Trillion National Debt is nothing to worry about.
[] Government is self-correcting.
[] We are invincible.
[] Bush is doing a grand job. He will protect us.
[] Ignore those chicken-little dooms-dayers.
[] Don’t believe the warnings.
[] Don’t worry ! Be happy !
[] La la la lalalala la la !

Posted by: d.a.n at January 10, 2006 12:09 PM
Comment #111925


To determine the affect of this $3tril increase in debt one needs to look at the increase in

GDP, which i believe to under a 4% growth rate during his tenure and the economy is expected to slow from current rates to about 3% (or a little more). You need only look at the present value of $3tril and you can determine that this is substantially more than the growth in the economy is bringing in. Additionally the $3tril carries substantial interest risk, vs. no risk of no additional debt.

There are two points I would like to make concerning your arguments.

1. You need to use the nominal growth rate of the economy which adds inflation. The nominal rate growth rate of the economy is about 6%.

2. Interest rates as a percentage of GDP are less now than they were during Clinton’s term because interest rates are lower. Fedeal interest expense as a percentage of GDP has not been this low in 30 years. The debt is easier for the taxpayer right now than it is has been in decades.

3. There is little risk to the economy currently. Risk is always added into interest rates. US Treasury yields are low right now. There is no way you can have 30 year US treasury yields under 5% and have an investor worried about risk, inflationary or otherwise.

4. As long as the deficit is lowered so that the debt grows at less than the nominal rate of the economy, we will never ever get into trouble. Presidents in time of recession and war have always borrowed funds and increased the deficit. This does no harm as long as when the emergency is over we reduce the deficit. It is neither necessary nor desirable to have budget surpluses.


Posted by: Craig Holmes at January 10, 2006 3:20 PM
Comment #111988

A good article that addresses many of the concerns we are discussing.

It compares statistics and concludes that things really are as bad as they were in the 1990s.

Posted by: Jack at January 10, 2006 5:31 PM
Comment #112018

Did you hear China is going to start reducing their exposure to the U.S. dollar?

I don’t blame them for being nervous.

You guys are killin’ me.
The national debt is nothing to worry about?
And who is talking about surpluses?
How can you have a surplus with $8.1 trillion in Debt?
How is $1 billion a day in interest alone a good thing?

Also, I still believe some of you fail to factor in everything.

I hope you are right about your rosy predictions, but that’s not what all the economists are saying, and they’ve got a lot more experience with sophisticated models and data than most of us.

Even if those of us that are saying the debt is a problem are wrong, you can not argue that the massive debt, coupled with shortfalls in Social Security, 77 million baby boomers earning less, spending less, paying less taxes, and wanting to draw from troubled Social Security and Medicare is nothing to worry about. As much as I’d like to believe it’s nothing to worry about, I’m not buying it.

Also, why does it seem only a few over here in the red column are saying there’s nothing to worry about and the debt is not too high?

Posted by: d.a.n at January 10, 2006 7:35 PM
Comment #112033


Nice article. That is consistent with many that I am reading. I want to go out on a limb and predict one of the next attacks from the left. About 9 months ago, the left was arguing that the economy was terrible because inflation was on the way, and the fed was going to raise interest rates and we were entering into a time of stagflation. Of course this didn’t happen.

Also the dollar was in freefall with the Euro, and it was the decline of the Roman Empire or somethink like that. The truth is that whenever the fed lowers rates the dollar falls, and when the fed raises rates the dollar rises. So no the fed has raised rates and the dollar has risen so “The sky is falling because the dollar has fallen” arguments are gone.

Guess what? Now that the fed has telegraphed that they will stop raising rates the dollar has fallen a bit. As we move into this time of LOWERING Fed rates, the dollar will go back down this year. So, I am hearby predicting that the next “sky if falling” agrument will be the declining dollar.


It doesn’t matter if China diversifies. Watch the treasury yields and the stock market. Both the Bond market (flat yield curve) and the stock market (up) are predicting a lowering of interest rates and resumption of robust growth after a time of slower growth.


No recession in 2006. Slower growth yes, recession one. Even George Soros is predicting that if the fed CONTINUES to raise rates we could have a recession in 2007. I think George is right on that. But I don’t think the Fed will do that.

Our pattern in the US is for longer period of time in recovery. We are getting better at managing the economy. Recoveries are lasting nearly a decade. This trend should continue. Presidents in the future in general should be takig credit for longer and longer expansions records whether they are republican or democrat.


Now that hasn’t happened. Inflation is fine, and the fed just said that interest rates have peaked.

Posted by: Craig Holmes at January 10, 2006 8:36 PM
Comment #112034


It’s nice to have someone here who understands economics.


Posted by: Craig Holmes at January 10, 2006 8:38 PM
Comment #112054

You and Jack are the master of rose colored glasses spin.
Is there not even a smidgen of caution in either one of you?
Most people (and rightfully so) are raising valid concerns, and Craig and Jack just keep on saying (no matter what) that everything is OK. But, then we don’t have your superior knowledge of economics. We do not understand anything about economics. We can not pat each other on the back and congratulate each other with our superior knowledge of economics.

Craig, you thought enough of Harry Dent to read his book, but you totally discount his concerns about 2009 to 2020. Sure, I don’t see the DOW reachning 40,000 either, but the irrational exuberance of 1997 to 1999 was unexpected too. I know other economists that are rightfully concerned about the growing debt, and the growing government too (beyond nightmare proporations). It’s simply the ratio of debt to revenues. We’re paying about 25% of every dollar to interest alone. That’s not good. That’s terrible. That’s because the debt is too large. That is a negative drain on the economy. And it is at a time when many massive entitlement systems will be under more strain.

Is there anything, in either of your opinions, that needs some attention? What does your crystal ball say? Does it just show the same thing all the time. Rosy times ahead, no matter what?

Has it ever occured to you that in the vast breadth of opinions and analysis, that your rosy outlooks are on the far extreme?

Has is ever occured to you that reality probably lies somewhere between your predictions and those on the other extreme?

Also, regarding the National Debt, you both constantly say it isn’t that large compared to GDP. Well, I don’t agree. The National Debt is about 70% of GDP. That’s substantial.

But, please humor me for a moment.
How are we going to reduce the $8.1 trillion National Debt when we currently borrow $1 billion per day to just pay the $1 billion per day in interest?

And, do you think it is OK to heap that debt onto future generations? Because, there is no way that amount of debt is going to disappear any time soon. Like I demonstrated above, it would take 127 years to pay off the debt. Instead, the debt has been growing exponentially since 1980, and drastically since 2000.

I just don’t understand how you (Jack and Craig) can maintain your position that everything is OK. You constantly point to currently low interest rates, low inflation, and low unemployment, but you fail to recognize that all of that was largely due to massive borrowing from foreign nations. What do you think will happen to the U.S. dollar when we are no longer able to meet our massive $1 billion per day (or more) in interest? Seriously, you don’t see that as a disaster in the making? If not, you are the supreme optimists. Nothing wrong with optimism, until it borders on fantasy.

At any rate, we will all find out in the next 5 to 10 years. Everything is not OK. Unless there are some major fiscal changes in policy, and we continue down this path of fiscal irresponsibility, there will be painful consequences. And to say otherwise is irresponsible. Caution is needed now. Massive National debt, massive personal debt, and looming shortfalls in massive entitlements is reason to worry. Especially when coupled with potential energy shortages, $1.6 trillion in pension shortfalls, an aging population, and increasing competition abroad. To ignore all of that actually hurts your argument. If you came clean and said, “well, there is some concern about 77 million baby boomers…”, etc., you might have some credibility. But, to continuously post things in the red column that ignore real issues that have the potential to unravel the economy detroys your credibility.

Posted by: d.a.n at January 10, 2006 10:01 PM
Comment #112057


I am not in the prediction business.

My reading of history indicates that nobody has consistently predicted the economy - ever. People claim they have been able to do so, but they are lying or fooling themselves. The question is, if they are so smart, why aren’t they rich. So those who don’t have several million dollars in money they made from stratch in stocks and bonds should reconsider detailed predictions.

I am just looking at the present. The economy has been very good since 2003. That is not prediction, it is just history. The economy may crash and burn someday, but not today.

My complaint is that many people can’t seem to recognize what is happening today. You can predict all you want. If you predict long enough you may be right.

Posted by: Jack at January 10, 2006 10:24 PM
Comment #112072


Harry Dent’s views are simply too simplistic because of globalization. If you water down his views he has a point, which is that demographics will effect the market. Where Harry Dent fails and Jeremy Siegal “Stocks for the long Run” and his latest book, counter Dent very well. Siegel is a much more accomplished economist. Siegel looks at demographics on a world wide scale. Siegel takes Dent and expands on his work as is far more believable. Especially if you read “the world is flat”. The three books combined give a pretty good picture of the future.

Basically, the markets should be stable going forward because the emerging middle classes in China/India. There is not a world “age wave.” There is only an American Eurpean and Japanese age wave. (Well I probably missed a few areas). The future belongs to the young, and the young are in other parts of the world.

As baby boomers age, we will use technology to get the thinngs we want. Just as Dent is wrong about the dow at 40,000, I think he is wrong about the great depression he predicts after. Water both down, and you will see America more like European growth rates as we age, and China/India more like our growth rates as they “age” into middle age.

The dire predictions of baby boomer retirement are are not going to happen. They assume that the baby boomers will retire in the same pattern as their parents. Name anything else the baby boomers have done like their parents? The big news you will hear over time is baby boomers delaying retirement. Also, you will hear of baby boomers taking second or third careers or part time jobs. we have watched our parents retire and said “nah, it’s not all that great”. Our parents were the masters of the industrial age, with it’s defined benefit union plans. Baby boomers are the masters of the information age with it’s 401(k).

Unemployment rates will be low in our retirement unless we allow large immigration, just as unemployment rates were high when we were young. (because there were so many of us entering the workforce in the 70’s).

Another thing Dent does not account for is learning. As a country we have learned so much about economics. The whole Feeral reserve function was not there hardly at all in the 30’s. Dent’s thesis works in generalities, but go line on line and it falls apart.

Dent is going to look like the Y2K people do now in a few years. The “age wave” will not be a tsunamia or a tidal wave. It might be a nice ride though!! IT will be more than a ripple.

I do not have big rose colored glasses on. What I believe is that the American enonomy will continue on it’s course. We will have recessions, and recoveries. Growth rates may slow with an aging population for a while. I think we are going to muck through as we have which is very good. Mucking through as we have is good enough!!


Posted by: Craig Holmes at January 10, 2006 11:58 PM
Comment #112074


One more thing. This isn’t because there is a republican in the whitehouse. When I look at the economy over the long haul, I can’t see how one party is superior.

I do think it is better to keep the federal budget reasonable. I would certainly be opposed to fundamentally expanding it as a percentage of GDP.

I think the tax cuts Bush passed were correct because of the times they were made. I am undecided on whether they should be extended.


Posted by: Craig Holmes at January 11, 2006 12:01 AM
Comment #112143

Thank you.
That’s much better.
I agree the economy appears better since 2003, but it’s largely an illusion due to massive debt.
Yes, federal spending should be reduced, and not tied to GDP.
And, I also agree with tax cuts. The government gets too much as it is, and the more they have, the more they spend and borrow. The only problem with the tax cuts is that it did not benefit the low to middle income classes as much as it should have. But, that’s difficult until tax reform is implemented to make it more fair.

Posted by: d.a.n at January 11, 2006 8:06 AM
Comment #112324
I do not have big rose colored glasses on. What I believe is that the American enonomy will continue on it’s course. We will have recessions, and recoveries. Growth rates may slow with an aging population for a while. I think we are going to muck through as we have which is very good. Mucking through as we have is good enough!!

The fact that you (such an optimist) are saying we will muck through somehow is revealing enough to to me.

When government is fiscally and morally irresponsible, anything is possible.

Especially if you factor in the following.

Posted by: d.a.n at January 11, 2006 8:23 PM
Comment #113084


The fact that you (such an optimist) are saying we will muck through somehow is revealing enough to to me.

I am a realist who looks like an optimist because you are a pessimist!!


Posted by: Craig Holmes at January 13, 2006 11:35 PM
Comment #113253

Nope, I’m a realist who looks like a pessimist because you have rose colored glasses, and I don’t.

: )

Posted by: d.a.n at January 14, 2006 7:35 PM
Comment #119944

To put the last 5 year in perspective here’s a historical view to job creation over the last 50 years.

Percent of job growth over the 5 years ending:

1955 _ 10.56%
1960 _ 03.74%
1965 _ 15.96%
1970 _ 13.59%
1975 _ 10.21%
1980 _ 16.56%
1985 – 08.41%
1990 – 10.68%
1995 – 08.33%
2000 – 12.08%
2005 – 01.50%

For those who think that the President effects job growth here is the change during their term:

11.41% - Truman
05.51% - Eisenhower
01.54% - Eisenhower
10.56% - Kennedy/Johnson
16.53% - Johnson
08.70% - Nixon
06.88% - Nixon/Ford
13.04% - Carter
05.66% - Reagan
11.22% - Reagan
02.38% - Bush 41
10.59% - Clinton
09.49% - Clinton
-0.03% - Bush 43

Posted by: Arm Hayseed at February 3, 2006 4:12 AM
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