These are perhaps the two biggest problems with the American economy right now. Were the American people not in debt and/or living with unemployment, I think the wealth disparity could be stomached a lot more easily. As for the Occupy Wall St. protests, the problem is that they eventually have to focus this incredible energy and dissatisfaction towards specific goals. I suggest they focus on these two goals, easing debt and creating jobs.

 

My suggestion for easing debt is simple and straightforward: forgive our debt. The US government, under both Bush and Obama, have used taxpayer money to bail out Wall St. This was a huge redistribution of wealth UPWARDS. I think Wall st. has benefitted enough, and now it is the people's turn to see the fruits of our "investment". You want to help homeowners? Forgive their debt. You want to help the unemployed? Forgive their debt. You want to help minorities, or the poor, or the sick? Forgive their debt. I am fully behind a re-redistribution of wealth which will benefit the 99% and would lead to more job creation and a stronger overall economy just by itself.

 

The other issue, employment, still needs to be addressed however. We are unable to compete globally in manufacturing when those jobs can be done for 40 cents an hour in China and elsewhere. Without manufacturing jobs, we are left only with a service industry which by itself creates less full-time jobs, pensions, health insurance... the whole gambit. We need to invest in our country and in its people, and this requires government spending, which is politically virtually impossible when we have been dug into such a hole of debt. There are jobs out there for scientists, but we can't all get them, and for many of us it is too late to learn, and we are still not investing enough in science for those of us for whom it is not too late, i.e. our children.

 

So my two questions are (and feel free to comment on anything you read here), do you agree or disagree with the idea of debt forgiveness, and what ideas do you have for solving the unemployment problem? Or do you just think we are royally screwed as a country and there are no feasible solutions?

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There's a lot of good eatin' on a license fee.

The Chinese and Indian governments don't buy patents or produce goods.  Those functions are done by multinational companies that produce and sell worldwide.  Production is done in the most cost effective place, near the biggest markets.  The USA is neither.

Yes, I am aware of that. Selling to India or China was a figure of speech.

 

Production is done in the most "cost-effective" place, which usually is places where the employees are paid $0.20 per day without benefits. The US employee can't compete with Chinese and Indian labor, nor should we. We should not be racing toward the lowest common denominator because multinational corporations want to go from $15 earnings per share to $20 earnings per share. Sadly, this is the goal of many pro-business politicians.

> We should not be racing toward the lowest common denominator

Right, but what _do_ we do about it?

I think we should all start small businesses, and operate as much as possible at the local level, off the global economic grid. But when I have a hole in my sock, it's off to WalMart.

So you are happy with just letting the ultra-rich of the world (American bankers) sit on unprecedented fortunes made at the expense of the American people and watch as America drops to the level of, say, a Russia? And we shouldn't do anything about it as a people, by say coming together in a democratic government and make the people who are speeding up our decline play any role in keeping our population healthy and educated? And we can't use our government to help people start businesses or create American jobs?

 

And how is America not the biggest market, bar none? 

> how is America not the biggest market, bar none?

The Indian middle class is as big as our whole country.

> So you are happy

I'm not at all happy with the Masters of the Universe and their excesses.  But even if we the people confiscated the entire fortunes of the top 10 people, we would still be in the hole.  And if we had that power, we would implode.

My "strategy" against unemployment assumes that we have to save ourselves.  It does not imply that I approve of that necessity.

You may find this article interesting in regard to innovation in the US and theft from other developing countries.

 

http://www.cnn.com/2011/11/03/us/china-russia-industrial-espionage/...

I had thought about that problem. Supposing everyone's debt were erased, does this mean that the system which people are working within will change to avoid the same set of circumstances from repeating itself? I think the answer is clearly no. But let me answer your other questions first.

 

No tax money would be used to erase anyone's debt. I don't see how that would be the case anyway. Erasing debt does not cost anyone anything, excepting the banks of course from their sources of income. Yes there are student loans and such which are owed to the government, but that tax money is already spent, and would be returned to the people who most need it (those in debt) and not returned to those who need it the least (the rich). This is admittedly simplistic, but if there are "special cases" (as I'm sure there are), they can be dealt with as such. So yes, creditors would take an involuntary haircut. Why would the economy restart on a smaller capital base? That money hasn't left the economy, it has simply left the banks. And no, banks would not be allowed to hedge their losses by taking it out of private accounts.

Banks could be rebuilt, and they would know that they have to play by the rules of fairness and would in any case be prevented from practices which undermine the society as a whole. I have no problem with banks collapsing. They got us in this mess, they should be the ones to take the fall, not the American people. The value of the future payment of the loan? It would be replaced by the value of not having a loan to repay. Is there no value in that?

 

Yes, forgiving all debts would cause credit to seize up. Perhaps the government should be getting into the business of banking, lending to its citizens according to the merits of each loan. This would put the American people in charge of lending to fellow Americans, instead of leaving this job up to wealthy private individuals who would then use that money not to create jobs or value for other Americans but to pamper themselves in luxuries we can no longer afford as either a nation or a species.

> Is there no value in that?

Not to the banks' shareholders.

> Perhaps the government should be getting into the business of banking

FNMA, FHLMC.  Been there.

> what ideas do you have for solving the unemployment problem?

> Or do you just think we are royally screwed

Yes.  Sorry.  High pay regular jobs are gone for good.  Get used to it.

I think those of us with jobs need to keep working as hard and as smart as we can, and be as frugal as possible.  Those without jobs, especially long term unemployed, need to go into business for themselves, because nobody is going to hire them.  IMO, the biggest problem with our education system is that we train kids to expect to _get_ jobs, rather than expect to _make_ jobs.

America needs to go back to being a "nation of shopkeepers," and let WalMart sell its junk to somebody else.  Of course we all get a lower standard of living for our troubles.  I don't see any way around it.

"Forgive debt" sounds clean and simple.  It's neither.  I'm a retired teacher with some small investments.  By cancelling somebody's debt to a company in which I hold stock, I'm having my investment stolen.  Also, we've lived frugally and would gain nothing by this proposal; a friend who lived high and borrowed wildly would gain hugely.  Rewarding bad behavior rarely improves it.  To me this is a bad idea both in theory and in practice.  Work with individual famillies who need help; don't throw (my) money at all borrowers.
I don't understand how people won't just admit that the top couple hundred people stole billions from the American people. They are criminals who only got away because we handicapped the SEC and IRS. Regulation should have prevented this. Every moron that was in favor of deregulation deserves a swift kick in the ass.

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