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PostPosted: Mon May 25, 2015 8:51 am    Post subject: 1111 Reply with quote

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Maybe, their goal all along was to shrink government, while lowering taxes and, perhaps, planting seeds for future prosperity, 10 or 20 years down the road.

After all, they’re politicians. And, do we believe everything they say?

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I think, productivity in U.S. manufacturing has been somewhat overstated.

U.S. manufacturers use to do everything “in-house.” Then, they began outsourcing their work to other firms, boosting the service sector of the U.S. economy.

Also, the U.S. offshored low-end manufacturing, with declining prices, to other countries, and shifted into more high-end manufacturing with market power.

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When people purchase American goods, they’re also purchasing high standards and regulations.

China sells its goods too cheaply, or much cheaper, because of low standards and regulations.

The Law of Comparative Advantage isn’t aligned properly between the U.S. and China.

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Matt says “GDP fell because imports went up is the most stupid statement…”

What about GDP rose because exports went up?

Maybe, you believe the summation of every country’s GDP doesn’t equal world GDP.

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"Capital Controls"

The money supply should be controlled, one way or another.

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The Kansas economy isn’t as diversified as the U.S. economy. The mix of industries is different.

Would Reaganomics have worked better than Obamanomics in the U.S. over the past six years?

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Much of the Colorado boom, in the ’90s, particularly around the Denver Tech Center (Colorado’s Silicon Valley), where tech buildings, upper-middle class houses, impressive malls, etc. were built, was from higher-skilled workers moving from other states, e.g. California and Texas, and other countries, e.g. India. Colorado’s gain was those other places losses.

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The cumulative loss of the output gap, since 2008, seems to be over $6 trillion, so far. The federal government lost about $1.5 trillion in tax revenue.

And, spent a lot on the unemployed.

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The output gap could’ve been closed quickly.

The consumption boom accelerated in the 2001-07 expansion, since the country reached full employment with up to $800 billion a year trade deficits. Americans stocked-up in assets and goods, which reduced discretionary income.

The weak recovery is the result of small and slow tax cuts (with many state tax hikes, or revenue raising laws, that offset much of the federal tax cuts), too much regulation (on top of excessive regulation), and too many disincentives to work (for both lower and middle class Americans).

I agree with Krugman, the stimulus was too small, to jolt the economy into a self-sustaining cycle of consumption-employment. However, the U.S. itself created headwinds, while also attempting to move the economy forward.

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The mix of growth is important. The goal should be to raise living standards.

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Chinese purchasing power may be overstated, because environmental regulations, labor standards, food & drug regulations, etc. are much less reflected in Chinese produced goods than American produced goods. Moreover, not much of a safety net is implied in the price of Chinese goods, which also results in a higher Chinese savings rate. Consequently, Chinese exports, to the U.S., are too cheap and American exports, to China, are too expensive.

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I think, one reason why poverty remains high is many people choose government benefits, without the need to work, over a low-paying job, or even a decent paying job, although the total value of the government benefits may be less than a low-paying job.

That can create a dependent class with less experience in the workplace, than otherwise, and a poor work ethic, to compete with other workers.


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