How do we fix the economy?

Ok it's no secret that the last 2 years we have been in a recession and now are showing a little glimpse of recovery. However, I have heard many people say that We(americans) are the true cause of the recession due to our spending habits that gets us in debt and basically buying things that we basically can't afford.
Now I will not ;oint any fingers at any particular party because that's neither here nor there, but my question is how do we fix the problem?
Ok, if we tell Americans to cut back and save more of your money then wouldn't that just make the recession last even longer? I mean basically the way you get out of a recession or stimulate the economy is by consumer spending correct? So if Americans were to all at once start saving their money(which all of should be doing) and stop spending money on cars, clothes, food(dining) wouldn't that hurt the economy because those business that depend on consumer spending would be hurt? I mean the way I look at it you don't get out of a recession by saving money we must spend it!!! i just always assumed the more money we spend the better the economy? Can someone elaborate on this issue pelase.

WE, you are asking for a simple answer to a very complex question. There are many different options, none of which may be correct, to answer your question. Like they say, stick 10 economists in a room and you get 10 different answers to how to fix the economy.

wow! Where to start...
What most Americans want is a job right now. Jobs are created by the spending of money and the confidence that the employer will make a profit. Confidence is the easier of the two; the people in power need to make a promise (yeah, I know a political promise is worth nothing) or some demonstration that they truly understand and cut taxes or at the very least guarantee a freezing of taxes for the forseeable future (6 years?). This will remove some of the uncertainty for business owners.
The first part is kind of a chicken and egg scenario. People need jobs to spend money and people need to spend money to create jobs. Every dollar that government spends has to be taken from the economy first so we need to stop the deficit spending. Besides much of it has been wasted and only works so long as government spends money. Now I would support government spending if the money was given to the private sector to create jobs in a more organic way. A major building project or building projects in all the states. The money could be allocated to the states with the highest unemployment for work that is necessary. The is the notion that when times are tough, home owners invest in making their house nicer. So the government could pay for the demolition of vacant houses/buildings, shipyards could be building more ships for our navy, a fence for our southern border, etc. It is late and I'm not giving this much thought right now but I was thinking about this earlier today.

Now I would support government spending if the money was given to the private sector to create jobs in a more organic way. A major building project or building projects in all the states. The money could be allocated to the states with the highest unemployment for work that is necessary. Originally Posted by john_galt

How does this fit in with the conservative idea of a free market? This reeks of "government envolvement" and "redistribution of wealth".

Before you get too upset. I mostly agree with you. I'm just not sure that you agree with yourself.

First, I would extend the Bush tax cuts enacted in 2001 and 2003. If these are allowed to sunset on Jan. 1, 2011, there will be across-the-board tax increases on everyone's income tax, as well as other tax increases and removal of deductions related to Obamacare:

http://www.atr.org/sixmonths.html?content=5171

Second, I would have the Fed. Government put a freeze on all entitlement increases for a period of two years - this is not making cuts in spending, just holding the entitlement spending to current rates (except for COLA adjustments in Soc. Sec.).

Third, I would reduce taxes on businesses and delay the implementation of Obamacare taxes until the plan is to take place in 2014 (unless Obamacare is repealed, which is my hope in 2011 or 2013). This would allow businesses to plan for the future without a punitive expense which will cause reductions in workforce.

Fourth, let the private sector flourish. Remove as many restrictions, regulations or other controls on private sector businesses. Dial back government hiring and incentive spending - this does nothing but add to the national debt. And, no offense JG, but do not have the government give money to the private sector - it makes more sense to cut the taxes on business and let the private sector do its own incentive spending.

In all, government is the problem. Elect council members, county supervisors, state and federal representatives and Senators, regardless of party affiliation, determined to reign in spending of any kind while returning more of taxpayers money back to the taxpayer. Remove elected officials that extend any tax that is supposed to sunset and that allow cuts to sunset or refuse to make permanent (for example, a 1 percent sales tax in Clay County is supposed to expire in 2011, but a law enforcement division is requesting this sales tax to be extended for financing a new jail - this is typical of sales and property taxes that are supposed to sunset, they never seem to go away). This is going to sound cliche, but there are more Democrats who want to spend and increase taxes than Republicans, but there are those in the GOP who agree with the spending, primarily representing northeastern US states. Everyone of these spenders needs to be thrown out.

Fourth, let the private sector flourish. Remove as many restrictions, regulations or other controls on private sector businesses. Originally Posted by fritz3552

I don't speak Pelicanese, but I think he's saying, "Go F*** yourself." LOL
Seriously though, that argument doesn't work anymore. Not after the stock market collapse and the BP oil volcano fiasco. The notion of lax regulation and minimal restrictions just ain't gonna fly.

The answer is simple, acheiving the answer is the problem.

JOBS, JOBS, JOBS, JOBS

Just read an article which states that this economy has resulted in the permanent elimination of 7.9 million jobs. The government is predicting that the unemployment rate will not reach the 4% rate it was before the recession AGAIN, they are predicting at least a 7% rate until 2013. They go on to say that many of the jobs lost were lost in industries that are not likely to recover so these jobs will never be replaced.

If people are not working, they are not spending, its just that simple. How we address the jobs issue is the complicated part, one the government still is not fully engaged in addressing.

It was my understanding that the bulk of shovel ready jobs which the stimulas bill was to produce was to come in 2010. We are half way through 2010, where are the jobs, how come we have only spent 30% of the stimulas money, are we waiting until we are in the Presidential election cycle before these jobs begin appearing. I guess its more important to win an election than to do what it takes to benefit the country. I guess when you dont have to worry about taking care of your familys and money you can concentrate on winning, our government is broken, both parties suck, the tea party idea has been bastardized by big business (Forbes and his group support and help fund the tea party), winning an election has become more important for Howard Dean and Steele than directing a party that wants whats best for America. I personally think they should all be shot for their treasonist acts. Our elections have come down to picking which turd does not stink as much, we base entire political ideologies on 3 or 4 special interest concerns, Abortion, Gun Control, Enviorment, Gay rights. "hey I know he's a crook and stupid, but he supports Abortion so I am voting for him" or "hey he has not morals and is all about what benefits him, but he is loved by the NRA so I am voting for him". As Americans we should be ashamed of ourselves for sitting by and watching the destruction of good government by big business and special interest groups. As a government we should be ashamed of how easily we can sell out our principles for money or power.

This rant is not directed at an individual party, rather both parties are equally guilty of contributing to the moral, financial and social dismemberment of this country. They should remember the old saying, when you point your finger, you have 3 pointing back at you.

I would call for a revolution but the truth is the people of this country are fat, lazy and nothing like those who founded it, they could not fight for an idea, they would never be willing to sacrafice for the greater good. I dont think I could gather more than 10 people who would fight for the ideal of a great America, some would fight for the perceived personal benefit they would get back, some would refuse because they dont feel they have been treated right, most would refuse because they might miss their favorite TV show.

As the owner of a business, what is keeping me from hiring and or adding equipment for expansion is the unknown. what new "tax" "fee" "program" are these washington people going to hit me with next. Take Health care if the limit to must play in the goverment program is 50 then i will make sure i never grow over 49. That type of punitive program hurts business and gives us no reason to grow. To me the problems with washington will never get fixed until you stopr the (my appologoes because he just passed) Robert Byrd's of our government. Our founding fathers never meant for the congress to be your lifes work. They expected you to serve your term or 2 and then return to your family. Until we set a limit on how long these people can serve we will never be able to get real control again. Because as soon as they get elected its all about giving money to their districts to make sure they get elected. They stop thinking about the country as a whole and just spend all their time getting reelected. Term Limits are the best way to fix the economy. The other thing would be to elect business people instead of lawyers. As the old saying says whats a 1000 lawyers at the bottom of the ocean --- a good start.

1963Cobra and dirtyDog I wish you guys would go into politcs because you guys are right on target and I agree with both of you. However, if I am not mistaken the last major recession was during George Bush the elder and I believe the unempolyment was modest- so I don't think jobs is the key factor. True, peple must have jobs to spend money, but the people who have jobs now are not spending according to the reports I read at the level that they once was and I don't know if that's a good or bad thing.
Now there are a lot of jobs that will never comeback mainly the ones that were outsourced overseas- I actually have heard some economist say that outsourcing of jobs overseas is a good thing here's the scenario they gave:
*** An average DVD player can be purchased in the United States easily for $75 bucks or less. The DVD palyer for 75 bucks was more than likely made overseas. However, if that same DVD player was made in the United States which would have meant a "job" for an american worker we would perhaps be paying $150 for the same DVD player. So is America or a politician ready to stand firm that we must keep jobs at home and not ship them overseas and at the same time pay twice the value then it would have cost to have it made overseas? It's obvious that a company is going to spend less making an item overseas-in many cases jobs overseas may pay a worker $1 a day whereas a company would have to pay an American worker so much more- so the cost would have to be passed on to the consumer.
Now if a company is making products overseas with cheap labor I expect the product to be very affordable when it hits the Unites States- remember Nike got flamed for making sneakers in sweat shops overseas paying workers crumbs and then selling the sneaker for nearly $200 bucks in the States- talk about a Gross Margin profit now that's dead wrong!

There is only one way to fix things now, and it is so simple Congress will never go for it. Besides, it takes a lot of power from them, and they would rather see the country go down the tubes than actually fix things. The answer is: The Fair Tax www.fairtax.org

Consumer confidence has to be high for a economy to thrive. Like you say there are people who have money and arnt spending it. The primary reason is consumer confidence is very low, people are unsure of whats happening next week or next month so they are hording money. There are many factors to what can cause a recession and each recession is different. However, consumer spending is necessary for an economy to grow, this cash flow must be maintained from the top to the bottom. If it stops the economy will slow. The final straw that forced this economy to faulter was the gas prices that jumped up to $3.50 a gallon, which tightened the purses and then the housing concern, caused some purses to burst open. People have to spend, so that the companies that they spend at can spend to pay for expansion and product which causes them to spend on contractors, manufactoring, trucking and banking services.

Outsourcing is not the only reason for lost jobs, first you have about 7.9 million job lost to industries that have been forced to change because of the recession, auto workers are an example, these changes are permanent, this according to a report on AP today. You also have a substantial number of jobs being lost to technology. Everyone loves technology but its costing us jobs. Here is an example, Redbox, everyone loves to get their movies for a $1.00 at the local McDonalds, blockbuster is near death and when it finally convulses off to its demise, it will leave over 14000 people looking for work. Now they can go to the store down the street because there are none. These are jobs lost, not replaced. Now there are those who argue that the new technology replaces those jobs with new ones. Mcdonalds which owns the majority share of Redbox and Coinstar eomployee around 500 people to build the machines and an additional 1000 to maintain them. Lets see 14000 - 1500 = a net loss of 12500 jobs.

"An average DVD player can be purchased in the United States easily for $75 bucks or less. The DVD palyer for 75 bucks was more than likely made overseas. However, if that same DVD player was made in the United States which would have meant a "job" for an american worker we would perhaps be paying $150 for the same DVD player"

We did for many years, the real reason for outsourcing is not to lower the price of equipment we buy, its for companies to build products cheap enough for other countries to buy products from American companies. We will always operate in a trade deficit, because our prices for labor force the cost of goods to be so high most other countries cannot afford to buy them if they are made in the states.

Nike can charge $200.00 a shoes because it pays millions of dollars for professional athletes to endorse the product in the American market. The chinese wont pay that much because bong chan the local soccar star does not get millions in endorsements.

"Now if a company is making products overseas with cheap labor I expect the product to be very affordable when it hits the Unites States"

This is not always the case, because products not manufactured in America which have competition with a product manufactured in America will be tagged with a tarriff effectivly raising the cost of the product once it arrives here. The Japanese are building cars in the US simply because its cheaper than making the car in Japan and then paying the tariff on them when they get here.

Okay, I see I have to explain again and I figured out the problem (to a point). It is about perceptions. Being a conservative is not being against ALL government spending as some here believe. It is about spending for necessary, constitutionally mandated, and efficient items. I spoke of supporting government spending earlier and some people jumped on this like pigs on feces without any understanding.
Here it is simplified; The navy could use some new ships. In fact we could add one battle group and that would create jobs in Virginia (carrier), Mississippi (destroyers), Alabama and New Hampshire (cruisers), South Carolina, Florida, and Texas (support ships). Plus the parts for these ships are built across the entire nation to used in the shipyards. That is good, necessary, constitutionally mandated government spending.
This country also needs a real border fence along the Mexican border and means a fence, monitoring, maintenance, watch towers, and a continous border road with stations. That is good, necessary, constitutionally mandated government spending.
If Gitmo is so onerous (which I don't agree with) then the government could spend the money for large facility to be built in an isolated area like New Mexico, Arizona, Nevada (they are hurting for jobs), Montana (Ted Turner might have to give up some buffalo land), or Alaska. Maybe Canada would be interested. Not a makeshift facility but a long term, completely independent facility well away from any collateral damage or possible hostages. That is (in my opinion) good, necessary government spending. Get the picture yet? There are things that can be built by the private sector that the country needs (which is a federal responsibility).
What conservatives don't want are bridges and airports to nowhere. Brand new highways 25 miles away from a perfectly good highway going the same direction.
Conservatives are against fraud, waste, and abuse in general. Are you for those things?

LM - hate to burst your bubble, but the collapse of the economy began with the sub-prime mortgage programs sponsored by My Boy Lollipop and Chris Dudd; and BP was regulated - in fact given an award for this particular rig by the Bamster's administration. But I digress....

I believe the phrase used is: "the government that governs least, governs best". By extension, you could say that by governing least, it spends less. JG's assertion on constitutionally mandated programs, such as defense and border security would be the best way to keep traditionally high unemployment states in the deep south and eastern seaboard areas flourishing. Putting money into existing infrastructure is also a good idea; however, ideas like building a new terminal at KCI, where the three that currently exist are perfectly usable, or putting another loop near LaCygne and into Harrisonville (which I believe are the airport to nowhere and new highway referred to above) is unneccessary and could be put to better use elsewhere.

And does anyone else find it odd that the Congress felt it necessary to add funds in Obamacare for waste and abuse fraud? Isn't that already a part of Medicare and included in its annual funding?

If you would read the fair tax book, you would see how many of these troubles are eliminated. There would be more jobs created in the US than we could handle, and the government would have a chance at actually reducing our national debt.

What conservatives don't want are bridges and airports to nowhere.


Conservatives are against fraud, waste, and abuse in general. Are you for those things? Originally Posted by john_galt

Your latest posts doesn't match up with your first post. You pulled back from having money "given to the private sector" to what amounts to a list of big government spending programs.

For some strange reason you included the above sentence about bridges to nowhere. Are you saying that Sarah Palin isn't a conservative? Or maybe that she was before she wasn't? Her history with the infamous bridge to nowhere (and her outright lies about it) are well documented. It boggles the mind why you'd bring that up and mention Alaska. Maybe you're thinking about other conservatives like Republican Senator from Alaska Frank Murkowski. Yeah, no waste fraud or abuse there...