we'll continue to stagnate.

If that does happen....what next?

Welcome to the new normal.

That's not an answer. It only raises more questions.

1: WHY?
2: Acceptable?
3: Neccessary?
4: Who says so?
5: In reply to no 4 - WHY?

Business cycle. Extreme excess as we had for at least a decade before the collapse results in "snap back" behavior to a sustainable rate of growth. Welcome to the new normal. (It really was the normal all along, you just didn't realize it.) If you force excess growth you will just build another bubble to burst and a bigger one with even more pain.

You might be able to change the normal rate of growth, but to do that you have to change priorities of the economy. Drop unproductive things like health care that increases longevity and drains pension plans, and spend the money on pure R&D to find new things people want to consume, or even better solutions looking for problems to solve. A Euro commitment to establishing a Mars colony might be a very good place to start if you wish to change the baseline normal.

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There you go -- eliminate duty of care while reducing health care access to the poor and elderly, but, just to show you care, offer free burial services <smile>.

Drop unproductive things like health care that increases longevity and drains pension plans, and spend the money on pure R&D to find new things people want to consume, or even better solutions looking for problems to solve.

Drop unproductive things like health care that increases longevity and drains pension plans, and spend the money on pure R&D to find new things people want to consume, or even better solutions looking for problems to solve. A Euro commitment to establishing a Mars colony might be a very good place to start if you wish to change the baseline normal.

There you go -- eliminate duty of care while reducing health care access to the poor and elderly, but, just to show you care, offer free burial services <smile>.

Yes. Hey I've got a trillion to spend on health care. Do I spend it like Pharma wants on making you live ten more years in a nursing home, or do I spend it so you live one more productive year? On average of course. Valid question.

Spending it directly on health care and it goes to the problems of old age so you hang around longer and drain off more to enrich Pharma. Spend it on pure R&D like a Mars colony and you get who knows what but if all you get is a system to prevent car crashes so more young have more productive years ...

It is necessary to step back outside the box and see the entire picture.

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A nice little read:
http://www.bbc.co.uk/news/world-18456131

It is surprisingly easy to win the support of young voters for policies that would ultimately make matters even worse for them, like maintaining defined benefit pensions for public employees.

If young Americans knew what was good for them, they would all be in the Tea Party.

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Gary, as you well know most people who purchase homes incur debt far greater than their annual income. An important difference is that this debt substitutes a day to day living expense, rent, for a mortgage. At best over the long term home ownership has not been an investment but merely a forced savings plan. As for national debts if the debt is used to finance day to day operations, 2 unpaid for wars as an example, it is a bottomless pit. If it were used to finance some capital spending it is probably ok.

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Gary, I don't disagree with you all that much. There was an article this month in the Psychiatric Times (my wife's a psychiatrist - when not teaching in Religious Studies). Doctors Die Differently: Why -- and How. Talks about why Advance Directives very much need to be more wide spread in use and compliance.

Of course there are judgment calls to be made regarding quality of life.

That being said, there is a lot of medical care that actually extends useful, productive and decent quality of life.

The thing with those public employee pensions -- 20 years or more ago, when those pensions were pushed, one important rational for them was that compensation was quite a bit lower than the private sector. With the shift of compensation in the private sector from the middle level employees to the top, those employees in the middle ranks of the private sector no longer get much higher compensation than those with similar skill sets and responsibilities in the public sector. So the argument for rich defined benefit pensions is significantly reduced.

The question though is one of transition -- those who entered public sector jobs 20 or more years ago, did so even though compensation was less in part because of the job security and the pension programs.

I'd guess that one way to deal with this (which many states and municipalities are exploring) is to phase out these programs over time. Of course unions, where they exist are fighting this tooth and nail (just like rich corporation fight tooth and nail for every government largess they can obtain), but it seems that we can expect these pension programs to fade, particularly for those with less service time or new hires.

betreger, excellent point regarding the unpaid for wars. In 2001 Bush had an opportunity given the public mood, to push for sacrifice spread over the populatio and not simply on the military and reserve units. Instead, his advice was 'go out and shop'.

I suspect that many of the 'kill the debt' crew have managed to do the Spock thing and 'forget' this fact.

Gary, as you well know most people who purchase homes incur debt far greater than their annual income. An important difference is that this debt substitutes a day to day living expense, rent, for a mortgage. At best over the long term home ownership has not been an investment but merely a forced savings plan. As for national debts if the debt is used to finance day to day operations, 2 unpaid for wars as an example, it is a bottomless pit. If it were used to finance some capital spending it is probably ok.

If it was actual war, it might not be bad. Actual war, think WWII, requires a R&D commitment that a police action does not. The USA should not be the world police force. The rest of the world needs to grow a spine and clean up their own mess.

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If it were used to finance some capital spending it is probably ok.

If it was actual war, it might not be bad. Actual war, think WWII, requires a R&D commitment that a police action does not. The USA should not be the world police force. The rest of the world needs to grow a spine and clean up their own mess.
[/quote]

Spot on!

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Maybe it shouldn't but it is, and maybe others should but they don't.

After 9/11 the American public demanded action. The USA declared war upon international terrorism which effectively made it the worlds policeman, with the power to oversee it. The USA believes that rest of the world isn't capable of cleaning up their own mess, so therefore for the benefit of everyone else they will do it for them.

To carry out that role requires being a Superpower, of which at present only Russia and the USA qualify. However China in time is likely to become the third. Russia isn't interested in much outside of itself, but China my be. For the moment if the USA doesn't do what it does, no-one else will.

Absolutely correct. But the problem is that those who created the mess & can't see a way out of it, get snotty at America for "interfering" & attempt to blame them for the mess - One of the reasons why America does not trust Europe, & who can blame them!

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Oh my giddy aunt - this can't be true can it?

Cameron warns of breakup or stagnation

"Cap'n, I can't take much more of this - reduce speed to warp 1 or else"

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Correct. Now if he only stops being known as a "one-liner" PM, maybe we will get somewhere.

This week's G20 & the European mini-summit in Brussels next week will be the deciding factor on whether a move forward is made or we decline we even further...

... if the wrong decisions are made we will definitely be seeing this......

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This is gonna hurt.......

From 2014, pensions to be slashed 20% thanks EU

Savers lose £18 Billion

Proves that the £140 billion is not working

An Economist's View

"But the fundamental problem remains one of serious flaws in the design of the monetary union which have still not been fully addressed and the lack of any ability to convince the markets that growth will resume at some stage, somehow".

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Correct. Now if he only stops being known as a "one-liner" PM, maybe we will get somewhere.

Rather Cameron than Brown or, god forbid, Milliband. Be thankful for small mercies.

I'd rather have larger mercies, thank you very much!

Batten down the hatches

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Wonder what the Guardian has to hide? Or maybe, they found the news so depressing they forgot to update the website?

Merkel says no to new Greek bailout

Really? Sorry Guardianista, that's plain wrong as clicking that headline of yours takes one to an earlier report of Cameron speaking on his way to the G20 summit.....

...try & get it right next time, the country's depending on it!

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Wait, that's austerity, it must be good, right?

This is gonna hurt.......

From 2014, pensions to be slashed 20% thanks EU

Savers lose £18 Billion

Proves that the £140 billion is not working

An Economist's View

"But the fundamental problem remains one of serious flaws in the design of the monetary union which have still not been fully addressed and the lack of any ability to convince the markets that growth will resume at some stage, somehow".

Finally...

Action this day

"Anybody expecting the G20 to pull another rabbit out of the hat now simply hasn't been paying attention. Leaderless and at odds over what needs to be done, it has taken the G20 less than four years to become as redundant as the G8 it was supposed to replace".

Anybody with a modicum of sense would have already known that.

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But it didn't demand NOT paying for that action. That was a 'go shopping' mantra from the administration. Also, the action demanded fell on an all volunteer force. That removed some of the constraints of considered action from the population.

After 9/11 the American public demanded action. The USA declared war upon international terrorism which effectively made it the worlds policeman, with the power to oversee it. The USA believes that rest of the world isn't capable of cleaning up their own mess, so therefore for the benefit of everyone else they will do it for them.

Correct. Now if he only stops being known as a "one-liner" PM, maybe we will get somewhere.

Rather Cameron than Brown or, god forbid, Milliband. Be thankful for small mercies.

I'd rather have larger mercies, thank you very much!

Batten down the hatches

We ain't seen nothing yet, just wait until America goes back into recession
after this coming presidential election is over. At some time soon the USA will
have to turn the austerity screw down tight to stem it's booming debt. If they
stop spending then the whole world will know about it.

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The Kite Fliers

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Kite fliers: An imaginary club of solo members, those who don't yet
belong to a formal team so "fly their own kites" - as the saying goes.

Exactly & that will have a greater impact on China that many are not comtemplating at the moment!

IPad II's & IPhone 5's for $50 a throw anyone?

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