Bank of Canada Governor says US economy will never recover.
 

The respected Governor of The Bank of Canada, Mark Carney, just went on TV today and said he thought that the US economy will never fully recover.

"It's going to take a number of years before they get back to the U.S. that we used to know — in fact, they are not, in our opinion, ultimately going to get back to the U.S. that we used to know," he said.

Article is here:

http://www.canadianbusiness.com/arti...-fully-recover

Sad news.

He's prolly right.

It's good to hear from you again Sandy.

Chas

Welcome back old friend!

Meh. I think we'll be alright, eventually.

Dave

We may if we can eliminate all lobbyists and set political contributions to no more than $100 from any individual or PAC. Finally wrest the government back from the financial sector. Oh yeah, and while we are at it do away with quarterly reporting, that is what turned Wall Street into a casino in the first place.

Mark Carney will be right just as long as the powers that be ignore what is going on. More worried about keeping the money for their re-election campaigns coming in. Letting the lobbyists write the bills regulating their masters, I afraid it will be more of the same.

Learned a new term for the government we have now yesterday, Crony Capitalism. Hear it used before but not explained so well as on Bill Moyers new show.
http://billmoyers.com/episode/crony-capitalism/





Barney

Welcome Sandy! :)

Concur.

"Never," is a LONG time: which is an idea helping me personally right now, too. :cool:

I think anyone other than the crazies on the far right know this. I am not sure why this is news.??:rolleyes:

Oh yeah, this is news to the nuts on the far right.

What is that they say, they are the chosen people, the extraordinary people, the exceptional people? Something like that. :p

Common ground is so easy to find

+1 Merry......and well said.

It could be fixed in 6 months if the people in charge wanted it to.

Ok, Dave. You are in charge. How would you fix it in 6 months?

Yep, and that's the key---If they wanted to.

However, now more than ever, I suspect there is more money in simply running.
You don't even have to intend to win anymore. Just collect the spoils of being a candidate for a few months, then drop out. You've made millions. Sickening.

Dave

Step one would be to ride ourselves of the current government. You would need a revolution and the emergence of a benevolent dictator to lay the groundwork.

Do I have dictator like control?

I'd do this:

Job bank providing unlimited 8-9.00/hr jobs for anyone who wants to work.

Indefinite FICA moratorium

Totally revamped health care system providing anyone over 18 with 5k per year to spend on medical expenses. The unused balance is given to people to use how they wish. Anything above 5k is handled by Medicare/Medicaid. Kids under 18 are covered by Medicare/Medicaid.

Take the burden of healthcare of of businesses.

Id run a large ad campaign to educate the public on our monetary system.

Make states play on a level playing field to encourage companies to establish roots in the community to curtail our countries race to the bottom.

More to come...

Without raising taxes, how would you fund the above?

Isn't that what the U.S. Mint is for?:p

LMAO!

Hey, do we get to kill the dictator if we don't like him? :p

Pete

You could try, but he'd be a puppet, installed by China. They'd just keep replacing him.

Interesting plan, Dave.

Dave

First, taxes and borrowing don't fund government spending.

Government spending injects money into the economy. Taxes remove money from the economy. When unemployment is at 8% plus, it's a sure sign there is not enough money in the economy to stimulate demand. With a fiat currency system in a sovereign nation with monopolistic power over the issuing of currency, the act of simply issuing more currency doesn't by default cause inflation. Inflation will eventually occur when unemployment reduces to a level that is reaching full employment and the you either reduce spending or increase taxes to slow the economy down. The government could inject 500B into the economy tomorrow without effecting the value of the money you have in your wallet. If we were on a fixed currency system, that wouldn't be the case, however.

If you ever have too much time on your hands, go to an IRS office and pay your taxes in cash. They will promptly shred the money that you give them, it doesn't go into some account called revenue at the Federal level. It's just removed. When you pay taxes with your checking account, they just adjust the balance in the account down. It doesn't get moved anywhere.

As far as how do you pay for it? The job bank pays for itself quickly, all of those people who can't participate in the job market now suddenly have jobs and can buy things. In the job bank I propose, you'd never have the opportunity for getting a raise, the idea is to employ people because people who are working are more employable than those who are unemployed. You are a mechanic, you get a job as a mechanic and immediately become more attractive to the private sector. A similar plan used in Argentina provided 2M jobs within months in a population of 27M. Within 18 months, over one million of those jobs transitioned to the private sector. It was far less costly than unemployment and provides a couple of serious advantages. People who are working and making things are contributing to output as well as earning their wages. They are also potentially acquiring skills.

The health care reform I propose get rids of billions of dollars in waste, encourages real competition at medical practices, takes away the burden of health care from businesses, and takes medical decisions out of for profit corporations and puts those decisions in the hands of you and I and encourages and rewards people for being healthy. The concern here is that some people don't have the knowledge to make informed decisions, so there will be doctors taking advantage of those people. There is the secondary concern of people who would bypass important treatment for the extra thousand dollars at the end of the year.

That's just the start, but from a government spending perspective, I would predict it to be a wash at worst.

Would you like a personal assistant to take care of your household? Do you want your lawn mowed? Maybe you have a project at home that needs to be completed, kitchen remodel? The message is that there is infinite capacity to add jobs to the economy. As soon as those people have jobs and make money, they will add to aggregate demand and stimulate private sector growth, when the private sector grows, they'll hire people to satisfy the demand generated.
No need to worry until we approach full employment and when we do, not only are most of the issues taken care of by attaining full employment, but our primary concern will be shifted on how to slow the economy down. You reinstate FICA, and preferably, make the percentge float like an interest rate to control the economy.

That's the rub, isn't it? It would be a country wide re-education process and I'd start with Congress.

I am and with any luck, I always will be. Our government should be about serving public purpose and letting the race to the bottom continue doesn't help the country.

Most of my ideas are blatantly stolen from Warren Mosler with some very slight tweaking.

Kind of. Operationally speaking, government spending is "printing money", taxation is removing or "unprinting money".

Don't kill the dictator, he is a wise and compassionate god king with a giant head. Killing him could cause a gigantic earthquake that could destroy the world. And with the god king reference, I think I need to watch 300 again. :)

BTW, here is something to always keep in mind. The federal government doesn’t ever “have” or “not have” any dollars.

And another for good measure that I may have said in a recent thread. "If there is a dollar in your pocket, it exists because government spent it."

My comment about Michigan was tongue in cheek. Former Ohioan myself. Ended up in VA after a four year stint in the Navy. (Have relatives here. + I like being near the ocean.)

Anyways, I am in agreement with your "race to the bottom" statement. Don't see how allowing our heavy industry go down the toilet and replacing it with high unemployment and low wage service jobs is supposed to be anything but bad.

Unless you're an employer, of course...................

But, not even then, if you think it all of the way through. (Someone has to be able to buy the goods and services. Wouldn't you think?:rolleyes:)

Dave

Dave, no worries, I took it as a tongue in cheek comment.

It's quite a dichotomy that is created in our system. I think it's feasible that at a macroeconomic level, we could get some level of agreement among parties. The trouble is that business is run at a micro-economic level and the rules are different down there. What's good for the individual can absolutely be bad for the whole and it's my opinion that the purpose of government is to serve public purpose, not individual purpose. Corporations and individuals, as a general rule, will only (and always) only look out for their own good and government's role in the economy is to set up an infrastructure that supports microeconomic successes while benefiting the population as a whole.

I kinda see it in this loosely defined fashion;

At the macroeconomic level the system could be viewed as a closed loop.
Those at the top in business and government do the wheeling and dealing that creates
employment (Or not.). Those in the middle run the businesses. Those of us at the bottom do the actual work that creates the revenue that goes back to the top. Repeat process. (However, being the largest segment of society, us bottom feeders also make up a huge percentage of the consumer base.)

Disproportionate favor granted to any sector, or "class" if you will, can and usually does lead to problems elsewhere.

The wildcard, IMO, is the small business owner. He is often the owner, manager and to some greater or lesser degree the workforce as well. A totally different game.

As another uncle of mine, who was a self employed HVAC and refridgeration guy, was a good example. The most lucrative jobs in his neck of the woods (Northern Minnesota) in the 1960s were the unionized steel plants and railroads. At that time the unions would only allow union contractors to bid on work at those facilities. So, my uncle went down to the Teamsters Hall and joined. "I'm pretty sure there won't be any trouble. Not planning to go on strike against myself anytime soon." He made a pretty good living, BTW.

Dave

I'd say it's even simpler. That money *never* goes back to the top. It's simply removed from the economy.

LOL! Excellent.

Pete

At $8 I think most folks would wisely choose to search for a better job.

You couldn't afford to buy bird seed for a cuckoo clock at 8 bucks an hour even here in Bugtussell, I can only imagine how worthless it would by in NY.

Chas

If you figure in Food stamps and Medicaid that they would surely qualify for at this pay-scale is not the Government subsidizing the employer?




Barney

;)

Dave

Point well taken.

I'd be better off if my wife and myself went on relief, claimed SSDI, and worked part time. I've got a construction business which has survived for 20 years and she's a registered nurse.

Whenever it reaches the point that folks such as ourselves would be better of on relief, who should we blame? Ourselves???

We can't have the whole nation sitting on it's ass waiting for the end of the month. Some motherfucker has to grow the beans.

Forget the Austrian School, Keyenesiam, or any of those other economic theories...if you ain't got no beans to eat, you're gonna starve to death.

Some motherfucker has to go to work.

And we're paying people NOT to work.

Chas

The number has to be low enough not to pull jobs away from the private sector while high enough to get people interested. It's been phenomenally successful in Argentina and India and there is no doubt there is a number that would make it successful, here.

The whole idea here is that with the job bank, you are making people more employable in the private sector, giving them some income, and best of all, they are contributing to making something or performing a service not just collecting a check for not working.

Kind of sounds like the old Soviet Union, where people pretend to work and the government pretends to pay them.

I do agree with you on healthcare. If the government were to ACTUALLY reform it and create single payer, thus relieving the burden from private business, this would do more to create jobs than anything.

But that's not gonna happen because the only people who can change it have it made in the shade, and I'll guarantee you that those bastards aren't about to vote against THEIR best interests.

Chas

The only thing that really creates jobs is enough demand in the market. If there is no demand to fill, businesses will not hire.