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nebraska29
I love business insider, cnbc, and Peter Schiff. I have to confess that I'm a bear at heart(though I'm a Steelers fan football wise) when it comes to economic projections. I know it's a bit risky to play arm-chair economist here, but I'm hoping that we can do this and then measure progress on predictions as time progresses. Provided below are some resources that I have found useful in thinking about what is going to happen.

My prediction-The U.S. economy will lapse back into recession. This will be spawned by higher taxes, the ACA provisions hitting in full effect, coupled with foreign policy turmoil in either Asia or the Middle East. I don't believe the dollar will tank, but I think it will take a hit and the economic "progress" that we have seen up to this point will be erased, or at least, cut in half.


Christmas retail sales worse since 2009

Economy ends the year on a high note.

A strong dollar, but brewing Asian currency war....or outright war.

Red Lobster struggling in trying times for working class

U.S. economy headed for recession-societe generale analyst says.

Defleation shock-coming in 2014?


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Questions for debate:

1.)Provide a forecast and reasons for what you believe the U.S. economy will do this year.

2.)Will the dollar remain the superior currency, or will it be "dumped" by China or somehow lose value in the world market?

3.)If the economy slips, to what factors could we attribute it too?

4.)In regards to foreign policy, what issue(s) do you believe could help to derail the economy?

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Gray Seal
I think calling the current economic situation weak growth is being generous. A vast majority are seeing slowing receding buying power. I suppose the gains by the very wealthy can be considered growth but for me the economy should be considered as a whole.

I expect the steady decline of the economy to continue with episodes of sharp drops during the next few years. But I will admit, I expected some of those drops to begin a few years ago. The timing of such events is hard to predict. The power of printing money and promising wealth in the future fools people for a longer period of time than I expected.

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1.)Provide a forecast and reasons for what you believe the U.S. economy will do this year.

The amount of debt worldwide debt continues its steady climb. Central banks rule the markets worldwide. Money creation is rampant. The size of government is growing worldwide. For all of these reasons, the worldwide economy is going to sputter until it collapses.

2.)Will the dollar remain the superior currency, or will it be "dumped" by China or somehow lose value in the world market?

The dumping of the dollar has already begun. It will not be the superior currency as Americans continue to support politicians promising to improve everyone's condition by borrowing and money creation.

3.)If the economy slips, to what factors could we attribute it too?

The Federal Reserve is problem number one. Deficit spending is problem number two. The size of the government is problem three.

4.)In regards to foreign policy, what issue(s) do you believe could help to derail the economy?

The continuation of the foreign policies of being the policeman of the world, interfering in other country's problems, and war for the sake of supporting the military industrial complex will continue to derail our economy. ( Of course these three are being successfully sold to Americans as making us safe. )
nebraska29
Is it too early to go on the window ledge? detective.gif


QUOTE
By the closing bell, the Dow Jones Industrial Average had declined by triple digits while the S&P 500 ended with its worst decline in weeks. For every advance more than two stocks slid on the New York Stock Exchange.

Some pros worry the price action is a sign that headwinds are starting to blow. Whether it's the threat of higher interest rates, a potential showdown over the debt ceiling or the uncertainty presented by a new Fed chair, bears say there's every cause for concern.

First day decline
Bikerdad
Questions for debate:

1.)Provide a forecast and reasons for what you believe the U.S. economy will do this year.
Continue to limp along, losing ground. Real unemployment will continue to be high, with only the frakkin' boom offering any good news. The damage done by Obamacare and the ever expanding regulatory state will continue gnawing away at the foundations of our economy.

2.)Will the dollar remain the superior currency, or will it be "dumped" by China or somehow lose value in the world market?
It will remain. The only other possible contenders for world reserve currency are countries that have bigger, more intractable problems than the US.

3.)If the economy slips, to what factors could we attribute it too?
Truth. The ability of the Pollyanna Posse to snow the public on the economic reality is waning.

4.)In regards to foreign policy, what issue(s) do you believe could help to derail the economy?
Middle East flare ups, of course. South China Sea flare ups.

Hobbes
1.)Provide a forecast and reasons for what you believe the U.S. economy will do this year.

I think moderate growth (around 2.6-2.8%). That seems to be about the average of the analysts. Housing prices picked up considerably last year, which was essential for any sustained growth---it's the biggest asset most people have, and they aren't going to spend a lot of money if it is decreasing in value. Car sales have been picking up too, another good sign. Back to about 16 million units per year, which is where it was before the recession. Inventories building up, so the manufacturing sector doing well---and it doesn't appear to be a false bubble (inventories also build up when demand slows).

2.)Will the dollar remain the superior currency, or will it be "dumped" by China or somehow lose value in the world market?

Definitely. What would replace it? U.S. economy doing better than Europe's, and the Chinese yen is years (decades?) from gaining that sort of prominence...by which time their economy will be struggling as well.

3.)If the economy slips, to what factors could we attribute it too?

I don't think it will, so not sure what factors to put. They would be foreign issues, though.

4.)In regards to foreign policy, what issue(s) do you believe could help to derail the economy?

Don't really see that happening in 2014, but the usual candidates would be turmoil in the ME, or continued escalation of issues with China. The spat over the Senkaku Islands isn't getting nearly the coverage it should, and such issues will continue as China tries to exert more control in the region. Anyone who doesn't think a major conflict with China could happen is being naive (not saying it will, but it certainly could). It's also the reason that any massive scaling down of our defense spending would be just begging for trouble---conflict with China would make the war with Iraq look like child's play, and the ONLY way to prevent it from escalating into a real war is by making sure China perceives no way to win it.

Gray Seal
Applications for mortgages is at its lowest level in 13 years. Rail traffic in the United States is down 17% from a year ago.
WinePusher
1.)Provide a forecast and reasons for what you believe the U.S. economy will do this year.

I follow Peter Schiff pretty closely too and there seems to be a few holes in his prediction. He is claiming that the economy will fall back into a recession AND at the same time he's predicting runaway inflation. He’s essentially claiming that there will be major stagflation in the upcoming years and other than the 1970s (which can be written off as an ‘economic glitch’) there have been no consistently occurring, real world examples of stagflation. Inflation represents a growing economy, unemployment represents a contracting economy so it is seemingly impossible to have both at the same time. The real question is what will happen once the Federal Reserve stops all this quantitative easing. It’s been 5+ years since the recession ended, yet the Fed is still actively purchasing billions and billions of dollars in treasuries. It’s only a matter of time before all this excess money causes consumer prices to go through the roof. If prices don’t hit the ceiling this year, they will next year.

2.)Will the dollar remain the superior currency, or will it be "dumped" by China or somehow lose value in the world market?

Depends on what the Fed does. But as others have said, I really don’t see any other currency qualifying to become the world reserve currency.

3.)If the economy slips, to what factors could we attribute it too?

We can definitely attribute it to Keynesian economics and bad monetary policy on the part of the Federal Reserve. If unemployment rates or inflation rates shoot up substantially it will be the fault of Ben Bernanke, Janet Yellen and the Democrats. There’s no way around that. It will also vindicate the ideas and claims being made by libertarian, free market and Austrian economists. Their ideas should have already been vindicated with the 2008 housing bubble and recession but the Democrats along with their clueless Hollywood tools managed to spin the story and pin it on deregulation.

4.)In regards to foreign policy, what issue(s) do you believe could help to derail the economy?

The collapse of the European Union seems to be imminent and when the Euro falls apart that will be very good for the dollar.
Ted
1.)Provide a forecast and reasons for what you believe the U.S. economy will do this year.

growth of just 2-2.9%. we are stuck with just plain bad fiscal polices. this is Democrats at work. the Keynesian idea that big government spending is the cure is now thoroughly discredited but will not be abandoned by Democrats...they got the TAX increase on the top 2% that was going to "go a long way to improving the economy" - sure LOL



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FATAL FLAWS OF KEYNESIAN ECONOMICS
"The stimulus has failed, and John Maynard Keynes is to blame.
http://spectator.org/articles/37242/fatal-...esian-economics
It's now clear that the federal government's massive stimulus spending has not achieved its objectives. Why hasn't it? It's important that we have answers to that question.
The stimulus was premised on the economic model known as Keynesianism: the intellectual legacy of the late English economist John Maynard Keynes. Keynesianism doesn't work, never has worked, and never will work. Without a clear understanding of why Keynesianism cannot work we will be forever doomed to pursuing the impossible.
There's no real mystery about why Keynesianism fails. There are numerous reasons why and they've been known for decades. Keynesians have an unrealistic and unsupportable view of how the economy works and how people make decisions."


the dollar will remain the currency of choice because the EU is in even worse shape than the US.
there is noting in foreign policy that will help this economy. our issues are all internal...
Gray Seal
WinePusher, in regards to the collapse of Europe's economy and the Euro being a good thing for the United States I beg to differ. The interconnections of the banks of the world and their reliance upon all the central banks makes for a house of cards. If the Euro goes so will all of the world's central bank controlled currencies. The central bank based economies will have no winners.

The Federal Reserve has pumped a lot of dollars into foreign banks. The lords of our country definitely see the collapse of the central bank of Europe as a threat. They do not send out trillions on a whim. Of course this money creation is not going to work in the long run and doing so will make the upcoming collapse more miserable. The greater the distortion the steeper and longer the correction.

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Ted, it is not as simple as being a Democratic Party problem. It is a Keynesian problem which predominates in both parties. There are a few in Washington DC who get it and they do tend to be Republican. However, the vast majority of Republicans do not get it. This can not be blamed as a Democratic Party problem as if electing Republicans automatically will fix it. The Republicans are going to have a fight as to whether they really want small government or not. Those who recognize there is a big problem has grown to a significant minority. This group is large enough to begin swinging Republican primaries toward smaller government if the significant minority realizes their power and uses it.

Just having a "R" next to your name does not mean squat. It is going to take more attention than that to select people to cast off this current government.
Ted
QUOTE(Gray Seal @ Jan 8 2014, 01:36 PM) *
WinePusher, in regards to the collapse of Europe's economy and the Euro being a good thing for the United States I beg to differ. The interconnections of the banks of the world and their reliance upon all the central banks makes for a house of cards. If the Euro goes so will all of the world's central bank controlled currencies. The central bank based economies will have no winners.

The Federal Reserve has pumped a lot of dollars into foreign banks. The lords of our country definitely see the collapse of the central bank of Europe as a threat. They do not send out trillions on a whim. Of course this money creation is not going to work in the long run and doing so will make the upcoming collapse more miserable. The greater the distortion the steeper and longer the correction.

-------

Ted, it is not as simple as being a Democratic Party problem. It is a Keynesian problem which predominates in both parties. There are a few in Washington DC who get it and they do tend to be Republican. However, the vast majority of Republicans do not get it. This can not be blamed as a Democratic Party problem as if electing Republicans automatically will fix it. The Republicans are going to have a fight as to whether they really want small government or not. Those who recognize there is a big problem has grown to a significant minority. This group is large enough to begin swinging Republican primaries toward smaller government if the significant minority realizes their power and uses it.

Just having a "R" next to your name does not mean squat. It is going to take more attention than that to select people to cast off this current government.

Well lets make it more simple then. And yes I agree its not just a Democrat problem but they certainly are in the majority of those in Congress who buy into the Keynesian ideas.

The right way to get us out of this mess was used first by JFK and then by Reagan. So do I have to tell you what most Democrats think of the policies of Reagan? NO Democrat I know is going to intro a Bill to lower tax rates - yet this is EXACTLY what was proposed by Romney - and oddly enough by the Presidents own bipartisan Bowles-Simpson Committee - 3 years ago - and ignored....

Its not just smaller government its economic/tax policies.
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Gray Seal
Attacking the big problem by dropping taxes but ignoring spending is a prime example of Keynesian baloney.

Yes, 99% of those from the Democratic Party support Keynesian economics. 95% of those from the Republican Party support Keynesian economics. 95% of the Republicans are right there with 99% of the Democratic Party. The numbers from each party who support Keynesian economics are so close it does not seem accurate to say the majority of Keynesian economic supporters are from the Democratic Party.

Solving the problem of government being too big is to make it smaller. Government still needs to be the best it can be. Good government is a combination of being restricted in size and having the best people operating with what revenues they have. Smaller government is a third of the trifecta to improving the economy. Cutting revenue (lowering taxes) means nothing towards making government smaller if spending is disconnected from revenue. There is no progress with such a plan.

As you agree that Republicans share in the problem, which Republicans do you think understand the folly of Keynesian and favor Austrian economics? There seem to be so few the best plan might be to vote out all the incumbents from either party.
Ted
QUOTE(Gray Seal @ Jan 8 2014, 05:52 PM) *
Attacking the big problem by dropping taxes but ignoring spending is a prime example of Keynesian baloney.

Yes, 99% of those from the Democratic Party support Keynesian economics. 95% of those from the Republican Party support Keynesian economics. 95% of the Republicans are right there with 99% of the Democratic Party. The numbers from each party who support Keynesian economics are so close it does not seem accurate to say the majority of Keynesian economic supporters are from the Democratic Party.

Solving the problem of government being too big is to make it smaller. Government still needs to be the best it can be. Good government is a combination of being restricted in size and having the best people operating with what revenues they have. Smaller government is a third of the trifecta to improving the economy. Cutting revenue (lowering taxes) means nothing towards making government smaller if spending is disconnected from revenue. There is no progress with such a plan.

As you agree that Republicans share in the problem, which Republicans do you think understand the folly of Keynesian and favor Austrian economics? There seem to be so few the best plan might be to vote out all the incumbents from either party.

well lowering taxes is a proven way to increase demand. yes we need to reduce spending but our problem is demand and just having our government pour $$ out of the windows in DC has not worked for 5 years running and will not work.

what Reagan did is lower tax rates and close tax loopholes. he tried to cut spending but the Congress he had to work with promised and never delivered. the point is his policies - which were NOT Keynesian, worked.....

I have no illusions that anyone in this Administration is ever going to do any of this. If there was any interest they would not have blown off Bowles-Simpson....nothing being discussed now comes close to our problems and government is just getting bigger not smaller.

QUOTE
"Republicans have clearly led the charge away from Keynesianism, vociferously decrying the increase in budget deficits since the Great Recession began and demanding a dollar of spending cuts for every dollar increase in the statutory debt ceiling. Democrats have (generally) been more ambivalent—calling for (and passing) some fiscal support while often rhetorically privileging deficit reduction over other policy goals. Given this partisan pattern, it’s somewhat unexpected to hear some commentators speculate that a Mitt Romney administration could be more likely to provide Keynesian fiscal support to the U.S. economy in the near-term than a second administration by President Obama.

We can see the contrarian appeal of this story; Romney is indeed calling for very large increases in budget deficits in the near term (if one realistically assesses his budget plans), and since the most effective brands of Keynesian fiscal support requires it be deficit-financed, the Romney plan could qualify. In a new paper, Who would promote job growth in the near term? Macroeconomic impacts of the Obama and Romney budget proposals, Andrew Fieldhouse and I decide to take the candidate’s plans seriously to see if there’s much evidence that the Romney plan provides a bigger Keynesian boost to the economy in the short run. The quick answer is that it doesn’t.

Basically, increasing the budget deficit is only one plank of effective fiscal support; the other is spending borrowed funds on measures that provide a large boost to economic activity for each dollar increase in the deficit (i.e., spend on measures with a large “bang for buck”). Because so much of the increase in deficits in the Romney plan is driven by individual income and corporate tax rate cuts for affluent households, and because this is extremely inefficient fiscal stimulus, there is very little Keynesian boost. Worse, this ineffective increase in fiscal support on the tax side is counteracted by very damaging cuts on the spending side (his proposal to cap government spending at 20 percent of GDP is highly contractionary under any reasonable phase-in assumptions). Because spending cuts do indeed provide a large bang-for-buck, the Romney plan, even though it increases deficits in the near-term, actually sees net job losses over some of this period (calendar years 2013 and 2014).

- See more at: http://www.epi.org/blog/candidates-plans-k...h.WSaCyEkg.dpuf


Gray Seal
Ted, the quote box you have provided is so wrong it reads like a Saturday Night Live parody. It sort of says that Keynesian economics is something which should be slowly stopped and Republicans will do it slowly by continuing Keynesian philosophy but we are not going to call it Keynesian so it is OK.

President Reagan spoke a good game but his actual practices did not. Government grew considerably under his watch. Cutting spending with increased spending does not work. Until this is understood then saying you are anti Keynesian and believing this is so because you said it is goobly gook.

Anytime you speak that a benefit of a government policy is to stimulate demand you are dead center Keynesian. Creating bubbles is not making the economy better no matter what short term effect is seen.
Ted
QUOTE(Gray Seal @ Jan 9 2014, 09:15 AM) *
Ted, the quote box you have provided is so wrong it reads like a Saturday Night Live parody. It sort of says that Keynesian economics is something which should be slowly stopped and Republicans will do it slowly by continuing Keynesian philosophy but we are not going to call it Keynesian so it is OK.

President Reagan spoke a good game but his actual practices did not. Government grew considerably under his watch. Cutting spending with increased spending does not work. Until this is understood then saying you are anti Keynesian and believing this is so because you said it is goobly gook.

Anytime you speak that a benefit of a government policy is to stimulate demand you are dead center Keynesian. Creating bubbles is not making the economy better no matter what short term effect is seen.

I dont think that government programs to stimulate demand work - FIVE YEARS of this stupidity prove it. the point is there are other ways to do this and JFK and Reagan did it (and it worked) buy lowering tax RATES to stimulate demand.

Revenue increases can be accomplished by closing loopholes and/or reforming entitlement programs - none of which i see happening soon. Increased demand increases revenue to the Treasury by definition. Here is a list of tax increases so far from the Administration...

http://jeffduncan.house.gov/full-list-obamacare-tax-hikes

sooo to sat Republicans and Dems are the same here is just plain wrong. Dems hold to the "tax more spend more" methods that have failed. and yes both parties fail to show any enthusiasm for entitlement reform....big surprise.
AuthorMusician
It all depends on the Super Bowl.

If the NFC wins, better economy.

If the AFC wins, worse economy.

Of course, this does depend on your viewpoint from your particular position within the economy. For the 1%, it's been a good economy anyway and will probably continue to scrape money from the bottom, concentrate it, and sequester it at the top.

For the rest of us, not so great. For most, probably tolerable, but those ranks seem to be shrinking. There is some question on whether we measure unemployment in ways that actually reflect reality, so I hedge. Employment itself is changing with more freelancers and the Millennium Generation 20-somethings exploring alternatives to the typical employment relationship.
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