Savage Beatings Posted July 2, 2009 Share Posted July 2, 2009 Anecdotal: My wife and I just had a long talk about how we will have to curb our spending habits (yet again) in order to prepare for the rise in electricity that will come once the Energy Bill passes the Senate. In Obama's words, our utilities "will necessarily skyrocket." We live in Minnesota which is pretty coal dependent so we assume that we are screwed for a long time to come. And you know, the truth is, as much as the Energy Bill is probably aimed at trying to get us to change our energy consumption habits, the actual result (for us anyway) will be that our energy consumption stays pretty much the same, but we will pay for it by cutting out other luxuries like going out to eat, or going to the movies. Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted July 2, 2009 Share Posted July 2, 2009 Anecdotal: My wife and I just had a long talk about how we will have to curb our spending habits (yet again) in order to prepare for the rise in electricity that will come once the Energy Bill passes the Senate. In Obama's words, our utilities "will necessarily skyrocket." We live in Minnesota which is pretty coal dependent so we assume that we are screwed for a long time to come. And you know, the truth is, as much as the Energy Bill is probably aimed at trying to get us to change our energy consumption habits, the actual result (for us anyway) will be that our energy consumption stays pretty much the same, but we will pay for it by cutting out other luxuries like going out to eat, or going to the movies. You make a good point. The only way this type of legislation has a positive outcome IMO is to spend the tax receipts on true development of alternate green energy to make it viable and cost effective for everybody to eventually replace coal and drive everybody's energy expenses down in the long run. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 2, 2009 Share Posted July 2, 2009 people cant afford anything....inflation least of our worries.......for now People couldn't really afford "it" before - the difference now, aside from unemployment and pay cuts, is the home equity piggy bank is closed. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 2, 2009 Share Posted July 2, 2009 Somebody is going to have to pay for all this spending, and more than likely it will be the business owners that will be doing it. Until we can figure out how big of a hair cut Pelosi, Reid, and Obama actually get passed, we are going to be hesitant to make capital improvements, because we don't know if we are going to be able to afford them. I doubt any of us really know the impact the the Stealfromus Bill will have on our taxes yet, and we have Cap and Tax that just passed the house and is on it's way to the senate. I do think there's a certain amount of that thinking going around, and unfortunately it makes sense. you're an employer, your employment costs are about to go up with new health care mandates. your energy costs are about to go up. your taxes are about to go up. and to top it all off, you're not really sure how much all of these costs will go up, and that uncertainty alone can be crippling. add to that the fact that the prospects for long term economic growth are kind of iffy. some folks are wondering if the narrow passage between the scylla and charybdis of inflation and deflation is disappearing completely. I just think a lot of people are going to have to see tangible growth before they trust the economy enough to hire a lot of people and/or make a lof of investment. which means, at best, we see another jobless expansion before jobs follow. but where is that growth going to come from? it's going to be hard for anyone to get optimistic about the economy if the only thing happening is the government frantically printing and spending money. it's a spectacle that doesn't exactly inspire long-term confidence. which is why the stimulus bill seems so misdirected and ineffective. yeah you're spending money, but if nobody believes it's really changing anything for the better... Quote Link to comment Share on other sites More sharing options...
H8tank Posted July 2, 2009 Share Posted July 2, 2009 We are so screwed. Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 2, 2009 Author Share Posted July 2, 2009 Just from my perspective as a business owner, I'd have to say you are wrong based on the following reasons: 1) People are scared and don't believe the stimulus package is going to work. I'll give you an example, from my business. I currently have one superintendent out of work, which is actually ideal as it gives me someone to fill in on jobs for other to go on vacation or if someone has an illness, as well as someone to take care of any warranty issues that may arise. I'll have another out of work at the end of August, and another out of work sometime in December. Unless someone in our company really screws the pooch, this year will be very profitable, and we will turn a profit next year just based on our back log. Having said all that, we are looking to pick up some work for these supers, so we aren't just paying them to sit at home or to paint my house. In the last 3 weeks we've turned in three fee proposals and have been creamed. The last one, the low guy had a fee that is less than half of the lowest fee we have on any current contract. I'm preparing another one that the fee is so low that I'd have to increase my 5 year average by 30% just to cover my overhead . Increasing my volume by 30% isn't likely because people are hesitant to jump out there and expand, and even it they were they are having a harder time selling bonds to raise money (thanks BO and Chrysler). Basically I'm going after the work at a low rate because this year and next are made, so even with that low of a rate it is profitable, but also in the hopes that those that don't have my backlog will fail, thus reducing the competition so that 18 months from now with less competition we will see more realistic fees. 2) Taxes - Somebody is going to have to pay for all this spending, and more than likely it will be the business owners that will be doing it. Until we can figure out how big of a hair cut Pelosi, Reid, and Obama actually get passed, we are going to be hesitant to make capital improvements, because we don't know if we are going to be able to afford them. I doubt any of us really know the impact the the Stealfromus Bill will have on our taxes yet, and we have Cap and Tax that just passed the house and is on it's way to the senate. 3) Health Care - Until we know what is going on with health care there are just so many uncertainties, on so many levels. Look at how much of our GDP is health care, it's something around 20% or so right now. So you have to think what changes are going to be made, and how are they going to affect that 20% of our GDP? Will the public option pay the same to health care providers as Medicare currently does? Will it put private insurers out of business eventually? Currently medicare pays doctors and lawyers about 15% to 20% less than private insurance. Right now private insurance picks up a portion of the tab for he government shorting the health systems. If the privates go under because of the public option is subsidized by our tax dollars, and because they pay less than the prevailing rate for health care, then you are looking at a possible decline of 2% to 3% in our GDP. You also have to look at how are these health care subsidies going to be paid for? Right now we don't know. I know I've got a hair cut coming, but I don't know how big it is. It would have been helpful if we had gotten a real stimulus package instead of a funding everyone's pet project package. How much of the stealfromus package was actually stimulative, and how much is just expanding government? How long is the government expansion paid for under the current stimulus package, and when will we either have to cut the new government jobs, or raise additional taxes to keep them? What would have been helpful is if we had gotten a real stimulus package that included real stimulative spending along with a temporary tax cut. Compounding the problem of the stealfromus package not being stimulative you have to add into the turmoil the uncertainty caused by the environmental and health legislation Pelosi, Reid, and Obama are trying to force through. Honestly it doesn't matter where you stand on the issue of increasing the government's role in health care, or where you sit on the environment, Obama and congress should have waited to address these issues until after we started seeing some real recovery in the economy. I'm afraid, by not wanting to waste a crisis the administration has made it significantly worse. More than likely the administration was right, and unemployment would have topped out at 8% even with the crappy stealfromus package that was passed had it been in a vacuum, but when you combine the cost of the stealfromus package, with the uncertainty and potential cost of legislation they are wanting to ram down our throats, then you get a royal mess. the gist of your post is a pretty decent alternative hypothesis Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 2, 2009 Share Posted July 2, 2009 Speaking off the cuff right now, but in normal situations, the passing of the stimulus should help jump-start the economy even before the government actually starts decreasing taxes or spending more money. This is because firms should increase their investment (i.e. purchases of capital goods such as equipment, etc.) in anticipation of the stimulus going into effect. However, perhaps now this increase in investment isn't forthcoming because of problems in the financial sector that are hindering firms from being able to borrow money. I will note that I have no idea if my above hypothesis is correct or not, but I have mentioned before that if they don't figure out how to fix the financial system it won't matter what sort of stimulus they enact. I'd be pretty interested to know how much of this is actually happening. I mean, understanding that there are still big problems in the financial sector and big, gaping holes on a lot of balance sheets. and I know the recession was mostly caused by the bursting housing bubble wreaking havoc on the financial system. but it seems from my very layman, sideline perspective that credit-worthy businesses and individuals CAN find credit. perhaps the problem is that nobody's credit-worthy, thanks to depleted assets and a grim economic forecast. you can't really fix that by "fixing" the financial sector, can you? I guess what I'm asking is, is it possible at this point that the only real way to fix the financial system is with a healthy broader economy? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 2, 2009 Share Posted July 2, 2009 it seems from my very layman, sideline perspective that credit-worthy businesses and individuals CAN find credit. Judging by the amount of HELOC and CC offers dropped in my mailbox every day, I don't lack for extra credit if I want it. If I saved them all for a month, applied for them all simultaneously and was approved, I could max them all out to cash and F off to Rio for the rest of my life Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted July 2, 2009 Share Posted July 2, 2009 Time article - What Happened to the Stimulus? Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted July 2, 2009 Share Posted July 2, 2009 I'd be pretty interested to know how much of this is actually happening. I mean, understanding that there are still big problems in the financial sector and big, gaping holes on a lot of balance sheets. and I know the recession was mostly caused by the bursting housing bubble wreaking havoc on the financial system. but it seems from my very layman, sideline perspective that credit-worthy businesses and individuals CAN find credit. perhaps the problem is that nobody's credit-worthy, thanks to depleted assets and a grim economic forecast. you can't really fix that by "fixing" the financial sector, can you? I guess what I'm asking is, is it possible at this point that the only real way to fix the financial system is with a healthy broader economy? Credit is harder to get. Many people and institutions have lost a good deal of their net worth in the market, so they have less assets to post as collateral. The other problem for institutions is bond rates continue to go up. Between fears over the way bondholders were treated in Auto deals and the amount of paper the US Government is issuing, it makes borrowing a lot more expensive. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 2, 2009 Share Posted July 2, 2009 Credit is harder to get. Many people and institutions have lost a good deal of their net worth in the market, so they have less assets to post as collateral. right, and that was pretty much my point. if people can't get credit because they aren't credit-worthy (thanks to depleted assets and the like), that is a different sort of problem than not being able to get credit because the banks are in vapor-lock and simply CAN'T loan people enough money to keep things going because they themselves have no liquid assets. the latter problem is a financial crisis, the former is a broader symptom of a recessed economy...or so it seems to me. Quote Link to comment Share on other sites More sharing options...
muck Posted July 2, 2009 Share Posted July 2, 2009 ...as a quick aside... Even though I took some flack last fall for telling you guys that I was short the market during the free-fall, and that I told you guys that I wasn't going to tell you what I was doing anymore ... well, today I went long the stock market today for the first time in 14 months. Now, I'm not super invested (still like 80% cash), but I am long. [NOTE: It could very well flip back the other direction in a week ... we'll see ... but, I won't be telling anyone ...] Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 2, 2009 Share Posted July 2, 2009 guy on cnbc.com also making perch's argument: So we're not firing many people, but we're not hiring either. Why? This is especially confusing given the political mood in Washington during the past two years which has been far more focused on job creation (or savings) than on general economic growth. The stimuli plans were supposed to be job plans. The auto/bank bailouts cum nationalizations were supposed to be about saving jobs, not 'Wall Street'. So given two record breaking stimuli within two years, why isn't America hiring? America isn't hiring precisely because of government policy. Small business owners, who are usually the first into and the first out of the job pool, are standing by the fence and watching. They are paralyzed by regulatory uncertainty. If they hire someone who ends up doing poorly, will they be able to fire that person? Will they have to pay their health care bills after they've been terminated? If so, for how long? Who will pay for all these stimulus checks? If it will turn out to be small business, why would they hire instead of keeping costs low to prepare for the big tax bill? Where will the market move? Are you in the right business or are your clients in a politically disfavored industry? Are your clients in health care (being nationalized), autos (already nationalized), banking (somewhat nationalized) or any energy production process which uses carbon (pulverized)? Until you know, you don't grow, and until you grow your market, you don't grow your payroll. Jobs aren't languishing despite the government's best efforts. They're languishing because of them. Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted July 2, 2009 Share Posted July 2, 2009 guy on cnbc.com also making perch's argument: The auto/bank bailouts cum nationalizations were supposed to be about saving jobs, not 'Wall Street'. So given two record breaking stimuli within two years, why isn't America hiring? What the... ? Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 2, 2009 Share Posted July 2, 2009 What the... ? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 3, 2009 Share Posted July 3, 2009 What the... ? Tsk, tsk. cum1 /kʌm, kʊm/ Show Spelled Pronunciation [kuhm, koom] Show IPA Use cum in a Sentence –preposition with; combined with; along with (usually used in combination): My garage-cum-workshop is well equipped. Origin: 1580–90; < L: with, together with (prep.) Quote Link to comment Share on other sites More sharing options...
Avernus Posted July 3, 2009 Share Posted July 3, 2009 Tsk, tsk. Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted July 3, 2009 Share Posted July 3, 2009 Tsk, tsk. Fun hater Quote Link to comment Share on other sites More sharing options...
Brentastic Posted July 3, 2009 Share Posted July 3, 2009 from the BLS we've now lost 6.5 million jobs since the start of the recession deflationary depression Fixed. It's funny how all the experts refuse to learn from the past. Our economy is sooo over-valued right now. Unfortunately, the worse is yet to come. The Fed's constant manipulation of the money supply is an overlooked cause of our current economic situation and the governments current interventions will prolong and hinder the recovery. Our economy is a very complex organism that cannot be out-smarted or tricked into sustained growth by any man or groups of men. The only important result manipulation can achieve when applied to such a massive organism such as the free market economy - is a total collapse of everything that was fabricated. In other words, the longer and more severe the manipulation, the more severe the crash. Make no mistake about our current economy - this is a depression and deflation is all but certain. Quote Link to comment Share on other sites More sharing options...
Jackass Posted July 3, 2009 Share Posted July 3, 2009 Fixed. It's funny how all the experts refuse to learn from the past. Our economy is sooo over-valued right now. Unfortunately, the worse is yet to come. The Fed's constant manipulation of the money supply is an overlooked cause of our current economic situation and the governments current interventions will prolong and hinder the recovery. Our economy is a very complex organism that cannot be out-smarted or tricked into sustained growth by any man or groups of men. The only important result manipulation can achieve when applied to such a massive organism such as the free market economy - is a total collapse of everything that was fabricated. In other words, the longer and more severe the manipulation, the more severe the crash. Make no mistake about our current economy - this is a depression and deflation is all but certain. What are you basing your opinion on? Quote Link to comment Share on other sites More sharing options...
WaterMan Posted July 3, 2009 Share Posted July 3, 2009 I say we keep laying people off. That will turn things around. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted July 3, 2009 Share Posted July 3, 2009 I say we keep laying people off. That will turn things around. Fortunately for me, we haven't had to lay off anyone in more than 20 years. We've paid guys to sit at the house, we've paid guys that make over $100,000 a year to paint our houses, but we haven't had to lay off anyone. Having said all that, if it comes to it (and thankfully we are at least 18 months away from it) laying off a percentage of the workforce is better than going out of business and having all the employees out of work isn't it? Quote Link to comment Share on other sites More sharing options...
H8tank Posted July 3, 2009 Share Posted July 3, 2009 What's really cool, is in a couple weeks when Obamaplan decides to give 12 million illegals amnesty, with full health benies and welfare + job training. Quote Link to comment Share on other sites More sharing options...
Brentastic Posted July 4, 2009 Share Posted July 4, 2009 What are you basing your opinion on? I'm too wasted to go into details right now, but simply put - logic. Quote Link to comment Share on other sites More sharing options...
Front Row Posted July 4, 2009 Share Posted July 4, 2009 What's really cool, is in a couple weeks when Obamaplan decides to give 12 million illegals amnesty, with full health benies and welfare + job training. Don't they get that now? tickticktick Quote Link to comment Share on other sites More sharing options...
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