I'm a teenager liveing on america, and I have no idea whats going on. I know that economy has crashed, now the goverment? I dont know how the goverment can crash, or know what can happen. Are we going into another great deppresion? Can somebody please explain this all to me?

I have no idea either... i dont pay attention to the news, this pisses my girlfriend off, but oh well..

my job is safe, so i really have no worries.

Get ready guys, It's going to get worse before it get's better..Imo of course but my business revolves around how people spend there money. The trend I'm seeing is maybe we start to see a turn around in the fourth quarter of this year. Hope I'm wrong!

Everything is going to be fine. We are not even close to what it was like the the great depression. Unemployment was at 25% and stayed that way for over 5 years back then. It is only at 7 or 8 now. Heck, this is not even as bad as it was in the late 70's here when I was a teenager. I had to wait in line to get gas a few times and everyone was freaking out.

Hang in there, this is America, the people always dig out of it, but it would be a lot easier if the government would just get the hell out of the way or crash as you say. I'm thinking about filing for a guitar bail out. ;-)

BTW, have you always lived here in the U.S?

Exactly

yeah this is nothing....infact


in 5 years, employment rate will be at an all time low, because due to technology advancing so rapidly, there will be more jobs available that people willing to work


another cool fact is that in 5 years, 60% of jobs will be in technology not yet invented.


so hand in there, its always darkest before dawn.








and no. the government is not crashing...i dont know where you got that idea from

He's right. Things are just taking a temporary slow down. Probably the worst slow down you've ever seen and probably the worst I've ever seen, too. It will all turn around though, it will just take time.

Are you currently living with your parents? If so (and you're finished with high school), I'd continue to live with them, work and put some money in the bank. The more money you have in the bank, they less the slow down will effect you. For the most part, at a family level, the people that are struggling now are people that didn't have enough money in the bank to ride out the rough economy.

I know you're young and money talk is probably boring to you, but check out this site: http://www.daveramsey.com/

Listen to his podcast. He's spot on about not going into debt for things.

This post has been edited by purple hayes: Jan 27 2009, 07:26 AM

THis is nothing? Hmmm... I wonder...
The thing is that your government has to do something drastic to turn this around... You need to raise your taxes on pretty much everything, and cut down in standard of living, which people won't accept...

US National debt have reached insane levels.
Now it is: $10,631,751,783,570.16
It increases by $3,34 BILLION every day.
Each citizen in USA owes: $34,797.10
Iceland is pretty much bankrupt now, there each citizen owes $200.000...



Where does money come from to turn this around? Well, your government needs to sell more national debt papers abroad, which is like taking a loan really...
This means you are in the hands of other countries, too much national debt means you actually have the owners in other countries. China is one of the major foreign holders of US treasury, they own $681,9 BILLION.... and rising...

Many countries now want to sell back this debt to US, they fear that US will take another easy way out in these times of crisis: Make more money! This means the value of the $ will get lower but so will the debt...

I think us in the west are all in for a steelbath when it comes to standard of living. We simply have to, the longer we wait the harder we will crash. Maybe we can hold out for a few decades more, but sooner or later we will have to pay for this overconsuming lifestyle, and even if we get away with it, our children won't.
Even if we are better off right now in Europe than you guys in USA, of course we will be effected, and we will go down together... Next economical/military superpower is China.

So worry or not? Well, that's up to each individual, but I think everyone should KNOW what is going on, this may or may not be THE BIG CRASH. But it will come, without a doubt, sooner or later...

Some links about US debt and situation:
http://www.brillig.com/debt_clock/
http://www.concordcoalition.org/

This post has been edited by ztevie: Jan 27 2009, 08:54 AM

This year will be very hard economically, companies keep laying-off people etc. So it will get a lot worse before it get's better. Let's just hope the depression won't last very long.

Don't worry it will be OK. I don't see why you are so upset? Is there something wrong with the way you live??

ztevie has a good point.. Man this sucks. It scares me so much that China is going to be the boss in a couple of years. Let's hope the west can still kick ass for a couple of centuries.

Nah, China being boss aint so bad... For example, through history they haven't been very aggressive towards other countries. They received a lot of crap though, mostly from Japan, but also the mongols and the west...
I know, here we are very upset with Tibet and all that about human rights. They see it in a different way. They see Tibet as province of China, which, if you read history, it could be seen as. Of course, no country would accept provinces/countys to release themselves from the nation how they want?
Regarding human rights, they feel it is Chinas business only if they have death penalty and how their courts punish different crimes, and what is actually a crime...
I would like death penalty for some crimes here too... This guy in Belgium last week for instance?
China don't interfere very much with other countries.

As with all dominating civilizations before us, they have risen, and they have fallen. If the west would forever of eternity be the economical, political and military dominating power of the world, it would be VERY strange in a historical view... I think we will fall due to financial crashes like this. Greed, overconsumption and no responsibility regarding money will in the end send us back to the backwater of the world stage...

Edited for language: Micke on behalf of the moderating team

This post has been edited by MickeM: Jan 27 2009, 06:20 PM

Apologies as I'm not American (and not always an adult ) but as an answer (apologies - long post ):

Why it started - arguably there is no single cause but a number of contributing factors.

First, the banking crisis which was to a great extent precipitated both by their greed and poor regulation. This lead to their lending too much money to the 'sub-prime' (those thought to a 'bad credit risk' - often ex-prisoners, bankrupts and, sadly, the very poor). Their over-exposure here resulted in a collapse in the share market valuation of many banks and finance institutions when it became clear how exposed they were to bad debts. Various governments have tried to alleviate this problem by pumping huge amounts of reserves in to the banking sector.

Alongside this it is generally accepted by economists that economies are cyclic - they go up and down. So here a downturn is just part of this cycle. Arguably this downturn has been made worse because several major economies - including notably the USA and UK - have for a number of years followed the 'free market' monitarist approach and so there has been reduced public sector investment and limited regulation. (Note that Barrack Obama is talking about investing in public programmes like hospital, road and school construction - this is more a Keynesian fiscal approach where taxes are used to help generate employment and sustain the economy via social investment.) There is a lot of evidence that the 'free market' claim that there is a trickle down of wealth that aliviates poverty - which supports their argument for lowering taxation on the rich since their spending provides jobs - has not worked. - ie The rich have not bought us out of poverty, they have just got richer (there is a huge amount of evidence that demonstrates this).

Alongside this much of the working and middle classes took part in a consumerist boom financed largely by borrowing. Individual debt in the UK is currently 96,000 UK sterling per man, woman and child. That is the highest pro rata UK personal debt ratio ever. The US is in the same boat. Spending, based on borrowing is not sustainable over a long term. Once people stop spending - in order to pay off (or at least not add any more to) their debt then the economy starts to slide. This is further exacerbated as now many people are worried about rising unemployment and even less likely to spend money.

Failure to purchase and consume leads to a downturn in the demand for goods. As people stop buying goods manufacturers are forced to stop making them. To reduce manufacturing costs, manufacturers start to sack/make people unemployed. Unemployment and poverty rise, fewer goods get bought... After a while you enter recession.

Money supply - at present banks have responded to the banking crisis by reducing the amount of credit available. There is significantly less money in circulation then there was 12 months ago. In the UK this is exacerbated/made worse as UK banks have not passed on the full extent of the various interest rate reductions to their customers. With reduced amounts of cash circulating this means that people feel poorer despite a reduction in interest rates. Furthermore banks have tightened up cash supply to business - including demand for increased and/or immediate repayment of loans. This has in most cases forced businesses to cut their costs (sometimes by sacking people) and in some cases has lead to otherwise profitable ones in the UK going bankrupt.

A reduction in interest rates often results in a country's currency being devalued against other currencies. This makes any imported goods in to the said country relatively more expensive.

Normally at this point a country's main bank would release cash from its reserves and/or print more to increase the amount in circulation. However doing this often leads to inflation and both the US and UK governments are keen to keep inflation low so have not really done this. This refusal, along with all the above, is leading the UK (and perhaps USA) towards negative inflation - where things in the shops end up losing value. No one then buys anything as they keep waiting for it to be cheaper 'next month'. If that happens things will get worse.

At this point, for the UK, some commentators are concerned that the UK may need to turn to the International Money Fund to stabilise or even refloat sterling. (Personally I don't think this would be entirely a bad thing but I've long argued that we should have taken on the Euro and dumped Sterling). However many of are very patriotic about our country's currency. In the UK many would feel ashamed if the IMF had to step in and save the pound - probably similar in the US. What would result is a psychological impact on people who would feel shame and that their country is 'in a mess'. Thus rather then getting support early we may be leaving it too late.

Will we see a return to the Great Depression of the 20s? I'd like to think not - mainly as we now have things like the IMF and countries are acting reasonably together on this. However I do think things have not yet hit the bottom so will get worse before they get better.

On a personal note - I've seen my income cut by 35% in the last six months - despite no reduction in the volume of work, with the net result that we can now only buy essentials. I don't think I've seen the bottom of this yet either. What it reminds me of is the UK recession in the 70s and the 3 day week - many of the major economic factors are similar.

Again personally, I agree with and applaud your new presidents decision to follow a Keynesian approach and invest heavily in social development and fiscal policies. Your government may well get you out of the crisis by spending federal reserves in improving the infrastructure of the US and investing in the future. Just my opinion though .

Cheers,
Tony

Wow, impressive reply tony!
Very thorough and analytical...
With a little luck we may get out of this crisis in a couple of years. But we need to do dramatic changes in our lifestyle, and the economical system, otherwise I think these crisis will return, and one of those crisis will be THE BIG ONE, as I like to call it... That may send us to the middle ages, where we trade things for food, and services for food, where money has no value, other than putting into our fireplace since electricity stopped to work.
It's grim to even mention it, but sometimes the biggest welfare comes after big disasters, as WW2 as an example. Everything collapse, and the building up generates work, and eventually welfare.
We need to get out of the dependence of oil also. This can be a reason for WW3 in the future, when oil wells around the world start to dry out.

It is true the Regan era 'trickle down' method of distributing the wealth has been a complete failure. It's so bizarre to think that people today here in the US refer to funding public projects as 'building bridges to no where' and 'giving lazy [ethnic slur] people work'. The poor in this country are so completely blind that they actually support tax cuts for the people netting the most money every year even though year after year they struggle and struggle. Why not question your governments tax policies?

I mean it's almost pathetic, these people are hardworking and genuine citizens - they just seem to lack any sort of cognitive ability. They just don't try to think for themselves, they don't question what's going on and why it's going on, they just accept the status quo and go along for the ride. I think that's one of the major contributing factors in the economic slow down in the US... No one wants to change their standard of living, no one wants to question government, no one wants to stand up for themselves.
I mean, 50 Billion dollars to companies that created Hummers, Tahoes, Yukons - big, stupid vehicles no one really needed that have the lowest mpg rating in the world. While in Europe people drive around vehicles that get 30mpg.
We live an unsustainable life style in America and if everyone lived the way we do we'd need 4.5 planets.

I'm not saying in any capacity I don't like it here, I just think the rest of the world needs to be factored in before we make decisions. The world is a very precarious balancing act and we've been off kilter for awhile it seems..

This post has been edited by fatb0t: Jan 27 2009, 02:26 PM

Obla-di Obla-da Life goes on!

Thanks ztevie.

I agree btw that it is often only after a major shock that any real change occurs since there's an awful lot of inertia in the socio-economic sphere that resists any fundamental change (Bourdieu, and to a lesser extent Giddens, did some great analysis of this if you're in to that sort of macro sociology).

WWII - yes a lot of social/welfare change came in directly because of it. Not all necessarily positive - Britain spent decades paying off the gold loan following the Bretton Wood Accord. But that's change for you - it's impartial and doesn't care if it's positive/negative, free/painful .

Over here 'El Pais' (major Spanish national newspaper) ran some interesting guest pieces on the crisis - several of which argued that we are long overdue, and are now seeing, a collapse of global capitalism and the current obsession with a laissez faire free market economy. I pretty much agree but think it would be nicer if we could achieve that economic revolution without the pain. But as you say somehow the pain may well be necessary...

WWIII - might not be oil though - my money is on the scarcity of clean drinking water. It's a big issue where I live and has even set several provinces/regions in Spain at each others throats over the last few years.

Did you know that the US debt clock on Wall Street ran out of places as the figure has far surpassed what they thought it would ever amount to when it was installed?

Cheers,
Tony

Yeah, I heard about that debt clock...Insane! You'd think politicians would start to react merely on that fact alone?
Drinking water? Yes, that's something that will be a serious problem in the near future...
We don't see it here though. In north Sweden where I live have so clean water you can drink it directly in nature, and we have pleeenty of lakes and rivers.
We drink tap water which is so fresh that I wouldn't buy water on bottle even if I got paid to do it. We also have only one pipe of water into houses, which means we use this extremely nice water to shower and flush our toilets, clean our behinds and what not...
I don't know if anyone looked into the export possibilities, but it's probaly too expensive to ship it to other parts of the world...

I try not to think too much about future horror stories, it just makes life miserable. We can all do a small part, trying to save energy and water and so on, but in a global aspect the action must come from those who rule the world...

fatb0t: I think you are absolutely right! We don't think so much, we only react when our taxes or gas price go up. We want t live the good life, buy nice stuff, and what happens next we don't care about so much. A president in USA who deals with this problem and start putting high tax on big engine cars for example, will probably not be elected next time. The one who promise lower tax will...
In Sweden anyway, government really put the light on environmental and energy questions, taxing the heck out of some things... Swedes react with compaints. We see the need for this, but we can't understand what good it does that 9.000.000 people in Sweden drive with small, cheap cars, while people in bigger countries, like USA, still drive around with bigass V8 engine cars? A drop in the sea...
I was in Florida a few years ago with my girlfriend. WE were amazed, that at rush hour on the big highways, we could drive in the most left lane all alone. This lane was meant for people with 2 or more persons in the car. THe other lanes were filled up, we were alone in ours...

edited for language/skennington

This post has been edited by skennington: Jan 27 2009, 05:46 PM

I read a few articles about the drinking water crisis in parts of Spain. I seem to remember a bit of controversy about diverting rivers to some regions and (obviously enough) depriving others. Is that kind of thing going on Tony?

Last I heard it was still Resurrection.

The idea is to allow the city of Barcelona to abstract water from the River Ebro to alleviate the drought in Barcelona and much of Catalonia. It's supposed to be temporary solution to the drought as the Catalan parliment is in the process of building a big water purification plant at (I think) Sitges, near Barca, which will be ready @ 2010.

What has caused the argument is that the Ebro is Spain's longest river and flows through several other provinces/regions - many of which oppose the plan.

Here's a UK newspaper article on it...

Cheers,
Tony