US economy really in bad shape?

[Torsten]

Hello everyone. The mass media are now constantly reporting bad news about the US economy claiming that the unemployment rate is going to rise by about 7% until Obama's inauguration. Yesterday they announced that DHL will be cutting thousands of jobs and General Motors is reported to have lost billions of dollars within the past months.

We also have been shown pictures of US homeowners suffering foreclosures and losing their property. Now, I know that the media can manipulate the opinion of the masses so my question is: How bad is the economic situation in the USA really? Amy, Tom, Jamie, Skrej, Barb, Hank, Laura, Linda and all our other US forum members --who of you has been suffering any 'economic hardship' in the past couple of months and do you think it's getting better or worse?

Many thanks,
Torsten

TOEIC listening, talks: A city council announces school closures

[Prezbucky]

For me it's not too bad... I haven't lost my job.

I've noticed slightly higher prices at the supermarket but gas prices have fallen approximately 50% since the highest prices of this past summer, so that's good.

This $730 Billion bailout, caused by consumers' poor home-buying decisions and the fraudulent trading of mortgage-related securities on Wall Street, must be paid for. That may impact businesses (lost jobs), consumers (higher prices), and investors (de-valued stocks) alike.

We need another another big mass-marketable innovation to come along and get business going again, in the same way that the Tech Boom made the '90s prosperous.

The business of America is business, and we need to get back on track.

But to free up consumer capital, which is crucial, we must collectively start paying off our credit cards. Lower credit card payments means more discretionary income. Credit cards are the spawn of SATAN!

hehe (seriously, though, we must start buying things with money we actually have... okay, except for big-ticket items like cars and homes, and even then they need to be cars and homes that fit well within our budgets)
_________________
Billie Jean is not my lover. Hee.

[Jamie (K)]

I'm not doing too badly, but the state I live in has a lot of problems because of high corporate taxes and adversarial labor unions who seem to want to kill the goose that laid the golden egg. That started long before the recent "crisis", however. Since some of my work is paid for by the automotive industry, I've seen a little of that dry up, but it might also just be the usual lull between contracts.

I've read that the majority of foreclosures affected not people who lived in their houses, but people who bought the houses on speculation, hoping to flip them when prices went up even further. They gambled and lost. I feel a little sorry for them, but most of them knew the risks when they got into it, since it's happened before in recent history.

I read in Forbes today that the present stock market drop keeps being compared to the one in 1929, but that it has no resemblance to it. The writer said that it is more like the one in the 1970s, which caused no media hysteria. He thinks that the reason it's being exaggerated in the media is that the baby-boomers born in the 1940s are getting ready to retire, and the (almost certainly temporary) drop in the market is scaring them.

The big danger now is that the government is being tempted to take over more and more of the US economy in exchange for doling out rescue money. The government doesn't know how to run businesses, so this could result in some very severe economic damage, if people aren't vigilant.

Anyway, things could be much worse here. I feel sorry for the poor Russians.

[LucyGLV]

Why "poor Russians"? Russia is not the worst place to live in. Probably your media is just very creative trying to convince you that you are not an a total ...mess.
Don't be such a believer.
Lucy

[Jamie (K)]

Sorry, I didn't get my information from the American media. I read other languages besides English.

You've got companies firing as many as a quarter of their workers due to lack of demand. This is happening not only in the retail sector, but in other sectors as well, such as mining, and even local government. Some of the people who still have jobs are seeing their salaries cut. The Russian stock market lost three-quarters of its value, and many companies don't have cash to operate. Things are much worse than in the United States.

I don't imagine that in St. Petersburg -- one of the most expensive cities on earth -- you would see much misery. But before you start assuming American media are dishonest, remember that you live in a country where the government and the mafia murder and imprison journalists for reporting things they don't want known. (Of course, you will probably claim that every country does that, but it wouldn't be true.) Here is the list of journalists murdered.

And here are photos of two of them:

[Jan]

We can't even imagine in what sort of trouble Russia will be if the oil price will go down to 30 dollars per barrel, :( :( :( I am really afraid about peace in Europe.
I will prefer that oil price will recover a bit to give Russians some more financial means.
Domestic depts of RF regions reached almost the level of entire reservoir of foreign currency.
For Americans where are quite flexible regulations such a situation is very danger but not deathly in Russia well we will see... .

Jan

[Hairumian]

Hello everyone,

What you think about USA as a prominent destination for immigration, given current circumstances and developments?

[LucyGLV]

Jamie (K)
I think you should better start this discussion somewhere else. And you should better look at USA economic Armageddon then talk about murders in Russia . With US National debt graph showing $10T+ and US stock market crash

it is not a good idea to feel sorry for “poor Russians”. We will survive without your worries and without your pity. Mind your own business.

[Prezbucky]

We want Russia to prosper. It hasn't been easy going from Communism to Capitalism, but hang in there. There are peaks and valleys, but any capitalist economy is just an innovation away from (general) prosperity. The ideal is liberty, and that alone is worth economic downturns.

Our markets have not "crashed", by the way... the US stock market periodically suffers a correction, but it always rebounds. We'll figure out a way to fix this housing mess. What we really need is a new marketable idea to inspire consumers and investors.
_________________
Billie Jean is not my lover. Hee.

[LucyGLV]

About "crashes", by the way...
US Market psychology experts advice to substitute the term
Stock Market Crash by the "Panic of 2008." They hope it might help.
However, “ crash 2008 ” appears again and again. Just Google it.
(Stock Market Crash of 2008: How Low Can It Go?
www.drudge.com/news/113283/stock-market-crash-2008-low-can)

[Torsten]

Hi Lucy, the 'crash' only exists in the minds of some people who want to believe that the US stock market can 'crash'. The reality is that the US economy is much more resilient and stable than any other economy in the world.

By the way, you might want to check into the difference between 'advice' (noun) and 'advise' (verb).

TOEIC short conversations: Two colleagues talk about their current projects.

[Hairumian]

Thanks Jamie for your advice, I will initiate a separate discussion.

[LucyGLV]

Dear Torsten,
I’ve already mentioned the $10T+ debt (just in case you are not an economist let me explain that $10T means 10 trillion !!!!). This is a worrying 67% of GDP and equates to $79,000 for each American taxpayer. It hardly proves your point that “the US economy is much more resilient and stable than any other economy in the world”. Do you happen to know that US dollar, flat money, created out of thin air, is not backed by anything tangible.
Sophia Koropeckyj at Economy.com says “There is little doubt that the nation is in a recession, which will only deepen in coming months, as the financial crisis casts a pall on economic activity…"
I do misspell words sometime (advice vs. advise) but I am afraid that your economics knowledge is far from being perfect as well. It may have been your mistake to start this topic.

[Jamie (K)]

Lucy, I think you need to study some economic history yourself. The US has run deficits before that were a larger proportion of its GDP, but it didn't come to economic ruin. Also, when the US currency was based on gold and silver, there was a limit to possible economic expansion. Basing the currency on nothing, while counter-intuitive to some people, actually allows much more economic expansion.

[LucyGLV]

"...allows much more economic expansion..." - like now, ha-ha :)
US dollar is a currency based on nothing but the paper on which it's printed and it would be much better for the country to base a currency standard on something real (like the metals), not mortgage debt.