The Economic Crisis

[andrewwski]

I believe the worst is over, yes. The housing market is showing signs of recovery, as is the stock market. The rate of unemployment is increasing slower.

But it's not over yet. Chrysler just declared bankruptcy, and GM is on the verge. We're not out of it yet.

Most economists are predicting the recession will be officially over sometime between the last quarter of this year and the second quarter of next year. That sounds like a reasonable estimate.

[erp]

It's still as bad here in the South. The thing is, they're putting taxes on tobacco and textiles is just going overseas. That's basically what this community is built on, so it'll be interesting to see what happens. I know it's getting better, but it might be harder for the South to recover.

[fmtiger124]

The Dow went up 227 points today!

[RightorRong]

At state this year they only gave out medals for first through fourth place 'cause of a problem with funding. I could have gotten another medal. But there's still next year. Hopefully the economy will improve.

[fmtiger124]

At state this year they only gave out medals for first through fourth place 'cause of a problem with funding. I could have gotten another medal. But there's still next year. Hopefully the economy will improve.

thats the reverse of ours...we normally do 1-5 but we did 1-6 this year i don't know why

[gyourkoshaven]

These car bailouts frustrate me so much. This is going to cost a fortune for us when we're in charge of the country. I mean think about it: The feds have already put 100 billion into this and now that the supreme court is going to mess up the Chrysler purchase and going to cost us another 50 billion. It's important that we try to create our own products and declare our independence from jobs that we're shipping overseas, but I'm not sure it's worth putting the country in debt for 200 years. What do you guys think?

[sewforlife]

At state this year they only gave out medals for first through fourth place 'cause of a problem with funding. I could have gotten another medal. But there's still next year. Hopefully the economy will improve.

awww. I'm in a relatively small state, so it's 1-6 for us.

[andrewwski]

These car bailouts frustrate me so much. This is going to cost a fortune for us when we're in charge of the country. I mean think about it: The feds have already put 100 billion into this and now that the supreme court is going to mess up the Chrysler purchase and going to cost us another 50 billion. It's important that we try to create our own products and declare our independence from jobs that we're shipping overseas, but I'm not sure it's worth putting the country in debt for 200 years. What do you guys think?

Uh, if we were to really lose GM and Chrysler, the effects would be more devastating then you could imagine.

[gyourkoshaven]

I'm not so sure. The government would keep existing warranties. The only real problem would be the unemployment spike. That will get better regardless when the economy recovers. I'm not so sure we need more that ford.

[andrewwski]

Exactly, that would be the problem.

If the government did not bail them out, then there's no way the government would be honoring GM or Chrysler's warranties. That's blasphemy, it's not the role of the government. Plus without a significant share, they couldn't.

But warranties aren't the issue.

An unemployment strike is. It'd be more devastating than you think. Not only do you lose those autoworker jobs, but you also lose all of the market that goes along with it. All of the manufacturers that make components that get sold to the automakers would see a huge drop in demand, thus they'd be cutting lines and jobs left and right, fighting to stay solvent themselves. And you'd probably see a lot go out of business.

That would translate to job losses unlike we've ever seen in this country. It would seriously slow the economy down. Which is not what we want to do right now.

You're right, the unemployment level will drop when the economy recovers. But letting two of the big three automakers fail will send us much deeper into recession, send the unemployment rate to unprecedented levels since the Great Depression, and make the recovery take years. That's not a place we want to go.

It's also important to distinguish the difference between bankruptcy protection, which is completely normal, and bailouts.

Oh, and the country is already in more debt than it can ever repay.

What is concerning is how long the stimulus spending will last. Some government officials have said that this is only the beginning, which is concerning. The economy is showing signs of recovery, and if we spend too much, it's going to translate into hyperinflation in the future. Which is the opposite extreme - another place we don't want to be.