Originally Posted by pauld315

As long as the gov't keeps extending unemployment benefits, why are people going to go back to work or start a new company if they can make more or almost as much sitting home and collecting unemployment ? People who got laid off making X amount of dollars a year are hoping those types of jobs will be returning so they will just keep collecting unemployment as long as they can, waiting for a job to return that pays what they earned before. In the meantime, because of gov't regulations here in the US, high taxes for corporations, not knowing what will happen in the future with this administration, cost of Obamacare etc etc corporations are either holding onto the cash they have or moving these jobs overseas. I am afraid many of these jobs the people on unemployment are waiting for are not coming back. Sooner or later they will need to start over at much less pay than they were accustomed, maybe even less than they are getting on unemployment. Very scary economic scenario that is being perpetrated by this administration.

It is very scary times. I am sure the unemployed don't make the same income sitting home. Based on their wages, payment is around $400. It sure would be tough for anyone living on this amount. Plus it is subject to income tax. I think most unemployed find jobs with a substantial decrease in pay and benefits. Most folks who are out of a job deplete their savings, cash in their 401 accounts, and pray they won't lose their home or car. (Being a repo man is a great job these days! ) They don't have the capital to start a business or the credit rating to get a loan. Nor would they want to take such a risk considering the number of businesses that fail. I think the success rate is around 10%. With my small business I was involved with our local Chamber of Commerce. Most of the people that had small businesses in the networking group have folded.

I agree the jobs are not coming back. We are now a service economy. We often complain about products imported from China. Wait a few years. As wages rise there, factories will move to places like Vietnam, Cambodia, North Korea. It is driven by greed and maximizing profit. Living in the rust belt when not in TV I've seen this coming way before Obama was elected. It has been going on for quite a few years. This will further lead to the destruction of the middle class for working Americans. It seems that all of the middle class gains since WW II are being wiped out. Folks are just trying to stay above water.
Taxes.... I thought corporate taxes today are lower than they were in the 50s and 60s. Too many loopholes. Some corporations pay very little. Their investment in lobbyists is worth the cost. Someone sent me a survey to compare my taxes now and after the tax cut expire. I think they will increase $300 a year. Big deal. We can afford that.

I never thought a presidential administration could control economic cycles. Fiscal and monetary policies can soften the fall or stem inflation .FDR didn't pull us out of the depression. War production followed by the population growth after the war helped.

It has never been this bad in my lifetime.
I recall the stories that my grandfather shared with me about the depression... the run on banks, the collapse of the stock market, almost losing his home. Somehow they survived by hard work, growing their own crops, raising chickens. I could never fathom that happening.

Has anyone discussed how we never were asked to make sacrifices to pay for our recent wars? How much of our financial troubles are attributed to this?
The problems we face are grave. Instead of the blame game, why not look for real solutions?

Mitch: You nailed it especially in one area. I'm old enough to remember "cheap imports form Japan" - then they got more expensive to be replaced by "cheap imports from South Korea". The same thing happened and now it's "cheap imports from China". One difference is that China has FAR more people (in numbers) that have to be elevated from poverty before they run out of low-wage candidates. IMO, it'll just take longer for China to be replaced with the next developing nation.

The most recent data I have been able to find was the decade 1997-2007
http://www.industryweek.com/articles...ing_14159.aspx

The first thing that you will notice is that manufacturing employment decreased from 17 to 14 mullion during that period - a loss of 3 million jobs. This brought manufacturing employment below 16 million for the first time in decade. The unemployment is primarily created by productivity improvements. As the article points out manufacturing productivity increased by 94% in the twenty year period between 1981 and 2001. For this to happen with employment remaining constant, means that twice as much is being produced with no increase in the number of workers.

American workers are the most productive in the world, largely because we have increased output through capital investment. This has been the pattern since 1900. At that time over 90% of the population lived on the farm and produced food for the less than ten percent to consume. Today, the farm population is less than five percent of the total population and they produce not only enough food to feed us all, but enough to export billions of dollars worth of food. This means the farm output per person has increased productivity by more 20 times during that period. We did not lose farm jobs because of overseas producers undercutting US prices, but rather by the increase of farm productivity.

We need to shift to an economy that is largely service and information based as manufacturing jobs decrease just as manufacturing output is increasing.