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Detroit Bankruptcy?

Detroit Bankruptcy?

Old Jul 30th 2013, 10:24 pm
  #46  
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Default Re: Detroit Bankruptcy?

Originally Posted by Hiro11 View Post
This is already happening. The US auto makers are at least three years into a (partially government funded) rebound. Their fortunes have largely been revived. Ford has been making record profits and breaking sales records for a while. GM has regained the global sales crown it lost and is growing quickly overseas. Both of their stocks are doing very nicely. Some of this is just economic cycle, but I also believe that US manufacturers are genuinely making better cars these days. Also, clearly the UAW needs to share some of the blame for the problems.
Unless the mentality of the Detroit automaker CEOs has changed, they'll be back to business like usual but maybe there is now a new breed in charge and they'll make better decisions.
This is making some major causality assumptions.
I wasn't making any assumptions. In fact we don't know if tax cuts help the economy or tax increases hurt the economy since there is no proof either way. Republicans like to point to the Reagan tax cuts (but were really tax increases) that tax cuts stimulate the economy. Even if I believed that they were tax cuts, I have my doubts that is what stimulated the economy but instead believe it was major increases in government spending on the military that revived the economy (pure Keynesian economics of digging a hole and filling it back up) since all the spending did was create jobs with no benefit to the consumer.
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Old Jul 31st 2013, 1:10 pm
  #47  
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Default Re: Detroit Bankruptcy?

I know a few folks who think military spending is a net plus. On its' own I do not agree. I also don't believe one can spend ones' way out of debt. I'm willing to try, but I doubt my bank would like it

USdebtclock.org currently pegs the US total unfunded liability at 125 Trillion and climbing by the million as you watch.

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Old Jul 31st 2013, 5:07 pm
  #48  
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Default Re: Detroit Bankruptcy?

Originally Posted by Hiro11 View Post
This is already happening. The US auto makers are at least three years into a (partially government funded) rebound. Their fortunes have largely been revived. Ford has been making record profits and breaking sales records for a while. .....
Please excuse me for pointing out that the taxpayer funds (the government doesn't have any money of its own, only what it takes from people and businesses) that funded the "(partially government funded) rebound" went to GM and Chrysler Dodge, but NOT to Ford. Ford has reinvented itself, but did not declare bankruptcy nor take government bailout money.

Last edited by Pulaski; Jul 31st 2013 at 5:10 pm.
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Old Jul 31st 2013, 5:54 pm
  #49  
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Default Re: Detroit Bankruptcy?

Originally Posted by Pulaski View Post
the government doesn't have any money of its own, only what it takes from people and businesses
The US federal government can and does create money.

Originally Posted by Pulaski View Post
Ford has reinvented itself, but did not declare bankruptcy nor take government bailout money.
Ford received $5.9 billion in Department of Energy loans under the ATVM program.
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Old Jul 31st 2013, 5:58 pm
  #50  
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Default Re: Detroit Bankruptcy?

Originally Posted by MostlyYank View Post
I know a few folks who think military spending is a net plus. On its' own I do not agree.
Military spending contributes to growth, but it costs more than the growth that it creates. So it produces growth, but it's costly.

Originally Posted by MostlyYank View Post
I also don't believe one can spend ones' way out of debt.
Businesses do so routinely. And governments use spending to produce economic growth.

We could all save ourselves a lot of trouble if conservatives would figure out that the federal government is not a household. A household can't tax GDP and it can't print money.

On the other hand, city governments do more closely resemble a household, since their access to GDP growth is limited and they don't control the currency. The city of Detroit is in a very different situation from the US government.
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Old Jul 31st 2013, 6:15 pm
  #51  
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Default Re: Detroit Bankruptcy?

Originally Posted by RoadWarriorFromLP View Post
The US federal government can and does create money. .....
..... which impacts the future value of privately owned assets, by devaluing the currency, thereby transferring value from private ownership to government coffers just as surely as taxation would.
..... Ford received $5.9 billion in Department of Energy loans under the ATVM program.
The ATVM was not in any way connected to the TARP program that was used to rescue GM and Chrysler Dodge.

Tesla received ATVM loans, does that mean it was bailed out too?

Last edited by Pulaski; Jul 31st 2013 at 6:22 pm.
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Old Jul 31st 2013, 6:15 pm
  #52  
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Default Re: Detroit Bankruptcy?

In fairness to Ford that wasn't bailout money. They gave those to foreign manufacturers too.

When a business attempts to spend for growth it's a gamble and they sometimes fail.

We can print money till the presses melt but sooner or later we will lose reserve currency status. The group or party that succeeds in that will be reviled for a long, long time, a historical marker. And the trust fund? It's an IOU from the government to itself basically, there's no cash, just more debt.

The thought that our leaders think debt doesn't matter at all gives me a chill.

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Old Jul 31st 2013, 6:30 pm
  #53  
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Default Re: Detroit Bankruptcy?

Originally Posted by Pulaski View Post
..... which impacts the future value of privately owned assets, by devaluing the currency, thereby transferring value from private ownership to government coffers just as surely as taxation would.
You guys don't really get it. An economy needs growth (national income), otherwise it fails. Without growth, none of the other stuff matters, as the economy will fail. If stimulus is required for growth, then the government would be foolish not to stimulate it.

Originally Posted by Pulaski View Post
Tesla received ATVM loans, does that mean it was bailed out too?
Yes, it was. Without the ATVM program, Tesla would have failed.
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Old Jul 31st 2013, 6:53 pm
  #54  
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Default Re: Detroit Bankruptcy?

Originally Posted by MostlyYank View Post
I know a few folks who think military spending is a net plus. On its' own I do not agree. I also don't believe one can spend ones' way out of debt. I'm willing to try, but I doubt my bank would like it
Spending one's way out of debt by governments have a much greater chance of succeeding than cutting taxes. Ever since WII, temporarily increasing spending has pulled the country out of recessions but cutting taxes has always increased the national debt. The only times prior to the current recession that the national debt has increased as a percentage of gdp was during republican administrations when they cut taxes. Believe it or not, the democrats have done a much better job of reducing the national debt as a percentage of gdp than the republicans.

USdebtclock.org currently pegs the US total unfunded liability at 125 Trillion and climbing by the million as you watch.
Much of that is because of Medicare and an aging population. Currently the US spends about 2x as much of the gdp as most other developed countries for medical care with no statistical advantage. The problem can be solved by passing most of the costs to the seniors as is desired by the right or it can be solved by reducing costs to bring costs in line with other developed countries as favored by the left.

The only way the plan from the right will work is if enough seniors die since they can't afford the cost and the government won't treat them driving down demand and therefore costs. As along as the government will pay the bills for seniors that can't afford medical care or the seniors default on medical bills, costs will still remain at 2x that of other developed countries.

The proposals by the left have a much greater chance of succeeding without undue hardship for seniors by applying pressure on health care providers, negotiate drugs prices with pharmaceutical companies, require generic drugs to be tried prior to trying brand name drugs, eliminate unnecessary end of life procedures unless the patient pays the bill, and implement a single payer system for health care reform.
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Old Aug 5th 2013, 2:41 am
  #55  
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Default Re: Detroit Bankruptcy?

[QUOTE=RoadWarriorFromLP;10810048

On the other hand, the judge may be doing a bit of grandstanding herself. She issued instructions that her decision be sent to Obama and that he should look into the pension issue, a move that was a bit out of left field. Circuit court judges in Michigan are elected, and this judge is up for reelection next year -- she probably expects that this decision will play well with the votes in her district, even if it is overturned.[/QUOTE]

Judge Aquilina, a Democrat, certainly hopes that Obama will look favourably upon her when it comes time to name a new federal judge in her District. Her ruling is absurd, but fully expected. Look for Democrats to pressure Obama to bail out Detroit - and for him to figure out how many votes he could buy for the 18 billion it would cost the rest of us.http://britishexpats.com/forum/image...ies/unsure.gif
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Old Aug 6th 2013, 5:22 pm
  #56  
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Default Re: Detroit Bankruptcy?

What would be the point, I thought Detroit was solid Dem?
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Old Aug 6th 2013, 5:52 pm
  #57  
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Default Re: Detroit Bankruptcy?

Originally Posted by Hiro11 View Post
... GM has regained the global sales crown it lost and is growing quickly overseas. ....
Thank goodness the Chinese like Buicks.

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Old Aug 6th 2013, 7:27 pm
  #58  
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Default Re: Detroit Bankruptcy?

Originally Posted by MostlyYank View Post
Thank goodness the Chinese like Buicks. .....
That's easy to explain: it's that one child policy they've had since the 1980's, and they now have a rapidly aging population!
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Old Aug 6th 2013, 7:35 pm
  #59  
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Default Re: Detroit Bankruptcy?

LMAO!!

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Old Aug 7th 2013, 6:01 pm
  #60  
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Default Re: Detroit Bankruptcy?

Watching TV the other day this thread occurred to me, the slogan from Whose Line is it Anyway but thusly:

'the rules are made up and the debt doesn't matter'

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