Recession.............................Economy.. Hmm.....??

[livendive 8]

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No, we cut the Aid to N Korea BECAUSE they admitted the nuclear program.

I understand that, I just worded my post very poorly.

Blues,
Dave

"I AM A PROFESSIONAL EXTREME ATHLETE!"
(drink Mountain Dew)

[PhillyKev 0]

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Uh, yeah, it does. If their economy collapses, it has global repercussions.

When was the last time you bought something in a store, any store, that had a "Made in Israel" label on it?

Last week. Bought some hardware security authentication from Israel. In fact a whole lot of security related computer software and systems come out of Israel.

Trade between the US and Israel last year was around 20 billion, with them exporting 5 billion more to us than we to them. Mostly diamonds, jewelry, integrated circuits, printing machinery, and telecommunications equipment.

[Guest]

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the half trillion we will spend there doesn't bode too well for the immediate future.

We spent half a trillion (unadjusted) in Vietnam. Fat lot of good that did too.

"The mouse does not know life until it is in the mouth of the cat."

[nightjumps 1]

The philosophy of lowering interest rates goes back to the Keynesian theory of economics. Lowering interest rates is supposed ot stimulate home purchases and refinancing so that folks will spend money on durable goods.

That was probably a good plan when there were no credit cards, but times have changed and I think it most folks just use the extra money to pay down their debt, rather than purchase durable goods.

I must admit that this is way outside my area of expertise and that I only have 12 college hours in econ.

When I watched G. dubya's speech on stimulating the economy, I couldn't help but wonder if he missed one area that might help stimulate the economy more:

What about a tax credit to those companies that hire someone in the next twelve months. A lot of companies are in need of hiring someone, but are just "kinda waiting" to see what the economy does before hiring.

Any econ majors out there that could address this?

[BlueEyedMonster 0]

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Last week. Bought some hardware security authentication from Israel. In fact a whole lot of security related computer software and systems come out of Israel.

Who cares if they came from there? Supply and demand... Israel has no natural resources of its own. If products stop coming from Israel (or any other country for that matter) they will just come from somewhere else.

[billvon 3,120]

>If products stop coming from Israel (or any other country for that
> matter) they will just come from somewhere else.

And in the interim while the new country is ramping up, that product will be in short supply. Prices will go up, fewer people can afford it, fewer people have jobs building it, fewer shipping companies make money shipping it, and fewer raw-materials suppliers will supply the manufacturer. Which is why it's an economic hit until the system adjusts.

[BlueEyedMonster 0]

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>If products stop coming from Israel (or any other country for that
> matter) they will just come from somewhere else.

And in the interim while the new country is ramping up, that product will be in short supply. Prices will go up, fewer people can afford it, fewer people have jobs building it, fewer shipping companies make money shipping it, and fewer raw-materials suppliers will supply the manufacturer. Which is why it's an economic hit until the system adjusts.

Product is in short supply, prices go up, newer suppliers make a bigger profit, have more money to ramp up faster. Raw material suppliers are MORE eager to sell to new manufacturers because they just lost their bread and butter.... and the economic hit will be minimal. Just like when the earthquake knocked out Taiwan's chip manufacturing a few years back. Prices went up, but only for a short time. Outsourcing, quick re-tooling by dynamic companies ensured that the shortage was quickly eased.