I love how the budget deficit has nothing to do with Obama...

[JaggedEdge]

Where did you read/hear this at? The price in oil fell because the demand was not there, meaning people stopped using it as much as they were. Right now we have more oil in our reserves than we have ever had before. If you have ever thought about investing in oil, right now is the time to do it.

How did our demand fall at the exact same time Congress allowed us to drill offshore? Did people suddenly stop driving and stop turning on their heaters? Where the hell did you hear that at?

[JaggedEdge]

The FED is not, and has never been a neccesity in this country. If these "bigger Banks" do not operate right, then they will collapse just like you see now, but instead of letting them die like they should, we prop them up and give a false image of being sound. If they're in the process of failing that means they're doing something wrong and need to change the way the banks are managed. If they do not change, then they will just die off, and another bank will take it's spot.

Amen, I disagree with the FDIC protecting citizen money up to $100,000
as well. If we eliminated the FDIC, private companies will pop up and citizens can pay premiums to have an amount they want protected. People who never have more than $300 in their account really don't need protection, and people with a lot more money need more than $100,000 protected.

[epxroot]

How did our demand fall at the exact same time Congress allowed us to drill offshore? Did people suddenly stop driving and stop turning on their heaters? Where the hell did you hear that at?

Yes, they did. Where were you when gas prices shot up to over $4 in my area? During that whole time gas rose to ridiculous prices AMerican stopped consuming as much gas. We found way to conserve when using gas, and our consumption dropped. Thats one of the reason Elkhart IN is in such a hard time right now. Their whole industry was in RV's, and since people stopped driving, no one is buying those RV's. It was also all over the news.

[GoldenBoy812]

Note: I am without a doubt the most capitalist of anyone on this site. I live and breath free market theory:jointsmile: Now....

This system is not equipped to function in a free market state. The welfare/disability expenditures allocate resources in what might be, the most inefficient manner possible. In my family, i have 3 relatives that completely rely on government aid, and would be utterly in the gutter without it. Keep in mind, two of these three think of themselves as competent individuals, until you ask them why they do not have/or can hold a job. And of course, they only bank at a pawn shop/check cashing store. The third is truly disabled, although they will never admit it until you ask the same "job" question. To a point, our welfare system is needed, but not in the victim based fashion we have now.

The US also promotes free trade while its chief trading partner uses a double currency standard, that distorts the yuan by depreciating it against the dollar in a two limit band. Their population however, does not use this currency as a medium of exchange withing its economy, otherwise they would have 25% inflation or even greater. While it is true that the Chinese have allowed it to float a bit, the use of a double limit band is entirely centralized, and is on the opposite end of free trade. And yet, we will never end our trade with China because it keeps prices down.

Taxation feeds government activity. Even in states, the solution to budget deficits never really seems to encompass a reduction of spending. As the most efficient maximizer's of resources and credit are taxed on their success, the least efficient (whether or not it is their fault or not) have their poor economic decisions subsidized (welfare state). Just as many would site government bailing out big corporations as moral hazard, that has a tendency to facilitate failure inducing risk, so does providing unlimited assistance to the poor. In fact, it is my belief (although i have not studied the subject enough to actually confirm) that higher levels of taxation reduce the amount of charity donations (although economic recessions do as well). Regardless, the majority of voters are not rich, and it is of the interest of specific politicians to appease the majority for the sake of job security. Personally, i would have no objections to welfare if those who received it were not allowed to vote in elections. Reason be, if the only source of my income came from a political system, would i ever hold any issue in higher regard? One could mistake it as a form of political bribery. This is why i support a national sales tax.

There are many more reasons as to why we cannot be a free market. But given the situation, without a central bank like the Federal Reserve Bank of the United States, the lack of freedom in a market modeled on it will face constant depressions. When things get bad, people as a whole will spend less, and hoard currency. As this persists, trade flow begins to deteriorate to the point where more and more jobs are lost, and a race to the bottom is created. Dollar denominated assets fall with prices with desperate attempts to entice potential buyers with lower prices. Wage deflation follows.

If Ben Bernanke did not enact full scale quantitative easing practices (invoked inflation), prices would have far more than they already have. Not just prices for food, but the values of houses purchased in the past (with contractual obligations to make fixed payments) along with wages, retirement accounts, and demand in general.

Without a free economy, allowing ours to act as though it is free, without a central banking authority, will lead to constant deflationary price spirals that cause economic depressions.

[GoldenBoy812]

Yes, they did. Where were you when gas prices shot up to over $4 in my area? During that whole time gas rose to ridiculous prices AMerican stopped consuming as much gas. We found way to conserve when using gas, and our consumption dropped. Thats one of the reason Elkhart IN is in such a hard time right now. Their whole industry was in RV's, and since people stopped driving, no one is buying those RV's. It was also all over the news.

The 100% + increases in foreclosures accompanied with a collapse of the credit markets in October pulled prices into equilibrium. Whether or not that equilibrium is beneficial has yet to be determined, as the majority of retirement accounts contain energy based investment.

Which is why i agree with you. Less RV's, means less people making them, means less groceries, energy, and entertainment: this cycles into further job cuts.

Oil demand has fallen from over 1 billion gallons per day (20 million barrels) to about 900 million gallons per day. With a 10 to 1 inventory relapse possibility (every ten days our oil inventories can replenish one day of demand), cuts in world oil production took place.