Our financial system is crumbling this week.

[Hungary Jack]

Right. I understand that.

But, it seems, to me at least, that he has a valid point that you have to make something people want. We've gotten by by just giving out money which obviously everyone wants. But...that definitely won't last forever.

On top of that, the states being in so much debt. Illinois, New Jersey, California, etc are facing huge deficits and cuts/tax raises which could mean the loss of jobs for government workers both at the state and municipal level of their funding is cut as a resutl.

I guess I just worry too much. But, man, there's a lot of bad still out there.

We are only beginning to see the beginning of the great deleveraging of the US economy. Corporate balance sheets are in very good shape, but the balance sheets of our federal, state and local governments, as you suggest, look horrendous. And consumer balance sheets are pretty dismal too, with high unemployment and falling home prices to rub salt in the wounds. And yet some want to raise taxes on consumers...

[ghostrunner]

Right. I understand that.

But, it seems, to me at least, that he has a valid point that you have to make something people want.

I haven't watched the video, but I think that whole "we don't make anything" has been debunked by several people on the left and right. I'll see if I can find one.

Here is one that I suspect AD may have a quarrel or two with, given the name of the blog.

http://cafehayek.com/2006/02/we_dont_make_an.html

(on another note, I challenge anyone to google anything on Friedrich Hayek without getting completely derailed in the process)

[Freed Roger]

This guy isn't saying anything that hasn't been said before. Many people are scared, and rightly so. There's a market for a guy like him to play in to those fears-by doing it in prophet form.

[Arthur Dent]

Here is one that I suspect AD may have a quarrel or two with, given the name of the blog.

http://cafehayek.com/2006/02/we_dont_make_an.html

I don't have disagreement with most of that. There's nothing inherently wrong with increased employment in services instead of manufacturing. Although American unions have historically been concentrated in manufacturing, there's no reason that has to be the case. I do think the outsized growth of financial services is a serious problem, but this has nothing to do with the fact that finance doesn't take place in factories.

Side note: I am not sure whether I am counted as a manufacturing or service employee. The site I work at includes a factory, but I don't work there, and my job would be largely unchanged if production work were moved elsewhere. I think the answer is that I am considered to be in manufacturing since my company still produces much of its own output, but if production were shifted to third-party foundries located elsewhere, I could be reclassified as providing engineering services.

[ghostrunner]

Interesting poll results on the debt, and the "debt ceiling"

http://news.yahoo.com/s/nm/20110112/bs_ ... l_spending

Some 71 percent of those surveyed oppose increasing the borrowing authority

Only 24 percent say the country can afford to cut back on education spending

21 percent support cuts to law enforcement.

51 percent supported cutbacks to military spending.

Some 53 percent support cutting the budgets of financial regulators like the Securities and Exchange Commission,

47 percent support cutbacks to national parks

Only 20 percent supported paring Social Security retirement benefits while a mere 23 supported cutbacks to the Medicare health-insurance program.

Some 73 percent support scaling back foreign aid and 65 percent support cutting back on tax collection

Seems like the greatest support is for cutting spending in areas where the least amount is spent - except for the 51% for cutting defense, which surprises me.

[G. Keenan]

On top of that, the states being in so much debt. Illinois, New Jersey, California, etc are facing huge deficits and cuts/tax raises which could mean the loss of jobs for government workers both at the state and municipal level of their funding is cut as a resutl.

You can add Texas to that list.

[AWvsCBsteeeerike3]

On top of that, the states being in so much debt. Illinois, New Jersey, California, etc are facing huge deficits and cuts/tax raises which could mean the loss of jobs for government workers both at the state and municipal level of their funding is cut as a resutl.

You can add Texas to that list.

If the etc didn't take care of it. Okay. I'll go back and add it.

[G. Keenan]

On top of that, the states being in so much debt. Illinois, New Jersey, California, etc are facing huge deficits and cuts/tax raises which could mean the loss of jobs for government workers both at the state and municipal level of their funding is cut as a resutl.

You can add Texas to that list.

If the etc didn't take care of it. Okay. I'll go back and add it.

Chill out. You're all jumpy today. I wasn't trying to be a smart ass, just using your post as an opportunity to bring out a state that hasn't come up much in all the discussions about deficits.

[AWvsCBsteeeerike3]

Chill out. You're all jumpy today.

I really am for some reason

[Arthur Dent]

And, of course, Arizona. Thrill posted a nice article earlier about what happens when the right actually controls the budget. They've slashed social services and literally sold off the capitol building but still face a massive deficit.

http://harpers.org/archive/2010/07/0083023