Robert Winner

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38 cities in the USA have filed for bankruptcy ... why

If we are recovering ... the economy is getting stronger ... less unemployment .... why have 38 US cities filed for bankruptcy .... why are many states on the verge of bankruptcy ... why are we the USA 17 trillion dollars in debit.?

The words do not match the facts ....

I am not an economist or a financial analyst ... what is the problem and what is the solution or is it to late.

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    Dec 8 2013: The problem is that 'economists' use the wrong analysis and equations.

    As Kenneth Boulding said, " Anyone who thinks exponential growth can go on forever is either a mad man or an economist".

    We have both at the helm and their failures will affect us all.

    The one silver lining, 'the closer one lives to the ground, the less one will fall'. It's going to get very rocky quickly now.... pay attention.
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        Dec 8 2013: Jason.... Like Kenneth said, you must be either a mad man or an economist. Which one is it....
        Seems your living in a bubble... break out and smell the pollution...And state which part of finite planet do you not understand? Meanwhile we add a billion mouths every 15 years or so.... It took until the early 1800's to reach the first Billion. In 1950 there was 3 Billion and now over 7 Billion. If that ain't a bubble dude, I'm not sure what it.....
    • Dec 10 2013: What do you mean by wrong? Economists seek to understand market behaviour through mathematical modelling. Every such model is wrong, by definition, because models are simplifications of reality. That is, in fact, their purpose. A model that encompasses all of reality is as complex as the phenomenon that it seeks to model, and is therefore useless in the quest for understanding.

      You seem to have a problem with the idea of infinite exponential growth. There are two sides to this story: the theoretical, and the empirical. First, the theoretical. Exponential growth is an undeniable mathematical truth in certain well-defined problems. For example, the accumulation of interest is not just modelled as exponential growth, it is exponential growth. If you would leave your money at a bank for an infinite amount of time, the amount will grow exponentially for an infinite amount of time. You'd have a problem with a large body of mathematics if you deny this.

      In reality, of course, you could not leave your money at a bank for an infinite amount of time, and this is where the empirical side of the story comes in. I do not know of any economist who claims that any model of reality is completely accurate and valid for an eternity in the future. In other words, I don't think any economist is even claiming that exponential growth of empirical phenomena can go on forever, discrediting Kenneth Boulding.

      What economists do claim is that some empirical phenomena are best modelled as exponential growth, which is something quite different. For example, the growth of Brazilian GDP between 1920 and 1960 appears to grow exponentially.* If you'd try to predict the future on the basis of this graph, wouldn't you continue the same pattern that you have already seen? That is not believing that exponential growth continues indefinitely, that is making the best use of a limited amount of knowledge.

      * http://commons.wikimedia.org/wiki/File:Brazilian_GDP_growth_1920-1960.png
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        Dec 17 2013: Mr X
        Unchecked growth is called cancer in the medical and social models... Perhaps one day you will understand that.
        Think holistically and connect environmental, economic and social costs (liabilities or externalizations) and causes with subsequent effects and see if your world view doesn't get bigger.
        • Dec 17 2013: Unchecked growth is not necessarily exponential, nor is exponential growth necessarily unchecked.
        • Dec 26 2013: Politicians do not want to know about confidence intervals. Economic extrapolations that include confidence intervals very soon reach "plus or minus a number so large it might as well be infinity". Politicians don't want that part. They just want the line in the middle. Anything else is sinfulness.
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      Dec 28 2013: Craig,
      The link below gives a wise view of the statement " Anyone who thinks exponential growth can go on forever is either a mad man or an economist".

      http://www.youtube.com/watch?v=F-QA2rkpBSY&feature=related
  • Dec 5 2013: It's easy to understand but most refuse to accept the answer.
    The monetary system doesn't work.
    Just as home fore-closures are built into the banking system, so too do fore-closures infect cities and countries.
    It is finally failing and trying to keep it afloat is debt. Let it die and do not, under any circumstances, accept
    a global currency to replace it. Move away from money.
    (A cancerous cell is a cell that has forgotten how to die.)
    That may be one reason why this is happening: to force the world into a global currency in order to
    maintain and increase power over people.
    Take the control, ownership of the earth's resources away from those who have it. They mismanage them for profit and power. And waste them while polluting everything then they have the populace believing it is all because of over-population. Not wasting, not polluting is what economy is and should be about.
    Figure out how to create a just system for people to govern themselves in. It can be done, it has to be figured out.
    Nothing costs money. Everything costs people.
    Stop looking to those in authority, positions of power and influence and so on to solve your problems.
    They not only never do, never have, and may very well not know how to, more importantly,
    they have no intentions of doing so.

    Things don't.........."get done"..........because of money.
    Things ............."don't get done"......because of money.

    Money actually blocks humans from solving their problems. That and politics.
    Look at the word "politics"
    "Poli" means many. And" tics" are blood-sucking parasites.
    That's what bankruptcy is by those who cause it. Blood-sucking.

    The rise in value of money only means a lowering of the standard of life globally.
    And an increasing degradation of the global environment, all ecology and an even
    faster using and wasting of the earth's FINITE resources.
    Me wonders just why those in power are so willing, so eager and so active in intentionally destroying the earth!? True sociopaths? Psychotic?
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      Dec 5 2013: So, you have a problem with money.... It's really an inanimate object that is used in the exchange of goods and services.

      Here is a story. When I was a kid, I went to Sunday School. Sunday Schools were big back then. They taught us that Adam and Eve committed a sin after being tempted by the devil in the form of a snake. The old monk. our teacher, went on to say that the devil went out and won the souls of many men turning them evil. So, I can't really blame an inanimate object for the cruel evil of some men.
      • Dec 5 2013: You completely miss the point.
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          Dec 6 2013: I did? You mean that money did all that you described and not the people who manipulation the money to their will and way?
          Random,
          There are bad people out there doing bad things... They take money and use it as a instrument raise havoc on the rest of us.
          If you could take away all the money tomorrow, they would just find another means to do bad things. Things like money or nuclear bombs are just things.... it is the immoral people that take things and use them for immoral activities.
        • Dec 6 2013: If we know our kids will consume candy till they get sick and leave us with diaper duty. Who is at fault...

          Us for leaving the candy out. Us for allowing money to have so much control in society.

          I
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      Dec 28 2013: Random Chance, I just wish I could not agree with you.
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    Dec 28 2013: I was booted out of one conversation for posting the link below along with my expression of personal feelings, so I will keep my feelings to myself and see what happens.

    http://www.youtube.com/watch_popup?v=Lvl5Gan69Wo
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      Dec 7 2013: Jason. If the above truly represents your political views and associated finger pointing you have set your mind in concrete and any further discussion of facts would be fruitless.

      Thank you for the response. I wish you well. Bob.
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          Dec 7 2013: No. You stated it was right wing hyperbole and Bush's fault.

          Thanks for the reply. Good bye. Bob.
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          Dec 7 2013: I don't think Bob is a righty Jason, I've known his online persona for a while now and it is neither extreme like my countries nutty righties. Trust me, I'm always wading in with our righties but it is very informative.

          Is it not your countries Lobby department that has brought a lot of grief to the American people? The groups within groups that stay in the background?
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  • Dec 6 2013: Mismanagement and a gravy train mentality by politicians. They get elected and then they create cozy deals for their supporters. Eventually, people get sick of it and move away. Too few people live there to support the corruption anymore. City collapses.
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    Dec 6 2013: "Wealth inequality in America" is the most likely cause.
    http://www.youtube.com/watch?v=QPKKQnijnsM
    Especially if you combine that with this censored TED Talk by Nick Hanauer. http://www.youtube.com/watch?v=bBx2Y5HhplI
    • Dec 6 2013: Gee, how about irresponsible spending like drunken sailors by city government.
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        Dec 7 2013: "Irresponsible"? Yes very likely, but that's nothing new and it's not really a growing problem that would explain this...
        • Dec 17 2013: And personal indebtedness often comes about through behaviors that are "nothing new". However, an overall economic downturn will do more pain to the irresponsible spendthrift.
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        Dec 10 2013: I never said that we didn't have any lobbying, and I have 10 fingers so I'm pointing one at me right now. But there's also a really important difference here, as you say "Sweden's EX-politicians".

        You guys have to cash in to even get a chance at becoming a politician.

        And that combination could mean anything...
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    Dec 5 2013: Why are states and cities and even the USA in so much debt? Why bankruptcy?

    Simply put, they spent more then they had coming in. I don't understand and I asked politicians I know how could this happen and they tell me that there is so many things that need doing by government... from filling pot holes to fielding Army Corps overseas. They went onto say that they could always raise taxes to cover the costs... except when they can't. They didn't foresee industries collapsing, countries overseas making more stuff for our markets then we made. The didn't see the employed workforce drop to 60% of the available workforce and the resulting loss of taxes.

    They tell me there are two choices... they can continue to spend like they want to and raise taxes on those left working or find ways to cut back on spending to the most essential and meet the available income....
    The third option was financial suicide - bankruptcy.... Some just take the easy way out.
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    Dec 5 2013: Maths is not my forte, but let's try.

    USA debt 17 trillion. Some have put it at hundreds of trillion, but put that aside.
    USA population 300 Million
    Divide one by the other we get App. 50 Thousand.

    So the average family (Dad, mum, 2 bairns) owes 200 Thousand.
    Repayments over 25 years app. 1300 per month.

    Can the average family afford this ? If not the your bankrupt.
    The UK isn't far behind, but seem to be taking things a bit more seriously.

    Apologies if I am miles out.

    :-)
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    Dec 5 2013: Detroit is the archetype:

    https://mail.google.com/mail/?source=navclient-ff&zx=1rjzf1qfs9xrb&shva=1#inbox/142c05f3a6906470

    O's comments are ironic as the true cause of the financial inequality is the money printing which hugely favors the rich as they are able to invest ahead of the inflation with cheap money.

    At this point it would seem there are only 2 real options one is revolution the second is secession. There is an outside chance that more people are becoming economically literate and will demand instead of acquiesce.
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      Dec 5 2013: Pat maybe it is just hopeful thinking ... but MSNBC, NBC, ABC, and the huffington Post have all had as of late articles that were anti Obama. They have posted failures of the past and not much hope for the future.

      This could be two things ... One: That they truly see ... or Two: They are gearing up for Hillary and undo the ties to the Obama failures ... mid term elections are coming could also be a player.

      Frankly I do not hold much hope that the general public will see the issues. The chances are much greater that the public will fall for the same "Free Stuff" BS that they have for the last two elections.

      Even if the people became economically literate the path to recovery would be brutal and long term. Ike did it on a small scale but this recovery would be gigantic.
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        Dec 7 2013: I still think economic literacy is the answer, the trite statement of education blah blah but it is true imo.

        Another factor that is more pragmatic is simply that the dollar is being devalued which means that those cheap Chinese goods are not going to be cheap anymore it also means that jobs are going to be coming back this way to some degree. Along with this will be a different culture and because the dollar will be harder to come by, saving will become more prevalent. China will become a more consumption oriented country. And because jobs will being leaving China they will also go to mexico which will alleviate the border problem.
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        Dec 7 2013: How is a war a municipal responsibility?
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        Dec 7 2013: Ok I get you, the funny thing is that the Federal government is supposed to be subordinate to the states. Except in the case of a war, sort of incentivices the Fed to start wars?
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        Dec 7 2013: " I don't think subordinate is the correct term."

        Sure it is, in context of the constitution. It is a question of where sovereignty belongs which is with the individual followed by the state and then the FED.

        The financial problems are caused by abuses at the federal level. Things like the Fed level education which controls the state funds, same with highways, all of it an egregious violation of the 10th ammendment.
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        Dec 8 2013: "well that is only your opinion and not based on the constitution as written"

        Section. 4.

        The United States shall guarantee to every State in this Union a Republican Form of Government,

        No it is not my opinion.

        I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands

        apparently you do not know what a republic is.

        The idea is that the FED is held in check and IS subordinate to the states, this is because the framers understood the problems with a centralized government.

        This means that the FED has no business in education, roads, energy, and a litany of other things it has NO business being involved in no matter the perfunctory reasons people use for doing so.
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        Dec 9 2013: I agree to disagree, it is just a Republic period. Any arbitrary additional "ideas" to the contrary are delusional, a delusion shared by many.
  • Dec 4 2013: U6 is almost 14% Wages have fallen.
    States and cities with many people are in bad shape.
    As we start looking more like a third world country e.g. poor citizens What would you wxpect?
  • Dec 4 2013: Its because local government tends to be full of incompetence.
    Its just like the national government, except the people involved are usually less ambitious, don't have a wealth of experts to call upon, and are often under less supervision and accountability because their actions are a lot less likely to make it to the media (large parts of which have upgraded to a national scale in recent years, which makes your average local news beneath their interest).
    • Dec 4 2013: What about the overall economic situation? Do you believe our business leaders are really better?
      • Dec 5 2013: Overall economic situation is a result of a different process. Years of passing the economy down from hand to hand, with changing objectives and a million different players each with their own interests.

        The problem is, no one fully understands these big economic systems. We've got some pieces of the puzzle, but its all too complex to follow for any on person or even group of people. So we make rules of thumb, and we go with them. They work fine most of the time, but every now and again they fail, and we make new rules of thumb while we're paying the price for the problem with the old set.
        There's a reason you've got recessions the world over. No one's quite figured out a better system than trail, error, and the odd patch and mop up when things start to leak.
        • Dec 5 2013: In Econ101 We are told how to lower wages and engineer the domestic problems as were done in the past. Classical economics Ricardo and Malthus gieve us models that are very impressive.
      • Dec 5 2013: Those models only give you an incomplete picture.
        Even if they manage the economic side flawlessly (and I rather doubt they're capable even of that--again, its really complex even without going international), economy doesn't exist in a bubble. It strongly impacts the society around it which in turns influences the economy, and sociology is among the least exact of the sciences.

        Besides, based on empirical evidence (the only thing acceptable as a basis for a theory if you ask me), the models apparently aren't that perfect. Otherwise, we wouldn't have recessions, which we obviously do.
  • Dec 4 2013: The USA will be next! It has already begun. The first stages of default are already over and we are entering the second phase. How long do you think it will be before entire states declare bankruptcy? What happens when California or Texas declares bankruptcy? Several states have already filed papers to secede from the USA. The "United" states is no longer united, if you think so look closer at what is happening in DC. They are so busy dividing up and selling off America's assets they don't have time to legislate. They are selling our mineral rights to other countries, they are selling entire companies to other countries, they are selling our information to other countries, they are selling our technology to other countries, they are selling our land, water and air to other countries, they are selling our people to other countries. Is there anything in America that cannot be bought by some other country? Anyone with enough money can buy our constitution, bill of rights, legislators, white house and even the supreme court. Not only can it be done, it was already done a long time ago.
    • Dec 4 2013: Citizaens United etc.
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      Dec 4 2013: Yes I have read that many states wish to secede ... that many California cities have filed and more are awaiting the outcome of Detroit court cases and then will proceed with Detroit as a precedence. The 28 states that told the feds that Obamacare would bankrupt them were told that the fed would buy up the loans and the states would belong to the federal government with no states rights.

      I read a article that said some states will not allow, by law, cities to declare bankruptcy. So the true state of the union is unknown there many be hundreds in deep doo doo.

      Obama was on TV a few minutes ago stating that income disparity is the problem and poses a threat to the American Dream. It is the fault of the obstructionist GOP. I would suggest that he, Nancy Polosi, and Warren Buffet both lead the way ... divest themselves of all their wealth .... talk is cheap. When I see all of the multi-millionaire Congressmen giving up all of their wealth I will be a believer.

      Now that it is re-election time for many who are serving in Congress we see democrats distancing themselves from the president and these policies in a attempt to keep their elitist jobs ... hope the voters see that.

      I think we can see the problems with simple math ... You cannot spend more than ya got.

      But the last part of the question is what can we do ... and is it to late?
      • Dec 4 2013: http://youtu.be/I2KR0bPa92M
        I made the above video in response to that very question, it's called "Fed. UP" at the end is some suggestions I believe would be a good first step. The problem is the problem has been around for a long time and has become a really bad habit for the entire world. The solution is simple "If you break it, you fix it"

        The real problem is surprisingly just as simple. All organizations unrealistically want and have adopted another policy that goes like this: "I break it and then get you to fix it by force if necessary" or it does not get fixed and the world turns into a galactic dump.
        You see the few at the top mostly the Rothschild's have over the course of hundreds of years set that policy for the whole world. It is only successful because we use their currency (banking systems, stock markets). With their currency they bribe and control Corporations and corporations control governments and governments control with force the people.

        There is a simple two part solution! 1) Adapt and change the policy to- "If you break it, you fix it" and 2) Move over to a time based currency ("timebanking" it is currently not taxable)

        Once you stop giving them all your money their slave system will collapse like a house of cards.
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        Dec 5 2013: Bob, you write "and the states would belong to the federal government with no states rights." I have a feeling there is an error in whatever news source reported this.
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          Dec 5 2013: The remark came from Attorney General Eric Holder ... I will find the article again .. Bob.
    • Dec 4 2013: The USA cannot declare bankruptcy. A country can decide to default on its debts, but as a sovereign state it can not go bankrupt.
      • Dec 4 2013: minor detail... the results are the same. Poor choice of words.. TY Timo
        • Dec 5 2013: If I read correctly, your argument over the secession of states, the philosophy of 'if you break it, fix it' and 'timebanking', has its foundation in the possible bankruptcy of the USA. If I were to make such a far-fetched and, honestly, rather outlandish argument, I would ensure that I'd have my basic facts straight.
      • Dec 5 2013: OK Timo I thanked you for the correction, I made the correction above and I will agree that possibility of the USA defaulting is both outlandish and seems far-fetched, however I am sure the citizens of any country that has already gone through this felt the same way before it actually happened. Just as before any of our major corporations like the entire auto industry, Fannie May, most of the banking system, all of the investment trusts also thought it outlandish and far-fetched that they would be begging the American people for a $700 Billion loan. Then to thank us they sat back and laughed as they gave themselves bonuses, promotions and Obama rewarded them with cabinet posts in the government. That's what I call outlandish!

        And to top it off BOA didn't even need the loan so they took the money and bought out Wells Fargo with CASH! Check those facts.....