832 billion dollars

[bodman]

that is what America gives away yearly to foreign aid and the world food bank , WHY DONT WE JUST STOP IT FOR 2 YEARS UNTIL WE GET BACK ON TRACK.

[Adamski]

Dale,

As a member of the World Community, I think we have to be a little compasionate to the down-trodden. Even if the people of Bangladesh insist on living within a flood plane; I guess we must continue to bail them out. (Did you like the play on words?)

Larry /ubbthreads/images/graemlins/cool.gif

[geaston]

Where on earth did you got that number? It seems high by at least a factor of 10. A quick internet search says the non-military foreign aid budget in 2006 was 22.7 Billion, or .2% of GDP. Another indication your numbers are not just wrong but ridiculous, is the total expenditures of the Department of Defense in 2007 was 493 billion, not including Iraq and Afghanistan. Do you really think our foreign aid budget is higher then the Defense budget?

Including food aid is a total red herring, as the US own that food due to the massive subsidies given to corporate farming in the U.S..

If this was a report for high school civics class, I'm afraid you would flunk for lack of attribution.

(my attribution is wikipedia, which is not always right, but no where near as wrong as BodMan.)

[Bernard]

Bodman, Geaston is right. The number is much smaller. When you say just stop for two years did you take into consideration the number of human beings that would die of starvation if we did that?

I'm not a bleeding heart, but I do understand the responsibility that falls on a world power such as this great Nation. I can think of a whole lot of things that we can cut back on instead of food aid.

[bodman]

hey guys I googled foreign aid from america and that was the number i found. putting the problem in business terms we have a mess . if your mat has lost 50% of gross what you gonna do go buy more equipment ,give employees a raise , add health insurance for employees 4 weeks vacation , free dry. well what happens boom, up in smoke gone, close the doors. OR DO YOU SUCK IT UP DIG IN AND cut expenses. let employees go. open 24 hours , put out flyers the point is you would put yourself on a budget tighten up your belt and work thru it . giving money away is not one of them, WHY ON EARTH DO WE PAY FARMERS NOT TO GROW A CERTAIN CROP I have never heard an explanation I could understand, and why do we have to keep starving people alive , what do they contribute to the world ( maybe disease) ? wake up lets take care of us and once we are back on our feet then we can help out.

[Adamski]

Dale,

You bring up some valid issues, that's for sure. Oh, there I go with my Governor Palin impressions. Anyway, I'm getting a HUGE tax refund back from the feds on last year's income taxes. Last year was a TERRIBLE year in all respects. Huge losses in the stock market, poor year for the laundromat and even my house lost 100s of thousands in value. Nothing good came out of 2008 for me.

Others are in the same boat. So the fed must refund huge amounts of income tax at exactly the same time as it spends huge amounts of money on Obama's stimulus program. Something's got to give. Will our country become insolvent? Will we be faced with rampant inflation as the Bureau of Engraving & Printing prints more money for M1 (our cash money supply)? Will we face economic collapse that will make last October look like a mere economic hiccup? Will unemployment top 20% nationally (it's at 15% in Muskegon country right now)? I wish I had the answers but I don't. I can only suggest that we all tighten our seat belts real snug because I think the ride could get even rougher than it has been up to now.

Larry /ubbthreads/images/graemlins/cool.gif

[bodman]

one thing our goverment could do is suspend all credit cards for 3 years which would make people live on what they earn, freeze the interest rate on the cards 4%max that way people could pay back the cards and decrease the principal owed . To borrow an idea from BillCosby social security will immediately return to its original state . If you did not put nuthin in you get nothing out. and The president nor any other politician will be able to touch it. and on education welfare checks will be handed out on friday at the end of the 40 hour school week and the successful completion of urinalysis and a passing grade. Thanks Bill. We have become a nation of IT IS NOT MY FAULT the moon was in the wrong phase or some other dumb thing like that. The main reason I went into the coin laundry business was to get away from employees that only have excuses not remedies.

[geaston]

Larry,

I have a background in Economics and you are right. It seems to me we have to accept huge unemployment numbers or high inlfation in the short term (this is your textbook Phillips Curve.) I think it's probably going to be unemployment. If it's inflation it's really going to add a new wrinkle to card vs. coin debate. 20% annual inflation is whole lot of dollar coin conversions to keep up with. /ubbthreads/images/graemlins/wink.gif

[Adamski]

[ QUOTE ]
one thing our goverment could do is suspend all credit cards for 3 years which would make people live on what they earn, freeze the interest rate on the cards 4%max that way people could pay back the cards and decrease the principal owed .

[/ QUOTE ]

Dale,

Yes, it would be nice the get personal credit card spending under control. However, I think we also need to take away Congress' national credit card which is drawn on the Bank of National Debt. Somebody has got to say "enough is enough".

Larry /ubbthreads/images/graemlins/cool.gif

[Adamski]

[ QUOTE ]
... It seems to me we have to accept huge unemployment numbers or high inlfation in the short term (this is your textbook Phillips Curve.) I think it's probably going to be unemployment. If it's inflation it's really going to add a new wrinkle to card vs. coin debate. 20% annual inflation is whole lot of dollar coin conversions to keep up with. /ubbthreads/images/graemlins/wink.gif

[/ QUOTE ]

Geaston,

I think that high unemployment or high inflation will wipe out many laundromats (as well as other types of businesses). Laundromats may be recession resistant but they certainly are NOT depression proof. The strong will survive to prosper someday but the weak will rapidly turn to dust.

My laundromat is the market's High Price Leader and it's suffering due to 15% local unemployment. The higher unemployment goes, the more my business suffers. So, you'd think that if the High Price Leader is losing business due to high unemployment; then the Low Price Leader must be gaining business, right? Wrong! All laundromats in my market are down substantially but it appears that I still have the highest volume in this market. So being a Low Price Leader (or worse yet - Low Price Follower) is no guarantee of survival if we fall into a Great Depression.

Larry /ubbthreads/images/graemlins/cool.gif

[Brett]

Larry, your house lost 100s of thousands of $$$$ in value in Michigan? I own 3 mats,I must be doing something wrong!!!!! BTW I agree it is stupid to pay not to plant, but I will give all I can to keep one person from starving in this world. I was a soldier for 20 years running around the world and know how good we have it here. I may vote republican, but I'll reach out to help anyone in need if they also want to help themselves.

[geaston]

For our industry as a whole, high unemployment is going to preferable to high insurance for several reasons:
1) Unemployment is not equally distributed across the US, whereas Inflation basically is. You in Michigan are going to suffer the worst of it, no question. But I'm in Montana and our employment base is radically different from yours, so I suspect I'll be ok.
2) Real, lasting energy inflation would wipe out most of us. We simply couldn't raise our prices fast enough.
3) The unemployed need clean clothes as well. They may come in less, but they'll come in. People who's wages are eaten up by rapid inflation face much tougher choices.
4) We are actually much closer to a period of deflation right now than inflation, which in a macro sense is a catastrophe waiting to happen. If energy prices continue to deflate *and* you are not in need of an upgrade (because deals will be very difficult to find) then you actually may thrive.
5) We don't have an inventory who's value may be subject to change.

[Adamski]

geaston,

The current deflation, which is limited to a few specific sectors such as energy and natural resorces, is not likely to continue or progress to other areas. As consumers reduce the volume of their purchases due to unemployment, the retail cost, on a per purchase basis, will likely increase due to the inefficiencies of that reduced volume. As that happens, inflation will begin to take hold in all sectors of our economy.

So, what I am saying is this: we already have an increasing national unemployment rate. I think this, combined with wild government spending, will prime the inflation pump and we'll see prices of everything climbing 8 - 10 percent annually. No state will be immune from either the rise in unemployment or the inflation. At this point, I think it's unlikely the Stimulus Program will save any of us from depression (or at least becoming very depressed).

Larry /ubbthreads/images/graemlins/cool.gif

[geaston]

It can't be both, at least in the near term. Unemployment and inflation pull in opposites direction. What we are seeing in a rise in unemployment and fall in inflation. This is to be expected, it is the Phillips curve.
My point is we have enough to worry about, and inflation isn't one them in the short term. Inflation won't come until there is rising demand, which is hard to see with all the continuing news.

[nycwash]

The recession proof vs recession resistant distinction is very interesting and important since most people either go or consider going into laundromat business thinking it is recession proof.

Larry,
% wise how much did your sales drop?

I can see the unemployed people have less stuff to wash since there is no “work cloths.” Also, if people are unemployed they have much more time to do their wash using home machines or even by hand.

[Adamski]

nycwash,

I'm down about 1% for every 1% of unemployment in Muskgeon county - that's about 14%. I've been watching my competitors closely and I've noticed NO increase in their business ... in fact, I believe they are down as well.

Folks out of work can:
1. Wash at mom's house.
2. Wear their clothes 2 days instead of one.
3. Hand wash their clothes in the kitchen sink.
4. Dirty fewer clothes since they're out of work.
5. Find a cheaper laundromat.
6. Wash at Sacred Suds for $1.00 for their ENTIRE laundry.

I'm not complaining, mind you. I'm lucky to still have most of my customers all things considered. After all, my vend prices are among the highest in the nation.

Larry /ubbthreads/images/graemlins/cool.gif

[nycwash]

[ QUOTE ]
nycwash,

I'm down about 1% for every 1% of unemployment in Muskgeon county - that's about 14%. I've been watching my competitors closely and I've noticed NO increase in their business ... in fact, I believe they are down as well.

Larry /ubbthreads/images/graemlins/cool.gif

[/ QUOTE ]

Larry,
Thanks for sharing.

The way I am reading it you are down more than 1% in gross for 1% in unemployment, unless unemployment was 0% before. Also, for others who might not understand a 14% drop in gross can easily cause a 30% drop in net.

[Adamski]

nycwash,

You are very astute ... and correct.

Larry /ubbthreads/images/graemlins/cool.gif

[Howard]

Here is another way of looking at our messed up economy. Many companies are cutting worker's hours or letting them take a pay cut so as to not layoff some workers. This is a big mistake. While it sounds nice on the surface it is helping to kill the economy. When you layoff 10% of the workers then 10% of the workers feel pain - but they collect unemployment and may get other aide. When you cut the wages of everybody by 10% no one looses everything, but everyone looses 10% with no unemployment insurance of other aide. That 10% reduction in gross may makeup 50% or more of their disposable income. Thus, they cut back on purchases which hurts all the other businesses in the area and helps prolong the cycle.

[geaston]

[ QUOTE ]
Here is another way of looking at our messed up economy. Many companies are cutting worker's hours or letting them take a pay cut so as to not layoff some workers. This is a big mistake. While it sounds nice on the surface it is helping to kill the economy. When you layoff 10% of the workers then 10% of the workers feel pain - but they collect unemployment and may get other aide. When you cut the wages of everybody by 10% no one looses everything, but everyone looses 10% with no unemployment insurance of other aide. That 10% reduction in gross may makeup 50% or more of their disposable income. Thus, they cut back on purchases which hurts all the other businesses in the area and helps prolong the cycle.

[/ QUOTE ]

Howard, when you reduce hours across the board the firm is still producing something, albeit at a reduced rate. They are also paying payroll taxes, SS contributions while usually keeping a substantial part of the benefits. Also, ramping back up to 100% is relatively easy. When a firm simply closes 10% of it's production, that production is gone for good or at least for a very long time.
There are no easy choices in these times, but reduction in hours is always going to be a better choice for employees, firms and communities than closing factories. Unfortunately by the time many firms get to this point the decision is made for them and closing is the only option.

[Howard]

geaston -- I think you missed my point. From the company's perspective you get the same reduction in output from a 10% cut in people versus a 10% cut in hours for all people. Same total payroll, same payroll taxes, same output. I am talking about the macro economic impact and suggesting that the 10% cut in hours is far more devastating to the economy than cutting back 10% of the workforce.