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| Economy |
| $2 Trillion Underground Economy May Be Recovery's Savior |
| 2013-04-26 |
| [CNBC] The growing underground economy may be helping to prevent the real economy from sinking further, according to analysts. The shadow economy is a system composed of those who can't find a full-time or regular job. Workers turn to anything that pays them under the table, with no income reported and no taxes paid -- especially with an uneven job picture. "I think the underground economy is quite big in the U.S.," said Alexandre Padilla, associate professor of economics at Metropolitan State University of Denver. "Whether it's using undocumented workers or those here legally, it's pretty large." "You normally see underground economies in places like Brazil or in southern Europe," said Laura Gonzalez, professor of personal finance at Fordham University. "But with the job situation and the uncertainty in the economy, it's not all that surprising to have it growing here in the United States." Estimates are that underground activity last year totaled as much as $2 trillion, according to a study by Edgar Feige, an economist at the University of Wisconsin-Madison. That's double the amount in 2009, according to a study by Friedrich Schneider, a professor at Johannes Kepler University in Linz, Austria. The study said the shadow economy amounts to nearly 8 percent of U.S. gross domestic product. Much of that money goes into cash registers, said Gonzalez, as personal consumption has risen since the recession. |
| Posted by:Fred |
| #7 @Anguper Hupomosing9418 It's only safe to Print AFTER bankruptcy. printing in expectation of bankruptcy merely maintains the malinvestment in the economy. Until that clears there will be no recovery. It's like taking heroin to stave off withdrawal pain, it will work, but you'll still be a junkie. |
| Posted by: Bright Pebbles 2013-04-26 20:01 |
| #6 -- There is no recovery. -- There's always been an underground economy. I once got a 30% discount on a motel room simply for paying cash up front. -- at the rate Bernanke is inflating the currency This Great Depression II we are in involves massive deflation. Bernanke is only keeping it from being even worse. Even before the events of 2007, he had gone on the record saying he would do that even before 2007. --- Don't conflate higher prices with inflation. --- Massive government spending and debt-buying is also making things look better than they are. If the gov't simply cut back its spending to the level of 2007, people would be hurting like they did in the early 1930's. |
| Posted by: Anguper Hupomosing9418 2013-04-26 13:59 |
| #5 Just like the underground economy has saved, oh, Peru for example? |
| Posted by: Iblis 2013-04-26 13:52 |
| #4 We are becoming more and more like Greece everyday. |
| Posted by: DarthVader 2013-04-26 12:44 |
| #3 Know/knew a guy who was pretty darned proud of his paid in cash job, all expenses paid apartment, no bank account, and one piece of mail a month. |
| Posted by: swksvolFF 2013-04-26 09:04 |
| #2 ..well at the rate Bernanke is inflating the currency, it won't be long that it'll be cheaper for the Treasury to sell watermarked paper at Staples/Office Max for you to indeed print your own money at home. |
| Posted by: Procopius2k 2013-04-26 09:01 |
| #1 > with no income reported and no taxes paid Who'd have guessed that freed from comparative advantage damaging taxes on incomes people would start to generate wealth?! I'm shocked. Shouldn't they just photocopy some money or something? I thought that's the way to create wealth. |
| Posted by: Bright Pebbles 2013-04-26 06:38 |