If my calculations are correct, the government yesterday...

[SkinsHokieFan]

.... committed to spending 2.3 trillion dollars. 2.3 trillion is 600 billion more then the ENTIRE FEDERAL BUDGET in 1999

According to this article here in the Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021001228.html?hpid=topnews) the Fed committed to
$1.5 trillion in public and private funds, just for starters -- with the possibility of more than $2 trillion -- to aid banks, unfreeze consumer credit markets and stem the soaring foreclosure rate.

And along with that, the Senate passed the stimulus bill at 837 billion

Just so people know exactly what is going on, this is a good graphic

Is anyone NOT very concerned about this?

http://media3.washingtonpost.com/wp-dyn/content/graphic/2009/02/11/GR2009021100754.gif

[PleaseBlitz]

People are scared, and politicians are taking advantage. Does this surprise anyone?

[SnyderShrugged]

How anyone with even a remotely right mind can not see the incredible negative impact this spending has on us and our future is beyond me.

[Peeping Wizard]

As long as the spending isn't on Bush's "evil" war it is justified and ok.

[twa]

Compare our spending spree to other countries yearly GDP if ya want a shock.

[greenspandan]

mccain lost. get over it.

[SkinsHokieFan]

mccain lost. get over it.

What does this have to do with McCain? :whoknows:

[Kilmer17]

Elections have consequences.

This shouldnt suprise anyone. Liberals are acting like Liberals. The problem is that over the last decade or so, the GOP has acted like Liberals too.

[SnyderShrugged]

mccain lost. get over it.


we have a winner for the single most assinine post of the week.

Like this has even a little to do with McCain (who is a big spender himself)

Go read a book, get yourself edumacated and tey not to sound like one with the IQ of a bowl of hair.

[SkinsHokieFan]

Elections have consequences.

This shouldnt suprise anyone. Liberals are acting like Liberals. The problem is that over the last decade or so, the GOP has acted like Liberals too.

Yup. Running the debt from 5.6 to 10 trillion was sickening. On crap like Medicare Part D, NLCB, the 2001 farm bill, the 2005 highway bill.

[Thiebear]

Think of the Children

[GibbsFactor]

Think of the Children

http://www.xzackly.com/troublonia/archives/minty.jpg

[Thiebear]

who knew madmax was set in 2012.

[G-Prime]

As long as the spending isn't on Bush's "evil" war it is justified and ok.

wow

[deejaydana]

This thread went from ZERO to hosed in record time.

But yes, all this massive spending is going to have some major consequences. If you could "spend your way to prosperity" wouldn't every other country do it also? Ugh, not going to be pretty for awhile.

[Midnight Judges]

So now tax cuts count as spending?

By this standard, The Republican "stimulus" of 2003 was about $5 trillion. And it doubled our national debt at a time when no stimulus was needed.

We would have been so much better off with Al Gore's lockbox strategy.

[The Evil Genius]

If you could "spend your way to prosperity" wouldn't every other country do it also? Ugh, not going to be pretty for awhile.

I would tend to think most wouldn't have the resources to do that, let alone think it.

[SkinsHokieFan]

So now tax cuts count as spending?

By this standard, The Republican "stimulus" of 2003 was about $5 trillion. And it doubled our national debt at a time when no stimulus was needed.

.

Many of the tax cuts we are proposing are tax credits.

Granted though, I have never found a tax cut I don't like :)

Point being in all of this, the government has just spent/committed an ass load of our future earnings. And I have been screaming about it for years

[BURGUNDYBLEEDER]

I would tend to think most wouldn't have the resources to do that, let alone think it.

And we don't have the resources either but it didn't stop our leadership from thinking it and trying to do it.

[Larry]

Just observing that, for example, the "up to" number that this article is using assumes, among other things, that every single FDIC bank goes completely, 100% bankrupt, and the US Government has to reimburse the total insured amount of every checking account in the US.

IMO, that's a little bit like saying that Federal Disaster Relief is "committed" to paying disaster aid if every single square inch of the US floods this year.

[DjTj]

Just observing that, for example, the "up to" number that this article is using assumes, among other things, that every single FDIC bank goes completely, 100% bankrupt, and the US Government has to reimburse the total insured amount of every checking account in the US.

IMO, that's a little bit like saying that Federal Disaster Relief is "committed" to paying disaster aid if every single square inch of the US floods this year.Fed loans are also supposed to be paid back ... with interest. I'm not sure how it looks on their balance sheet, but I'm sure they didn't write off a trillion dollars.


Point being in all of this, the government has just spent/committed an ass load of our future earnings. And I have been screaming about it for yearsDon't worry, whenever we need cash, we'll just borrow it from our grandchildren...

[GibbsFactor]

Don't worry, whenever we need cash, we'll just borrow it from our grandchildren...

Yep, and if they ask why we did it, tell them nothing in life is free.



:D

[The Brave Little Toaster Oven]

Wow, maybe the Mayans were right...2012 is looking like the end of the world :silly:

[Zguy28]

We all should just liquidate and pool our assets and collectively buy a third world country.

[rdsknbill]

As long as the spending isn't on Bush's "evil" war it is justified and ok.

http://i361.photobucket.com/albums/oo60/JoBeStHe/joker.jpg

[jrfriedm]

This country is screwed, and the people that elected these idiots to office are the ones to blaim.

[GibbsFactor]

This country is screwed, and the people that elected these idiots to office are the ones to blaim.

Sorry

:kickcan:

[pez]

I think the morons are the ones that thought they could buy homes beyond their means...

That seems to be where this mess started..

Common sense is lacking in this country..

[greenspandan]

I think the morons are the ones that thought they could buy homes beyond their means...

That seems to be where this mess started..

Common sense is lacking in this country..

well, to be fair, that was just the spark. the real fuel for this fire has been building up for a long time. we're learning some tough lessons about oversight and investment practices. whole industries and new economic sectors were built out of slicing and ensuring and dealing and betting on the money that came from all these home sales and all the apparent equity being created out of thin air. THAT blame does not lie with home buyers.

yes, a lot of people are being foreclosed upon, but in a reasonably healthy system that would not cause the total economic collapse of our banking institutions.

[jrockster21]

As long as the spending isn't on Bush's "evil" war it is justified and ok.

"Since the beginning of 2008" - that includes Bush.

[jrockster21]

This country is screwed, and the people that elected these idiots to office are the ones to blaim.

So, since this spree started during Bush's term, and pretty much everyone who didn't vote for Obama probably voted for Bush, you must be blaming EVERYONE. Good strategy!

[SnyderShrugged]

So, since this spree started during Bush's term, and pretty much everyone who didn't vote for Obama probably voted for Bush, you must be blaming EVERYONE. Good strategy!



I pretty much blame any dumkopf who supports these horrible big government ideas, regardless of political stripe.:2cents:

[SkinsHokieFan]

I pretty much blame any dumkopf who supports these horrible big government ideas, regardless of political stripe.:2cents:

Ditto. It is an atrocious tragedy we the people have allowed this to happen

[Tulane Skins Fan]

Elections have consequences.

This shouldnt suprise anyone. Liberals are acting like Liberals. The problem is that over the last decade or so, the GOP has acted like Liberals too.

Hmm... IF you are insinuating that democrats WANT to spend this money because it is part of the liberal agenda to spend trillions to restore the banking/credit industry, then I disagree. If you are stating that liberal philosophy would be to spend their way out of a crisis, I'll give you a little more leeway.

Unfortunately, it has become necessary for government to save a failing economy. Bottom line, period. If government had not done what it already has, not only would Lehman have disappeared, but perhaps EVERY bank would have, and with that, our country for the most part.

:2cents:

[Tulane Skins Fan]

This country is screwed, and the people that elected these idiots to office are the ones to blaim.

I really don't see how the government got us INTO this mess. The people who are to blame are the CEO's of these banks who took these unnecessary risks.

And anyone who thinks this is all big government requiring sub-prime lending, blah blah blah, hasn't looked at the ENTIRE issue. This is not just a housing market crisis. And that is purely because of the private sector banks.

[SnyderShrugged]

Hmm... IF you are insinuating that democrats WANT to spend this money because it is part of the liberal agenda to spend trillions to restore the banking/credit industry, then I disagree. If you are stating that liberal philosophy would be to spend their way out of a crisis, I'll give you a little more leeway.

Unfortunately, it has become necessary for government to save a failing economy. Bottom line, period. If government had not done what it already has, not only would Lehman have disappeared, but perhaps EVERY bank would have, and with that, our country for the most part.

:2cents:


I don't believe you are qualified to state a bottom line, period statement in this matter, In fact, even some of the most respected economists could not make such a declaration.

You also cannot prognosticate what would have happened if the government hadnt bailed out, simply because there is no possible way to know since they did it.

[SnyderShrugged]

I really don't see how the government got us INTO this mess. The people who are to blame are the CEO's of these banks who took these unnecessary risks.

And anyone who thinks this is all big government requiring sub-prime lending, blah blah blah, hasn't looked at the ENTIRE issue. This is not just a housing market crisis. And that is purely because of the private sector banks.



nonsense

[Tulane Skins Fan]

I don't believe you are qualified to state a bottom line, period statement in this matter, In fact, even some of the most respected economists could not make such a declaration.

You also cannot prognosticate what would have happened if the government hadnt bailed out, simply because there is no possible way to know since they did it.

Ok, I'm not an economist. I truly concede. I also concede that no one really knows what would have happened if the government did nothing.

However, every economist that has rendered an opinion on this has said that government intervention, in some way, is absolutely necessary to save the economy. While they may not all agree that the country would have entirely collapsed, not a single economist has said we should let it die. Politicians have. But I haven't heard an economist say otherwise.

Again, if there is someone I'm not aware of, I'll retract that comment.

[Tulane Skins Fan]

nonsense

Well stated.

[SnyderShrugged]

Ok, I'm not an economist. I truly concede. I also concede that no one really knows what would have happened if the government did nothing.

However, every economist that has rendered an opinion on this has said that government intervention, in some way, is absolutely necessary to save the economy. While they may not all agree that the country would have entirely collapsed, not a single economist has said we should let it die. Politicians have. But I haven't heard an economist say otherwise.

Again, if there is someone I'm not aware of, I'll retract that comment.


You have not been paying attention here, or on the web if you believe that "No economists are saying that intervention isnt neccessary".

http://www.cato.org/special/stimulus09/cato_stimulus.pdf


I think you need to do some homework before youy post next as this error you have made is a well known fact.

[Duckus]

This sums of 95% of the threads in tailgate on the economy (as yes, it makes fun of all sides):

http://www.thedailyshow.com/video/index.jhtml?videoId=217705&title=Solving-the-Economic-Crisis

""Because in Washington, how uncertain you are is an inverse proportion to how stubborn you are and how angry you get"

[SnyderShrugged]

Well stated.



I know:)

[GibbsFactor]

However, every economist that has rendered an opinion on this has said that government intervention, in some way, is absolutely necessary to save the economy. While they may not all agree that the country would have entirely collapsed, not a single economist has said we should let it die. Politicians have. But I haven't heard an economist say otherwise.

Again, if there is someone I'm not aware of, I'll retract that comment.

What makes you think that any economist has the right to even speak up? They are weathermen. Nothing more. 90% were saying we weren't even headed into a recession, now, it's just a garden variety recession. CNBC needs to change it's name to the Weather Channel. They have no idea what they are talking about and are just trying to manipulate our current monetary system for their own good.

The economists just lost half our wealth. Either that or they falsely inflated our wealth by 100%. Either way, they have no clue and need to admit it.

[SnyderShrugged]

What makes you think that any economist has the right to even speak up? They are weathermen. Nothing more. 90% were saying we weren't even headed into a recession, now, it's just a garden variety recession. CNBC needs to change it's name to the Weather Channel. They have no idea what they are talking about and are just trying to manipulate our current monetary system for their own good.

The economists just lost half our wealth. Either that or they falsely inflated our wealth by 100%. Either way, they have no clue and need to admit it.



at least the keynesian economists.;)

The Austrian school folks nailed it long ago.

[ACW]

MJ's correct: tax cuts AREN'T spending.
And it's not ALL gov't money (they mentioned private funds).
Still over 1 trillion when interest is included. Where are the massive tax increases (if you're gonna spend, raise taxes instead of borrowing :2cents: ).

[Tulane Skins Fan]

You have not been paying attention here, or on the web if you believe that "No economists are saying that intervention isnt neccessary".

http://www.cato.org/special/stimulus09/cato_stimulus.pdf


I think you need to do some homework before youy post next as this error you have made is a well known fact.

Honestly, a month ago, which is when your one paragraph link sent me was written, this was a different story. Today, I don't hear anyone saying government intervention is not needed on some level.

I know you are a very ideological poster, but I think at this point it would be better to think, rather than preach.

[SnyderShrugged]

Honestly, a month ago, which is when your one paragraph link sent me was written, this was a different story. Today, I don't hear anyone saying government intervention is not needed on some level.
I know you are a very ideological poster, but I think at this point it would be better to think, rather than preach.


You are deluded if you think anyone on that list has changed their mind. I'm glad that you asked me to think not preach. I beleiev that you should do the same because see, I used facts and a link to prove my point. You relied on hyperbole and assumption.

please try again as you are starting to appear rather silly in your perceptions.

[alexey]

But yes, all this massive spending is going to have some major consequences. If you could "spend your way to prosperity" wouldn't every other country do it also? Ugh, not going to be pretty for awhile.
We are in a unique position of being able to print US dollars.

[SnyderShrugged]

We are in a unique position of being able to print US dollars.



which is precisely one of the root causes of this issue.

[SkinsHokieFan]

We are in a unique position of being able to print US dollars.

Excellent way to inflate the currency and reduce our standard of living

I can't wait to see food prices in 2012

[alexey]

which is precisely one of the root causes of this issue.
It's a root cause of a lot of things...

imho Dems actually have a greater chance of getting government spending under control. Unfortunately that's hard to see for subscribers of the silly "dems want to spend spend spend" strawman.

[SnyderShrugged]

It's a root cause of a lot of things...

imho Dems actually have a greater chance of getting government spending under control. Unfortunately that's hard to see for subscribers of the silly "dems want to spend spend spend" strawman.


I'd agree that the current climate gives the Dems a near perfect opportunity to stop the spending. Unfortunately, they have shown very little evidence that they are any better than the last GOP crop of controlling spending at all.

may I ask (in a non threatening way!) why you might believe that they will control spending, after what we have seen proposed thus far?

Honestly, I dont care what letter is on front of thier name. I would support someone from the communist freaking party if I felt confident they would reduce the nasty spending addiction that the Feds have gotten into.

[alexey]

Excellent way to inflate the currency and reduce our standard of living

I can't wait to see food prices in 2012
You can make anything appear like a bad idea by taking it out of context.

As things currently stand, it may very well be the case that doing this now is the best available course of action.

And no, supporting this course of action does not mean that people fail to realize its negative aspects.

[alexey]

I'd agree that the current climate gives the Dems a near perfect opportunity to stop the spending. Unfortunately, they have shown very little evidence that they are any better than the last GOP crop of controlling spending at all.

may I ask (in a non threatening way!) why you might believe that they will control spending, after what we have seen proposed thus far?

What we have seen proposed so far are things that we should have been doing all along.

To answer your second question:
http://img507.imageshack.us/img507/909/taxspendliberalhx6.jpg
http://www.futurepower.org/Deficits.gif

[Tulane Skins Fan]

You are deluded if you think anyone on that list has changed their mind. I'm glad that you asked me to think not preach. I beleiev that you should do the same because see, I used facts and a link to prove my point. You relied on hyperbole and assumption.

please try again as you are starting to appear rather silly in your perceptions.

Ok, the Cato Institute thinks the government should let the banks die. You win that one. :applause: I was wrong when I said no one.

Let me rephrase, nearly everyone thinks the government needs to do something. And the only people who think the government should do nothing are the extreme ideologues, who just talk down to others and whose policies got us into this mess in the first place.

[zoony]

Seems to me that the government is just trying to inject capital back into the shrinking economy as violently and as swiftly as possible.

Despite all of this, deflation is still occuring. So the only question I have, is 2 trillion enough? Yikes.

I'm okay with this if, when the economy turns around, the Fed pulls back on the money supply- and not do what Greenspan did and play it fast and loose for consecutive decades.

Once the economy gets healthy, home loans should be around 10%, damit.

.....

[SnyderShrugged]

Ok, the Cato Institute thinks the government should let the banks die. You win that one. :applause: I was wrong when I said no one.

Let me rephrase, nearly everyone thinks the government needs to do something. And the only people who think the government should do nothing are the extreme ideologues, who just talk down to others and whose policies got us into this mess in the first place.


wrong again. Do you really claim to know the ideologies and credentials of those on that one list? Are you seriously going out on that limb claiming that the only people against federal intervention into the economy are "extreme ideologs'? Are you claiming that list is exhaustive or are you just trying to sound like you didnt say something pretty misinformed and rather stupid?

[Tulane Skins Fan]

wrong again. Do you really claim to know the ideologies and credentials of those on that one list? Are you seriously going out on that limb claiming that the only people against federal intervention into the economy are "extreme ideologs'? Are you claiming that list is exhaustive or are you just trying to sound like you didnt say something pretty misinformed and rather stupid?

I think our definition of extreme ideologues is bound to be different.

Let me ask you this, if the stimulus plan works, will you stop? I mean, just stop all together? Or would you only be happy if the economy turned around on your terms?

[SkinsHokieFan]

Once the economy gets healthy, home loans should be around 10%, damit.

.....

The question would then be, what would constitute a healthy economy?

Would our economy truly be healthy while we are running 1 trillion dollar deficits?

[SkinsHokieFan]

I think our definition of extreme ideologues is bound to be different.

Let me ask you this, if the stimulus plan works, will you stop? I mean, just stop all together? Or would you only be happy if the economy turned around on your terms?

The thing is, we don't believe the current plan is anywhere near the correct course of action to take

And even then, the price would be steep. Inflation and a still propped up market by the government

The government's reach will have expanded quite a bit

[zoony]

The question would then be, what would constitute a healthy economy?

Would our economy truly be healthy while we are running 1 trillion dollar deficits?

During the 1990s boom the gov ran surplusses coming off the 90-91 recession.

Not sure aboutthe 1980s (in terms of surplus), but I know there was a huge boom coming off the recession of the late 1970s.

There will be another boom. I believe we'll start to come out of it at the end of Q2 this year. With "boom" years probably starting at the end of 2010.

What we should be doing is demanding fiscal prudence on the part of our leaders in times of prosperity- something we've rarely done.

Now is the time I'm okay with the gov spending and printing money.

[Tulane Skins Fan]

The thing is, we don't believe the current plan is anywhere near the correct course of action to take

And even then, the price would be steep. Inflation and a still propped up market by the government

The government's reach will have expanded quite a bit

Ok, but assume, despite those reservations, in reality it goes perfectly to plan. The money gets lent, jobs are created and in ten years the private sector has even paid back the government for the money lent and the government makes a small, but legitimate profit on the package. Assuming that, would that be bad or good?

[SnyderShrugged]

I think our definition of extreme ideologues is bound to be different.

Let me ask you this, if the stimulus plan works, will you stop? I mean, just stop all together? Or would you only be happy if the economy turned around on your terms?


And when, pray tell, is the point in time when "it worked" could reasonably be declared?

What will be your definition of "it worked"?

and sure, if I am wrong in what I believe in my heart about this plan, I definitely will admit it.

I would be happy if the econmy turns around via any means that doesnt have additional negative side effects (ie: bigger and bigger government, debt, devalued dollar, higher taxes, etc)

[SkinsHokieFan]

Ok, but assume, despite those reservations, in reality it goes perfectly to plan. The money gets lent, jobs are created and in ten years the private sector has even paid back the government for the money lent and the government makes a small, but legitimate profit on the package. Assuming that, would that be bad or good?

That would cause some serious cognitive dissonance on my part because it is the government, this thing will not go perfectly according to plan.

I can't even fathom that scenario, my head will explode :)

And I am being totally honest. I seriously cannot imagine a government plan going perfectly, in particular THIS plan

[Tulane Skins Fan]

And when, pray tell, is the point in time when "it worked" could reasonably be declared?

What will be your definition of "it worked"?

and sure, if I am wrong in what I believe in my heart about this plan, I definitely will admit it.

I would be happy if the econmy turns around via any means that doesnt have additional negative side effects (ie: bigger and bigger government, debt, devalued dollar, higher taxes, etc)

Well, thats the thing. If you are saying bigger government is a negative effect, despite what it does for the economy, job creation, etc. etc., then you will not ever admit it has worked. That's your ideology. You believe that big government is inherently bad. Some people may agree with you that big government is not something that we should push, but that if it government does get bigger and everything else is made for the better, then the outcome is a good one. However, I'm sure that the only way you will be happy is if all those things occur, and the government is smaller, i.e. you will only be happy with a good outcome on your terms.

[SnyderShrugged]

That would cause some serious cognitive dissonance on my part because it is the government, this thing will not go perfectly according to plan.

I can't even fathom that scenario, my head will explode :)

And I am being totally honest. I seriously cannot imagine a government plan going perfectly, in particular THIS plan


and logically, why would anyone even come close to assuming that the Federal plan would work? The historical evidence of similar moves is almost a complete book of failure after failure thus far.

[GibbsFactor]

Seems to me that the government is just trying to inject capital back into the shrinking economy as violently and as swiftly as possible.

Despite all of this, deflation is still occuring. So the only question I have, is 2 trillion enough? Yikes.

I'm okay with this if, when the economy turns around, the Fed pulls back on the money supply- and not do what Greenspan did and play it fast and loose for consecutive decades.

Once the economy gets healthy, home loans should be around 10%, damit.

.....

I've heard predictions as high as $16 trillion.


ETA: we are already near 10, not 2.

[SkinsHokieFan]

During the 1990s boom the gov ran surplusses coming off the 90-91 recession.


There will be another boom. I believe we'll start to come out of it at the end of Q2 this year. With "boom" years probably starting at the end of 2010.

What we should be doing is demanding fiscal prudence on the part of our leaders in times of prosperity- something we've rarely done.

Now is the time I'm okay with the gov spending and printing money.

If we are expecting coming close to surpluses we are gonna need another huge internet bubble. Who knows if that'll happen

I do not see another boom coming, in particular that quickly. There may not be a complete financial collapse but the debt and inflation are going to carry a HUGE burden on all businesses and individuals.

Taxes will have to up in 2010. There is no way any aspect of the 2001 tax cuts will remain in place. The amount of money we are about to print is going to throw everything out of whack with all the dollars that will be in circulation in 2010.

[SnyderShrugged]

Well, thats the thing. If you are saying bigger government is a negative effect, despite what it does for the economy, job creation, etc. etc., then you will not ever admit it has worked. That's your ideology. You believe that big government is inherently bad. Some people may agree with you that big government is not something that we should push, but that if it government does get bigger and everything else is made for the better, then the outcome is a good one. However, I'm sure that the only way you will be happy is if all those things occur, and the government is smaller, i.e. you will only be happy with a good outcome on your terms.


Actually the size and role of government arent MY terms, they were written a long time ago by some pretty intelligent guys. many of whom were concerned over crap like we have seen coming to pass.

[greenspandan]

That would cause some serious cognitive dissonance on my part because it is the government, this thing will not go perfectly according to plan.

I can't even fathom that scenario, my head will explode :)

And I am being totally honest. I seriously cannot imagine a government plan going perfectly, in particular THIS plan

Apollo 11? the Manhattan Project? ARPAnet?

[SkinsHokieFan]

Apollo 11? the Manhattan Project? ARPAnet?

You are either being obtuse or missing the point.

[SnyderShrugged]

You are either being obtuse or missing the point.



based on the McCain comment he made earlier, I'd say Obtuse.:)

[Toe Jam]

How anyone with even a remotely right mind can not see the incredible negative impact this spending has on us and our future is beyond me.

Well thank God our wonderful media is around to ask the tough questions.:rolleyes:

[DjTj]

That would cause some serious cognitive dissonance on my part because it is the government, this thing will not go perfectly according to plan.

I can't even fathom that scenario, my head will explode :)

And I am being totally honest. I seriously cannot imagine a government plan going perfectly, in particular THIS planThere is zero chance of it working perfectly.

There is a 99.9%* chance that the economy will eventually recover, and while the government will claim credit, others will insist that the private sector was primarily responsible and that the stimulus only hindered the recovery. Rinse and repeat.

* 0.1% chance that this all ends in horrible catastrophe caused by terrorists, earthquakes, asteroids, aliens, and/or the illuminati.

[Tulane Skins Fan]

There is zero chance of it working perfectly.

There is a 99.9%* chance that the economy will eventually recover, and while the government will claim credit, others will insist that the private sector was primarily responsible and that the stimulus only hindered the recovery. Rinse and repeat.

* 0.1% chance that this all ends in horrible catastrophe caused by terrorists, earthquakes, asteroids, aliens, and/or the illuminati.

Well said. And can I add that its more important that the economy recovers than it is how it happened or who is responsible.

[SkinsHokieFan]

There is zero chance of it working perfectly.

There is a 99.9%* chance that the economy will eventually recover, and while the government will claim credit, others will insist that the private sector was primarily responsible and that the stimulus only hindered the recovery. Rinse and repeat.

.

Lets ask ourselves this again?

How long will it take to recover and what will recovery look like?

The Japanese economy has "recovered" But it sure as hell doesn't look like it did in the 1980s

Will 8 percent unemployment, 10 percent interest rates, and double digit inflation be "recovery" because the bleeding stopped? And don't forget the debt on top of it

[SnyderShrugged]

Well said. And can I add that its more important that the economy recovers than it is how it happened or who is responsible.


would you add that if the economy could recover with no intervention at all too? since you dont care how it got there?

Wouldnt it be a good idea to even consider the possibility of a market correction (albeit a painful one in some respects) that could occur without spending trillions of dollars that we literally dont have?

[DjTj]

Lets ask ourselves this again?

How long will it take to recover and what will recovery look like?Hell if I know ...


The Japanese economy has "recovered" But it sure as hell doesn't look like it did in the 1980s

Will 8 percent unemployment, 10 percent interest rates, and double digit inflation be "recovery" because the bleeding stopped? And don't forget the debt on top of itJapan's never getting the 80's back (they're never getting the Edo Period back either).

We're never getting the 90's back (or the 50's or the 20's). But some kind of boom will come along eventually ... I hope it involves flying cars the next time.

[Henry]

We're never getting the 90's back (or the 50's or the 20's).

I dunno. Looks like we will in about 30 or 40 years. :)

[The Brave Little Toaster Oven]

I dunno. Looks like we will in about 30 or 40 years. :)

Flying cars in 30 or 40 years?? You heard it here first, folks! :silly:

[GibbsFactor]

There is zero chance of it working perfectly.

There is a 99.9%* chance that the economy will eventually recover, and while the government will claim credit, others will insist that the private sector was primarily responsible and that the stimulus only hindered the recovery. Rinse and repeat.

* 0.1% chance that this all ends in horrible catastrophe caused by terrorists, earthquakes, asteroids, aliens, and/or the illuminati.


So now we're just making up numbers?



:silly:

[zoony]

It's easy to be pessimistic right now.

Actually, it's easy to be pessimistic all the time.

[DjTj]

So now we're just making up numbers?



:silly:67.3% of numbers posted in this forum are made up 83.2% of the time.

[SparkleMotion]

Lets ask ourselves this again?

How long will it take to recover and what will recovery look like?

The Japanese economy has "recovered" But it sure as hell doesn't look like it did in the 1980s

Will 8 percent unemployment, 10 percent interest rates, and double digit inflation be "recovery" because the bleeding stopped? And don't forget the debt on top of it

Didn't Obama say 4 million jobs saved or created would be the initial measure of success?

How you can prove that action X "saved" job Y is beyond me, so I don't know how we're going to be able to measure the success of the plan that way.

Seems like that metric allows for fudging of numbers on both sides.

[SkinsHokieFan]

It's easy to be pessimistic right now.

Actually, it's easy to be pessimistic all the time.

I think there is a difference between pessimism and real critiques of the situation

Peter Schiff was a "pessimist" and a damn fool in 2006. He was literally laughed at.

Yet everything he stated came about

Hell this freakin Tailgate had people back in 2005 that were "pessimistic" And people like ATB turned out to be right on the money

[deejaydana]

I guess at this point one of my many concerns is how does gov't effectively balance the amount of oversight or intervention that is clearly needed in the financial sector (and perhaps other select industries) yet not just kill/stifle/muzzle/etc the businesses themselves at the same time? We are already getting tremendously negative feedback from the EU and China about our "protectionist" stance on the large infrastructure projects where some politicians have indicated that the raw materials will have to adhere to a "Buy American" standard. Wow. Scary times indeed and you'll find as many opinions and solutions as you will people willing to talk about how it should and will play out. The bottom line is: no one knows at this point where will be 2, 5 or 10 years hence.

I just will all of us, mainly the folks in power in DC, could for once put partisanship aside for the good of you and me, the taxpayer.

[Hubbs]

Honestly, a month ago, which is when your one paragraph link sent me was written, this was a different story. Today, I don't hear anyone saying government intervention is not needed on some level.

I know you are a very ideological poster, but I think at this point it would be better to think, rather than preach.

I literally just watched two of them on TV. Poke around any libertarian-oriented sites and you'll find them by the dozens.

[Tulane Skins Fan]

would you add that if the economy could recover with no intervention at all too? since you dont care how it got there?

Wouldnt it be a good idea to even consider the possibility of a market correction (albeit a painful one in some respects) that could occur without spending trillions of dollars that we literally dont have?

Of course I would. If that could happen, it would be the best option, imo, actually.

It just seems to me that things weren't getting better, they were getting worse, much worse, before the government got involved.

[Hubbs]

It's a root cause of a lot of things...

imho Dems actually have a greater chance of getting government spending under control. Unfortunately that's hard to see for subscribers of the silly "dems want to spend spend spend" strawman.

Obama's already stated that there will be trillion-dollar deficits for "many years to come."

[Jumbo]

It's easy to be pessimistic right now.

Actually, it's easy to be pessimistic all the time.

We knew your beliefs in good had been lost by being in the tailgate too long. That's why you were asked to join the staff.

[Hubbs]

Ok, the Cato Institute thinks the government should let the banks die. You win that one. :applause: I was wrong when I said no one.

Let me rephrase, nearly everyone thinks the government needs to do something. And the only people who think the government should do nothing are the extreme ideologues, who just talk down to others and whose policies got us into this mess in the first place.

Again, so far from correct it's making my head spin.

http://survivalsshtf.blogspot.com/2009/01/common-sense-economists-do-nothing.html
http://www.csmonitor.com/2009/0209/p09s01-coop.html
http://blog.mises.org/archives/009405.asp
http://finkelblog.com/index.php/2009/01/31/kudos-watch-gma-gives-fair-shake-to-free-market-economists-opposed-to-stimulus-plan/

I could literally add to the list all day, but you get the point. You're making pretty sweeping generalizations about something that, while I have no doubt you oppose because of good intentions, you don't seem to have done much research on.

[Hubbs]

The Japanese economy has "recovered" But it sure as hell doesn't look like it did in the 1980s

It's more likely that we'll see Japan's slow economic growth in the middle of this decade as the equivalent of a stock market "dead cat bounce," because their recent numbers are awful.

Not fun to have an export-based economy when the world isn't buying anything.

[Tulane Skins Fan]

Again, so far from correct it's making my head spin.

http://survivalsshtf.blogspot.com/2009/01/common-sense-economists-do-nothing.html
http://www.csmonitor.com/2009/0209/p09s01-coop.html
http://blog.mises.org/archives/009405.asp
http://finkelblog.com/index.php/2009/01/31/kudos-watch-gma-gives-fair-shake-to-free-market-economists-opposed-to-stimulus-plan/

I could literally add to the list all day, but you get the point. You're making pretty sweeping generalizations about something that, while I have no doubt you oppose because of good intentions, you don't seem to have done much research on.

I know a lot of people want to see nothing happen. I can't say how many of them actually know what they are talking about. Other than those at the Cato Institute, it appears to me that the experts believe government needs to play a role in this.

Also, to me, the libertarian sites and blog posting are the ideologues I was talking about. And not ones that I, personally, take seriously. There are plenty of conservative economic thinkers who believe government needs to play a role. In fact, I would guess most believe that. But yes, there are always people on the fringes. Just like I'm sure some people say that the government needs to just totally nationalize the banking system for good. I don't take those people seriously either.

[Pwyl]

We knew your beliefs in good had been lost by being in the tailgate too long. That's why you were asked to join the staff.

This:
http://www.extremeskins.com/showthread.php?t=255021

Question is FINALLY answered.

Jumbo is Vader.

[Hubbs]

Of course I would. If that could happen, it would be the best option, imo, actually.

It just seems to me that things weren't getting better, they were getting worse, much worse, before the government got involved.

The Redskins were winning most of their games before the election. The Redskins lost most of their games after the election. The only logical conclusion is that the Redskins were all McCain voters, and were too upset with Obama's win to practice.

(Not trying to be an ass, just trying to point out that you're arguing that the only way the collapse could have slowed - which isn't necessarily what happened - is by the federal government pumping $700 billion dollars into banks for the purpose of lending, even though the money hasn't been lent. As for whether or not things were getting worse more quickly, are you basing that entirely on the stock market? Not only did it drop several thousand more points after the bailout, but the entire subprime sector of the real estate industry had pretty much disintegrated by the time the feds started throwing cash at the problem. The subprime disaster was the quickest, most violent part of this. The rest are dominoes that take time to fall - monthly job losses have been increasing, not decreasing, for example. And the commercial real estate market - which is the next big potential explosion - won't really begin to show how it was affected by the subprime implosion for another few months.)

[deejaydana]

Just like I'm sure some people say that the government needs to just totally nationalize the banking system for good. I don't take those people seriously either.

I don't take the people seriously who say we will have Universal Health Care in this country. It "may" happen but it's not likely to happen soon and to make it "mandatory" is just beyond absurd (that's a different talk for a different thread tho, sorry for the mini-hijack there).

[luckydevil]

edit: double post

[Tulane Skins Fan]

The Redskins were winning most of their games before the election. The Redskins lost most of their games after the election. The only logical conclusion is that the Redskins were all McCain voters, and were too upset with Obama's win to practice.

(Not trying to be an ass, just trying to point out that you're arguing that the only way the collapse could have slowed - which isn't necessarily what happened - is by the federal government pumping $700 billion dollars into banks for the purpose of lending, even though the money hasn't been lent. As for whether or not things were getting worse more quickly, are you basing that entirely on the stock market? Not only did it drop several thousand more points after the bailout, but the entire subprime sector of the real estate industry had pretty much disintegrated by the time the feds started throwing cash at the problem. The subprime disaster was the quickest, most violent part of this. The rest are dominoes that take time to fall - monthly job losses have been increasing, not decreasing, for example. And the commercial real estate market - which is the next big potential explosion - won't really begin to show how it was affected by the subprime implosion for another few months.)

haha... not exactly what I meant. I think I'm looking at Lehman Brothers, and reflecting on the effect their collapse had, not just on the market, but on the economy. And not just on the US economy, but on the global economy, which in turn made things more difficult on the US economy.

I may be wrong, but its my impression that those few who are saying we should do nothing, are doing it on the premise that some banks will fail, and new ones that work more efficiently will take over, etc. etc. The problem is that the banks that failed would have had a bigger effect on the economy than just on the banking industry. The truth is that the government vastly UNDER-estimated the effect that the collapse of Lehman would have on the economy. And that collapse, by itself, was almost too much for the global economy to handle. If we allowed other banks to fail in the same way, there wouldn't be a need for new, more efficient banks, to have been created.

[luckydevil]

Boy and girls, the party is just getting started.

Tulane skins fan, better pay attention to the nationalized bank folks ( I would argue that in this case socialism may be indeed be preferable to corporatism--- if those are the only 2 options at play), because it is coming. The most influential economist in this country is a big supporter. The liberal establishment ( which he is a part of) supports it as well.

[Hubbs]

I know a lot of people want to see nothing happen. I can't say how many of them actually know what they are talking about. Other than those at the Cato Institute, it appears to me that the experts believe government needs to play a role in this.

Also, to me, the libertarian sites and blog posting are the ideologues I was talking about. And not ones that I, personally, take seriously. There are plenty of conservative economic thinkers who believe government needs to play a role. In fact, I would guess most believe that. But yes, there are always people on the fringes. Just like I'm sure some people say that the government needs to just totally nationalize the banking system for good. I don't take those people seriously either.

Ideologues? Dude, that was the Christian Science Monitor (which, if you're not familiar with it, isn't what it sounds like, it's a well-respected publication), ABC, a different ABC guy, and one - count 'em, one - blog that could at least be defined as "libertarian," although to slap it with the word "ideologue" would be like me claiming that the Wall Street Journal is just a bunch of Republican ideologues because it's owned by Rupert Murdoch.

Most of "the experts" are the same ones that created this mess in the first place, and, as recently as a year ago, were telling us that everything was dandy. Most of the people who actually saw this coming are on my side of things. Sooner or later, you might want to consider the possibility that we're not all "ideologues," because I know plenty who, like myself, only promote libertarian principles when they make sense. I don't want to get rid of public schools. I don't want the eliminate minimum wage. I don't want to make food stamps a thing of the past. A year and a half ago, I knew nothing about economics. This crisis has led me to dive in head-first, and I happily listened to both sides, because back then, I wouldn't have even described myself as a libertarian. But after reading and listening to God knows how many arguments, I said, "You know, those guys seem to be right a lot more often than the other fellas."

Try it. You just might like it.

[luckydevil]

Most of "the experts" are the same ones that created this mess in the first place, and, as recently as a year ago, were telling us that everything was dandy. Most of the people who actually saw this coming are on my side of things. Sooner or later, you might want to consider the possibility that we're not all "ideologues," because I know plenty who, like myself, only promote libertarian principles when they make sense. I don't want to get rid of public schools. I don't want the eliminate minimum wage. I don't want to make food stamps a thing of the past. A year and a half ago, I knew nothing about economics. This crisis has led me to dive in head-first, and I happily listened to both sides, because back then, I wouldn't have even described myself as a libertarian. But after reading and listening to God knows how many arguments, I said, "You know, those guys seem to be right a lot more often than the other fellas."

Try it. You just might like it.

In fairness,a lot of non-libertarians saw this coming too.

[DjTj]

http://survivalsshtf.blogspot.com/2009/01/common-sense-economists-do-nothing.html
http://www.csmonitor.com/2009/0209/p09s01-coop.html
http://finkelblog.com/index.php/2009/01/31/kudos-watch-gma-gives-fair-shake-to-free-market-economists-opposed-to-stimulus-plan/

Three of your links just cite to various economists from the same CATO ad, but this one is pretty interesting:

http://blog.mises.org/archives/009405.asp

The blogger actually misinterprets the editorial from the WSJ:
The realization by the public that the government's intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP? http://online.wsj.com/article/SB123414310280561945.html

I think that's very much right, and we are making many of the same mistakes with the continued bailout and stimulus package ...

The Fed definitely screwed up by keeping interests rates too low for too long, and the government pushed homeownership too hard, but just because the government screwed up then doesn't mean that the best solution is to do nothing. Notice that Taylor doesn't advocate doing nothing. He is a monetarist who favorably quotes Friedman; not someone from the Austrian School.


It did not have to be this way. To prevent misguided actions in the future, it is urgent that we return to sound principles of monetary policy, basing government interventions on clearly stated diagnoses and predictable frameworks for government actions.

Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far.Government needs to work smarter. I don't think the stimulus package necessarily falls in the "smarter" category, but I'm not completely doom-and-gloom about it either.

It seemed to me from the start that the focus should have been on getting the toxic assets off of the banks' balance sheets, but the price tag on that was probably enormous, and it was easier to feed the banks little bits of liquidity and hope the market would heal itself ... That hasn't happened, so we're still really just stuck continuing to do that - it's like we're trying to plug a bunch of holes in the dam with chewing gum and praying that the water will recede.

The libertarians just want to let the dam burst and figure out who sinks and who swims, but that line of thought has been pretty clearly rejected by the majority of economists, including Taylor, and a majority of Americans.

Maybe there is just too much water for a real bailout ... but I think it makes sense to keep trying to plug the dam - maybe we'll get a little smarter about it as we go along - and hopefully we can all survive without getting too wet before the water recedes on its own.

[Hubbs]

haha... not exactly what I meant. I think I'm looking at Lehman Brothers, and reflecting on the effect their collapse had, not just on the market, but on the economy. And not just on the US economy, but on the global economy, which in turn made things more difficult on the US economy.

I may be wrong, but its my impression that those few who are saying we should do nothing, are doing it on the premise that some banks will fail, and new ones that work more efficiently will take over, etc. etc. The problem is that the banks that failed would have had a bigger effect on the economy than just on the banking industry. The truth is that the government vastly UNDER-estimated the effect that the collapse of Lehman would have on the economy. And that collapse, by itself, was almost too much for the global economy to handle. If we allowed other banks to fail in the same way, there wouldn't be a need for new, more efficient banks, to have been created.

I actually have no problem with the government stepping in to prevent the unexpected and sudden collapse of banking giants in the face of a cascade of defaults like that. I see that as one of the proper roles of government, much in the same way that I don't think the government should station a fireman in your house 24/7, but should show up in a big, red engine when your entire living room is on fire.

What I do have a problem with is the government then deciding that it can manipulate the actions of banks that weren't going to die by convincing them to make loans they wouldn't otherwise make (which, hello, was one of the biggest reasons we got into this mess in the first place) by handing them hundreds of billions of dollars, dollars that now sit in vaults because they haven't been loaned. What I do have a problem with is giving billions more to auto manufacturers that are going to go bankrupt anyway (Chrysler has said they might need another bailout as soon as this year), propping up an artificial market share that could otherwise be absorbed by one of the many foreign companies that makes a ****-ton of their cars in America anyway. And what I have a problem with more than anything else is the government believing that taking over more of the economy and spending more money that we don't have is the solution, because that comes down to a basic battle between the economic models of capitalism and socialism. Capitalism wins that one hands down.

[Tulane Skins Fan]

Ideologues? Dude, that was the Christian Science Monitor (which, if you're not familiar with it, isn't what it sounds like, it's a well-respected publication), ABC, a different ABC guy, and one - count 'em, one - blog that could at least be defined as "libertarian," although to slap it with the word "ideologue" would be like me claiming that the Wall Street Journal is just a bunch of Republican ideologues because it's owned by Rupert Murdoch.

Most of "the experts" are the same ones that created this mess in the first place, and, as recently as a year ago, were telling us that everything was dandy. Most of the people who actually saw this coming are on my side of things. Sooner or later, you might want to consider the possibility that we're not all "ideologues," because I know plenty who, like myself, only promote libertarian principles when they make sense. I don't want to get rid of public schools. I don't want the eliminate minimum wage. I don't want to make food stamps a thing of the past. A year and a half ago, I knew nothing about economics. This crisis has led me to dive in head-first, and I happily listened to both sides, because back then, I wouldn't have even described myself as a libertarian. But after reading and listening to God knows how many arguments, I said, "You know, those guys seem to be right a lot more often than the other fellas."

Try it. You just might like it.

To me, an ideologue is someone who lives by an ideology, at that alone. In this case, the ideology is that government has no role in the market ever, period. That is the ideology that these ideologues are espousing.

Now, I would probably even agree that in most, if not nearly all, instances its better to let the free market sort things out for itself. However, i'm not so ideological to think that there is a 0% chance the government can help, in any way. I'm also not so ideological to think that government can solve every problem. I don't pretend to have all the answers either. But, it appears that the consensus among economists is that the government can play a helpful role, with the exception of those economists who are claiming that its just always better to have the government stay out of it - the ideology.

[deejaydana]

It seemed to me from the start that the focus should have been on getting the toxic assets off of the banks' balance sheets, but the price tag on that was probably enormous, and it was easier to feed the banks little bits of liquidity and hope the market would heal itself ... That hasn't happened, so we're still really just stuck continuing to do that - it's like we're trying to plug a bunch of holes in the dam with chewing gum and praying that the water will recede.



here is what I would like to know, as an admittedly well-informed yet not completely Econ 101 worthy poster on this board:

How do we ever truly 'get rid of' the toxic element on the banks' balance sheets? I was reading the stuff on creating a 'bad bank' and that just sounded like complete hogwash to me. You have to face/write off bad debt at some point, right? Do we just write this down, on the taxpayers' tab, over a stretch of time? I would love to hear some informed voices because I just don't see a good ending to this one. Am I missing something here? Help? Any advice is appreciated.

[Hubbs]

In fairness,a lot of non-libertarians saw this coming too.

Oh, I know, you don't have to be a libertarian to believe in free market economics. He was just saying that anyone left who thinks that the best way to solve this is for the government to leave it alone must be a libertarian ideologue.

[dcoles11]

This country is screwed, and the people that elected these idiots to office are the ones to blaim.

You can't even spell "blame" right and you're calling other people idiots?

[Tulane Skins Fan]

Oh, I know, you don't have to be a libertarian to believe in free market economics. He was just saying that anyone left who thinks that the best way to solve this is for the government to leave it alone must be a libertarian ideologue.

What I'm saying is that the only people who appear to be in support of doing nothing are those who are espousing Austrian-theory etc., and saying that its always best to do nothing.

[luckydevil]

The libertarians just want to let the dam burst and figure out who sinks and who swims, but that line of thought has been pretty clearly rejected by the majority of economists, including Taylor, and a majority of Americans.



You know sometimes the cure is worse than the disease. Being popular doesn't make it right.

It is important to note that not all monetarists agree after all Anna J. Schwartz is pretty much in do nothing camp. Her take on the crisis is very different than her take on the great depression.

[luckydevil]

Oh, I know, you don't have to be a libertarian to believe in free market economics. He was just saying that anyone left who thinks that the best way to solve this is for the government to leave it alone must be a libertarian ideologue.

A lot of non-free market economists saw this coming.

[Hubbs]

Three of your links just cite to various economists from the same CATO ad, but this one is pretty interesting:

Do they? My bad, I was just copy-pasting the first ones I found that didn't look identical. Although, to be fair, there's a difference between members of Cato and economics who signed onto the ad. Many of them otherwise have nothing to do with Cato.


Government needs to work smarter. I don't think the stimulus package necessarily falls in the "smarter" category, but I'm not completely doom-and-gloom about it either.

What magical pixie dust improves government's level of work? Government is what it is - inefficient, full of pork, and chiefly concerned with getting re-elected. As it ever was, as it ever will be.


The libertarians just want to let the dam burst and figure out who sinks and who swims, but that line of thought has been pretty clearly rejected by the majority of economists, including Taylor, and a majority of Americans.

Maybe there is just too much water for a real bailout ... but I think it makes sense to keep trying to plug the dam - maybe we'll get a little smarter about it as we go along - and hopefully we can all survive without getting too wet before the water recedes on its own.

"A majority of economists" were completely wrong a year ago. A majority of the public initially wanted the bailouts, too - less than a month later, over 2/3 were against them. A majority of the public supported the stimulus package a month ago - now support is in the 30's. The majority of Americans are extremely fickle when it comes to economics.

[Hubbs]

To me, an ideologue is someone who lives by an ideology, at that alone. In this case, the ideology is that government has no role in the market ever, period. That is the ideology that these ideologues are espousing.

Now, I would probably even agree that in most, if not nearly all, instances its better to let the free market sort things out for itself. However, i'm not so ideological to think that there is a 0% chance the government can help, in any way. I'm also not so ideological to think that government can solve every problem. I don't pretend to have all the answers either. But, it appears that the consensus among economists is that the government can play a helpful role, with the exception of those economists who are claiming that its just always better to have the government stay out of it - the ideology.

What? I can think of exactly one person I've read anywhere who has said that. If you think that's what people on my side of the fence are saying, then, in the immortal words of Jeff Goldblum as he and Will Smith raced out of an alien mothership, "We need to work on our communication."

The government has lots of roles in the market. Minimum wage. Labor laws. Enforcement of contracts. Interest rates (even though many libertarians disagree with that one... I'm still unsure about it, so I'll throw it in for now). What my fence-pals are saying is that the government cannot change economic reality, no matter how many trillions it throws at the situation. Not only is it delaying the inevitable, it's actually making things worse, because in addition to the fact that many companies that used to be profitable no longer are (Chrysler, Six Flags, Blockbuster, Sirius, Dollar Thrifty, it could go on forever) and will, sooner or later, go under, we have to pay interest on the money we used to keep them on life support. The interest on the stimulus package for the first ten years is $350 billion. $350 BILLION. That's just interest. Nearly half a trillion dollars going towards absolutely nothing.

[Hubbs]

What I'm saying is that the only people who appear to be in support of doing nothing are those who are espousing Austrian-theory etc., and saying that its always best to do nothing.

Always best to do nothing if we're only talking about the government trying to make the economy do something it wouldn't otherwise do with the goal of economic growth? I originally wrote "yes," but I even take that back, because I think a very good economic argument can be made for things like minimum wage, and many Austrian theorists would agree. I'd have to make it so nuanced that you couldn't possibly describe it as an ideology. The only "always" is for things like propping up failing companies in the name of economic growth - utterly impossible. No country in the history of the world has pulled that off.

[Hubbs]

A lot of non-free market economists saw this coming.

Well then they have nothing to do with the whole "libertarian ideologue" thing. :silly:

[DjTj]

here is what I would like to know, as an admittedly well-informed yet not completely Econ 101 worthy poster on this board:

How do we ever truly 'get rid of' the toxic element on the banks' balance sheets? I was reading the stuff on creating a 'bad bank' and that just sounded like complete hogwash to me. You have to face/write off bad debt at some point, right? Do we just write this down, on the taxpayers' tab, over a stretch of time? I would love to hear some informed voices because I just don't see a good ending to this one. Am I missing something here? Help? Any advice is appreciated.Well the theory is that the debt is not as bad as it seems, and that the government has a much longer liquidity horizon than any private bank. Basically, the government would buy up mortgage-backed securities in exchange for cash. The banks could then operate without all those "toxic" assets on their books. The government could tolerate the declining paper value a lot better than any private bank, and in conjunction with buying the securities could work to lower rates and try to keep as many mortgages on the books as possible ... then whenever the housing market rebounded (2 years? 5 years? 10 years?), the government could then sell the securities back on the open market ... given a long enough time horizon, the losses shouldn't be that bad.

This editorial explains the concept pretty well: http://online.wsj.com/article/SB122161086005145779.html


Do they? My bad, I was just copy-pasting the first ones I found that didn't look identical. Although, to be fair, there's a difference between members of Cato and economics who signed onto the ad. Many of them otherwise have nothing to do with Cato.Yeah, they are all economists who just signed on to the ad, but I guess my point is that they're not saying anything new or different from all the other libertarians.


What magical pixie dust improves government's level of work? Government is what it is - inefficient, full of pork, and chiefly concerned with getting re-elected. As it ever was, as it ever will be.I suppose I don't subscribe to that same brand of cynicism. Getting reelected is not always at odds with doing the right thing ... if democracy is to work, it should be aligned with doing the right thing most of the time. If people can learn from their mistakes, then voters can learn from their mistakes, and politicians can learn from their mistakes, and government can learn from its mistakes.


"A majority of economists" were completely wrong a year ago. A majority of the public initially wanted the bailouts, too - less than a month later, over 2/3 were against them. A majority of the public supported the stimulus package a month ago - now support is in the 30's. The majority of Americans are extremely fickle when it comes to economics.Like it or not, majority rules. Gallup says that 51% believe it is critically important to pass some kind of stimulus. http://www.gallup.com/poll/114202/Obama-Upper-Hand-Stimulus-Fight.aspx


It is important to note that not all monetarists agree after all Anna J. Schwartz is pretty much in do nothing camp. Her take on the crisis is very different than her take on the great depression.By the way, Schwartz supported the "Resolution Trust Corp." proposal that I was endorsing above.

http://online.wsj.com/article/SB122428279231046053.html

She suspects that Paulson abandoned the idea because it would have led to a few more bank failures ... whatever the reason, I do think it was a mistake to not pursue that course. Both the monetarists and the Austrian school lost out in that debate.

[luckydevil]

Well then they have nothing to do with the whole "libertarian ideologue" thing. :silly:

The back and fourth reminded me of a joke made by Chris Hayes

"In the current financial crisis, the two groups who come out looking good are the Marxists and the Austrians"

Yeah, that's about right.

[Hubbs]

here is what I would like to know, as an admittedly well-informed yet not completely Econ 101 worthy poster on this board:

How do we ever truly 'get rid of' the toxic element on the banks' balance sheets? I was reading the stuff on creating a 'bad bank' and that just sounded like complete hogwash to me. You have to face/write off bad debt at some point, right? Do we just write this down, on the taxpayers' tab, over a stretch of time? I would love to hear some informed voices because I just don't see a good ending to this one. Am I missing something here? Help? Any advice is appreciated.

The theory behind it, as I understand it (and I haven't read too much about it, so don't take it as gospel) is that most financial institutions simply couldn't survive holding that much "toxic" debt for years and years. The government, however, can, and eventually - maybe 10, 15 years from now - those assets will at least rebound enough to sell them off without a huge loss. Now, that can work for homes that have dramatically dropped in price, because they'll eventually rebound and grow faster than inflation for at least a little while. The complicated financial instruments, the securities and all that, I have no freaking clue if the same rules apply.

[Hubbs]

I suppose I don't subscribe to that same brand of cynicism. Getting reelected is not always at odds with doing the right thing ... if democracy is to work, it should be aligned with doing the right thing most of the time. If people can learn from their mistakes, then voters can learn from their mistakes, and politicians can learn from their mistakes, and government can learn from its mistakes.

The whole reason Communism didn't work is because the state is an inherently inferior economic entity to free markets. That will never change.


Like it or not, majority rules. Gallup says that 51% believe it is critically important to pass some kind of stimulus. http://www.gallup.com/poll/114202/Obama-Upper-Hand-Stimulus-Fight.aspx

Hey, I never said the majority doesn't rule. But that doesn't mean the majority is right. The majority thought the sun revolved around the earth 1,000 years ago.


By the way, Schwartz supported the "Resolution Trust Corp." proposal that I was endorsing above.

http://online.wsj.com/article/SB122428279231046053.html

She suspects that Paulson abandoned the idea because it would have led to a few more bank failures ... whatever the reason, I do think it was a mistake to not pursue that course. Both the monetarists and the Austrian school lost out in that debate.

Yeah, I liked that plan better than most because, while it pushed my buttons when it comes to creating ever more national debt, at its core it was saying, "Look, you guys get the economy flowing again, we over here in the government will just sit on a bunch of bad debt because it would overwhelm you." I like that line of thinking much, much more than I like the government taking the economy into its own hands.

[DjTj]

The whole reason Communism didn't work is because the state is an inherently inferior economic entity to free markets. That will never change.And the whole reason anarchy didn't work was because free markets don't operate without the protection of a stable government and the rule of law.

Clearly, there are acceptable levels of government action somewhere between authoritarian regimes and survival-of-the-fittest.

The government isn't trying to take ownership of all the factories and put us all on communal farms. The stimulus package is just trying to inject a little bit of capital into a few different areas. I think we're well within the range of reasonable government action here.


Hey, I never said the majority doesn't rule. But that doesn't mean the majority is right. The majority thought the sun revolved around the earth 1,000 years ago.I'm not saying that the majority is right. I don't even like the stimulus plan really. But I do think that the libertarian criticism of everything is a little over the top ... we're really taking relatively limited action, and the free market will still be alive and well when this is all over.


Yeah, I liked that plan better than most because, while it pushed my buttons when it comes to creating ever more national debt, at its core it was saying, "Look, you guys get the economy flowing again, we over here in the government will just sit on a bunch of bad debt because it would overwhelm you." I like that line of thinking much, much more than I like the government taking the economy into its own hands.The stimulus doesn't exactly put the economy into the government's hands. In the big picture, all we're really doing is borrowing money from the future to spend today. I think that is a very reasonable thing to do in a crisis, even if we're not spending it completely efficiently.

The government is buying some stuff and throwing some money around, but after the money is paid out, it will find its way into the free market, and if the government allocation was inefficient, the market will distribute it to the right place ... I don't think the stimulus is so completely out-of-whack that it will prevent that from happening.

[GibbsFactor]

I know this current crisis has been predicted by lots of people in lots of different fields for at least 5 years now. Due to policies, American Corporate Capitalism and wasteful government spending, those that properly called for deflation (http://www.extremeskins.com/showthread.php?t=207587) (I didn't just make it all up in a drunken rage) think that there's nothing we can do at this point and any more spending will just make the inevitable much more harder to deal with.

I think some people are realizing this now. Of course, who knows, doing nothing may very well be disastrous. Let's just hope we don't need World War III to pull out of this.

I certainly don't want to see a domino effect with our unemployment. Hopefully Obama and his team can make this work. I sure am hoping.

[Hubbs]

And the whole reason anarchy didn't work was because free markets don't operate without the protection of a stable government and the rule of law.

Clearly, there are acceptable levels of government action somewhere between authoritarian regimes and survival-of-the-fittest.

...which is why I've happily listed plenty of ways in which libertarians who aren't rigidly dogmatic do believe the government should step into economic matters. We're talking strictly about growth itself.


The government isn't trying to take ownership of all the factories and put us all on communal farms. The stimulus package is just trying to inject a little bit of capital into a few different areas. I think we're well within the range of reasonable government action here.

Little bit? What, are you used to Zimbabwe dollars?


I'm not saying that the majority is right. I don't even like the stimulus plan really. But I do think that the libertarian criticism of everything is a little over the top ... we're really taking relatively limited action, and the free market will still be alive and well when this is all over.

If you honestly believe that this is "relatively limited action," you haven't been doing much more than glancing at headlines.


The stimulus doesn't exactly put the economy into the government's hands. In the big picture, all we're really doing is borrowing money from the future to spend today. I think that is a very reasonable thing to do in a crisis, even if we're not spending it completely efficiently.

You're talking two different things here. One is taking on more debt, which I disagree with in almost every circumstance, but can at least acknowledge that, in special situations like this (or, say, world war), it might have merit. I lean towards arguing that it still does more harm than good even now, but I'm not completely positive.

The other topic is the government spending the money to do things that the market otherwise wouldn't do. Not only will it do this in an inherently inefficient way, but the problem is, once peoples' economic livelihood depend on increased government spending, that spending will never go away. Look at this chart:

http://www.usgovernmentspending.com/usgs_line.php?title=Total%20Spending&year=1850_2010&sname=US&units=p&stack=1&size=m&spending0=1.75_2.00_1.69_1.71_1.81_1.77_1.99_1.92_ 2.15_1.94_1.79_1.74_8.39_9.53_9.28_13.27_5.96_4.52 _4.91_4.41_4.31_4.17_3.70_3.65_3.95_3.78_3.59_3.23 _3.24_3.21_2.92_2.59_2.45_2.51_2.47_2.67_2.41_2.45 _2.33_2.60_2.55_2.85_2.57_3.02_3.21_2.84_2.86_2.84 _2.99_3.62_3.05_2.87_2.37_2.32_2.45_2.29_2.24_2.15 _2.53_2.49_2.51_2.57_2.47_2.48_2.75_2.71_2.10_3.86 _17.22_24.13_7.67_7.49_5.13_4.35_4.22_4.00_3.69_3. 70_3.77_3.68_4.34_5.37_7.27_9.05_9.00_10.30_10.94_ 9.58_9.81_10.04_9.92_11.18_21.96_41.78_45.73_47.90 _29.93_16.95_13.22_15.04_15.25_14.42_19.97_21.08_2 0.42_17.71_17.37_17.74_18.42_18.46_18.48_19.25_18. 24_18.02_17.86_16.44_17.08_18.91_19.58_18.65_18.84 _18.65_18.63_17.77_17.96_20.29_20.37_20.15_19.99_1 9.66_21.18_21.68_22.91_22.86_21.66_22.42_22.19_21. 19_20.86_20.86_21.59_22.09_21.80_21.17_20.67_20.49 _19.96_19.28_18.89_18.36_18.23_18.40_19.21_19.71_1 9.62_19.90_20.15_19.77_20.53_20.42_19.34&legend=

Other than wars, which are an entirely separate issue, whenever the federal government reaches a new level of size, it stays there. Permanently. Oh, sure, there are minor fluctuations as economic growth outpaces government growth or vice/versa, and maybe a second-term President slashes a department or two, but the overall picture speaks loud and clear. Once the government takes up a larger role in the economy, it keeps that role. Forever.


The government is buying some stuff and throwing some money around, but after the money is paid out, it will find its way into the free market, and if the government allocation was inefficient, the market will distribute it to the right place ... I don't think the stimulus is so completely out-of-whack that it will prevent that from happening.

This sounds like a basic argument for a centrally planned economy. Those don't work.

[wilsonian]

We can't print and spend our way into prosperity. We need productivity and more savings in order to have a more efficient, vibrant economy. Debt-financed spending is what caused this crisis. It's not the solution.

[DjTj]

Little bit? What, are you used to Zimbabwe dollars?

If you honestly believe that this is "relatively limited action," you haven't been doing much more than glancing at headlines.I'll admit you've probably got me there. I don't know want to know too much about the stimulus because I know that the more I know, the less I'll like it. :D


You're talking two different things here. One is taking on more debt, which I disagree with in almost every circumstance, but can at least acknowledge that, in special situations like this (or, say, world war), it might have merit. I lean towards arguing that it still does more harm than good even now, but I'm not completely positive.

The other topic is the government spending the money to do things that the market otherwise wouldn't do. Not only will it do this in an inherently inefficient way, but the problem is, once peoples' economic livelihood depend on increased government spending, that spending will never go away.

Other than wars, which are an entirely separate issue, whenever the federal government reaches a new level of size, it stays there. Permanently. Oh, sure, there are minor fluctuations as economic growth outpaces government growth or vice/versa, and maybe a second-term President slashes a department or two, but the overall picture speaks loud and clear. Once the government takes up a larger role in the economy, it keeps that role. Forever.I suppose I don't look at the chart and see a doomsday scenario. I see a continuous expansion of government throughout the twentieth century as the United States came to be the most powerful nation in the world - not exactly a bad period for us. As a nation grows larger and more powerful, the government can and should provide more; there's nothing wrong with that, and it doesn't necessarily lead to authoritarianism.

We can disagree about taking on more debt, but I do think it is worth it to try to take some future money and inject it into the present. Inflationary concerns are not as high right now, so stimulus spending shouldn't have a big downside.


This sounds like a basic argument for a centrally planned economy. Those don't work.I think I was arguing that the market is fundamentally resistant to a planned economy. The market will tend to cover up the mistakes that central planners make. The government may inefficiently spend billions trying to send men to the moon, but the market will take that technology and make better computers, batteries, velcro, or whatever. As long as the government doesn't completely take over major industries, which we're not doing (yet), it's pretty hard for the government to completely **** it up.

That's really all I'm arguing. The market is resilient. Some of what the government is spending on is good, most of it is probably bad, but the aggregate effect of injecting more money into the economy should help with the recovery.

[SkinsHokieFan]

Look people

This is a simple matter of mathematics, something I have been trying to argue for years

Take out the political parties and philosophies in all of this and get it down to the basic Jeffersonian thought

Do the leaders of today have the right to bankrupt our generation?

Because we no longer are talking about millions or billions, its trillions upon trillions upon 43 trillion already in unfunded future liabilities

This is a PRE BAILOUT Perot Chart.

Again, taking the politics out of this, and looking at the math, how is this possibly sustainable in any way at all?

http://perotcharts.com/images/challenges/challenges24.png

[SnyderShrugged]

Look people

This is a simple matter of mathematics, something I have been trying to argue for years

Take out the political parties and philosophies in all of this and get it down to the basic Jeffersonian thought

Do the leaders of today have the right to bankrupt our generation?

Because we no longer are talking about millions or billions, its trillions upon trillions upon 43 trillion already in unfunded future liabilities

This is a PRE BAILOUT Perot Chart.

Again, taking the politics out of this, and looking at the math, how is this possibly sustainable in any way at all?

http://perotcharts.com/images/challenges/challenges24.png



Good chart shf. It's really telling when it's taken out of a political context (and we often end up gravitating to a political pov).

[SnyderShrugged]

lets all be clear here. The Senators who supported the bill had pet projects baked in. Of course Specter supported it! And look! Ried gets a large chuck for a light rail through the middle of the mojave, useful! LOL

But hey, it gets better because we will see a massive $13 stimulus injection in our take home pay and seniors can cash the extra $250 to pay for their Ensure drinks for the year.:mad:

All this while openly claiming that we really wont see much impact on jobs from most of ther provisions.


Wow! what a well thought our and useful plan that will save us from economic disaster!:rolleyes:


http://www.google.com/hostednews/ap/article/ALeqM5gdDrWnoMueqVFI-Uo1ClxVZur22AD969TIKG2

Economic stimulus package on track for final votes
By ANDREW TAYLOR – 5 hours ago

WASHINGTON (AP) — Economic stimulus legislation at the heart of President Barack Obama's recovery plan is on track for final votes in the House and Senate after a dizzying final round of bargaining that yielded agreement on tax cuts and spending totaling $789 billion.

Obama, who has campaigned energetically for the legislation, welcomed the agreement, saying it would "save or create more than 3.5 million jobs and get our economy back on track."

The $500-per-worker credit for lower- and middle-income taxpayers that Obama outlined during his presidential campaign was scaled back to $400 during bargaining by the Democratic-controlled Congress and White House. Couples would receive $800 instead of $1,000. Over two years, that move would pump about $25 billion less into the economy than had been previously planned.

Officials estimated it would mean about $13 a week more in people's paychecks when withholding tables are adjusted in late spring. Critics say that's unlikely to do much to boost consumption.

Millions of people receiving Social Security benefits would get a one-time payment of $250 under the agreement, along with veterans receiving pensions, and poor people receiving Supplemental Security Income payments.

An additional $46 billion would go to transportation projects such as highway, bridge and mass transit construction; many lawmakers wanted more.

The House could vote on the bill as early as Thursday, though Friday seemed more likely. The Senate would follow, but its schedule is less certain.

The Obama plan offers a 60 percent subsidy to help unemployed people pay health insurance premiums under the COBRA program and divvies up $87 billion among the states to help them with their Medicaid costs for the next two years. It provides $19 billion to modernize health information technology systems, even though such funding will create few jobs right away.

To tamp down costs, several tax provisions were dropped or sharply cut back. A provision popular with Republicans and the big business lobby that would have awarded about $54 billion to money-losing businesses over the next two years was instead limited to small businesses, greatly reducing its cost.

A $15,000 tax credit for anybody buying a home over the next year was dropped; instead, first-time homebuyers could claim an $8,000 credit for homes bought by the end of August. Car buyers could deduct the sales tax they paid on a new car but not the interest on their car loans.

But nothing could shake negotiators from insisting on including $70 billion to shelter middle- to upper-income taxpayers from the alternative minimum tax, originally passed a generation ago to make sure the super-rich didn't avoid taxes.

The move is aimed at easing headaches that would follow if Congress passed it later in the year — rather than creating jobs. The Congressional Budget Office estimates that provision will have relatively little impact on the economy.

In late-stage talks, Obama and Senate Majority Leader Harry Reid, D-Nev., pressed for $8 billion to construct high-speed rail lines, quadrupling the amount in the bill that passed the Senate on Tuesday.

Reid's office issued a statement noting that a proposed Los Angeles-to-Las Vegas rail might get a big chunk of the money.

Scaling back the bill to levels lower than either the $838 billion Senate measure or the original $820 billion House-passed measure caused grumbling among liberal Democrats, who described the cutbacks as a concession to the moderates, particularly Sen. Arlen Specter, R-Pa., who are feeling heat from constituents for supporting the bill.

Specter played an active role, however, in making sure $10 billion for the National Institutes of Health, a pet priority, wasn't cut back.

After final agreements were sealed Wednesday afternoon, staff aides worked into the night drafting and double-checking in hopes of officially unveiling the measure Thursday

[SnyderShrugged]

wow, watching the stock market this morning certainly tells me that others are worried about the the impact of the stimulus on the economy, and I'm not certain they are happy.