Quote from WIN007
At the time Obama took office the economy was shedding 750,000 a <b> month</b>. he inherited a two-front war, a tanked economy and a 5 trillion dollar deficit for 2009's budget which is set by the prior Administration. There has been far less of a spending spree such as a long term loss of revenues both in the Bush tax cuts for the wealthy and a chronically displaced middle-class workforce which WAS paying taxes.
Outside of a much needed stimulus of which 60% was more tax cuts supposed to create job hiring incentives, he actually <i> hasn't </i> gone on a big spending spree.
The phrase, "Bush tax cuts for the wealthy" is nothing but a partisan talking point. Obama wisely signed a continuation of these very same tax cuts, acknowledging the very simple economic truth that raising taxes on anyone during a recession is mistake. The government is overhead,
and any money the government takes out of the productive economy (taxes) is money that won't be spent elsewhere in the economy. I reject Keynesian economic theory because we're proving it to be an abject failure right now with.
I'm not a big Obama fan; he was not my choice of candidates but I see no value in blaming problems 10 or 30 years in the making on the man either.
I partially agree with this: the problems we face today were indeed 30+ years in the making, and are the result of an ever-growing, ever more powerful central government which has become a malignant tumor draining the life out of this country. That said, it is entirely appropriate to place blame on an administration which refuses to learn from past failure and instead continues to make things even worse by exhibiting more of the same behavior that caused the problem in the first place.
The tea party's chantings , which ultimately end in default on the national debt will cause far worse crisis.
I'm sorry but this is absolute partisan rubbish, and it is so patently misleading that it is worthy of calling outright propaganda. Refusing to increase the debt ceiling DOES NOT equal default. Default only happens if we stop paying on current debt obligations, and the government makes plenty
of revenue to cover that. We will only default if our politicians decide that it is more important to continue other
spending than it is to service current debt obligations.
Don't buy it becuase you'll lose everything if that happens. Geithner is not lying. The bond market will collapse , stock market will collapse,, currency will be worth nothing, inflation will be runaway and the housing and job market of today will seem like a paradise.
Actions have consequences and some of what you predict above are going to happen no matter what we do, it is only a matter of when, and how much worse it will be by letting the government delay the inevitable. Point by point:
1) The bond market.
This is already an abject disaster, and our creditor nations are already losing confidence precisely because of the insane, unsustainable borrowing binge the US has been on for the past several decades. Do you know why current interest rates are so low? It's only because the Federal Reserve has completely broken the bond market via "quantitative easing" - they are inflating the monetary base to purchase Treasury debt with devalued dollars. Our own central bank is now the largest holder of US debt than any other entity, including China. Here is the end-stage reality: the Federal Reserve simply cannot continue to monetize the debt like this or we will end up in a hyperinflationary death spiral like Weimar Germany prior to WWII or Zimbabwe. The inflation we've already seen in food and fuel prices are the direct result of the Fed's currency debasement.
Yes interest rates will rise. They have to to rise, and they're going to - it is inevitable because they are only being held artificially low by unsustainable currency basement by the Federal Reserve. Deal with it - this is the first of the "actions have consequences" lessons this childlike nation must learn.
2) The stock market.
This is even worse than the bond market. Anyone with any money in stocks right now is certifiably insane. We've just had our sixth consecutive weekly decline in the stock market - the worst since 2002 - as the world is waking up to the hard reality that there is no economic recovery
- just an illusion created by the temporary effect of insane deficit spending. If I lose my job, I can continue to spend like crazy and appear prosperous by charging up my credit cards - for a while. That's what our government has been doing with this "stimulus" nonsense.
Thus far, the stock market has only been levitated by the exact same debt games that are holding interest rates artificially low. Since those games are unsustainable
, it is only a matter of time before it all falls apart. The longer we try to suspend reality and avoid letting the correction happen, the worse it will be. Consequences.
You are completely wrong on this point. What the government is doing right now
with this deficit spending and debt monetization is what is killing the value of our currency. This is why food and energy prices have gone up so much recently. Stopping this nonsense and showing some fiscal responsibility will restore the value of the currency and increase our dollar's purchasing power.
Tied to my points about currency above. Again, you are completely wrong. Inflation is what happens when a government borrows too much and devalues its currency by printing too much of it. If we stop letting our government borrow $0.41 of every dollar it spends, and in particular we stop letting our Federal Reserve destroy the value of our currency by monetizing the debt, inflation will go DOWN.
Housing has been dropping like a rock and will continue to decline for a long time. We've blown a huge bubble in this sector - again with unsustainable DEBT - to create the temporary illusion of prosperity. To pretend that we can restore or continue this nonsense with insane federal deficit spending is dangerous childlike naivete. The housing market only got as high as it did because we played games with DEBT - made it too easy for people to buy homes they really could not afford, by making it too easy to borrow ever-increasing amounts of money. Real estate values will stabilize only when we get back to the point where you've got to have a 20% downpayment and realistic front and back debt-to-income ratios to qualify for a mortgage. We're getting there, but we're not yet there yet.
Again, this correction is inevitable - it's only a matter of how long it takes to get there and whether we continue to make things worse by letting our government deficit-spend us into oblivion.
Government deficit spending does NOT "create jobs" in any meaningful way that contributes to actual, sustainable, organic economic growth. I reject Keynsian economics as our government has been practicing it for decades - we are proving right now that it does not work. The so-called "stimulus" did NOTHING except create some temporary busy work and boost the stock market. The fact that we still have >9% unemployment and 400,000+ weekly new unemployment filings shows what a complete waste of borrowed money this was. It has been proven to be an unsustainable failure. You know what Einstein's definition of insanity is, right?
If we want jobs, the only way to get them is to make it more attractive for people to pay other people to make things in this country. Increasing taxes and devaluing the currency has the opposite effect. Government is an obstacle
. I know this as fact, as in the past I have been my own employer and run my own business.
Nor is deficit spending inherently bad.
Now you sound like a Bush Republican.
60% of federal spending goes to social entitlement payments. That is bad
If it's invested well and you get a return on it that's fine. microprocessor, the arpanet (internet), nanotechnology, much in biotechnology are all examples fo this.
All of these things will develop on their own via private investment if there is money to be made in it (capital seeks profit). All the government has to do is stay out of the way, because government is unproductive overhead. If there is not
money to be made in it, it's not an investment.
there are other times to deficit spend as well; epidemics, unanticipated crisis like war and national disasters. It's absolute silliness to suggest a nation can run it's affairs like a household.
How much of our current federal deficit spending is going towards epidemics, war, or natural disasters? Our three current wars in the middle east don't count - it is ridiculous that we are even still there and that Obama has started our involvement in this new war in Libya.
It is NOT silly to suggest the nation can and should run its affairs like a household - it's the same dynamics on a larger scale. There is no escaping the simple reality that you cannot borrow infinite amounts of money forever. What IS silly is suggesting that we go on borrowing $0.41 of ever dollar we spend, and debasing our our currency to do it.
If you can see three legs to an economy: consumer spending, business spending and investment and govt spending, then if the first two are flat than that ONLY leaves govt. Thus as near every economist in the nation has said, slashing the govt workforce or state in a recession is only going to make things far worse yet.
The slashing and burning of the budget is evident in the late unemployment spikes as hundreds of thousands of govt workers and vertical industry workers hit the unemployment lines. Well, we told ya.
Consumer and business spending is down BECAUSE of the government. Yes, the government workforce must shrink - it is unproductive overhead