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Let me try to explain the workings of ours and past recessions and depressions and how to fix them. Let's start with the Great Depression: undisputed that it fixed by World War II, right? Well here's why: it was started by too much manufacturing capability and not enough market (The Black Tuesday stock market crash caused a loss of over $40,000,000,000 (40 billion dollars) to kick it off (a.k.a. not enough money in circulation) and what followed was the failing of over 9,000 banks during the 1930s and a drastic decline in consumer spending... sound familiar?). You might have noticed a metaphor I used in an earlier post "turning car plants into tank factories overnight." Well that's exactly what we did when WWII came, we printed money to put into circulation and used deficit spending to accomplish this feat. It was basically a self-induced inflation that fixed the economy.
Our current recession was caused slightly differently, but still with the same outcome. We overvalued things and overvalued things that really shouldn't have a value at all. I'm, of course, referring to the pyramid scheme of bets and betting on bets and then betting on those bets so that the person on top of the pyramid (the first ones to make bets and offered the people behind him to bet on his bet) gets money both if he wins or loses. Since I'm somewhat pressed on time, I won't get into the complicated details about how people you have never met in your life are betting on all the shit you're doing in the stock market, but the point is that it could have been stopped by regulation, but wasn't because we were closing our eyes and wishing the car accident away whenever a Republican got behind the wheel (i.e. Bush) while the Democrats we had in congress were sitting on their asses. Anyways, you all see that the economy crashed, banks failed, spending stoped, etc. etc.. Obama's solution is basically to follow in the footsteps of FDR without staging a live-fire international World War II reenactment but instead focusing the deficit spending on other peaceful, productive sectors. The one problem about the self-induced inflation method is that it gets worse before it gets better making it political suicide and making whoever in charge easy to attack (as has been apparent). I'm pretty sure that when Obama ran with the policy he has, he knew this and didn't expect to make it into his second political term. Hell, at this rate he could very well be shot before year three (making it literal suicide). Anyways, he's putting his integrity and life on the line to fix a recession while, not quite as serious, is much more international than the Great Depression (whose other contributing factor was the drought, a localized geographical event). So, as I am currently pressed on time, I'll put in the conclusion: Obama is taking the same steps as FDR (I know some conservatives don't really think highly of FDR, probably for the same reason Obama probably won't make into into his second term) without the war, with much more risk that American conservatives are now in the Reaganomics era and crazier than ever, and with a case of much more global spread. and that, along with the hope he brought to those who aren't affected by silly stories like kids singing songs about presidents and racial equality being interpreted as socialism, especially with his bipartisan attempts to communicate with the other side at the beginning of his attempts, even with a majority in Congress (while I still think was like trying to reason with the world's craziest mental patient, it was still noble), is why he's won the prize.
Our current recession was caused slightly differently, but still with the same outcome. We overvalued things and overvalued things that really shouldn't have a value at all. I'm, of course, referring to the pyramid scheme of bets and betting on bets and then betting on those bets so that the person on top of the pyramid (the first ones to make bets and offered the people behind him to bet on his bet) gets money both if he wins or loses. Since I'm somewhat pressed on time, I won't get into the complicated details about how people you have never met in your life are betting on all the shit you're doing in the stock market, but the point is that it could have been stopped by regulation, but wasn't because we were closing our eyes and wishing the car accident away whenever a Republican got behind the wheel (i.e. Bush) while the Democrats we had in congress were sitting on their asses. Anyways, you all see that the economy crashed, banks failed, spending stoped, etc. etc.. Obama's solution is basically to follow in the footsteps of FDR without staging a live-fire international World War II reenactment but instead focusing the deficit spending on other peaceful, productive sectors. The one problem about the self-induced inflation method is that it gets worse before it gets better making it political suicide and making whoever in charge easy to attack (as has been apparent). I'm pretty sure that when Obama ran with the policy he has, he knew this and didn't expect to make it into his second political term. Hell, at this rate he could very well be shot before year three (making it literal suicide). Anyways, he's putting his integrity and life on the line to fix a recession while, not quite as serious, is much more international than the Great Depression (whose other contributing factor was the drought, a localized geographical event). So, as I am currently pressed on time, I'll put in the conclusion: Obama is taking the same steps as FDR (I know some conservatives don't really think highly of FDR, probably for the same reason Obama probably won't make into into his second term) without the war, with much more risk that American conservatives are now in the Reaganomics era and crazier than ever, and with a case of much more global spread. and that, along with the hope he brought to those who aren't affected by silly stories like kids singing songs about presidents and racial equality being interpreted as socialism, especially with his bipartisan attempts to communicate with the other side at the beginning of his attempts, even with a majority in Congress (while I still think was like trying to reason with the world's craziest mental patient, it was still noble), is why he's won the prize.
"we printed money to put into circulation and used deficit spending to accomplish this feat. It was basically a self-induced inflation that fixed the economy."
The problem is that we NEVER stopped using deficit spending and that we relied on inflation and a growing GDP for the government to stay afloat. Both are unreliable means of managing an economy. The toxic mortgages (which Bush tried to address) merely brought events to a head sooner. We are currently projected to nearly double the national debt in ten years. It is unrealistic to think that the GDP will be able to match that pace, so that leaves us with inflation. By further devaluing the dollar, you are talking about putting significant additional strain on the public. $5-10 per gallon fill-ups could very well become a reality and not just the tease we had a couple of years ago- if not higher (I would be looking at spending $1,000 or so a month just to keep my nads from freezing off). It is highly unlikely that wages will rise with inflation, particularly if the unemployment rate remains high. Also, the standard of living will most likely decline significantly. We are looking at going from 8% of our spending covering just the interest on the debt to nearly 16% and growing. This is not healthy because it means we are going to have to continue the cycle of borrowing.
One way or another the American public is going to have to suffer through a difficult period to restore the US's economic luster, partially their own fault for obscene consumerism, but mostly because of irresponsible leadership that has refused to make difficult decisions. Probably the only thing saving our asses right now is that many nations depend on US consumption which will dry up as the dollars reach continues to shrink.
The only good possibility from all of this, is that maybe we will finally be able to produce a pair of socks in the US cheaper than having them shipped from the other side of the planet. However, don't count on the government to keep the minimum wage on track with inflation as this is a self fulling path to destruction. Much like the ridiculous belief that health care reform is going to cut into insurer profits.
If the government had been running a surplus during the good years, the country would be much better positioned to deal with the current stresses. Don't forget the barbarians at the gates that are celebrating a weakened America. Its not all peace and love outside the borders- or inside for that matter. As our credibility flounders, so will our alliances.
The problem is that we NEVER stopped using deficit spending and that we relied on inflation and a growing GDP for the government to stay afloat. Both are unreliable means of managing an economy. The toxic mortgages (which Bush tried to address) merely brought events to a head sooner. We are currently projected to nearly double the national debt in ten years. It is unrealistic to think that the GDP will be able to match that pace, so that leaves us with inflation. By further devaluing the dollar, you are talking about putting significant additional strain on the public. $5-10 per gallon fill-ups could very well become a reality and not just the tease we had a couple of years ago- if not higher (I would be looking at spending $1,000 or so a month just to keep my nads from freezing off). It is highly unlikely that wages will rise with inflation, particularly if the unemployment rate remains high. Also, the standard of living will most likely decline significantly. We are looking at going from 8% of our spending covering just the interest on the debt to nearly 16% and growing. This is not healthy because it means we are going to have to continue the cycle of borrowing.
One way or another the American public is going to have to suffer through a difficult period to restore the US's economic luster, partially their own fault for obscene consumerism, but mostly because of irresponsible leadership that has refused to make difficult decisions. Probably the only thing saving our asses right now is that many nations depend on US consumption which will dry up as the dollars reach continues to shrink.
The only good possibility from all of this, is that maybe we will finally be able to produce a pair of socks in the US cheaper than having them shipped from the other side of the planet. However, don't count on the government to keep the minimum wage on track with inflation as this is a self fulling path to destruction. Much like the ridiculous belief that health care reform is going to cut into insurer profits.
If the government had been running a surplus during the good years, the country would be much better positioned to deal with the current stresses. Don't forget the barbarians at the gates that are celebrating a weakened America. Its not all peace and love outside the borders- or inside for that matter. As our credibility flounders, so will our alliances.
I respect your point, Fluffy, and I'm glad you didn't post in a testosterone-fueled rage fest. However, the 1980s+ inflation you're referring to was actually the cradle of "Reagonomics." After World War II, FDR's policy on economics worked so well (simply because he took the "too much industrial potential with no market" and added workers, in turn jobs, in turn: market; maximizing our industrial output and more) that we kept using it... then someone took that policy and thought: "Hey, this would work so much better if you took out all the regulations and let the market find its own way!". Voila! Result: all the results and consequences that you just mentioned. This is how we learn from history, and this is why, when this economy is fixed (hopefully sooner), we have to bring back all those regulations that were there in the first place.
Also, you took my quote out of context, the feat I was referring to was "turning car plants into tank factories overnight:" a.k.a. "making our own socks" with 63 mm armor that fired 75 mm shells (I guess we needed to make reliable G.I. socks in mass numbers as well, but this analogy is so much more fun). Obama's job is to do the same thing without a war. You seemed to assume that I meant that just throwing money up in the air randomly will solve all of our problems, but the point of inflation in the use of counteracting recessions is to make jobs (if you put the money into the right sectors, in this case: manual labor such as road work and yes, even things being criticized like trimming hedges on the White House lawn make jobs. And, as I recall, the years after FDR's work and WWII were golden years with America's largest middle class.)
To turn the tables, how do you know that the lack of money to spend in a Laissez Faire solution to the economic situation won't cause people to rely more on 5 cent socks imported from countries where working conditions allow people to have sweat shops starving their workers? You can't implement an import tariff like the Smoot-Hawley tariff used by Herbert Hoover in the 1930's, that did not work and made the situation even worse. That, and Republicans don't like taxes, it would be equal, if not worse, political suicide. Also, as said in the origin of the word "Laissez Faire," what if the government lets the sharks who started this whole mess to keep doing things like egging people on to make money on the pyramid scheme of betting on betting on peoples' bets to bet on people betting on the guys making our socks, which even you admitted makes our recession worse (even if you supposedly say that it wasn't what started our mess). You need to regulate to keep everything in check. So a Laissez Faire solution takes way too many risks, it risks that the greedy don't keep on screwing stuff up and it risks that consumers won't keep consuming cheap chinese and sweatshop products.
If you ask me, we've had enough gambling.
Also, you took my quote out of context, the feat I was referring to was "turning car plants into tank factories overnight:" a.k.a. "making our own socks" with 63 mm armor that fired 75 mm shells (I guess we needed to make reliable G.I. socks in mass numbers as well, but this analogy is so much more fun). Obama's job is to do the same thing without a war. You seemed to assume that I meant that just throwing money up in the air randomly will solve all of our problems, but the point of inflation in the use of counteracting recessions is to make jobs (if you put the money into the right sectors, in this case: manual labor such as road work and yes, even things being criticized like trimming hedges on the White House lawn make jobs. And, as I recall, the years after FDR's work and WWII were golden years with America's largest middle class.)
To turn the tables, how do you know that the lack of money to spend in a Laissez Faire solution to the economic situation won't cause people to rely more on 5 cent socks imported from countries where working conditions allow people to have sweat shops starving their workers? You can't implement an import tariff like the Smoot-Hawley tariff used by Herbert Hoover in the 1930's, that did not work and made the situation even worse. That, and Republicans don't like taxes, it would be equal, if not worse, political suicide. Also, as said in the origin of the word "Laissez Faire," what if the government lets the sharks who started this whole mess to keep doing things like egging people on to make money on the pyramid scheme of betting on betting on peoples' bets to bet on people betting on the guys making our socks, which even you admitted makes our recession worse (even if you supposedly say that it wasn't what started our mess). You need to regulate to keep everything in check. So a Laissez Faire solution takes way too many risks, it risks that the greedy don't keep on screwing stuff up and it risks that consumers won't keep consuming cheap chinese and sweatshop products.
If you ask me, we've had enough gambling.
shank tank, don't forget that the banks that were making these insane gambles knew full well that if/when it all went up in smoke they stood a damn good chance of getting free money from the government because they were "too big to fail". The problem with capitalism that you are missing is it only really works, when you let it work. Once you start adding safety nets for those who's demise would cause many lost jobs you skew their risk/benefit.
I'm mostly with death fluffy on this, only I don't think we should use deficit spending except in real dire situations, eg. risk of hostile invasion. Part of the problem is it's not easy for an elected official to cut spending, because he's going to be giving less money to one group or another. Also do not forget that federal reserve notes aren't wealth. They are basically IOUs that you are legally prevented from cashing in these days. It used to be, for most of the country's history that you could cash them in for gold and proceed to do whatever you please with it. Like take it to another central bank in another country and get their bank notes. Then in 33 it became that only foreigners could cash in FRN's, now nobody can, and the fed can crank more out more or less at will.
This is creating money out of nothing, and you can't get something from nothing, for nothing, if that were the case Zimbabwe would be leading the world in standard of living. But as third world hell holes go, they rank among the worst, having a life expectancy slightly lower than in most war zones.
edit, i actually have alot more i should say, i know im leaving alot out, but im tired
I'm mostly with death fluffy on this, only I don't think we should use deficit spending except in real dire situations, eg. risk of hostile invasion. Part of the problem is it's not easy for an elected official to cut spending, because he's going to be giving less money to one group or another. Also do not forget that federal reserve notes aren't wealth. They are basically IOUs that you are legally prevented from cashing in these days. It used to be, for most of the country's history that you could cash them in for gold and proceed to do whatever you please with it. Like take it to another central bank in another country and get their bank notes. Then in 33 it became that only foreigners could cash in FRN's, now nobody can, and the fed can crank more out more or less at will.
This is creating money out of nothing, and you can't get something from nothing, for nothing, if that were the case Zimbabwe would be leading the world in standard of living. But as third world hell holes go, they rank among the worst, having a life expectancy slightly lower than in most war zones.
edit, i actually have alot more i should say, i know im leaving alot out, but im tired
Yeah, but the reason it works for us and not Zimbabwe is because we have the problem of too much industrial potential (they do not) and no money to give to workers. It's a non-linear deflationary spiral for us: stock market crashes, people lose money, people stop spending, businesses lower prices and lay people off, people have less money, people stop spending even more, prices go down even more, businesses lay more people off etc etc...
Again, I ask you how exactly a Laissez Faire solution to a deflationary spiral like ours or The Great Depression would fix it and where it has been used successfully in history. Refer to my third paragraph in my previous post. I would remind you, Herbert Hoover was attempting to bring the same do-nothing solution to The Great Depression.
To clarify what I meant on some parts in my previous post: the Smoot-Hawley tariff: it was a tariff on imports, not exports or buying said imports... the only problem with that is that you can't take such an action without retaliation, all the other countries put taxes on us importing commodities to them and that is why it didn't work. Also: regulation doesn't mean bailing out failing companies... it means that the government would take action against schemes like the one that got us into this mess before it gets too serious.
Again, what is the proof that a Laissez Faire solution works. It doesn't help when there's clear historical proof that it doesn't and your argument is still "Ohhhh, the economy just does."
Again, I ask you how exactly a Laissez Faire solution to a deflationary spiral like ours or The Great Depression would fix it and where it has been used successfully in history. Refer to my third paragraph in my previous post. I would remind you, Herbert Hoover was attempting to bring the same do-nothing solution to The Great Depression.
To clarify what I meant on some parts in my previous post: the Smoot-Hawley tariff: it was a tariff on imports, not exports or buying said imports... the only problem with that is that you can't take such an action without retaliation, all the other countries put taxes on us importing commodities to them and that is why it didn't work. Also: regulation doesn't mean bailing out failing companies... it means that the government would take action against schemes like the one that got us into this mess before it gets too serious.
Again, what is the proof that a Laissez Faire solution works. It doesn't help when there's clear historical proof that it doesn't and your argument is still "Ohhhh, the economy just does."
First off, deregulation was well under way prior to Reagan. To insist on blaming him as the source of all woes is just party politics.
http://en.wikipedia.org/wiki/Reaganomics
"In sum, a large study by economists Paul Joskow and Roger Noll concludes that the changes in economic regulation
"simply do not reflect a sudden ideological change in federal executive branch views....many of the significant changes in economic regulation began during the Carter administration and were initiated by liberal Democrats.... it is not particularly productive to refer to a generic deregulation movement or to think of it as a consequence of the election of Ronald Reagan."[9]"
And...
http://en.wikipedia.org/wiki/Deregulation#United_States
"Deregulation 1970-2000
Deregulation gained momentum in the 1970s, influenced by research at the University of Chicago and the theories of Ludwig von Mises, Friedrich von Hayek, and Milton Friedman, among others. Two leading ‘think tanks’ in Washington, the Brookings Institution and the American Enterprise Institute, were active in holding seminars and publishing studies advocating deregulatory initiatives throughout the 1970s and 1980s. Alfred E. Kahn played an unusual role in both publishing as an academic and participating in the Carter Administration's efforts to deregulate transportation."
Certainly there is no doubt that his administration accelerated the national debts growth by tripling it during his tenure. But to lay the blame for the current situation is not realistic. It took both Republicans and Democrats to make this mess.
As far as misquoting you, I feel that I got what I wanted out of it, though obviously I was unable to clearly make my point. It is debatable whether or not FDR's policies shortened or extended the Great Depression http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx , and I have no intention of going into that at this point. My point was that once the situation was improved, the debt should have been repaid, and a national surplus grown to deal with national disasters such as war, Katrina, the death of Michael Jackson, etc.. This did not happen.
Your overall discussion seems to be centered on partisan rhetoric. So where are the roadworks and dam building and hedge trimming jobs? When I hear about a modest decline in new unemployment claims, the words 'due to government labor projects' are not included or alluded to. What I have heard about, is money being poured into and in some cases forced upon banks that should be allowed to fail. If we want to go down the partisan road, wasn't the Democratic rallying cry during the Reagan years "Down with Corporate Welfare!"?
The reality is that the US economy is hollow and can't afford its debt. We cannot forever depend on GE, Microsoft, Hollywood and the so called "Service Industry" to be the sum of our production. The Service Industry is a freaking joke anyway because it is easier to export than Hershey's candy manufacturing. http://logisticstoday.com/operations_strategy/outlog_story_8579/ Which leaves us with food production (a large portion of which is imported), legal and medical services and retail. Just about everything else is brought in from overseas. Until we close our borders to the international community or become capable of producing desirable goods at costs that match or beat that '5 cent pair of socks' that Bangladesh can offer, increasing the debt is only going to put greater strain onto an already weak and faltering framework.
As far as the war arguement, I don't honestly think you can draw any parallels between FDR and Obama. Obama inherited two wars. FDR, while he may have wanted to go to war, was ultimately pushed into it by Pearl Harbor. So, I'm sorry, your arguement there doesn't make sense to me.
Please explain to me how you are turning the tables? Exactly where did I advise a course of Laissez Faire solutions? Do you think I am so deluded as to have celebrated when the congress voted to make it more difficult for citizens in financial difficulty to file for bankruptcy while doing nothing to curtail the predatory lending practiced by many banks and credit card companies? There must be some form of accountability.
You said "Also, as said in the origin of the word "Laissez Faire," what if the government lets the sharks who started this whole mess to keep doing things like egging people on to make money on the pyramid scheme..." Isn't this exactly what the federal government has done by bailing out these institutions that knowingly participated in the bad mortgage scheme? Or did they suddenly realize the error of their ways and develop a moral character? Don't try telling me they didn't or couldn't have known the end result of their behavior. I was talking about it ten years ago and I don't even have a college degree!
Edit: And can the Dev's or Whistler ban me from these forums? I'm spending way too much time here :(
http://en.wikipedia.org/wiki/Reaganomics
"In sum, a large study by economists Paul Joskow and Roger Noll concludes that the changes in economic regulation
"simply do not reflect a sudden ideological change in federal executive branch views....many of the significant changes in economic regulation began during the Carter administration and were initiated by liberal Democrats.... it is not particularly productive to refer to a generic deregulation movement or to think of it as a consequence of the election of Ronald Reagan."[9]"
And...
http://en.wikipedia.org/wiki/Deregulation#United_States
"Deregulation 1970-2000
Deregulation gained momentum in the 1970s, influenced by research at the University of Chicago and the theories of Ludwig von Mises, Friedrich von Hayek, and Milton Friedman, among others. Two leading ‘think tanks’ in Washington, the Brookings Institution and the American Enterprise Institute, were active in holding seminars and publishing studies advocating deregulatory initiatives throughout the 1970s and 1980s. Alfred E. Kahn played an unusual role in both publishing as an academic and participating in the Carter Administration's efforts to deregulate transportation."
Certainly there is no doubt that his administration accelerated the national debts growth by tripling it during his tenure. But to lay the blame for the current situation is not realistic. It took both Republicans and Democrats to make this mess.
As far as misquoting you, I feel that I got what I wanted out of it, though obviously I was unable to clearly make my point. It is debatable whether or not FDR's policies shortened or extended the Great Depression http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx , and I have no intention of going into that at this point. My point was that once the situation was improved, the debt should have been repaid, and a national surplus grown to deal with national disasters such as war, Katrina, the death of Michael Jackson, etc.. This did not happen.
Your overall discussion seems to be centered on partisan rhetoric. So where are the roadworks and dam building and hedge trimming jobs? When I hear about a modest decline in new unemployment claims, the words 'due to government labor projects' are not included or alluded to. What I have heard about, is money being poured into and in some cases forced upon banks that should be allowed to fail. If we want to go down the partisan road, wasn't the Democratic rallying cry during the Reagan years "Down with Corporate Welfare!"?
The reality is that the US economy is hollow and can't afford its debt. We cannot forever depend on GE, Microsoft, Hollywood and the so called "Service Industry" to be the sum of our production. The Service Industry is a freaking joke anyway because it is easier to export than Hershey's candy manufacturing. http://logisticstoday.com/operations_strategy/outlog_story_8579/ Which leaves us with food production (a large portion of which is imported), legal and medical services and retail. Just about everything else is brought in from overseas. Until we close our borders to the international community or become capable of producing desirable goods at costs that match or beat that '5 cent pair of socks' that Bangladesh can offer, increasing the debt is only going to put greater strain onto an already weak and faltering framework.
As far as the war arguement, I don't honestly think you can draw any parallels between FDR and Obama. Obama inherited two wars. FDR, while he may have wanted to go to war, was ultimately pushed into it by Pearl Harbor. So, I'm sorry, your arguement there doesn't make sense to me.
Please explain to me how you are turning the tables? Exactly where did I advise a course of Laissez Faire solutions? Do you think I am so deluded as to have celebrated when the congress voted to make it more difficult for citizens in financial difficulty to file for bankruptcy while doing nothing to curtail the predatory lending practiced by many banks and credit card companies? There must be some form of accountability.
You said "Also, as said in the origin of the word "Laissez Faire," what if the government lets the sharks who started this whole mess to keep doing things like egging people on to make money on the pyramid scheme..." Isn't this exactly what the federal government has done by bailing out these institutions that knowingly participated in the bad mortgage scheme? Or did they suddenly realize the error of their ways and develop a moral character? Don't try telling me they didn't or couldn't have known the end result of their behavior. I was talking about it ten years ago and I don't even have a college degree!
Edit: And can the Dev's or Whistler ban me from these forums? I'm spending way too much time here :(
Quite frankly, my point on this subject is that deficit spending and then establishing regulations in the aftermath seems to be the only logical way (whether you prefer it or simply view it as the only available option) of getting out of this. As far as "turning the tables," I was assuming that your view was to use "Laissez Faire" as an alternative solution to deficit spending much like LNH's view:
"The problem with capitalism that you are missing is it only really works, when you let it work." - LNH
If you are for neither, then what approach would you suggest we take to a deflationary spiral/recession/depression?
About the Carter administration: I didn't say that using deregulation was originally coined by Reagan, I'm blaming Reagan for taking the idea, accelerating it, and then reforming the Republican party to stick by the silly idea for years to come. Ask any Democrat today and they will be against deregulation. Today's Republicans, on the other hand, went crazy and stand by the deregulation idea and yell "Socialist!" every time someone opposes it. Because the modern Democrats actually learned from history and the Republicans went in the exact opposite direction and frankly, went a little crazy, is why I'm a Democrat.
As far as FDR compared to Obama: look up "The New Deal" and you'll find something that's very reminiscent of what Obama's trying to do. Also keep in mind that FDR's "New Deal" worked jointly with speaking built to give people hope and a form of presidential speaking via communication through media that FDR called "fireside chats." Sound familiar? From what I've seen, Obama is trying to follow directly in FDR's footsteps.
"The problem with capitalism that you are missing is it only really works, when you let it work." - LNH
If you are for neither, then what approach would you suggest we take to a deflationary spiral/recession/depression?
About the Carter administration: I didn't say that using deregulation was originally coined by Reagan, I'm blaming Reagan for taking the idea, accelerating it, and then reforming the Republican party to stick by the silly idea for years to come. Ask any Democrat today and they will be against deregulation. Today's Republicans, on the other hand, went crazy and stand by the deregulation idea and yell "Socialist!" every time someone opposes it. Because the modern Democrats actually learned from history and the Republicans went in the exact opposite direction and frankly, went a little crazy, is why I'm a Democrat.
As far as FDR compared to Obama: look up "The New Deal" and you'll find something that's very reminiscent of what Obama's trying to do. Also keep in mind that FDR's "New Deal" worked jointly with speaking built to give people hope and a form of presidential speaking via communication through media that FDR called "fireside chats." Sound familiar? From what I've seen, Obama is trying to follow directly in FDR's footsteps.
Our economy isn't dieing because of the housing collapse, it's dieing because as a country we have been spending more than we make for a long time, (trade deficit), and the only ways you can do that is to either spend down savings (not always bad, sometimes good opportunities present themselves) or go into debt.
Now the progressives have grown the government to such an extent that if it were to try and run without borrowing money from other countries, it'd crush the economy under its dead weight. (we know it's incapable of spending less)
At this point the deficit spending isn't really going to do any more harm, one more cigarette for the guy dieing of pancreatic cancer. Won't change the end result, just speed it along with some slight enjoyment along the way.
The problem with deficit spending is it's addictive, not that it can't be used to fix a temporary problem. The problem is its bad politically to stop giving handouts to people, because they will vote for the other guy, and they damn well better give out something or they won't hold office. I think I called it political heroin in another thread. That's basically what it amounts to.
That's why it's better to let it sort itself out and it has before, we had recessions before we starting printing and borrowing money like crazy, and they did end. The difference is the recessions tended to be longer but less severe, like a headache for a couple days instead of a 12 hour migraine.
As for deregulation, I say as little regulation as possible, and if they fuckup and fail, they fail, tough shit, it's called personal responsibility. So yes, I am in favor of "Laissez Faire" economic policy, part of why i don't seem to make sense to you is that im not Keynesian, I'm Austrian, also I'm not a republican or a democrat, so don;t bother trying to make this about dumbo and the jackass.
Now the progressives have grown the government to such an extent that if it were to try and run without borrowing money from other countries, it'd crush the economy under its dead weight. (we know it's incapable of spending less)
At this point the deficit spending isn't really going to do any more harm, one more cigarette for the guy dieing of pancreatic cancer. Won't change the end result, just speed it along with some slight enjoyment along the way.
The problem with deficit spending is it's addictive, not that it can't be used to fix a temporary problem. The problem is its bad politically to stop giving handouts to people, because they will vote for the other guy, and they damn well better give out something or they won't hold office. I think I called it political heroin in another thread. That's basically what it amounts to.
That's why it's better to let it sort itself out and it has before, we had recessions before we starting printing and borrowing money like crazy, and they did end. The difference is the recessions tended to be longer but less severe, like a headache for a couple days instead of a 12 hour migraine.
As for deregulation, I say as little regulation as possible, and if they fuckup and fail, they fail, tough shit, it's called personal responsibility. So yes, I am in favor of "Laissez Faire" economic policy, part of why i don't seem to make sense to you is that im not Keynesian, I'm Austrian, also I'm not a republican or a democrat, so don;t bother trying to make this about dumbo and the jackass.
ST, far from being any sort of a historic and inspiring success, the New Deal was a miserable failure that made the economy worse than when that barbarian took office. Only WWII, and not the New Deal plus WWII, brought us out of the Great Depression with the speed that occurred.
To some extent, New Deal policies could do a great deal of good: CCC style projects would be an excellent means of emptying urban areas of problematic young populations, for example, while simultaneously providing the rest of us with nice things like roads. But LNH's larger point, that simply spending our way out of a situation created by far too much debt is not a tenable solution, is correct. Letting capitalism work requires the federal government staying the fuck out of the way and letting crashes happen when they've failed to regulate them away ex ante; surely next time they'll put something in place to ban or limit CDOs and other swaps, but in the meantime, this "protecting the financial system" excuse for socializing private losses is terribly destructive to our economy.
Protecting losers from the full consequences of their choices is poor policy, and harms those who kept their powder dry in anticipation of the coming crash, as well as those who wound up footing the bill for these bankers' salvation. Let it all burn, we'll sort it out later.
To some extent, New Deal policies could do a great deal of good: CCC style projects would be an excellent means of emptying urban areas of problematic young populations, for example, while simultaneously providing the rest of us with nice things like roads. But LNH's larger point, that simply spending our way out of a situation created by far too much debt is not a tenable solution, is correct. Letting capitalism work requires the federal government staying the fuck out of the way and letting crashes happen when they've failed to regulate them away ex ante; surely next time they'll put something in place to ban or limit CDOs and other swaps, but in the meantime, this "protecting the financial system" excuse for socializing private losses is terribly destructive to our economy.
Protecting losers from the full consequences of their choices is poor policy, and harms those who kept their powder dry in anticipation of the coming crash, as well as those who wound up footing the bill for these bankers' salvation. Let it all burn, we'll sort it out later.
What do you think it was about WWII that got us out the the depression? It certainly wasn't "stepping aside and letting the Depression blow over." Our debt raised over 120% of our GNP directly coinciding with WWII, but it brought jobs to America so that we could actually work through the Depression rather than sitting on our asses with no money and waiting to be "reborn from the ashes" or something like that.
What Obama did to bail out the banks probably prevented a lot of damage (what the irresponsible owners did with the money later on is another matter). Keep in mind that one of the biggest contributions to the Great Depression was the bank crises, the failing of over 9,000 banks that took even more money out of our system providing an even larger jump in the downward inflationary spiral. Obama's quick reaction wasn't pretty, God no, but at least it prevented something like that from happening. If he had done what you have mentioned, then we would probably be much deeper in this shit then we are right now meaning much less production than we have right now. Then again, that's not exactly what I mean when I say regulation, I don't know why you keep jumping to think that it is. Regulations are the rules that should have been in place when this recession started to crack down on all the schemes.
To go back to the original point of this post:
"Let it all burn, we'll sort it out later." -Dr. Lecter
So you think we should let everything fail, allow massive unemployment rates, and then writhe about in the mud for 5-10 more years while taking the rest of the world with us while we can "sort it out later." While that entire time we could take out a loan, get workers back into our equation of massive US industrial potential and use actual production to work off our debt plus previous debt plus maybe even reviving science and research again, all done with our maximum US potential we all used to know and love?
What Obama did to bail out the banks probably prevented a lot of damage (what the irresponsible owners did with the money later on is another matter). Keep in mind that one of the biggest contributions to the Great Depression was the bank crises, the failing of over 9,000 banks that took even more money out of our system providing an even larger jump in the downward inflationary spiral. Obama's quick reaction wasn't pretty, God no, but at least it prevented something like that from happening. If he had done what you have mentioned, then we would probably be much deeper in this shit then we are right now meaning much less production than we have right now. Then again, that's not exactly what I mean when I say regulation, I don't know why you keep jumping to think that it is. Regulations are the rules that should have been in place when this recession started to crack down on all the schemes.
To go back to the original point of this post:
"Let it all burn, we'll sort it out later." -Dr. Lecter
So you think we should let everything fail, allow massive unemployment rates, and then writhe about in the mud for 5-10 more years while taking the rest of the world with us while we can "sort it out later." While that entire time we could take out a loan, get workers back into our equation of massive US industrial potential and use actual production to work off our debt plus previous debt plus maybe even reviving science and research again, all done with our maximum US potential we all used to know and love?
The banks could have failed, that's why we have FDIC insurance, so peoples savings wouldn't get wiped out by massive bank failures.
As for regulation, lets not forget that the banks originally didn't want to make these bad loans, but they were pushed to by the Community Reinvestment Act All in the name of helping the little guy. Wow that worked out just fantastically. If not for the CRA and the knowledge that the govt would consider them "too big to fail" the vast majority of those bad loans never would have been made. But hey, at least Clinton gets to tout how he got so many low income minority into home ownership.
As for regulation, lets not forget that the banks originally didn't want to make these bad loans, but they were pushed to by the Community Reinvestment Act All in the name of helping the little guy. Wow that worked out just fantastically. If not for the CRA and the knowledge that the govt would consider them "too big to fail" the vast majority of those bad loans never would have been made. But hey, at least Clinton gets to tout how he got so many low income minority into home ownership.
This forum sure does live up to its name.
As to your last paragraph, absolutely. The dire events you describe are speculation, much like thinking the US has turned the corner is speculation. Maybe we have, maybe we haven't. But I don't think it would take much to get the great turtle to pull its head back in at this point. I find it insulting that those banks and bankers are getting away with and rewarded for behavior that would get me a roommate named Bubba. Sooner or later the US is going to have to take a bitter pill to recovery or fail. I'd rather get it over with personally. Let me ask this question, how many people who took those mortgages in good faith have been absolved of their debt? The message is clear. It is OK to screw the American public because they like it and ask for more please. I personally think the banks that did not engage in risky loans and showed that they were financially stable should have had a guarantee of monetary backing if they needed it.
As to your first paragraph, where are the jobs?
You ask what approach I would use. Well, here is where I will likely get hammered fairly severely.
1) A balanced budget amendment requiring the government to pay for all of its programs without the use of debt and to maintain and grow a surplus. The only exception should be the need to use debt for an extreme emergency and required to be paid back within three years.
2) Eliminate the ability to tack items onto congressional legislation. If its not important enough to merit its own bill, then its not that important. If members of congress habitually don't read and understand the legislation they are voting on, then perhaps cutting back to just the key issues of the day might be a rational solution.
3) Restrict lobbyists. Do not allow them to meet privately with leaders. Require them to host an open forum to any interested Congressperson instead. Ensure that other interested parties are able to engage in open debate.
4) Gas the rent-a-crowd.
5) For the current crisis, cut back on or eliminate non-critical government expenses.
6) Gas the rent-a-crowd again because this is such a great idea.
7) If you must use debt, use it intelligently and as an investment. At this point there is absolutely no choice but to use debt because its all we have. Increase spending on education, research, new and expanding business loans, the national infrastructure, etc.
8) Gas the rent-a-crowd.
9) Simplify the tax code to a Flat Tax system. Limit the deductions to key aspects that should be supported like family, home and the like. The same for businesses.
10) Penalize agencies and their leaders for failure to enforce existing regulations. Bernard Madoff should have never gotten away with his sceme for so long.
11) Gas the rent-a-crowd.
12) This one is the eternal struggle between yin and yang, good and evil, God and Satan, Allah and comic strip writers, tickling and Elmo. Balance Regulation of industry and Free Market. This means that regulators are going to have to intelligently look at the impact regulation or the lack thereof is having and adjust according to need. Business needs room to breathe and grow, but it cannot and must not be trusted to not abuse an 'exploit'.
13) Having a social safety net is great. An individual who attempts and fails should have a cushion to land on so that they may try again. How many times did Sam Walton fail before Walmart? Adequate health care for every US citizen is a good thing. Though a person who does not follow sound medical advice with such a system should be penalized by an increase in personal cost for their choices. Businesses are not people and should be allowed to fail, particularly when they make poor or dishonest choices.
14) Gas the rent-a-crowd.
15) The national debt is not going to pay itself off. Once the Flat tax is implemented at roughly the current $/person average, increase it by 2-5% initially and adapt as necessary to balance peoples ability to maintain a similar standard of living while paying down the debt.
16) Off topic: If we must have a health reform, then public plan that gives a standard of care to every tax paying citizen and their defendants (including retired citizens of course), while also continue to care for those who are physically or mentally unable to work. Pay for it as a percentage of the tax already taken out for Medicaid/care. Let the insurance companies cover the extras like viagra and boob jobs.
17) Thanks to LNH's well timed reminder, wouldn't a better investment have been to support and encourage QUALITY inner city jobs by offering subsidies and / or tax breaks for hiring local residents that met the desired demographic so that they could AFFORD to buy a home for their families? I know where I'd be buying my 5 cent socks, I'll tell you what!
17 a)(because I don't feel like renumbering this damned thing) It is ok to offer business incentives to promote a social agenda. It is not ok to mandate compliance unless it is a human rights issue.
18) Find a way to restore the US's production advantage. China maintains an artificially low currency value to achieve this. Sadly nearly every recent US innovation is being manufactured in other countries.
19) Get us the FUCK off of dependency on foreign oil. Better, Get the rest of the world off of dependency on oil as well. I am by no means an environmentalist nor am I convinced that global warming is caused by human activity. However, renewable energy that does not emit pollutants only makes sense.
20) Legalize marijuana and certain other non-violent, non ultra addictive or non self destructive, intoxicants. Regulate them and tax them.
21) Legalize prostitution and regulate the hell out of it. And tax it.
22) World events are not a "Father Knows Best" Episode and the US is NOT Jim Anderson.
23) Crime and drug addiction are NOT caused by poverty. Social and cultural values and attitudes are a more significant factor. The poor in the US are still a hell of a lot better off than many peoples around the world.
24) Just for good measure, Gas the rent-a-crowd.
25) Get me the hell off of these forums so I can get back in game or catching up on my reading.
26) Restrict the size of government to what is necessary. Administrative costs are a bitch and cuts there is often more effective than reducing the staff on the sales floor.
As to your first paragraph, where are the jobs?
You ask what approach I would use. Well, here is where I will likely get hammered fairly severely.
1) A balanced budget amendment requiring the government to pay for all of its programs without the use of debt and to maintain and grow a surplus. The only exception should be the need to use debt for an extreme emergency and required to be paid back within three years.
2) Eliminate the ability to tack items onto congressional legislation. If its not important enough to merit its own bill, then its not that important. If members of congress habitually don't read and understand the legislation they are voting on, then perhaps cutting back to just the key issues of the day might be a rational solution.
3) Restrict lobbyists. Do not allow them to meet privately with leaders. Require them to host an open forum to any interested Congressperson instead. Ensure that other interested parties are able to engage in open debate.
4) Gas the rent-a-crowd.
5) For the current crisis, cut back on or eliminate non-critical government expenses.
6) Gas the rent-a-crowd again because this is such a great idea.
7) If you must use debt, use it intelligently and as an investment. At this point there is absolutely no choice but to use debt because its all we have. Increase spending on education, research, new and expanding business loans, the national infrastructure, etc.
8) Gas the rent-a-crowd.
9) Simplify the tax code to a Flat Tax system. Limit the deductions to key aspects that should be supported like family, home and the like. The same for businesses.
10) Penalize agencies and their leaders for failure to enforce existing regulations. Bernard Madoff should have never gotten away with his sceme for so long.
11) Gas the rent-a-crowd.
12) This one is the eternal struggle between yin and yang, good and evil, God and Satan, Allah and comic strip writers, tickling and Elmo. Balance Regulation of industry and Free Market. This means that regulators are going to have to intelligently look at the impact regulation or the lack thereof is having and adjust according to need. Business needs room to breathe and grow, but it cannot and must not be trusted to not abuse an 'exploit'.
13) Having a social safety net is great. An individual who attempts and fails should have a cushion to land on so that they may try again. How many times did Sam Walton fail before Walmart? Adequate health care for every US citizen is a good thing. Though a person who does not follow sound medical advice with such a system should be penalized by an increase in personal cost for their choices. Businesses are not people and should be allowed to fail, particularly when they make poor or dishonest choices.
14) Gas the rent-a-crowd.
15) The national debt is not going to pay itself off. Once the Flat tax is implemented at roughly the current $/person average, increase it by 2-5% initially and adapt as necessary to balance peoples ability to maintain a similar standard of living while paying down the debt.
16) Off topic: If we must have a health reform, then public plan that gives a standard of care to every tax paying citizen and their defendants (including retired citizens of course), while also continue to care for those who are physically or mentally unable to work. Pay for it as a percentage of the tax already taken out for Medicaid/care. Let the insurance companies cover the extras like viagra and boob jobs.
17) Thanks to LNH's well timed reminder, wouldn't a better investment have been to support and encourage QUALITY inner city jobs by offering subsidies and / or tax breaks for hiring local residents that met the desired demographic so that they could AFFORD to buy a home for their families? I know where I'd be buying my 5 cent socks, I'll tell you what!
17 a)(because I don't feel like renumbering this damned thing) It is ok to offer business incentives to promote a social agenda. It is not ok to mandate compliance unless it is a human rights issue.
18) Find a way to restore the US's production advantage. China maintains an artificially low currency value to achieve this. Sadly nearly every recent US innovation is being manufactured in other countries.
19) Get us the FUCK off of dependency on foreign oil. Better, Get the rest of the world off of dependency on oil as well. I am by no means an environmentalist nor am I convinced that global warming is caused by human activity. However, renewable energy that does not emit pollutants only makes sense.
20) Legalize marijuana and certain other non-violent, non ultra addictive or non self destructive, intoxicants. Regulate them and tax them.
21) Legalize prostitution and regulate the hell out of it. And tax it.
22) World events are not a "Father Knows Best" Episode and the US is NOT Jim Anderson.
23) Crime and drug addiction are NOT caused by poverty. Social and cultural values and attitudes are a more significant factor. The poor in the US are still a hell of a lot better off than many peoples around the world.
24) Just for good measure, Gas the rent-a-crowd.
25) Get me the hell off of these forums so I can get back in game or catching up on my reading.
26) Restrict the size of government to what is necessary. Administrative costs are a bitch and cuts there is often more effective than reducing the staff on the sales floor.
Who's the rent-a-crowd? (It's not a term I've heard before)
Protest groups that show up for media attention and to affect public opinion towards their viewpoint on issues through over the top displays.
You forgot #27. Otherwise: Good idea(s)!
(Luckily, this discussion has shifted its aim, I can now safely participate.)
(Luckily, this discussion has shifted its aim, I can now safely participate.)
13, A flat tax would be nice, My opinion is the easiest way to implement it would be a national sales tax on everything but food, water, basic clothing, medicine, and housing (say maybe for up to two homes because some people might buy one before they sell the other). As for how to define basic clothing, I'm not sure there, somebody smarter than me will have to figure that out.
I don't really agree with 13, your friends, family, and neighbors are your safety net. If you've been such an intolerable ass that you have alienated all of them, you've made your bed.
As for #17, subsides should only last for a short while, A very short while, 3 months per worker, long enough to get them trained and up to speed, not so long as to have company's living off the taxpayers. And they shouldn't care about demographics.
What do you mean by promoting a social agenda? I hope you're not talking about incentivising hiring one racial/ethnic/sex/etc over another.
19, Oil can't last forever, ethanol doesn't really work, coal can be made into vehicle fuel, which in my opinion makes it too valuable for electrical generation, nuclear sounds like a good option to me, it's cost effective when you aren't running fast-breeder reactors. Reprocessing brings the average lifetime waste per person down to a hockey puck, maybe a bit more, I think we can find a portion of desert to store that. Honestly I think the market will make a solution, oil companies are already working on one I bet, because they know the demand will be there.
I'm also not a fan of #20 and 21, the whole free love hippie crap disgusts me, but it's their life, to hell with them.
Also medicare and medicaid needs to pay more for procedures, doctors often lose money, or just break even, taking medicare and medicaid patients on a family practice basis. That's why many family doc's are saying if the public option becomes reality, they will have to close up shop, my mothers doc told me that when I took her there cause she sprained her foot back on Monday.
I don't really agree with 13, your friends, family, and neighbors are your safety net. If you've been such an intolerable ass that you have alienated all of them, you've made your bed.
As for #17, subsides should only last for a short while, A very short while, 3 months per worker, long enough to get them trained and up to speed, not so long as to have company's living off the taxpayers. And they shouldn't care about demographics.
What do you mean by promoting a social agenda? I hope you're not talking about incentivising hiring one racial/ethnic/sex/etc over another.
19, Oil can't last forever, ethanol doesn't really work, coal can be made into vehicle fuel, which in my opinion makes it too valuable for electrical generation, nuclear sounds like a good option to me, it's cost effective when you aren't running fast-breeder reactors. Reprocessing brings the average lifetime waste per person down to a hockey puck, maybe a bit more, I think we can find a portion of desert to store that. Honestly I think the market will make a solution, oil companies are already working on one I bet, because they know the demand will be there.
I'm also not a fan of #20 and 21, the whole free love hippie crap disgusts me, but it's their life, to hell with them.
Also medicare and medicaid needs to pay more for procedures, doctors often lose money, or just break even, taking medicare and medicaid patients on a family practice basis. That's why many family doc's are saying if the public option becomes reality, they will have to close up shop, my mothers doc told me that when I took her there cause she sprained her foot back on Monday.
My intended use of social agenda was to suggest an effort to provide economic opportunities to people living below the poverty level, particularly in the inner cities by creating meaningful jobs. Guarded by restricting the subsidy to the targeted residential areas. And yes, subsidies should be limited depending on their nature to no more than 3-12 months.
For 19, I didn't mention it, but I had hoped it was implied that my secondary reason for moving off of oil is to reduce the economic power base that supports terroristic organizations, while making the US and other nations susceptible to energy manipulation.
20 & 21, My reasons for this are
1) They aren't going to go away.
2) Making them illegal only makes criminals out of otherwise decent folk.
3) Making them illegal provides a significant portion of gang and organized crime income. Legitimizing some but not all should significantly reduce their resources.
4) If you tax it you increase state and federal revenues without having to raise taxes on other folk.
5) Legalizing it could reduce the number of incarcerations and the number of cases pending in the courts significantly.
6) While I haven't personally touched drugs in over 15 years or a prostitute ever, I am a firm believer that people have a God given right to destroy their lives by methods of their own choosing so long as it does not interfere with the rights of anyone else.
Texas has no personal income tax. It does just fine on revenues from sales tax. So I'm open to your comments.
I personally use only two medical fields. Optomitrists and Dentist. I don't have any use for the rest, so my ability to speak to the health care issue is sorely limited. I expect to go out like a bug on a windshield.
Oh, and
27) Gas the Rent-a-Crowd!
And I did actually forget number 27 so, we'll make it 28
28) The federal government should not attempt to micro-manage the country. It should issue macro level policies and leave it to the state and local governments to implement at the micro level.
For 19, I didn't mention it, but I had hoped it was implied that my secondary reason for moving off of oil is to reduce the economic power base that supports terroristic organizations, while making the US and other nations susceptible to energy manipulation.
20 & 21, My reasons for this are
1) They aren't going to go away.
2) Making them illegal only makes criminals out of otherwise decent folk.
3) Making them illegal provides a significant portion of gang and organized crime income. Legitimizing some but not all should significantly reduce their resources.
4) If you tax it you increase state and federal revenues without having to raise taxes on other folk.
5) Legalizing it could reduce the number of incarcerations and the number of cases pending in the courts significantly.
6) While I haven't personally touched drugs in over 15 years or a prostitute ever, I am a firm believer that people have a God given right to destroy their lives by methods of their own choosing so long as it does not interfere with the rights of anyone else.
Texas has no personal income tax. It does just fine on revenues from sales tax. So I'm open to your comments.
I personally use only two medical fields. Optomitrists and Dentist. I don't have any use for the rest, so my ability to speak to the health care issue is sorely limited. I expect to go out like a bug on a windshield.
Oh, and
27) Gas the Rent-a-Crowd!
And I did actually forget number 27 so, we'll make it 28
28) The federal government should not attempt to micro-manage the country. It should issue macro level policies and leave it to the state and local governments to implement at the micro level.
Nice thread!
Full of...fertilizer : )
meanwhile
Bleed well all : )
Full of...fertilizer : )
meanwhile
Bleed well all : )
I pretty much agree with your way of thinking in its entirety, Death Fluffy, especially concerning drugs, and for the same reasons, too.
It's a pity there aren't that many of us, in my opinion...
It's a pity there aren't that many of us, in my opinion...