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View Full Version : The Stimulus Package -- I think the remaining Republicans are well and truly crazy



Wounded Ronin
13th February 09, 07:34 PM
Well, we've been having issues getting the fiscal stimulus package passed in Washington. I'm convinced that the few Republicans remaining in DC are mostly extremists, because most of the moderate Republicans from moderate states probably lost their seats to Democrats during the last election.

Here we are, in a serious crisis, in a situation where a massive government spending bill might or might not work, and where a great deal depends on public perception and momentum of the stimulus bill. The thing might not work anyway, but we have to take a gamble and try, and what it comes down to is if layoffs stop, jobs become available, and how consumers react.

But the whole thing is in the process of being spoiled by a bunch of Republicans and their abstract idea that government spending is bad. Fox News and Rush Limbaugh are going into overdrive sniping at the package on the basis that it's legitimate to give a tax cut to one of the Wall Street types who helped cause this problem in the first place in the backdrop where an economic recession where people tend to save rather than spend money, but if we want to build a highway and provide a bunch of construction jobs, that's evil, foul, PORK and even if it causes the stimulus bill to fail by god we're going to errode public confidence in the stimulus bill and complain about it on the mass media because PORK dammit PORK. If we want to fund education so teachers don't get laid off that is PORK DAMMIT PORK PORK MUST BE STOPPED AT ALL COSTS because apparently when we talk about creating or preserving jobs teaching jobs don't count.

What the hell is the matter with the Republicans? Are they living on another planet? Are they experiencing a different reality than you or I? Am I seriously just watching them errode our chances of making out of this recession because of their abstract pre-occupation with government spending and their hatred for well-maintained highways?

Cullion
13th February 09, 07:37 PM
The better amongst them are trying to stop you being stolen from to the tune of trillions by private corporations. The rest are simply angling for their own special interests to get a slice of the pie written in to the bill.

Where do you think the money the administration would like to distribute is going to be taken from ?

Wounded Ronin
13th February 09, 07:40 PM
Me, pretty much. Future generations. But that's the price we'll have to pay. It's okay, I never dreamed of accumulating great wealth myself. I'm very comfortable with taxes so long as the government provides health and social services.

Cullion
13th February 09, 07:45 PM
Me, pretty much. Future generations. But that's the price we'll have to pay.

What do you think you'll be buying with that money, exactly ?
What do you think that money is going to fix ?


It's okay, I never dreamed of accumulating great wealth myself. I'm very comfortable with taxes so long as the government provides health and social services.

Actually, the proposed spending is likely to be funded by inflating the money supply, so the elderly poor are relying on defined benefits retirement packages will be hurt the most.

HappyOldGuy
13th February 09, 07:52 PM
Just to confuse people. I'm going to take the opposite position. I support a stimulus bill in principle. But this stimulus bill has been hosed from the getgo and needs to be taken out back and put out of it's misery.

First things first. TANSTAAFL There ain't no such thing as a free lunch. Any stimulus spending we do here is borrowing from the future to pay for today. That's in the best case scenario where the money we spend today actually doesn't make things worse today. Which can happen.

Obama had a generally good approach on where to spend the money. Deferred infrastructure spending that we should have been doing already, some greenhouse spending on key industries, keep the states solvent, and keep the financial system afloat.

But he fucked up. Instead of making his own plan, he let congress take the ball and run with it. The democrats in the house poured a billion dollars into the hog trough and instead of going through the bill looking to fix it, the republicans in the house decided to play political grandstanding. So that even when Obama sat down with them and begged them to give substantive feedback, they decided not to.

And then the senate pretty much did the same thing.

And now the negotiating committee has taken the wisdom of solomon to heart and chopped the baby in half.

Who wants half a baby?

Cullion
13th February 09, 08:04 PM
An inflationary stimulus bill wouldn't just make things worse for future generations, it would make things worse today by exerting upward pressure on interests rates.

Truculent Sheep
13th February 09, 08:08 PM
Am I the only one who's alarmed at the fact that very few people who have voted for the bill have actually read the fucker?

Cullion
13th February 09, 08:17 PM
That's common practice now on both sides of the Atlantic. Yes, it's very wrong. But certainly no longer unusual.

JudOWNED
13th February 09, 08:20 PM
I'm ambivelant. Something has to be done. But I'm not sure massive gov't spending of money the gov't doesn't have is it. The first bailout I could get behind, because, as much as I think corporations should be allowed to fail, I understand that if the SYSTEM fails we're screwed. I could see how the first bailout was designed, however poorly, to save the system. This bailout/stimulous just seems to be giving a lot of people money regardless of the outcome.

Either way, you said it yourself, wounded. "...a massive government spending bill might or might not work..." That being the case, how can you be mad at republicans for not voting for a bill that is a crapshoot at best?

Zendetta
13th February 09, 08:22 PM
Irony: the crisis came about when a bunch of people spent a bunch of money they didn't have.

And now, to fix the problem, the government is going to...

MrGalt
13th February 09, 08:40 PM
Doesn't something UNexpected have to happen for it to qualify as irony?

Everybody thinks I'm some kind of libertarian nutter so I won't spell out the slippery slope I see, but if a private investor gave a company this much money he'd have bought a significant stake in it if not controlling interest. Somebody may bring that up in the future.

We already have "progressive" taxation too, which sounds like the first part of a quote I have in mind, but now things like a CEO salary cap sound a lot like giving "to each according to his need."

Of course I also have no real perspective on how things are going in America now, so maybe I don't realize the coast-to-coast Dust Bowl everybody is trying to get by in.

Cullion
13th February 09, 08:40 PM
I'm ambivelant. Something has to be done. But I'm not sure massive gov't spending of money the gov't doesn't have is it. The first bailout I could get behind, because, as much as I think corporations should be allowed to fail, I understand that if the SYSTEM fails we're screwed.

'The system' doesn't exist. It's a small proportion of the workforce concentrated in the major cities' finance districts gambling against each other with financial instruments. Your society could function perfectly well if all those companies went bust.



I could see how the first bailout was designed, however poorly, to save the system. This bailout/stimulous just seems to be giving a lot of people money regardless of the outcome.

The first bailout and all other subsequent bailouts are simply forced transfers of real wealth from the productive working population to a corporate elite.

Wounded Ronin
13th February 09, 08:53 PM
Either way, you said it yourself, wounded. "...a massive government spending bill might or might not work..." That being the case, how can you be mad at republicans for not voting for a bill that is a crapshoot at best?

It's like if you're in the woods and a bear is coming to eat you. You've got a 9mm handgun with a 15 round magazine. You basically have to dump the magazine at the bear in order to have a hope of stopping it. If the bear is not incapacitated you're screwed because you're out of ammo, and if you're lost in the woods you're still screwed for being out of ammo in an emergency situation. But you still have to do everything you can to stop the bear.

If you decide to shoot the bear only twice you're basically dead. You have to dump your mag and pray for the best and any last minute overly-intellectualized efforts to save ammo will just ensure you die rather than survive for the moment.

HappyOldGuy
13th February 09, 09:05 PM
Hey, I didn't realize the health care EMR program got put back in.

Sooooie! Oink! Oink! Oink!

Never mind me, I'll be at the trough.

Japuma
13th February 09, 09:13 PM
It's like if you're in the woods and a bear is coming to eat you. You've got a 9mm handgun with a 15 round magazine. You basically have to dump the magazine at the bear in order to have a hope of stopping it. If the bear is not incapacitated you're screwed because you're out of ammo, and if you're lost in the woods you're still screwed for being out of ammo in an emergency situation. But you still have to do everything you can to stop the bear.

If you decide to shoot the bear only twice you're basically dead. You have to dump your mag and pray for the best and any last minute overly-intellectualized efforts to save ammo will just ensure you die rather than survive for the moment.

This is the dumbest thing I have ever read... Let's just throw everything we have at it without thinking about what we are doing. There is no figurative bear running at us, if we take a couple of month to think about what we are doing we are going to be far less screwed then if we just throw a ton of money blindly at the problem.

Take the infrastructure spending for instance. Most people agree that maintaining and upgrading our infrastructure is a way to stimulate the economy. However, the way they are trying to throw all this money at once at the states is going to screw us in the long run. I work for Maryland State Highway Administration as a construction project manager and looking at our upcoming project ad list we have a ton of work coming up (without the stimulus package jobs). Now, when we get the stimulus money we are going to have 90 days to design, bid and build all of these projects because of the way federal money needs to be spent. So insted of having a well thought out plan on how is best to allocate this money were going rush these jobs out and then be in the same predicament were in at this same time next year.

Cullion
13th February 09, 11:34 PM
Even if you planned out how to spend the money, the very fact the new money has come into existence is going to cause even more problems. The biggest long-term problem is there are no sound ideas about how to stop it happening again coming from political leaders about how to stop it happening again.

Pumping credit into the economy with artificially low interest rates is how Alan Greenspan got you into this mess (and he mostly did it in response to earlier banking sector 'emergencies'). Asking for even more is like an alcholic treating his hangover by opening another bottle of whiskey.

Wounded Ronin
13th February 09, 11:45 PM
There is no figurative bear running at us.

The figurative bear is the crux of the issue. If there were no figurative bear running at us then there'd be no reason to pass a stimulus bill. We could be as cautious as we like and do business like normal.

IMO there is the figurative bear, i.e. massive economic disaster which will permanently affect the United States unless we're really lucky with a massive emergency measure.

In other words if there were no figurative bear I'd basically not disagree with you for the most part. But the problem is that I think there's a bear and you don't.

Wounded Ronin
13th February 09, 11:48 PM
Even if you planned out how to spend the money, the very fact the new money has come into existence is going to cause even more problems.

I don't think anyone fails to realize the basic problem with issuing lots of money and out-of-control currency devaluation. That's why I was kind of hoping for crushing taxes somewhere along the line to finance all the butter.

Cullion
13th February 09, 11:57 PM
I don't think anyone fails to realize the basic problem with issuing lots of money and out-of-control currency devaluation. That's why I was kind of hoping for crushing taxes somewhere along the line to finance all the butter.

So you want the end result to be that the state controls a higher proportion of America's capital?

Hmm.. I see.

That will impoverish you.

WarPhalange
14th February 09, 12:06 AM
Even if you planned out how to spend the money, the very fact the new money has come into existence is going to cause even more problems.

No. This is in essence a loan that the people are taking out for themselves in the hopes of giving it back later via taxes. If it all worked out perfectly, then it would be fine. It would pull us out of our current predicament and we'd repay when we were back on our feet, exploiting third world countries again.

The fact that this plan would, even if it worked out perfectly, make fat cats even richer is a side-effect. All I care about is my bank account. If I can save myself at the expense of making fat cats richer, so be it. It's better than taking it up the ass proudly, because I know that the fat cats are getting a slap on the wrist, too. You have to pick your battles, and I don't think this is a time to fight over what's right or wrong, but how to get everything back on track.

Now this is just abstract thought here. I'm not saying this plan is good or anything. It's pretty much a mishmash of ideas thrown together in the hope that they will somehow form something cohesive. It should be scrapped and built again from the ground up.

Want to shut up the Republicans? Have them write a bill to fix this. Put the spotlight on them. Then when they try to pass it, attack them ruthlessly until they shut the fuck up.

Feryk
14th February 09, 02:40 AM
The fact that this plan would, even if it worked out perfectly, make fat cats even richer is a side-effect. All I care about is my bank account. If I can save myself at the expense of making fat cats richer, so be it.

The problem is that the fat cat will be able to get fat while you are still in the starting blocks of recovery. Also, the current 'spend anything to make it go away' mentality is a recipe for runaway inflation. Think people are walking away from their mortgages now? Wait until all the variable rate mortgages are sitting at 10%.



Want to shut up the Republicans? Have them write a bill to fix this. Put the spotlight on them. Then when they try to pass it, attack them ruthlessly until they shut the fuck up. Did you like the last 8 years that much?

WarPhalange
14th February 09, 03:02 AM
The problem is that the fat cat will be able to get fat while you are still in the starting blocks of recovery. Also, the current 'spend anything to make it go away' mentality is a recipe for runaway inflation. Think people are walking away from their mortgages now? Wait until all the variable rate mortgages are sitting at 10%.

Hey, I said the plan is a fiasco. I am just trying to disprove Cullion's assertion that apparently any such plan would be bad.


Did you like the last 8 years that much?

Dems have the power now. That's the difference.



Well, okay, legally they are in power. But it doesn't look like they've grown any kind of spine yet.

Kiko
14th February 09, 05:46 AM
I'm no economist, but...
http://www.engrish.com//wp-content/uploads/2009/02/the-new-economy.jpg

Cullion
14th February 09, 06:42 AM
No. This is in essence a loan that the people are taking out for themselves in the hopes of giving it back later via taxes.

No it isn't, because once the newly created money is 'given back' via taxes it will still exist.
Do you think the government would burn it once it collected it ?


If it all worked out perfectly, then it would be fine. It would pull us out of our current predicament and we'd repay when we were back on our feet, exploiting third world countries again.

You really need to think harder about economics and what money and credit really are.

All these bailout plans are is a way of transferring the cost of recifying bad loans from the private interests that made them to the general population. Just let them go bust. You have no reason whatsoever to settle their debts for them.

socratic
14th February 09, 07:00 AM
The last bailout worked for us Aussies since our government actually had real money (surplus rather than debt) to hand out. Something along the lines of "here's some money, go spend it" might work for the US, too.

Out of curiousity, didn't massive government spending in public infrastructure pull Japan out of its 3rd world status and into a golden age?


All these bailout plans are is a way of transferring the cost of recifying bad loans from the private interests that made them to the general population. Just let them go bust. You have no reason whatsoever to settle their debts for them.

When a bank ceases to exist so does all the money you put in your account, no?

Cullion
14th February 09, 07:52 AM
The last bailout worked for us Aussies since our government actually had real money (surplus rather than debt) to hand out. Something along the lines of "here's some money, go spend it" might work for the US, too.

The difference would be that the US would be creating the money out of thin air, thereby engendering inflation rather than spending reserves.



Out of curiousity, didn't massive government spending in public infrastructure pull Japan out of its 3rd world status and into a golden age?

No, industrialisation coupled with a cultural knack for efficient organisation and a strong work ethic did. If 'print money and spend it' was all that was needed then Zimbabwe would be rich too.



When a bank ceases to exist so does all the money you put in your account, no?

That depends on two things:-

i) Whether or not you have a custodial account (where your balance is not on the banks balance sheet) most people don't.

ii) What level of deposit insurance your government provides.

Sun Wukong
14th February 09, 07:57 AM
Just to confuse people. I'm going to take the opposite position. I support a stimulus bill in principle. But this stimulus bill has been hosed from the getgo and needs to be taken out back and put out of it's misery.

First things first. TANSTAAFL There ain't no such thing as a free lunch. Any stimulus spending we do here is borrowing from the future to pay for today. That's in the best case scenario where the money we spend today actually doesn't make things worse today. Which can happen.

Obama had a generally good approach on where to spend the money. Deferred infrastructure spending that we should have been doing already, some greenhouse spending on key industries, keep the states solvent, and keep the financial system afloat.

But he fucked up. Instead of making his own plan, he let congress take the ball and run with it. The democrats in the house poured a billion dollars into the hog trough and instead of going through the bill looking to fix it, the republicans in the house decided to play political grandstanding. So that even when Obama sat down with them and begged them to give substantive feedback, they decided not to.

And then the senate pretty much did the same thing.

And now the negotiating committee has taken the wisdom of solomon to heart and chopped the baby in half.

Who wants half a baby?


A fine and accurate understanding.

Cullion
14th February 09, 08:03 AM
I appreciate that the more mature proponents of 'stimulus' acknowledged there's no such thing as a free lunch, but I think you're too sure of the idea that the burden will be onerous but more manageable by being 'in the future' and 'spread out' somehow.

Printing money like this can and does have shorter-term costs in terms of interest rates that are likely to cause other shocks in the economy.

Sun Wukong
14th February 09, 08:55 AM
Yes, yes they will, which is why I'm doing my investments after checking an inflation prediction table. God I love having friends who are really really good with money AND math.

The bailout at this point is good and properly fucked, but I don't think it's long term effects will be nearly as disastrous as will the giant deficit and national debt are. While this stimulus package was a large amount of money, it's not the worst thing going on right now by far. It's just the thing that get's more air time because it's controversial.

Zendetta
14th February 09, 02:01 PM
Well, I'm no economist, but...


It's like if you're in the woods and a bear is coming to eat you. You've got a 9mm handgun with a 15 round magazine. You basically have to dump the magazine at the bear in order to have a hope of stopping it.

... I'm pretty sure you are bear-bait, because that 9mm isn't going to do the trick. It's likely to make the Bear meaner and angrier.

You really want to tackle this kind of thing with a scoped rifle, ie from a great distance, and with much more foresight. Oops, too late for that.

The sad thing is that the Guides told us we were in Bear Country.

Cullion
14th February 09, 03:18 PM
Here's your necessary government intervention for you, from Cullion's perspective:-

) The way in which bankruptcy is handled in most western countries means that wide-scale financial institution bankruptcy could theoretically mean that the clearing system may cease to function. This would mean that ATMs no longer worked, your bank accounts were effectively frozen and your pay check could leave your employers account but not then appear in your account whilst lawyers spent months arguing about who got the bank's funds first.

This is the fear that had politicians murmuring about martial law and civil unrest if the stimulus bill wasn't passed. They were right that a total lock up of the clearing system would mean mass civil unrest, but the solution is a timid surrender to banking sector PR and lobbying. The answer should have included the gleeful seizure of key components of banking infrastructure whilst letting the insiders who lobbied for free money to twist in the wind.

By all means use government legislative powers and money to fix that, whilst letting the market punish the financial institutions by bankrupting them and enforcing all laws against their boards of directors for knowingly trading whilst insolvent. This shit has to be punished fully and even the left-wing leaders like Obama and Brown haven't come close to nailing these crooks. Their proposed sanctions are timid at best. Even this modest part would require government spending, but it would be just and necessary to protect the ordinary working Joe from starvation, without disincentivising anybody from saving, or working for a living rather than waiting for the government to just give them shit for free.

ii) Even if the clearing system still functions, many ordinary people will still be bankrupted and/or unemployed as this absurd virtual credit bubble unwinds.

People sometimes need to learn the hard way. But I don't want them to starve or their kids to be homeless. A civilised country will need to spend some amount to keep these people alive whilst the trouble unwinds ready to start new growth again. The more you leave the big picture to the free market, the quicker the shit will get flushed out of the system, but the bottom rung deserve to be kept alive. It doesn't have to be that expensive. You can still have fun and educate yoursel on a shoestring budget, but everybody needs to come out of this with a stress-induced understanding that running up debt without thinking about economic fundamentals is stupid.

iii) It all needs to be tacked on to, or quickly preceeded by a bill that addresses why this happened in the first place.

HappyOldGuy
14th February 09, 03:28 PM
Again, good things in a stimulus bill right now.

Tax credits for hiring.
Government spending that is likely to reap long term economic growth. (greenhouse spending on new industries, targeted infrastructure)
Spending to keep key otherwise solvent institutions afloat, including state and local governments. For private companies, this has to include equity or significant pain for the receiver.

Sometimes a short term cash infusion, but we're past the point where that can do any good. Likewise, helping people with mortgages was a good idea but that boat has sailed.

But since it looks like I am going to be sucking in the ducats of a very poorly thought out public healthcare IT spend, let it be known I will be doing my part and interviewing you peons for personal servant positions.

Cullion
14th February 09, 03:35 PM
Tax credits for hiring.

Do you mean blanket reductions on employment taxes? because I can dig it, but it needs to be matched by cuts on spending unless you want your government to sink deeper into debt.



Government spending that is likely to reap long term economic growth. (greenhouse spending on new industries, targeted infrastructure)

Your faith in central planners' ability to pick winners is touching, but misplaced.



Spending to keep key otherwise solvent institutions afloat

What's your definition of 'otherwise solvent'?



including state and local governments. For private companies, this has to include equity or significant pain for the receiver.

Why no pain for governmental bodies that have overspent? Don't you see how you're just storing up trouble?



Sometimes a short term cash infusion, but we're past the point where that can do any good. Likewise, helping people with mortgages was a good idea but that boat has sailed.

You can, and should, still keep them alive, and that is going to cost.



But since it looks like I am going to be sucking in the ducats of a very poorly thought out public healthcare IT spend, let it be known I will be doing my part and interviewing you peons for personal servant positions.

I'd rather a ten of you than a 7-figure investment banker HoG, but surely you can see this is not a path back to real productive growth ?

HappyOldGuy
14th February 09, 03:47 PM
Do you mean blanket reductions on employment taxes? because I can dig it, but it needs to be matched by cuts on spending unless you want your government to sink deeper into debt.

...

You can, and should, still keep them alive, and that is going to cost.


As an american I have a baseline existential horror at the notion of a 'dole'. I would rather spend less efficiently to keep people receiving a paycheck for working than more efficiently just to keep them housed and fed.



I'd rather a ten of you than a 7-figure investment banker HoG, but surely you can see this is not a path back to real productive growth ?

What about a 7 figure HOG? I'm liking that idea!

Cullion
14th February 09, 03:55 PM
As an american I have a baseline existential horror at the notion of a 'dole'. I would rather spend less efficiently to keep people receiving a paycheck for working than more efficiently just to keep them housed and fed.

Almost all cultures have that natural revulsion (at least where their peers are concerned, they mysteriously blank it out and/or accuse you of conspiracy theory when you point out that the banking system allows people to earn interest from loaned digits they created from nothing).

The thing is, in the long run, a $20000 non-productive position, whether it's paid for out of taxation, borrowing or inflation is bigger burden on the whole economic
fabric than a $10000 stiped to tide you over whilst seeking real productive work.



What about a 7 figure HOG? I'm liking that idea!

That's up to you. Have some self-respect and make it honestly. I don't mean 'legally', I mean 'honestly'.

Sun Wukong
14th February 09, 04:31 PM
I'm going to remain optimistic for awhile with the economy. We're in a shit state, but at least the end of the worst of our problems is in sight if you look with the right eyes you can at least see the possibilities this will go down.

The truth is that in the current state, unless we have a complete collapse of the US economy and/or some kind of apocalyptic anarchy we're going to make it through this and hopefully the lessons learned will give us a better road map to the future of managing our economy.

However this plays out, I think we'll get a valuable lesson out of this for the future. I'm going to be optimistic that the future holds good things as we take back some of our national dignity.

I agree that the remaining republican congressmen seem to be acting a little crazy, but hopefully after this dark comedy of errors comes to a close they'll have evolved or at least learned to include evolution in their vocabulary.

Cullion
14th February 09, 04:42 PM
You can even make it through anarchy, and if it did come to that for some reason, you will. Truly noble men should have only 3 concerns. 1) How will we protect the most vulnerable through the bottom of the swing? 2) How will we recover? 3) How do we stop this happening again?

It's going to be worse in the UK btw. Much worse.

WarPhalange
14th February 09, 06:59 PM
I appreciate that the more mature proponents of 'stimulus' acknowledged there's no such thing as a free lunch, but I think you're too sure of the idea that the burden will be onerous but more manageable by being 'in the future' and 'spread out' somehow.

I'll reply to the rest later, but in essence yes, it will be better by being in the future and spread out. We can either crash now and build up again over several years, with even higher unemployment, or we can bounce back up and take slowly take care of the consequences then. You can take a hit to your wallet easier when you actually have something in it.

Wounded Ronin
14th February 09, 07:17 PM
... I'm pretty sure you are bear-bait, because that 9mm isn't going to do the trick. It's likely to make the Bear meaner and angrier.

Yes, that was precisely the point of the illustration. You're probably screwed anyway, but your one and only chance of survival would be to dump the magazine and hope for some lucky hits to fragile parts of the bear.

socratic
14th February 09, 10:04 PM
Out of curiousity, how similar is the current situation and the apparently looming crash to the Great Depression? Are we seeing a recurrence of certain trends? Should the government be spending and trying to keep the civilian side afloat or withdrawing and cutting off it's excess fat? I was under the impression the latter attitude generated the Depression, so shouldn't the natural inclination be to the former attitude?

SFGOON
14th February 09, 11:41 PM
Yes socratic, you are precisely right. John Maynard Keynes would agree with you. We just had a lot of banks stop making fake money, so the government has stepped in and started doing it in their place. If they hadn't there would suddenly be a lot less dollars in the system than there used to be, which would shock everyone's awe and they'd stop working.

Money is just a carrot that makes people go out and work. Someone has to fucking dangle it!

Robot Jesus
15th February 09, 07:15 AM
I see the stimulus package as a much needed experiment in fascist economics.

Cullion
15th February 09, 08:55 AM
I'll reply to the rest later, but in essence yes, it will be better by being in the future and spread out. We can either crash now and build up again over several years, with even higher unemployment, or we can bounce back up and take slowly take care of the consequences then. You can take a hit to your wallet easier when you actually have something in it.

But that's the point. Your assumption that it will be 'spread out' somehow isn't a safe one.

Cullion
15th February 09, 08:59 AM
Out of curiousity, how similar is the current situation and the apparently looming crash to the Great Depression?

Very simillar, but there are two characteristics that could make the relative decline worse:-

1) The credit overhang is actually larger.

2) Lower savings and higher levels of consumer debt in working and middle class households.




Are we seeing a recurrence of certain trends? Should the government be spending and trying to keep the civilian side afloat or withdrawing and cutting off it's excess fat? I was under the impression the latter attitude generated the Depression, so shouldn't the natural inclination be to the former attitude?

The depression was caused by the collapse of a credit bubble slightly smaller than this one.
Stimulus was tried during the depression but it didn't work very well in the US. When it was done by just printing new money (as has already started in the US and UK) in Weimar Germany it lead to hyperinflation and the political system collapsed.

It then took a strong visionary who always put his own people first to bring employment back..

HappyOldGuy
15th February 09, 12:38 PM
The specifics were completely different. There were no commoditized mortages or default derivatives involved in the great depression. And I certainly don't see the brits returning to the gold standard right now. There are plenty of similarities, you pretty much can't have a financial collapse unless you have a huge percentage of your money in highly leveraged financial institutions.

The problem with blaming inflationary spending the way Cullions cult does is that it's like blaming gravity for your broken leg. It obviously plays a role, but it was also there all those other days where you didn't break anything, and it's also kindof a law of nature that you can't do much about.

One key thing to remember about the US version of the great depression is that we were also getting fucked by mother nature at the same time. Little thing called the dust bowl, which turned the suffering at the individual level up to 11. So even if the financial losses reach the same level, we're still not going to see the same level of human suffering.

Cullion
15th February 09, 12:49 PM
The specifics were completely different. There were no commoditized mortages or default derivatives involved in the great depression.

No, that's why the debt overhang is worse this time. It's still about debt deleveraging.




The problem with blaming inflationary spending the way Cullions cult does is that it's like blaming gravity for your broken leg. It obviously plays a role, but it was also there all those other days where you didn't break anything, and it's also kindof a law of nature that you can't do much about.

That's the most absurd thing I've ever seen you write.



One key thing to remember about the US version of the great depression is that we were also getting fucked by mother nature at the same time. Little thing called the dust bowl, which turned the suffering at the individual level up to 11. So even if the financial losses reach the same level, we're still not going to see the same level of human suffering.

The relative loss will be larger, but that still leaves you, on an absolute scale, with a greater productive capacity for basics like food, clean water and electrical power.

HappyOldGuy
15th February 09, 12:56 PM
That's the most absurd thing I've ever seen you write.

You call me when you reach an economically healthy, sustainable 0 inflation and I'll come sip the coolaid. Till then, I'm sticking with bourbon.

Cullion
15th February 09, 01:01 PM
You call me when you reach an economically healthy, sustainable 0 inflation and I'll come sip the coolaid. Till then, I'm sticking with bourbon.

You had one and handed it over to a banking cartel which is about to collapse your public finances.

HappyOldGuy
15th February 09, 01:47 PM
You had one and handed it over to a banking cartel which is about to collapse your public finances.

When exactly was that?

http://en.wikipedia.org/wiki/File:US_Historical_Inflation_Ancient.svg

Cullion
15th February 09, 02:26 PM
What are you trying to tell me with that graph HoG?

Can you explain to me what the 'inflation' figures before the government started collecting such econometric stats means ?

HappyOldGuy
15th February 09, 02:41 PM
I'm not trying to tell you anything. I want you to tell me exactly when


You ... handed it over to a banking cartel which is about to collapse your public finances.

Zendetta
15th February 09, 02:44 PM
What happened in 1950?

Cullion
15th February 09, 02:55 PM
I'm not trying to tell you anything. I want you to tell me exactly when

You had no monetary inflation after the revolution. The spending power of the dollar didn't start it's prolonged erosion until the founding of the Federal Reserve.

Now, tell me what you think that graph really measures.

HappyOldGuy
15th February 09, 03:24 PM
You had no monetary inflation after the revolution.
So it never existed at a time when we actually, you know, had a currency and a government. That was my point.

Cullion
15th February 09, 03:26 PM
So it never existed at a time when we actually, you know, had a currency and a government. That was my point.

No, no, no. You had a government and a currency. You just didn't have a fiat currency or a central bank.

HappyOldGuy
15th February 09, 03:38 PM
No, no, no. You had a government and a currency. You just didn't have a fiat currency or a central bank.

I'm not sure what you are referring to. (http://mises.org/story/1273)

Cullion
15th February 09, 03:45 PM
You're being obtuse. You know as well as I do that you're trying to argue in favour of fractional reserve banking and fiat money by citing a paper giving an example of the economic trouble caused by not using one.

The US was on a commodity backed money system from 1785, and tried several different variations, with concept of a central bank falling in and out of favour.

The decades-long prolongued depreciation of the purchasing power of the dollar, combined with ever burgeoning debt in the working and middle class is a modern phenomenon however, coincident with the founding of the Federal Reserve system.

HappyOldGuy
15th February 09, 03:53 PM
You're being obtuse. You know as well as I do that you're trying to argue in favour of fractional reserve banking and fiat money by citing a paper giving an example of the economic trouble caused by not using one.

The US was on a commodity backed money system from 1785, and tried several different variations, with concept of a central bank falling in and out of favour.

The decades-long prolongued depreciation of the purchasing power of the dollar, combined with ever burgeoning debt in the working and middle class is a modern phenomenon however, coincident with the founding of the Federal Reserve system.

The paper points out that we had already paper currency and massive inflation after the revolution. That's pretty relevant to the claim that


You had no monetary inflation after the revolution.

Are you now moving the goalpost to 1785? Is 1785-1791 the period you want to claim as your economic golden age?

Cullion
15th February 09, 04:13 PM
The paper points out that we had already paper currency and massive inflation after the revolution. That's pretty relevant to the claim that



Are you now moving the goalpost to 1785? Is 1785-1791 the period you want to claim as your economic golden age?

I want to claim the eras of commodity backed money.

WarPhalange
15th February 09, 08:17 PM
Great idea. The second people stop caring about gold, our entire economy is in the shitter.

Cullion
15th February 09, 08:24 PM
Great idea. The second people stop caring about gold, our entire economy is in the shitter.

You can pick another commodity if you want. Gold has been used as money for a very long time and people still buy it when they lose faith in a country's paper money.

But Gold isn't magic. Fixing the paper against some commodity that can't be created at the stroke of a keyboard is just a way of protecting credit markets and the money supply from being deliberately meddled with by central planners, that's the real point of so-called 'hard money'.

sasquatch989
15th February 09, 09:41 PM
I'll just jump in here and say it: This stimulus is the most retarded thing we can do. This 'crisis' was started by easy money and easy credit, too much consumption, not enough savings. Our manufacturing has moved overseas because of government mandates that make the cost of business here too expensive. The last 350 Billion dollars didnt do shit, this stimulus isnt gonna do shit. Save this post under the category "Shit i should have paid attention to" and when you read it, shoot yourself. If they really want to stimulate the economy, they should give us all our money back.

sasquatch989
15th February 09, 09:44 PM
And for all you pro-socialists, I'm living in a country where 'Socialism' is written in the constitution. This is the shittiest place in the world I have ever lived

Spade: The Real Snake
15th February 09, 11:29 PM
I would have supported this Spendurific Package if Obama just had the fucking stones to come right out and say
"GIMME THAT GOT DAMNED CHAIN"

Shawarma
16th February 09, 05:07 AM
It appears that he actually has some faith in this entire "bi-partisan" thing. Idiot. The Republicans don't really have any interest in helping him, they WANT him to fail at fixing the economy so they can run Sarah Palin in 2012 and beat him.

Phrost
16th February 09, 01:26 PM
It appears that he actually has some faith in this entire "bi-partisan" thing. Idiot. The Republicans don't really have any interest in helping him, they WANT him to fail at fixing the economy so they can run BOBBY JINDAL in 2012 and beat him.

Cullion
16th February 09, 02:03 PM
I'd be really surprised if the Republicans thought Sarah Palin was their secret comeback weapon at this point.

HappyOldGuy
16th February 09, 04:18 PM
She is very popular in some circles, but the secret masters of pubdom are still looking for their crossover candidate who can steal back soccer dads/latinos/asians/etc. Phrosts pick is interesting, but I think it's dubious whether any Louisiana pol can survive the scrutiny a presidential candidate gets.

Sun Wukong
16th February 09, 04:25 PM
Just a note to you people out there in "Will Bobby Jindal run?" land. Yes, he will. He will then lose because of his "poor performance" record in Louisiana. He hasn't accomplished shit there, not that it's his fault, but his national campaign will be put in the shitter if he runs simply due to the massive amounts of skeletons in the closet of the Louisiana state government. I don't possibly see how he could survive all the muck-raking that goes on in a presidential election year.

Wounded Ronin
16th February 09, 05:20 PM
I'm living in a country where 'Socialism' is written in the constitution. This is the shittiest place in the world I have ever lived

Virginia has a socialist constitution?

Zendetta
16th February 09, 08:44 PM
I'd be really surprised if the Republicans thought Sarah Palin was their secret comeback weapon at this point.

There is a Secret Cult that worships her as the Pagan Whore of Corn Pone Babylon that she is.

HappyOldGuy
16th February 09, 11:04 PM
There is a Secret Cult that worships her as the Pagan Whore of Corn Pone Babylon that she is.

You forgot the first rule of Sarah club.

Zendetta
17th February 09, 11:37 AM
uh, does it involve "drilling"?

Phrost
17th February 09, 02:37 PM
Just a note to you people out there in "Will Barack Obama run?" land. Yes, he will. He will then lose because of his "poor performance" record in Chicago. He hasn't accomplished shit there, not that it's his fault, but his national campaign will be put in the shitter if he runs simply due to the massive amounts of skeletons in the closet of the Illinois state government. I don't possibly see how he could survive all the muck-raking that goes on in a presidential election year.

Sun Wukong
17th February 09, 02:54 PM
Jindal's been on the job in Louisiana a lot longer than Obama has, and has introduced exactly nothing in that time. In fact, Louisiana is teetering on the verge of complete financial collapse. Without federal funds, his administration is fucked; you need to do more research, it's apples and oranges between those two man.

I don't think you know so much about the executive office in Louisiana if you think that Jindal is going to be in any position to run in '12. Obama may take a beating, but pawning the last administrations shit off on Obama alone is going to be a tough sell to the American public coming from a guy, for example, whose administration is slashing educational programs left and right while ranking #49 out of 50 for education. If Jindal actually get's something accomplished down there I'll know, but it doesn't look very likely with the way that place is fucked up.

Cullion
17th February 09, 02:57 PM
I just don't think Americans are ready to vote for somebody who looks like a young Osama Bin Laden. They've had time to get used to African Americans with Morgan Freeman and Will Smith etc..

Sun Wukong
17th February 09, 03:03 PM
Well, he got elected in Louisiana, which is a hard district for a "not-white-guy" to win, but that's only because the last governor took all the heat from hurricane katrina. Jindal is a much better candidate than GW and McCain were, however I just don't see where he will get. While everyone else in the country may be experiencing a bush war economy with poverty, in the state of Louisiana things look a lot more like an econ production of Apocalypse Now.

EuropIan
17th February 09, 03:12 PM
This is what I do here.
A-DOwLnQ4nk

Sun Wukong
17th February 09, 03:13 PM
there are also a couple of other little gems to contend with on the campaign trail for Jindal.

1. He's a staunch and outspoken critic of abortion, going so far to say that it is NEVER ok to have an abortion.

2. He has a published account of participating in an EXCORCISM. That's right kids, he took part in purging a supernatural demon from someone's body..., and directly admitted to it. In Louisiana, that's not a big thing, but come election year, holy shit nobody want's to hear that kinda fruit ball hookey crap.

Cullion
17th February 09, 03:20 PM
Perhaps Dr. Paul's elixir of youth with be ready by then. Just maybe..

Shawarma
17th February 09, 03:27 PM
Isn't Jindal a Republican of the "burn-ungodly-faggots-and-ban-evolution" variety?

Sun Wukong
17th February 09, 03:35 PM
all signs point to YES.

http://blamethedirge.typepad.com/photos/uncategorized/2008/07/31/magic8ball.gif

Sirc
26th February 09, 06:20 PM
This whole debacle reminds me of a movie I recently watched again.

http://boxoffice.com/blogs/steve/-armageddon.jpg

It's like this:

There's a meteor (imminent economic collapse) that only a few people saw coming (economists) and tried to warn the gov't (the government) about it but they didn't really pay much attention.

Then as the threat approached and became real, the gov't (the government) pulled the best driller team from some unknown place (Obama administration) to fight off the meteor (imminent economic collapse). Since America is the greatest country in the world everyone was relying on them to stop the meteor (you should know now) from destroying the earth (america).

So Bruce Willis (Obama) comes in with his pal Ben Affleck (Biden) and they go into space (Congress) to fight the meteor with this crazy plan (simulus package). Which is by the way was to drill a hole in the meteor (economic collapse) and shove a huge gigantic nuke down inside of there (stimulus package) hoping that it will save the earth (america). Nobody is sure whether or not the plan will work, but boy howdy are they going to try.

But just like the movie, I'm not sure how it's going to end because I shut it off and did something more interesting and less pertinent to learning life lessons. I'm pretty certain the meteor was destroyed and everyone was ok, right?

Sun Wukong
26th February 09, 06:23 PM
i think liv tyler got naked at some point.

Let's hope that's not a euphemism for Pelosi or Mrs. Clinton. (sorry ladies.)

Spade: The Real Snake
26th February 09, 06:35 PM
I see this close to Sirc's vision, except the entire administration is fucking Steve Buscemi, getting a 60% loan and then blowing it figuring "Fuck it, I won't be around when the shit hits the fan!"

Sirc
26th February 09, 06:51 PM
By the way, recessions have a tendency to fix themselves and meteors burn up in the atmosphere.

Fear mongering and escalation of actual threat of problems is stupid.

Cullion
26th February 09, 07:12 PM
Let's hope that sarcastro isn't fucking dumb enough to think that a celebrity token black dude with a background as a 'community organiser' isn't the top 'elite team' you have to pull you out of this mess. no really.

oops.