THE FEAR: PASS IT NOW, OR WE MAY NEVER RECOVER

[fmccap]

Obama warns of need for stimulus bill right away

[Roadtrip]

Obama warns of need for stimulus bill right away

 

If taxpayers are in fear of what might happen if Congress does not pass this "stimulous" bill, they will be downright horrified to learn about some of the things the bill actually contains.

 

As someone said about the crafting of Congressional spending bills, "If you're not at the table, you're on the menu."

[Cocheese]

Pass it now so that the public won't figure out how bad this is until it's too late.

 

Quick, someone get Obama's speechwriter to come up with something awe-inspiring and people once again get distracted from the real issues. It got him elected, it might just be able to get the US into full on socialism

[retro-man]

Yeah, well extrapolating from his criticism, if Henninger had been around in an earlier era, we wouldn't have any interstate highway system, Grand Coulee or Hoover Dams, public libraries, National park lodges, post offices, libraries, municipal water systems, space program, folks in rural areas would still be waiting for electricity and irrigation, and the Axis would've won WWII because we wouldn't have had the infrastructure in place for war production.

 

I don't see what is so controversial about maintaining and upgrading Federal buildings and constructing research facilities and alternative energy projects. I don't see how such projects don't create jobs and create longer term benefit. So what's Henninger's solution; tax cuts for the wealthy, and hope the money finds its way into the economy instead of into an ice sculpture of David pissing vodka into a punchbowl?

 

 

Having said that, I don't like to see government by fear. We just finished 8 years of "the terror presidency" that used fear to push through bogus wars and erosions of civil liberties, and I hate to see us continuing on down that road.

Edited February 6, 2009 by retro-man

[Roadtrip]

Yeah, well extrapolating from his criticism, if Henninger had been around in an earlier era, we wouldn't have any interstate highway system, Grand Coulee or Hoover Dams, public libraries, National park lodges, post offices, libraries, municipal water systems, space program, folks in rural areas would still be waiting for electricity and irrigation, and the Axis would've won WWII because we wouldn't have had the infrastructure in place for war production.

 

I don't see what is so controversial about maintaining and upgrading Federal buildings and constructing research facilities and alternative energy projects. I don't see how such projects don't create jobs and create longer term benefit. So what's Henninger's solution; tax cuts for the wealthy, and hope the money finds its way into the economy instead of into an ice sculpture of David pissing vodka into a punchbowl?

 

 

Having said that, I don't like to see government by fear. We just finished 8 years of "the terror presidency" that used fear to push through bogus wars and erosions of civil liberties, and I hate to see us continuing on down that road.

 

Retro:

 

If, in "an earlier era," you're referring to the New Deal, both the interstate highway system and the space program were initiated during the Eisenhower administration, and both were inspired by the measure of national defense they would (or were supposed to) provide. (I'm a BIG supporter of both.)

 

Rural electrification would have happened without FDR's help. Wendell Willkie, the president of the utility company Commonwealth and Southern, had intentions on just that, but his efforts were dashed by the courts in favor of Roosevelt's Tennessee Valley Authority. In later years, rural electrification was driven by lobbying efforts from special interest groups, such as ski resorts lobbying their respective Congresspersons.

 

I don't know that "the Axis would've won WWII because we wouldn't have had the infrastructure in place for war production." Actually, our defense infrastructure was woefully inadequate before we entered WWII. The government had to co-opt private industry (and women) in order to facilitate winning the war.

 

There were lots of lasting contributions from the New Deal, including the ones you mentioned. But there was an awful lot of wasteful spending on make-work programs that did nothing to help the economy to recover. The government spent and spent and spent, and as late as 1937, when the economy was suffering a recession within the Depression, Treasury Secretary Henry Morganthau basically threw up his hands in front of a Congressional finance committee and said, "I don't know what else we can do!"

 

Much of what exacerbated the Great Depression was trade protectionist policies (Smoot-Hawley), tax increases, and the Wagner act (which empowered labor unions), which scared the hell out of businesses and entrepeneurs that might have otherwise been willing to invest (and create jobs).

 

If you're willing to rail against tax-rate cuts, as well as advocate for protectionism and unions (such as the "Card-Check" legislation pending in Congress), then all I can say is you should be careful for what you wish for.

Edited February 6, 2009 by Roadtrip

[retro-man]

Having grown up in the Northwest, I know full well the relationship between the BPA (Grand Coulee, Bonneville, Chief Joseph, et. al.), Kaiser Aluminum, and Boeing. I would be very careful about downplaying the effect of the New Deal on our success in WWII. Yes, the space program and Interstate highways were initiated under Eisenhower. Many on here have argued that the New Deal was basically in effect until Reagan (which I happen to agree with). Those were investments that had much longer term benefits than what the free market is set up to recognize. We inherited this marvelous civil legacy bequeathed to us out of the sweat of our grandfathers and great-grandfathers, and we have let it go to pot, partying like it was 1999 and pursuing nonsense like privatization of public utilities. We have seen where that has gotten us.

 

Re.:

- The New Deal's efficacy: one economist - I forget which one - called WWII "the biggest public works project in history". I also agree with that.

- The effects of Smoot Hawley (which was meant, among other things, to keep the Japanese in their place): I question how much effect a trade war really had under circumstances in which global trade was a tiny fraction of what it is now, both in absolute terms and as a portion of the economy, and we were virtually self-sufficient. Common sense tells me it is overstated by people with a free trade agenda. I have maintained (and still do) that we were in a very real sense much more prosperous 40 years ago, when International trade was about 3% of GDP as opposed to over 33% now. More important, we were ascendant then.

[jpd80]

Is the government still lending money or starting to give it away?

 

I would see a loan as something to be repaid by people other than the tax payers.

I would see a give away as something to be paid by tax payers.

 

Debt is the only thing in this world that reaches out to you from the grave....................

[RangerM]

If taxpayers are in fear of what might happen if Congress does not pass this "stimulous" bill, they will be downright horrified to learn about some of the things the bill actually contains.

 

As someone said about the crafting of Congressional spending bills, "If you're not at the table, you're on the menu."

 

Here's a fun website for you:

 

Stimulus Watch: Keeping an Eye on Economic Recovery Spending

[No_Fear]

Here's a fun website for you:

 

Stimulus Watch: Keeping an Eye on Economic Recovery Spending

 

After listening to the negotiating that has gone back and forth in the Senate the last two days, I am convinced the stimulus bill should be completely scrapped. There is far to much needless spending and the whole thing should be shredded and deep-sixed. Today they voted to amend the bill to do away with money for golf courses, museums, and swimming pools, and rightly so. Why were these things even included in this bill? We have people needing jobs and they are spending time right now debating whether or not to do away with spending for more "pork". They just spent over an hour on one amendment and they haven't even voted on it yet. As each day passes our economy continues to spiral downhill. What are they thinking? President Obama says delaying passage of this bill is inexcusable and unacceptable! What say you?

[NickF1011]

President Obama says delaying passage of this bill is inexcusable and unacceptable! What say you?

 

I say passage of this bill is inexcusable and unacceptable.

[napfirst]

According to some polls ths stimulus is losing steam with the American people.....that's why obama is getting desperate.....trying to shove it down our throats.....I would encourage everyone to email your Senators and them know how you feel......

[grbeck]

The Hawley Smoot tariff hurt international trade, and virtually guaranteed that the economic downturn would spread beyond the United States.

 

The agricultural sector was the hardest hit by the tariff. American farmers found their goods locked out of foreign markets. This, in turn, caused farmers to default on their loans, leading to runs on banks in rural areas, which only exacerbated the effects of the downturn in the U.S.

 

Foreign trade was a much smaller part of the U.S. economy, but it was heavily concentrated in the agricultural sector. Other countries, however, that did depend more on foreign trade were hurt by Hawley Smoot and subsequent retaliatory tariffs passed by other countries.

 

Another industry hit hard by the contraction of foreign trade was the American automobile industry. American cars were quite desirable around the world in the late 1920s and early 1930s. The loss of foreign markets - either through retaliatory trade measures, or simple declines in demand brought about because of the economic contraction, caused, in turn, by the downturn in world trade - is one reason American automobile production dropped a staggering 75 percent from 1929 to 1932.

 

Did Hawley Smoot CAUSE the Great Depression? No. But it helped turn what should have been a short and sharp recession into the Great Depression.

 

Incidentally, if protectionism were the answer, it would seem that Hawley Smoot should have stopped the country's slide into a depression when it was passed in 1930. But the downturn only gathered speed after its passage...unemployment skyrocketed, and hit 25 percent by 1933. Protectionism certainly didn't do much good in keeping Americans employed in the early 1930s.

[Roadtrip]

On the subject of exports, according to the U.S. Department of Commerce, "Exports comprised 12.3% of U.S. GDP in the fourth quarter of 2007. To put this in historical terms, exports were only 9.6% of U.S. GDP five years earlier (Q4 2002), and 5.1% 40 years ago (Q4 1967)."

 

On the subject of agricultural exports, the U.S. is by far the largest agricultural exporter in the world. The implications of this became evident when our government began subsidizing corn farmers for the production of ethanol as an alternative fuel source (another fine example of government meddling in the economy). As more and more farmers began forgoing the crops they could have more-efficiently produced in favor of government-subsidized corn, the price of wheat, corn and soy soared to new levels, and this had a global impact. The increased cost of these simple staples caused food riots in places like Cairo and Mexico City. Considering that much of the rest of the world relies on the U.S. as its primary food source, it should seem apparent that protectionist trade policies and trade barriers would harm our trading partners who rely on us for much of their food, and therefore harm the United States' image in the global community.

[retro-man]

U.S. trade balance (in 2007 dollars) in:

 

1967: + $21.5 billion ($3.5 billion 1967 dollars)

2007: - $708.5 billion

 

It's a whole 'nother game than it was. In 1967, protectionism would've threatened to wipe out a $21 billion surplus. In 2007, it threatens to wipe out a $708 billion deficit. I'm not sure I would call that a threat. More like a cherished promise.

 

You know how we have been undergoing a steady growth in the number of hours worked per person, and a fairly explosive growth in the number of hours worked per household (until the last few months that is)? You know how we have witnessed a steady erosion in benefits like health care and traditional pensions? You know how the costs of things like housing, energy, healthcare, and food have constantly exceeded the official figures on inflation? In short, you know how we have been steadily growing poorer and poorer? You know how the current "de-leveraging" is exposing that erosion in real wealth for what it is? We have been sending $2,245.00 per second out of the country, and borrowing it back with interest. The troubles we are having are the inevitable result of laissez faire trade policy engaging countries with far lower standards of living than our own.

Edited February 7, 2009 by retro-man

[Ford Jellymoulds]

U.S. NATIONAL DEBT CLOCK

 

 

 

The Outstanding Public Debt as of 07 Feb 2009 at 11:29:11 AM GMT is:

 

The estimated population of the United States is 305,602,657

so each citizen's share of this debt is $35,089.30. The National Debt has continued to increase an average of

$3.45 billion per day since September 28, 2007!

http://www.brillig.com/debt_clock/

 

[streetline51]

There is this one thing that I keep remembering from my college days , from way back when .lol We had a professor in a class ,can't remember which one or even how we came about talking about this , but he made a statement that has stayed with me all these years. He said something to this effect, " Remember when you are watching the world events unfold that there is one reason only for what happens at the UN , and that is to bring the USA into the same position as the rest of the world. Since the other countries can't or wont ever be able to move up to the standers of us, the USA, then the only way to make everyone equal is to bring us down to their standards , take from us till we are at the same level as them. Because of the type governments they have ,and lack of understanding they have, they have wasted most of the resources they had that would have made them great too. " This same guy also made another statement that made us all burst out in laughter , " One day water will cost more than gasoline " Who would have thought that a store could sell water in the early 70's ? And some of it for over $2 a bottle !

So what am I saying, just remember, the government is the best at playing this game we call " bait & switch" . And it doesn't matter who has the power , they are all about the same as long as we leave the same people in power long enough . Me thinks it is time to clean house and to make ALL of them accountable for their actions !!!

[fmccap]

You know how we have been undergoing a steady growth in the number of hours worked per person, and a fairly explosive growth in the number of hours worked per household (until the last few months that is)? You know how we have witnessed a steady erosion in benefits like health care and traditional pensions? You know how the costs of things like housing, energy, healthcare, and food have constantly exceeded the official figures on inflation? In short, you know how we have been steadily growing poorer and poorer? You know how the current "de-leveraging" is exposing that erosion in real wealth for what it is? We have been sending $2,245.00 per second out of the country, and borrowing it back with interest. The troubles we are having are the inevitable result of laissez faire trade policy engaging countries with far lower standards of living than our own.

Wouldn't it be more the effect of our monetary system over trade policy?

[fmccap]

Japan’s Big-Works Stimulus Is Lesson

In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan’s Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.

 

In the United States, it has also led to calls in Congress, particularly by Republicans, not to repeat the errors of Japan’s failed economic stimulus. They argue that it makes more sense to cut taxes, and let people decide how to spend their own money, than for the government to decide how to invest public funds. Japan put more emphasis on increased spending than tax cuts during its slump, but ultimately did reduce consumption taxes to encourage consumer spending as well.

 

Economists tend to divide into two camps on the question of Japan’s infrastructure spending: those, many of them Americans like Mr. Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste.

 

Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power.

[Bored of Pisteon]

The Hawley Smoot tariff hurt international trade, and virtually guaranteed that the economic downturn would spread beyond the United States.

 

The agricultural sector was the hardest hit by the tariff. American farmers found their goods locked out of foreign markets. This, in turn, caused farmers to default on their loans, leading to runs on banks in rural areas, which only exacerbated the effects of the downturn in the U.S.

 

Foreign trade was a much smaller part of the U.S. economy, but it was heavily concentrated in the agricultural sector. Other countries, however, that did depend more on foreign trade were hurt by Hawley Smoot and subsequent retaliatory tariffs passed by other countries.

 

Another industry hit hard by the contraction of foreign trade was the American automobile industry. American cars were quite desirable around the world in the late 1920s and early 1930s. The loss of foreign markets - either through retaliatory trade measures, or simple declines in demand brought about because of the economic contraction, caused, in turn, by the downturn in world trade - is one reason American automobile production dropped a staggering 75 percent from 1929 to 1932.

 

Did Hawley Smoot CAUSE the Great Depression? No. But it helped turn what should have been a short and sharp recession into the Great Depression.

 

Incidentally, if protectionism were the answer, it would seem that Hawley Smoot should have stopped the country's slide into a depression when it was passed in 1930. But the downturn only gathered speed after its passage...unemployment skyrocketed, and hit 25 percent by 1933. Protectionism certainly didn't do much good in keeping Americans employed in the early 1930s.

 

 

 

"Anyone? Anyone?"

[retro-man]

 

"Anyone? Anyone?"

I think I already addressed that. In the 1920s and 30s (and 50s and 60s), we ran a trade surplus, and on a very small volume. Now we are at a colossal and growing deficit on a huge volume - which in my opinion is bleeding our wealth. Ross Perot's "giant sucking sound". IT'S NOT 1930. It's simply a different game. We have little to lose and much to gain by instituting a responsible trade policy.

 

Incidentally, we still have many many barriers in place from things like cotton and textiles, to price supports for food crops, to the 25% "chicken tax" on light trucks. But these are hodge-podge in response to special interests, not the result of a cohesive and deliberate policy. I've said it before, and I'll say it again: absolute free trade: bar no products from any country: Cuban cigars? Fine. Iranian hemp (for rope making of course)? Fine. But tariff each country's imports to bring market prices up to where they'd be if they had our labor and environmental standards. If they want to get the tariffs scrubbed off, they have to improve their environmental and working conditions to our level. Not us lowering ours to their level in order to be able to compete. That's just stupid and destructive.

[retro-man]

Wouldn't it be more the effect of our monetary system over trade policy?

Walk me through it please.

[fmccap]

Walk me through it please.

Fiat Money. It has never survived throughout history.

[retro-man]

I understand the concept of fiat money. I just need to know how it relates to the material economy. Please go further into the relation between currency, labor productivity and material wealth. I can understand how the temptation would be there to create inflation. But that's not exactly what we are experiencing now - although we are experiencing an erosion in purchasing power, which may be another form of the same thing. But the balance between our productivity and the amount of material goods available remains relatively stable, doesn't it?

[Ford Jellymoulds]

I understand the concept of fiat money. I just need to know how it relates to the material economy. Please go further into the relation between currency, labor productivity and material wealth. I can understand how the temptation would be there to create inflation. But that's not exactly what we are experiencing now - although we are experiencing an erosion in purchasing power, which may be another form of the same thing. But the balance between our productivity and the amount of material goods available remains relatively stable, doesn't it?

 

Interest rates have just hit there lowest rate sinces records began 300 years ago in the UK, Labour have used every tool in their toolbox to turn the economy around, the only tool they have left now is to start printing money which they have said they will do. This will lead to high inflation and sky high interest rates somewhere down the line coupled with the sky high tax burden of bailouts.

 

 

Daily Mail Reports...

 

 

 

LETS PRINT MORE MONEY - LABOUR'S LATEST BIG IDEA TO FIX BRITAIN'S BROKEN ECONOMY

It has hurled billions at the banks without managing to get them lending and trimmed VAT with negligible effect on struggling stores.

 

Now Labour is considering a new tactic to deal with the recession - simply print more money.

 

With interest rates slashed to their lowest level in 300 years today, the Government might be forced to create the billions it needs to launch another bank rescue scheme

 

Chancellor Alistair Darling and Bank of England governor Mervyn King were said to be contemplating the remarkable and risky measure used with catastrophic consequences by Robert Mugabe in Zimbabwe.

 

The prospect of what is known as ' quantitative easing' - printing money - emerged after Mr Darling gave a clear sign that the recession will be worse than expected.

LINK

 

Edited February 7, 2009 by Ford Jellymoulds

[fmccap]

I understand the concept of fiat money. I just need to know how it relates to the material economy. Please go further into the relation between currency, labor productivity and material wealth. I can understand how the temptation would be there to create inflation. But that's not exactly what we are experiencing now - although we are experiencing an erosion in purchasing power, which may be another form of the same thing. But the balance between our productivity and the amount of material goods available remains relatively stable, doesn't it?

If you have the time here are a few videos that have a lot of information and different ways of looking at things.

 

The Gig Is Up: Money, the Federal Reserve and You.

Live from Wolfe Hall at The University of Colorado School of Law, on December 4, 2008, Mr. Fielder, a criminal and constitutional lawyer from Denver, Colorado, presents a power point and video presentation on the creation of money with an historical analysis of our current banking system.

 

The Money Masters - How International Bankers Gained Control of America