You're kidding me Mr. Obama... Really, the spending isn't sustainable?

[ponycar17]

Obama Says U.S. Long-Term Debt Load ‘Unsustainable’ (Update2)

By Roger Runningen and Hans Nichols

May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.

Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending.

Entitlement Programs

In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. He also said he was confident that the House and Senate would pass health-care overhaul bills by August.

“Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

Obama prodded Congress to pass restrictions on credit-card issuers, saying consumers need “strong and reliable” protection from unfair practices and hidden fees.

“It’s time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,” the president said.

Obama called on Congress to send to him by May 25 a bill that would clamp down on what he says are sudden rate increases, unfair penalties and hidden fees. He also wants the measure to strengthen monitoring of credit-card companies.

House Bill

The U.S. House of Representatives passed the credit-card bill last month after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees.

The Senate continued debating its version of the bill today. It would require credit-card companies to give 45 days’ notice before increasing an interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment.

The president said Americans have been hooked on their credit cards and share some blame for the current system. “We have been complicit in these problems,” he said. “We have to change how we operate. These practices have only grown worse in the midst of this recession.”

The American Bankers Association, which represents card issuers, has warned lawmakers and the Obama administration against taking punitive action or setting requirements that are too stringent. Doing so, the lobby group says, would limit consumer credit and worsen a credit crunch.

Obama said that restrictions “shouldn’t diminish consumers’ access to credit.”

Uncollectible Debt

Uncollectible credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Lawmakers have said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts.

Obama held a White House meeting last month with executives from the credit-card industry, including representatives from Bank of America Corp. and American Express Co. Afterward, he told reporters that credit-card issuers should be prohibited from imposing “unfair” rate increases on consumers and should offer the public credit terms that are easier to understand.

“The days of any time, any increase, anything goes -- rate hike, late fees -- that must end,” Obama said today at Rio Rancho High School. We’re going to require clarity and transparency from now on.”

He also said the steps he has taken to stimulate the economy and start the debate on overhauling the health-care system are beginning to take effect.

‘Beginning to Turn’

“We’ve got a long way to go before we put this recession behind us,” Obama said. “But we do know that the gears of our economy, our economic engine, are slowly beginning to turn.”

Taking questions from the audience, Obama repeated his stance that he wants legislation to overhaul the health-care system finished before the end of the year, saying it is vital to the economy.

Health-care costs are driving up the nation’s debt and burdening entitlement programs such as Medicare, the government- run insurance program for those 65 and older and the disabled.

The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, four years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago.

To contact the reporters on this story: Roger Runningen in Albuquerque at rrunningen@bloomberg.net; Hans Nichols in Washington at =1871 or hnichols2@bloomberg.net

Last Updated: May 14, 2009 19:40 EDT

From http://bloomberg.com/apps/news?pid=2...e8w&refer=home

Really Mr. Obama... Really? You're getting it? Have the economists finally injected enough truth into your diet to have you thinking healthy? Did you take absolutely no economics courses in college? What a damn idiot?!...

And now we look back to what Obama and his administration said about the TEA party protestors...

Obama targets tea bags at town hall

At his 100th-day town hall meeting in St. Louis Wednesday, President Barack Obama took direct aim at the anti-tax “tea party” demonstrations that have cropped up over the last month and took a veiled shot at the Fox News Channel, the cable news network closely associated with the protests.

Asked about fiscal discipline and entitlements reform, Obama seemed to be repressing a smile as he jabbed critics of his spending plans.

"Those of you who are watching certain news channels on which I'm not very popular, and you see folks waving tea bags around, Obama said, “let me just remind them that I am happy to have a serious conversation about how we are going to cut our health care costs down over the long term, how we are going to stabilize Social Security.”

“But,” Obama continued, “let's not play games and pretend that the reason [for the deficit] is because of the Recovery Act."

It’s the president’s most direct response so far to the protests that flared up in some locations around tax day, on April 15.

In his briefing that day, White House Press Secretary Robert Gibbs told reporters: “I don't know if there's a specific response to protests..I think you saw the president today talk about as candidate Obama promising to bring a tax cut to 95 percent of working families in America, and as president delivering that tax cut.”

From http://www.politico.com/news/stories/0409/21870.html

And the administration claim that they don't understand the TEA Party movement when "95% of Americans just got tax cuts". Here's a clue to you Obamanites, it's not a tax cut for long. Obama just admitted that. The TEA Party crowd already knew it. We think. We get it...

The 95% figure is a pure LIE!!!!! From The Wall Street Journal...

Obama's 95% Illusion
It depends on what the meaning of 'tax cut' is.

One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.

It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut.".....

Continued at http://online.wsj.com/article/SB122385651698727257.html

Another link where David Axelrod mouths off about TEA Parties and the false 95% figure... http://politicalticker.blogs.cnn.com...-is-unhealthy/

Is anyone else seeing this administration underestimate the common sense of the people? Does anyone else see them parading out grandiose cuts to the budget which amount to mere fractions of percentages of the total budget?

See the Fox News article attached...
Republicans Deride Obama's $17B Proposed Cut in Federal Spending

Really, am I the only one that sees the administration underestimating the intelligence of their critics?

Discuss!

[bcj1755]

You mean Barry has finally realized that the US Treasury is NOT a bottomless pit filled with money?! But before he realized that, he turned the federal budget into a bottomless pit filled with debt He CAN'T be THAT stupid. He's just doing what his puppetmasters tell him to do. Barry is such a freakin' tool. Will someone PLEASE send him back to Kenya?!?!

[ponycar17]

It seems that Mr. Obama wanted to heal the economy much like the story in one of my son's books.

Obama wanted to act as an economist without economics credentials much like Patrick acted as a doctor without medical credentials...

[Marlin T]

The spending is only part of the problem.
Just wait until the inflation from all that new money they printed kicks in, then the interest rates from the antistimulate bill, then the cost for bailing out states like California and Mass and …

But now I have to ask you all a question. Do you think that after he said this that congress will spend any less, or Obomba will veto any massive spending bills?

I’m seriously doubting that anybody here is going to answer yes. L

[Bobitis]

So he's gonna quit spending?
HAHAHAHAHAHAHAHHAHA!!!!!!!

We're laughing at ourselves while the rest of the world laughs at us.

Nero fiddling while Rome burns.

[armedandsafe]

Have the economists finally injected enough truth into your diet to have you thinking healthy?

Not at all. He is beginning to BRAG about the results he is getting toward his plan to destroy the American Experiment.

Pops

[ponycar17]

From this group of independent thinkers I expect many more posts. Come on guys, tell us what you really think. I look forward to hearing!

[OBrien]

I can only see this as the government controlling one more thing. The credit card companies are in the business of making money. They do that very well. When you apply for a credit card and get approved they send tons of fine print. Its up to the person getting the account to know what can and more than likely will happen.

I can see how this bill can help people financially but government controlling business does not seem right to me. I think credit card companies should give you more notice on changes to your account but I think it should be through company policy. It's a hell of an advertisement when your competitor tends to raise interest rates and fees with out notice and your company gives notice. I know which card I would be swiping.

If the government can tell credit card companies what fees they can and can't spring on people with out notice where else will they do that? Ever take a car in for an oil change and find out you need something that's going to cost $600 Maybe they should put a bill in for mechanics. Would that be crossing the line? How is it different?

[bcj1755]

Originally Posted by OBrien

I can only see this as the government controlling one more thing. The credit card companies are in the business of making money. They do that very well. When you apply for a credit card and get approved they send tons of fine print. Its up to the person getting the account to know what can and more than likely will happen.

I can see how this bill can help people financially but government controlling business does not seem right to me. I think credit card companies should give you more notice on changes to your account but I think it should be through company policy. It's a hell of an advertisement when your competitor tends to raise interest rates and fees with out notice and your company gives notice. I know which card I would be swiping.

If the government can tell credit card companies what fees they can and can't spring on people with out notice where else will they do that? Ever take a car in for an oil change and find out you need something that's going to cost $600 Maybe they should put a bill in for mechanics. Would that be crossing the line? How is it different?

Very good point. I feel the same way about the gov't involving itself (illegally, I might add) into private business. This is just the beginnings of a socialised government controlled command economy.

Originally Posted by ponycar17

From this group of independent thinkers I expect many more posts. Come on guys, tell us what you really think. I look forward to hearing!

I think you already know what I think about this

[walien]

I'm not sure you can throw all of this on Obama. The Republicans had control of all three branches of legislature in this country for most of this decade and they were plenty spendthrift. Obama is doing basically the same thing that W would be doing.

I certainly appreciate the Tea Party folks (not as much as the band, but I appreciate them still), but they're ostriches with their heads in the sand. When I can find one of them that will explain to me how we can deal with our massive long term debt while cutting tax revenues I'll give them credit for good ideas. Until then, they're just part of the problem. They're another group with their hands out wanting to take from the government.

The vast majority of government spending in this country isn't elective. The amount that is discretionary is pretty small and our debt load is pretty massive. Cutting taxes while we're running huge deficits will only make them bigger and presents another macro-economic risk to the economy. Not to mention that it would just be more that people like me who pay a lot in taxes will have to pay back.

I'm sort of blown away about how the average tax payer expects tax rebates when this country is running such massive deficits. There was a lot of talk by the freshmen class in the 90's about balanced budgets, but that idea quickly went out of their heads it seems.

[ponycar17]

walien, the Republicans certainly did spend. They spent primarily on a war effort. Even given that effort's positive effects of providing funding to defense industry at home, it still shouldn't have gone as far as we did. You're right that deficit spending needs to stop. The Obama spending plan fails to prove to me any sustainable industry growth potential. It seems more of a stop-gap feel-good measure. Tax cuts are far more effective than Keneysian style economics that provides short-term public works projects.

Let me state why... Already, it has been shown that most of the stimulus money is going to areas with already-low unemployment. That does nothing for the hardest hit areas in this recession. For a truly positive and broad-reaching impact to be felt by a macro-economy there needs to be a uniform application of funds. Also, de-incentivizing business while giving only minimal stimulus is a recipe for economic contraction and inevitable inflation.

I don't agree that Bush spending/budget was totally ineffective. As I pointed out in other posts, the Bush tax cuts to provide business incentives while also providing a demand-side stimulus worked VERY well to bring us out of the recession of 2000 that lasted into half of 2001.

If not for the burst of the housing bubble we would still be in a very stable economy. That's just my opinion. I blame the housing bubble on Democrat policy, including our current president himself. He was one of the many to legally combat banks claiming affirmitive action injustice in the housing industry. He and others were behind the poorly formulated policies that led us to the housing meltdown.

As for the Tea Party protesters, there were many of them out there because it was the popular thing to do. There are many more who feel that spending has gone haywire and were energized by the Tea Part effort even though they didn't come out to protest. I think the disdain at spending falls on both sides of the aisle. Our next to final speaker at the Tea Party I went to called out the final speaker, US Senator Jim Demint, and asked him to LEAVE the Republican party even though the event was sponsored by a Republican group. Sure, there was a lot of partisanship at the event but MOST of the Republicans who showed up to speak were staunch Conservatives. Governor Mark Sanford and Jim Demint were 2 of those. The only Republican who voted for the stimulus package, Representative Gresham Barret, was booed so loudly he honestly couldn't be heard in the crowd. We're not afraid to hold our own accountable in public and at the ballot box. We need more people who feel as strongly as the Tea Party protesters felt.

By the way, the Tax outrage was more directed at expected future tax hikes because of the spending and expected inflation. That inevitable inflationary effect will prompt tax hikes. There are an awful lot of people who realize that we can't get something for nothing.

Thanks for the comments.

[armedandsafe]

Every time we have cut taxes (not eliminated them, just reduced them) the economy has responded by delivering increased REVENUES into the national treasury. Funny, that, allowing people to keep their money to spend allows them to spend it. hmmmm

Mr Bob Brinker has a saying he is fond of bringing up at least once a month. He says that reducing taxes is just wrong. He asks us to carry it to its "logical conclusion" and reduce taxes to zero and imagine how much revenue will be realized. I have asked him several times to take his argument to its "logical conclusion" and raise taxes to 100% and imagine how much revenue will be realized.

He has never answered me.

Pops

[RunningOnMT]

Originally Posted by walien

I'm not sure you can throw all of this on Obama. The Republicans had control of all three branches of legislature in this country for most of this decade and they were plenty spendthrift. Obama is doing basically the same thing that W would be doing.

I certainly appreciate the Tea Party folks (not as much as the band, but I appreciate them still), but they're ostriches with their heads in the sand. When I can find one of them that will explain to me how we can deal with our massive long term debt while cutting tax revenues I'll give them credit for good ideas. Until then, they're just part of the problem. They're another group with their hands out wanting to take from the government.

The vast majority of government spending in this country isn't elective. The amount that is discretionary is pretty small and our debt load is pretty massive. Cutting taxes while we're running huge deficits will only make them bigger and presents another macro-economic risk to the economy. Not to mention that it would just be more that people like me who pay a lot in taxes will have to pay back.

I'm sort of blown away about how the average tax payer expects tax rebates when this country is running such massive deficits. There was a lot of talk by the freshmen class in the 90's about balanced budgets, but that idea quickly went out of their heads it seems.

Sorry, you are wrong. The vast majority of spending IS discretionary. Every give away program the liberals have saddled us with. Not even mentioning pork.

This entire mess we are in were caused by the fine liberal congress that said fannie mae needed to extend credit for non credit worthy people. O-baaa-ma as an attorney actually sued banks on behalf of ACORN over their lending policies not being "liberal" enough.

How dare you say the tea partiers have their hand out when they just want to keep their own hard earned money. Are you here because you have any interest in firearms or just to stir things up?

Of course republicans have been guilty too, but dont forget we have had a war to pay for.
If you don't understand how tax cuts increase government revenue you might try reading a couple books on economics.

[walien]

PonyCar,

They spent both before and after 9/11. Have a look at W's first budget if you don't believe me. Tax cuts do stimulate, no doubt, but the economic multiplier varies. I'm not sure how much you're spending these days, but I don't know of almost anyone who isn't cutting back in some way. Giving someone a tax break right now doesn't mean that they will spend it.

I'm not sure where you're getting your data regarding areas that benefit, but the largest portion of Obama's program IS tax cuts. More than 1/3 of it is. If you think tax cuts are the only thing that should happen, you should only 2/3 be complaining about the program.

In terms of the rest of the program, there is a high economic multiplier to infrastructure projects and there is a huge need for infrastructure across the country. The money will need to be spent eventually anyways.

There are components of it that are seen as soft such as the extension of unemployment benefits and food stamps. Conservative pundits jump all over these, but someone on unemployment is pretty likely to spend all that they get. The US hasn't normally needed a long-term unemployment system as the low rate of unemployment meant that people could just get another job. With some states at >10% unemployment, it's not a bad thing to do in the short run. Will it stimulate the economy? Someone buying housing, heat and food will stimulate the economy. Most of that is produced domestically as well. I didn't get the Bush tax cut, but a few of my friends spent it on a weekend in Canada.

Other things on the package like wastewater and drinking water infrastructure, money to modernize schools and keep teachers employed, an increase in medicaid and money to provide health insurance to the unemployed will all stimulate the economy quite well. You can't hire the chinese to build a teacher for you and you equally can't hire the Chinese to dig ditches for pipes. The economic multiplier on all of it is high.

This is much different than government borrowing more money from China, to give to taxpayers so that they can run out and buy more goods like TV's from China.

In terms of blaming the Democrats for the housing crisis, have a look at what happened with the housing bubble and the types of loans that happened under the second Bush administration. They controlled the Pres, House and Senate and bad loans ballooned during this time. You can blame it all on the democrats, but that's not true.

Yes, people did lobby that lower income people should get housing loans. That lobbying didn't say that they should get an interest only, stated income loan that would reset in 5 years. The banks were giving everyone, particularly those least qualified to pay, loans that were just stupid. They did this both under Democrats and Republicans.

After the S&L crisis in the 80's, banks were restricted on what types of debt they could carry. They weren't, however, restricted on what types of debt they could sell. They eventually figured out that they could sell debt, have it rated by rating agencies and then sell it to investors as mortgage backed securities. Since the banks didn't carry the debt, they really didn't care if the loans were good or not. They were making money either way. The rating companies were doing well and didn't want to rock the boat and basically rated everything as good debt. Greedy US consumers just wanted more, bigger houses even if they couldn't afford them and many assumed that prices would go up forever. They didn't.

None of this was due to policies that said that banks couldn't discriminate. It was due to a lack of oversight. The Bush administration was very big on a lower government intervention in things like financial institutions. The monies to enforce regulations were reduced under Republicans. They also sat by and did nothing when they had control of everything earlier in this decade. Janet Jackson's boob got a lot more attention than housing loans. Their ideology was less government regulation is always better. It's not.

Anyone who has studies money and banking in Economics knows that the historical regulation of banks has always had to do with governments trying to stop banks from making too many risky loans. The banks want to do it to make more profits, but the governments are the ones that ultimately have to pick up the pieces and thus they bear the brunt of the risk.

The economy would be world's better than it would have been without the housing collapse. There still would have been problems eventually with banks due to things like credit default swaps, but then again, much of the growth earlier this decade was due to the housing bubble building. We would likely have had lower growth earlier in the decade, but not had the recession we have now.

I never said that the stimulus post-911 didn't work. Spending money does stimulate the economy. That's true whether by the government doing it or individuals. With that said, you seem to be completely ignoring the role of Alan Greenspan and interest rates and exchange rates in what happened post-911. The President isn't as all powerful as you might think.

Every time we have cut taxes (not eliminated them, just reduced them) the economy has responded by delivering increased REVENUES into the national treasury. Funny, that, allowing people to keep their money to spend allows them to spend it. hmmmm

That might be true, but it doesn't return as much as you give out. It's basically why supply side economics failed. In many cases, by the way, it's not letting people keep their money. Much of that tax relief goes to people who don't even pay in to the system in terms of income tax, so the 'tax rebates' we see, even for many who post on this board, are just the government borrowing from the Chinese to give money to people. That's not a tax cut.

The stimulus that we're seeing now is, sadly, required due to the economic mess we're in. I'm firmly in favor of a balanced budget above everything, but in cases were banking crisis have tanked economies, such as not long ago in Japan, fiscal spending has been most successful in getting the economy back on track.

Personally, I think that if more people actually cared about buying American goods instead of the cheap stuff from China along with using less oil from countries that hate us, we'd be far better off. Stopping the Chinese from illegally pegging their dollar to ours would be a good first step.

[glocknut]

Originally Posted by walien

I'm not sure you can throw all of this on Obama. The Republicans had control of all three branches of legislature in this country for most of this decade and they were plenty spendthrift. Obama is doing basically the same thing that W would be doing.

ha ha ha...

mike
gn

[walien]

GlockNut,

Should I take your laughing to mean that you fully agree with me? It would be nice given how much myself and others have put into the thread to get some more input than "ha ha ha". It sounds like you have an opinion to express. How about laying it out for everyone...

[ponycar17]

I'll respond with numbers later today. This should be interesting.

[RunningOnMT]

Originally Posted by walien

.



That might be true, but it doesn't return as much as you give out. It's basically why supply side economics failed. In many cases, by the way, it's not letting people keep their money. Much of that tax relief goes to people who don't even pay in to the system in terms of income tax, so the 'tax rebates' we see, even for many who post on this board, are just the government borrowing from the Chinese to give money to people. That's not a tax cut.

.

Wrong again. In the first place just what do you mean "it doesn't return as much as you give out"? We're not talking about "giving out" anything. We ARE talking about tax payers keeping more of their own money.

Secondly In almost any example you can find whether it be federal, or state income taxes, whenever there is a reduction in tax rates the revenue taken in by the government has increased.

What you termed as a failure happened to have occured during the Reagan administration which saw one of the greatest periods of growth and prosperity we have ever known. You know it sounds to me like you are reading some liberal publication while making this stuff up.

[Trouble 45-70]

Profligate spending by GOP Congresscritters got them thrown out of office the last 2 elections like the gun-grabing Dem. Congressritters were thrown out a few elections ago. Too bad The Democrat citizens wouldn't throw out their money-grabing congresscritters the same way. Perhaps they support robbery by government.

[ponycar17]

Let me first say, "oh boy, numbers!" Sorry, I like numbers. I shouldn't though. I just spent a day at work in a statistics-based class.

Originally Posted by walien

PonyCar,

They spent both before and after 9/11. Have a look at W's first budget if you don't believe me.

Clinton's 2000 budget was $1.77 Trillion. Bush's 2001 budget included things like the tax cuts for everyone, diversion of funds to pay back borrowed money from Medicare and Social Security and many entitlement programs including No Child Left Behind and Medicare Part D roots. I cannot find his actual budget figure but I can see where you're going. I don't and have never agreed with all of Bush's policies, however he didn't put us this far in the hole this early in his Presidency either. Obama's spending is break-neck speed.

Originally Posted by walien

Tax cuts do stimulate, no doubt, but the economic multiplier varies. I'm not sure how much you're spending these days, but I don't know of almost anyone who isn't cutting back in some way. Giving someone a tax break right now doesn't mean that they will spend it.

Yes, the economic multiplier does vary, and tax cuts to the ones who can least afford to spend makes little sense. What Obama proposes is to tax the people who are responsible for the growth and expansion under the Bush administration that led to a tax burden reduction from 4.00% to 2.99% to the bottom 50% of earners, and substantial wealth creation from 50% and up. You can't simply dole out tax breaks to the middle and lower classes without a supply-side aspect. One without the other does little to bolster the economy. From a simple macroeconomic viewpoint, consumers will push the demand curve outward with tax cuts. Suppliers will push the supply curve inward as they expand and compete against one another.

See a previous graph I've posted over and over on here.

A Bush style tax policy could and should result in pure growth with a relatively stable price point and increased output quantity, represented by price point P1 equal to the starting point, and quantity Q3 representing a higher output. An Obama style tax policy that punishes the rich while rewarding the other 95% only slightly could result in a higher price point, P4, and a lower output quantity, Q1. Granted, this is only a microecon representation but it is very indicative of macro concepts as well.

Originally Posted by walien

I'm not sure where you're getting your data regarding areas that benefit, but the largest portion of Obama's program IS tax cuts. More than 1/3 of it is. If you think tax cuts are the only thing that should happen, you should only 2/3 be complaining about the program.

First let me address the question of which areas are being affected most by the Obama stimulus plans concerning infrastructure spending. It's almost simply common sense but it may warrant some further explanation. The areas with the most need of infrastructure spending are also the largest and most productive areas. That's why they need the infrastructure... Those areas have an already-low unemployment rate on average. Hiring for the sake of building roads and bridges in an area with an already-low unemployment rate isn't the same as hiring in an area where the unemployment rate is already above 10%. Here's a story that demonstrates what I'm referring to...

STIMULUS WATCH: Jobs, but not where needed most

By MATT APUZZO and BRETT J. BLACKLEDGE, Associated Press Writers
Mon May 11, 3:51 pm ET
WASHINGTON – The billions in transportation stimulus dollars that President Barack Obama promoted as a way to create jobs shortchange counties that need the work the most, an Associated Press analysis has found.
The AP's review of more than 5,500 planned transportation projects nationwide is the most complete picture available of where states plan to spend the first wave of highway money. It reveals that states are planning to spend 50 percent more per person in areas with the lowest unemployment than in communities with the highest. The Transportation Department said it will attempt to replicate the AP's analysis as it continues pressing states to dole out money fairly.......Continued...

Continued at http://news.yahoo.com/s/ap/20090511/...mulus_left_out

Now, I don't believe that proposed 1/3 figure representing tax cuts as a portion of the stimulus bill. There are roughly 304 Million citizens in the United States. For the tax 'cuts' Obama has planned. The alleged cuts will come in the form of $800 tax credits for couples married and filing jointly and $400 for single tax payers (so, $400 per person). The elderly and some other groups will receive $250 as a check this year.

Let's say, as I've heard that around 134 Million actually pay taxes. That's around 40% of Americans. I'm going to use some theoretical percentages based as closely as possible on the actual numbers. Let's assume that approximately 40% of those are seniors who are eligible for the $250 tax credit. So, maybe 20% of the total population isn't paying taxes at all or is underage and not working.

So, by my logic tax payers will receive approximately (134,000,000 * $400 = $53.6 Billion) in tax cuts. The rest of America will receive approximately (122,000,000 * $250 = $30.5 Billion) in tax cuts for a total of $84.1 Billion in tax 'credits' over the next year. That amounts to close to ((84.1/787)*100 = 10.6%) of the stimulus budget, not 33%. John Kerry said the 'stimulus' plan was closer to 42% in tax cuts. I'll bet that figure includes 'potential' tax cuts allowed for first-time home buyers and the purchase of energy-saving appliances. Those cuts are NOT guaranteed and only projected. Wanna bet they won't make up that extra 31.4% of promised tax credits by large purchases? I kinda doubt it... That's a carrot dangled out in front of people who cannot discern fact from rhetoric. In other words, it's vote-buying by way of promising something you will never get.

Furthermore, because of the ill-devised withholding plan, millions of married-filing-jointly filers and those retired with a small income will owe most of their heightened W2 earnings back to the IRS in April, 2010 unless they adjust their W4s. If you and a spouse work, your employer will withhold approximately $800 less for both of you this year. Ironically, the credit is only good for $800. You'll owe $800 back to the IRS next year.

Originally Posted by walien

In terms of the rest of the program, there is a high economic multiplier to infrastructure projects and there is a huge need for infrastructure across the country. The money will need to be spent eventually anyways.

I admire your persistence but infrastructure projects do not work in kick-starting most economies as effectively as tax cuts. As I stated in a previous response to you, it didn't work for Japan. Japan abandoned infrastructure spending through a decade in the 1990s after it only helped to mount their national debt as a percentage of their GDP. I worked for a Japanese company for 3 years and had a few trips over there in 2002 where I saw what Japan did concerning infrastructure improvement. It was pretty amazing but hardly productive. Their roads are almost entirely toll roads as a method to pay for the road's construction and the Japanese really resent paying exorbitant car taxes and tolls to take a simple family trip into the mountains. A simple 100 mile trip to the country can cost a couple hundred dollar-equivalent Yen in Japan.

Infrastructure spending employs government and government-contract workers who are paid by the government. They are paid from the government's pocket and the taxes received back into the government coffers are simply changing hands; not growing wealth. Nothing fuels government income except the expansion of private industry. See the information provided in the following links on how Japan didn't succeed in their spending efforts in the 1990s, and why FDR's spending policy likely led us to a 7 year longer depression.

Originally Posted by walien

There are components of it that are seen as soft such as the extension of unemployment benefits and food stamps. Conservative pundits jump all over these, but someone on unemployment is pretty likely to spend all that they get. The US hasn't normally needed a long-term unemployment system as the low rate of unemployment meant that people could just get another job. With some states at >10% unemployment, it's not a bad thing to do in the short run. Will it stimulate the economy? Someone buying housing, heat and food will stimulate the economy. Most of that is produced domestically as well. I didn't get the Bush tax cut, but a few of my friends spent it on a weekend in Canada.

I can't argue with you on a short-term need to bolster unemployment protection. I don't like having to worry about being robbed while running to the grocery store. Crime would skyrocket if unemployment funding wasn't provided.

Originally Posted by walien

Other things on the package like wastewater and drinking water infrastructure, money to modernize schools and keep teachers employed, an increase in medicaid and money to provide health insurance to the unemployed will all stimulate the economy quite well. You can't hire the chinese to build a teacher for you and you equally can't hire the Chinese to dig ditches for pipes. The economic multiplier on all of it is high.

Some of that is certainly true. However, from my previous thread responding to you education is largely self-destructive. The more money education gets, the more it needs, and there's no ready rationale for that besides wasteful spending. Even when large sums of money are thrown at education all at once, more is begged for in following years, often with no tangible results from the previous funding allowance. My state is a prime example.

Originally Posted by walien

This is much different than government borrowing more money from China, to give to taxpayers so that they can run out and buy more goods like TV's from China.

Again, from what I stated above, much more is needed in terms of a supply-side tax cut, which Obama is eliminating. Demand-side-only does not work and is indeed only a 'stimulus' to make supply-side cuts work. Obama's plan wants to punish the top 5% of our income earners which have grown wealth tremendously for all Americans over the past 8 years. The top 5% of income earners have received massive tax cuts over the past 8 tax years. In 1999 the top 5% paid a 55.45% portion of the total tax base. In 2006's tax year they paid 60.14% of the total tax base. Those tax payers created wealth, which created jobs and allowed capital investment into other companies that correspondingly created MORE jobs. Obama wants to punish these most productive individuals that fuel our entire economy. Does that make sense? In economic theory, you've got a concept of marginal returns on investment. When an investment is made on an asset that could be better spent on another asset, then the difference is a net loss. Conversely when an investment is made on one asset that produces the same good more efficiently, the gain returned on that good is called a marginal return over the other investment. Investing in a lower-efficiency asset results in an 'opportunity cost' forgone by not investing in the higher-efficiency asset.

We're effectively choosing to make an unwise investment in 95% of Americans when the top 5% provide a much larger return to everyone. You seem to have some financial and economics know-how about you. Surely you can agree on that point.

Originally Posted by walien

In terms of blaming the Democrats for the housing crisis, have a look at what happened with the housing bubble and the types of loans that happened under the second Bush administration. They controlled the Pres, House and Senate and bad loans ballooned during this time. You can blame it all on the democrats, but that's not true.

I'm sorry but many Republicans attempted to stop these loans. From my previous response to you, the New York Times in 1999 acknowledged the threat of massive failure because of the force the federal government used to make banks give bad loans. The NY Times was right. Now they blame the Republicans and Bush for it all. I'm afraid there's a bit of a double-standard going on.

Let's look at some information...

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

From http://query.nytimes.com/gst/fullpag...gewanted=print

Originally Posted by walien

Yes, people did lobby that lower income people should get housing loans. That lobbying didn't say that they should get an interest only, stated income loan that would reset in 5 years. The banks were giving everyone, particularly those least qualified to pay, loans that were just stupid. They did this both under Democrats and Republicans.

And primarily Democrat recipients of funding and sweetheart loans from the mortgage Government Sponsored Enterprises (GSE's) were the ones defending those GSEs' solvency and denying an impending mortgage meltdown.

Some video...
http://www.youtube.com/watch?v=_MGT_cSi7Rs
http://www.youtube.com/watch?v=XVIAGWtCD10

Read this from American Thinker.com as well.

http://www.americanthinker.com/2008/...in_the_mo.html

This article details where Republican congressmen attempted to reign in the GSE's and were met with opposition from Democrats. Even George Bush voiced opposition to the impending crisis. I don't think I'm just holding the party line here. There's enough evidence to show collusion between Democrats and the banks, without help needed from Republicans. Indeed Barack Obama also benefited in the '90s and possibly later from this association with Community Activist groups that pressure the government for bad loans.

Also, see this pre-election work of art.
http://www.youtube.com/watch?v=TxgSubmiGt8

Originally Posted by walien

After the S&L crisis in the 80's, banks were restricted on what types of debt they could carry. They weren't, however, restricted on what types of debt they could sell. They eventually figured out that they could sell debt, have it rated by rating agencies and then sell it to investors as mortgage backed securities. Since the banks didn't carry the debt, they really didn't care if the loans were good or not. They were making money either way. The rating companies were doing well and didn't want to rock the boat and basically rated everything as good debt. Greedy US consumers just wanted more, bigger houses even if they couldn't afford them and many assumed that prices would go up forever. They didn't.

None of this was due to policies that said that banks couldn't discriminate. It was due to a lack of oversight. The Bush administration was very big on a lower government intervention in things like financial institutions. The monies to enforce regulations were reduced under Republicans. They also sat by and did nothing when they had control of everything earlier in this decade. Janet Jackson's boob got a lot more attention than housing loans. Their ideology was less government regulation is always better. It's not.

Anyone who has studies money and banking in Economics knows that the historical regulation of banks has always had to do with governments trying to stop banks from making too many risky loans. The banks want to do it to make more profits, but the governments are the ones that ultimately have to pick up the pieces and thus they bear the brunt of the risk.

The economy would be world's better than it would have been without the housing collapse. There still would have been problems eventually with banks due to things like credit default swaps, but then again, much of the growth earlier this decade was due to the housing bubble building. We would likely have had lower growth earlier in the decade, but not had the recession we have now.

We can agree on most of that assessment. One has to wonder why government would put into place mandates for banks to behave badly and then not foresee what would happen in the financial industry. The intervention we saw in 1995 is the reason banks chose to sell debt. The option was available to them and they could not fail because of government mandates. But... As the banks were eventually failing, they had strong Democrat ties to lie for them to keep them in business.

Originally Posted by walien

I never said that the stimulus post-911 didn't work. Spending money does stimulate the economy. That's true whether by the government doing it or individuals. With that said, you seem to be completely ignoring the role of Alan Greenspan and interest rates and exchange rates in what happened post-911. The President isn't as all powerful as you might think.

I'm glad we agree on the point of the post-911 stimulus. Spending public sector money does not stimulate the economy in any sustainable fashion for reasons I stated a few paragraphs above. It didn't work for 1990s Japan and didn't work for FDR. We'll have to agree to disagree on this one.

Yes, Greenspan's lowering of the Fed Discount Rate after 911 did play a role in making credit more available and that probably did exacerbate the already-frenzied mortgage lending industry. That's a good point!

Originally Posted by walien

That might be true, but it doesn't return as much as you give out. It's basically why supply side economics failed. In many cases, by the way, it's not letting people keep their money. Much of that tax relief goes to people who don't even pay in to the system in terms of income tax, so the 'tax rebates' we see, even for many who post on this board, are just the government borrowing from the Chinese to give money to people. That's not a tax cut.

You're right on a good portion of that. Giving a tax 'cut' to someone who doesn't pay taxes isn't a 'tax cut'; it's welfare. That was mentioned in my original post. That's why a 'tax cut' to 95% of Americans in Obama's plan never made sense to anyone who was paying attention.

Originally Posted by walien

The stimulus that we're seeing now is, sadly, required due to the economic mess we're in. I'm firmly in favor of a balanced budget above everything, but in cases were banking crisis have tanked economies, such as not long ago in Japan, fiscal spending has been most successful in getting the economy back on track.

Some of the stimulus is needed, mainly the unemployment bolstering in the short term. MOST of the stimulus will not be effective, and a small but toxic part of the stimulus is just wasteful.

Again, we disagree on Japan yet again. Japan has greatly distressed its citizens with taxes on every aspect of travel because of their version of an infrastructure stimulus. Read the article I posted above. Expect that we can see the same taxes, primarily through fuel tax increases.

Originally Posted by walien

Personally, I think that if more people actually cared about buying American goods instead of the cheap stuff from China along with using less oil from countries that hate us, we'd be far better off. Stopping the Chinese from illegally pegging their dollar to ours would be a good first step.

That's a good idea and I'll agree on a patriotic note but I'm left wondering who will buy our goods if we stop buying their's? I want to be an isolationist on some points and then I realize that if no nation can afford our goods we can't export anything.

Thanks for the interesting debate!

[cycloneman]

why are they saying this? who are they trying to fool? Me? What is the point? To say Im sorry i ****** up and now we need to stop spening? Is this a joke?

[walien]

"Obama's spending is break-neck speed. "

...as was that of his pre-decessor. With that said, Obama is facing the worst economic conditions since the great depression. It's not as if he walked into a healthy economy and decided to spend like this. You should also note, John McCain was promoting similar levels of spending during the election campaign. If you're going to hold him to task, at least do it in context and realize that the President of either party would be spending a lot of money right now.

Sadly, almost nobody in this country was interested in paying off debt when things were relatively good. Unfortunately, it seems that most people aren't well read enough to realize the massive growth in mandatory spending programs we'll be seeing over the coming decade or two.

"Obama wants to punish these most productive individuals that fuel our entire economy. Does that make sense?"

Warren Buffet would disagree with you. He was against the Bush tax cuts way back when. The wealthy in this country face the lowest tax burden in the free world. I'd hardly call that punishment. I pay plenty of income taxes. One of the benefits of the USA is the tax rate. It's not as if they won't be able to pay their head bills, phone bills, put gas in the car and send their kids to school. Someone making $300k/yr can pay their bills pretty easily. The increase in the highest marginal tax rate might raise their taxes, but not by much and it certainly isn't going to make their kids go hungry.

The issue, largely, in giving tax cuts is that people don't spend necessarily spend them. There's not a lot of stimulus to giving a tax rebate to people who will just poke it away with the rest of their money.

"The areas with the most need of infrastructure spending are also the largest and most productive areas."

The states were all given time to submit infrastructure projects. From what I understand, those projects that were most ready to go were given priority. I get the feeling that if the stimulus package would have focused on the areas of the highest unemployment even if the projects were to be delayed that people would be calling it socialist and ineffective.

"I'll bet that figure includes 'potential' tax cuts allowed for first-time home buyers and the purchase of energy-saving appliances."

Google is your friend if you don't know the breakdown. The figures do include the $8k tax break. It's a rather small amount relative to the overall tax relief. This will help those areas with the highest unemployment. $8k can be a downpayment in those areas. On the west coast and in many big cities, you'll need $80k to make a downpayment on most anything.

"Infrastructure spending employs government and government-contract workers who are paid by the government."

No, the money goes to contractors who perform the work. Do you think that every time you see roads being made that those are civil servants. They are private companies who win tenders and who hire other private companies to provide the goods needed. This means it is largely done by local people. Contrast thing to someone running out with a tax 'rebate' and buying a chinese TV/iPod.

"See the information provided in the following links on how Japan didn't succeed in their spending efforts in the 1990s, and why FDR's spending policy likely led us to a 7 year longer depression. "

The article about Japan completely fails to mention the causes of the economic troubles that Japan faced in the 90's. The latter is just two guys at UCLA who published a paper. It was only listed in the UCLA newspaper. Was it a peer reviewed and published study? How exactly did FDR cause famine? What was his position against the protectionism that was pushed at the time that led largely the problems. He also led the charge to put in things like the FDIC and SEC. We still use the FDIC and it's one of the reasons why few people know what a bank 'run' means.

I'd keep in mind that just because you find things on the internet that it doesn't mean they're true.

[RunningOnMT]

Again, it was Obama as a "community organizer' and senator and the rest of congress which is largely responsible for this crisis we are in now. Yes the war in Iraq has been expensive, but you can't blame the costs of financing a war on the administration in power during that war.

The record is clear and verifiable. The Clinton administration ordered Fannie Mae and Freddie mac to extend credit to people lacking the ability to pay their obligations. All part of catering to the democrat dependency class.

When Bush went to congress almost five years ago and called for reining in Fannie and Freddie and warning of a potential financial catastrophe, congress in it's infinite wisdom thumbed their nose at him.

If you wish you can youtube and watch for yourself as Barney Frank, Chris Dodd, Barbara Boxer, and the rest of the democrat congress argued that Fannie and Freddie were doing just fine. Doing so fine as a matter of fact that they needed to demand Fannie and Freddie to further lower mortgage loan requirements. The republicans led by people like John McCain argued strenuously against this and pleaded for closer oversight of these operations. Interestingly, Dodd, Frank, and Obama were the recipients of huge donations from Fannie and Freddie. funny how that works.

And now Obama and the dems tell us we are in this mess because of eight years of the failed economic policies of the Bush administration. What nerve. Anyone that buys this has seriously overdosed on the stupid kool-aid.

It was the failure of Fannie and Freddie and their insolvency resulting in the huge ripple throughout the banking industry that left it in shambles. When banks suffer everyone suffers. Companies that relied on credit and temporary borrowing found themselves unable to meet payrolls. This in turn results in lay offs and private businesses closing.

Now let's get to the automotive industry. Certainly the big three made some bad choices in what they offered the public. The ball was started rolling back in the early 70's with the influx of Japanese imports. Let's face it, the Japanese make a good product and during that time the big three lost a chunk of their customer base forever.

Despite all of the above, the single largest contributor to Chrysler and GM's woes were the unrealistic wage and compensation packages demanded by the UAW. No company can compete when their labor costs become so exorbitant.

Finally we have the problem of our market being flooded with products manufactured by a country who's standard of living is the lowest among any industrial nation. Some Chinese products are actually produced by unpaid prison labor. I don't care how well you run a company, an American company paying American wages can not survive in that environment.

There in a nutshell is why we are in this mess. The bottom line is we are there because there has been a concerted effort to cater to the democratic power base: labor unions and the so called disenfranchised that thrive on a free ride.

To go even further, it is my firm belief that much of this has been the intentional dismantling of the capitalist system in this country by those with clear ties to socialists and communists. there is no question that Obama is a socialist. he has had more than one socialist mentor or associate in his young life, and every policy he promotes leads us directly head long into world wide socialism.

Barack Obama is an unapologetic enemy of the capitalist system and every traditional value long held by freedom loving American citizens.

[ponycar17]

Originally Posted by walien

...as was that of his pre-decessor. With that said, Obama is facing the worst economic conditions since the great depression. It's not as if he walked into a healthy economy and decided to spend like this. You should also note, John McCain was promoting similar levels of spending during the election campaign. If you're going to hold him to task, at least do it in context and realize that the President of either party would be spending a lot of money right now.

I do agree with you. McCain would not have been an ideal pick. Obama is much, much worse.

Originally Posted by walien

Sadly, almost nobody in this country was interested in paying off debt when things were relatively good. Unfortunately, it seems that most people aren't well read enough to realize the massive growth in mandatory spending programs we'll be seeing over the coming decade or two.

You're partially wrong on that first assertion. As part of George W's first budget, a large portion of the budget surplus was used to pay back the Social Security trust fund.

Originally Posted by walien

Warren Buffet would disagree with you. He was against the Bush tax cuts way back when. The wealthy in this country face the lowest tax burden in the free world. I'd hardly call that punishment. I pay plenty of income taxes. One of the benefits of the USA is the tax rate. It's not as if they won't be able to pay their head bills, phone bills, put gas in the car and send their kids to school. Someone making $300k/yr can pay their bills pretty easily. The increase in the highest marginal tax rate might raise their taxes, but not by much and it certainly isn't going to make their kids go hungry.

Warren Buffet and George Soros alike don't make money off of traditional means. Most of their wealth is generated from currency exchange rates and monetary fluctuation over trade routes. I don't think Mr. Buffet has the same interests at heart as the average person considered wealthy but only in the upper 6 figure range. America's top 10% of earners only make $153K. The top 5% bracket starts at $388K. Those are small business owners and those with heavy market investments. Obama wants to raise taxes and therefore deter capital investment dollars to business by raising the capital gains and dividends tax rate from 15% to 20% at a time when getting investors into the market is hard enough. So, on top of taking away usable capital from those in the top 5% bracket he also deters them from investing... That sir, makes no sense. With financing so hard to obtain, corporations MUST have capital dollars flowing in to expand in these economic times.

Ireland's economy boomed through the latter '90s by imposing the lowest corporate tax rate of all industrialized nations. I remember hearing how companies like Microsoft moved into Ireland in the early '00s and college graduates were essentially naming their price if they had the proper credentials. Ireland didn't have enough skilled workers to fill the high-tech jobs filtering into their area.

Ireland's Low Corporate Tax Rate Leads to Prosperity

by Alicia Hansen

Ireland’s economy has undergone a remarkable transformation over the past two decades. A recent New York Times op-ed by Thomas L. Friedman attributes Ireland’s economic growth in part to the country’s low corporate tax rate.

Ireland is currently the second richest country in the European Union, with a per capita GDP higher than that of Germany, France and Britain. But in the mid-1980s, the economy was faltering, college graduates were emigrating, and the outlook was bleak:

"We went on a borrowing, spending and taxing spree, and that nearly drove us under," said Deputy Prime Minister Mary Harney. "It was because we nearly went under that we got the courage to change."

This change included a corporate tax rate cut to 12.5 percent, far below the rest of Europe, which attracted foreign investment. Nine of ten of the world's top pharmaceutical companies and seven of the top ten software designers currently have operations in Ireland..... Continued at the link

From http://www.taxfoundation.org/blog/show/626.html

My state is an example of how corporate tax cuts have encouraged industrial relocation. From 1970 until present we continue to lure elite automotive companies and other high tech industry through tax incentives. Although our textile market collapsed, and continues to falter, the area of our state where the automotive industry settled has the lowest unemployment.

Originally Posted by walien

The issue, largely, in giving tax cuts is that people don't spend necessarily spend them. There's not a lot of stimulus to giving a tax rebate to people who will just poke it away with the rest of their money.

That's irrational logic. The poor will spend or pay off debt, so there is some wasted money there. The tax cuts and credits to the poor and middle class only serve as a demand-side stimulus to the larger supply-side tax cuts at the heart of Conservative principles. The rich do not poke away money into their piggy banks to earn a meager 1.5% interest in an 8 month Certificate of Deposit. They didn't get rich by behaving in that manner. The rich are wealth creators. They have built a hearty income, and only intend to grow that income. Even if they only invest in stock, that provides capital funding to corporations to allow them to expand and add jobs either through production increases or efficiency opportunities. Production increases add manual labor and efficiency increases often add technical and logistics employment opportunities.

Again, the rich don't 'poke away' their money into a place where it's not useful. The opportunity cost of not investing is huge and the rich know it...

Originally Posted by walien

The states were all given time to submit infrastructure projects. From what I understand, those projects that were most ready to go were given priority. I get the feeling that if the stimulus package would have focused on the areas of the highest unemployment even if the projects were to be delayed that people would be calling it socialist and ineffective.

Hey, I'm just pointing out that the money isn't being used in a broad and effective manner as you claimed.

Originally Posted by walien

Google is your friend if you don't know the breakdown. The figures do include the $8k tax break. It's a rather small amount relative to the overall tax relief. This will help those areas with the highest unemployment. $8k can be a downpayment in those areas. On the west coast and in many big cities, you'll need $80k to make a downpayment on most anything.

My breakdown comes from independent thought and a good understanding of common taxes. If I was unsure I'd check out what the budget claims. The tax credits for the purchase of energy-efficient appliances will not be effective, unless as I suspect, this administration goes after energy prices to make energy exponentially more expensive. I think that the EPA's ruling that Carbon Dioxide is a public health hazard is proof that the goal is being pursued to artificially raise energy costs.

Originally Posted by walien

No, the money goes to contractors who perform the work. Do you think that every time you see roads being made that those are civil servants. They are private companies who win tenders and who hire other private companies to provide the goods needed. This means it is largely done by local people. Contrast thing to someone running out with a tax 'rebate' and buying a chinese TV/iPod.

I used to work for a government contractor who did construction services as well as life sciences/pharmaceutical facility development. I currently work as an engineer for a company that employs maintenance personnel from that same previous employer. Let me tell you personally that the manual laborers aren't the ones making the big money off of their employers' contracts. There's a lot of waste in contracting firms, and particularly government contractors.

And as I showed you above, those local people doing jobs under this so-called stimulus are already in a low-unemployment area for the most part...

Originally Posted by walien

The article about Japan completely fails to mention the causes of the economic troubles that Japan faced in the 90's.

Japan's primary problem was inflation of the Yen. The Yen's value fell miserably because of Japan's piling on of debt. They were doing what we think will work now... Sorry, it won't.

Originally Posted by walien

The latter is just two guys at UCLA who published a paper. It was only listed in the UCLA newspaper. Was it a peer reviewed and published study? How exactly did FDR cause famine? What was his position against the protectionism that was pushed at the time that led largely the problems. He also led the charge to put in things like the FDIC and SEC. We still use the FDIC and it's one of the reasons why few people know what a bank 'run' means.

On the issue of FDR, I didn't say everything he did was wrong. Certainly, the strengthening and government backing of the financial industry helped create a feeling of security in the banking and investment community.

I said his spending was wrong. FDR's spending didn't pull us from the Depression. The export of weapons at the onset of WWII in Europe helped to bring us upward from the Depression. We suddenly had a good to export.

Even FDR's Treasury Secretary admitted the failure of their reckless spending.

“We have tried spending money. We are spending more than we have ever spent before and it does not work.”

- Henry Morgenthau Jr., Secretary of The Treasury to FDR, May 9, 1939

Others, such as Milton Friedman believed the same concept that FDR's spending only HURT the economy. Our economy started to turn around as Europe required exports of our arms for their war effort, before we became involved in the fight. The full recovery came amid the war and we boomed afterward.

Here's another article for you from CATO Institute. There is absolutely no doubt that FDR's choice to hike the top tax rate from 25% to 63% in 1932 exaggerated the deflation and only helped the unemployment to peak at 25% as a national average.

Originally Posted by walien

I'd keep in mind that just because you find things on the internet that it doesn't mean they're true.

I'd keep in mind too, that those who don't even attempt to reference their opinions are borderline willfully ignorant and I'm sure you don't want to appear in that light.

I have posted links to assert my point on the fly because citing textbooks where I've formulated my ideas on Economics wouldn't make sense in the discourse of a 20 minute forum post... I didn't just go looking for 'bad things about FDR' in Google. I for one have studied economics to some degree in college through a business minor. I often think I'd enjoy that field more than what I currently do for a living. I still find it interesting and actively research policy. I'm by far no expert still but I like to think I back my opinions well concerning cause and likely effect.

The chart I linked to above is one I did for a website I created to demonstrate why Obama's tax policies would fail. I did it as a favor to my mother-in-law who's going back to school for a Bachelor's Degree. Her study group used the website and cited it as a reference. The professor gave her a 97 on her paper concerning the subject. That class was Microeconomics. You're not talking to a Google warrior. I use links such as those above to back what I fundamentally already know in demonstrating my argument to you and others. I'm not just blindly trusting what I find online.

That's the end of the discussion for me as I can see this heading downhill quickly. I'm starting to question the genuine nature of your posts, and it's leaning toward a lesson in talking points from some other sources we've had on the Forum in the past. Pardon me if I'm wrong in that suspicion.

I'd also add that out of 42 posts you've made, 41 of them have been political and/or general interest in nature. Only the first one involved any interest in firearms. Does that fuel my suspicion? Oh, surely not...