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Seriously -- we can take the whole McCain-Bush-Obama battle and set it aside.

Two questions:

Why is the current admin. STILL spending money like crazy?
When does it stop?
 

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The money supply is contracting, the private sector is not currently injecting money into the economy, so to try to cushion the blow , the gov injects money into the economy.

As far as being worried about inflationary pressures, the gov isn't as deflationary pressures are in force as demand for everything falls,

I think a lot of you guys need to study macroeconomics, the last thing you want to do during such a period of economic contraction is for the Gov to add to the problem by cutting spending and raising taxes. The Gov is suppose to run deficits during downturns, the problem is this should be balanced by surpluses during growth, but we for some reason, we have been running deficits during our last cycle of growth.
 

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Has any economist gone on record as having agreed with the porkulus bill? I've been flipping through Fox, CNN, MSNBC, CNBC, and several others and every single economist has said that the majority of the bailout bill will neither create jobs nor stabilize our sagging stock market "until at least 2010 or 2011". Who exactly penned this bill and why aren't they standing before Congress (you know, the idiots who got us in this mess in the first place) explaining where every single dollar will go? I'm guessing most members of Congress are still trying to read what they already voted on. I can hear it now, over and over again in the offices and corridors "I voted to spend $20 billion on THAT?! Shit!"
 

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clemclan is offline.
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1) The adage is that you can't save your way out of a recession. Nearly 70% of our economy is consumer spending. Since the consumer won't/can't spend anymore, someone else has to step in to pick up the slack. This is the whole point of Keynesian economic theory, that the gov't is the consumer of last resort during economic recessions. Where Keynesian theory hasn't worked though, is that during times of economic expansion the gov't is supposed to reign in its spending and run budget surpluses to avoid overheating the economic expansion and pay back the deficits compiled during the recession. The problem is that we as voters lack the wisdom and will to compel our elected officials to do this 2nd vital thing.

2) It stops in exactly the same way and for exactly the same reason that individuals are compelled to stop overspending - those supplying the credit refuse to lend them any more.

Our economy is certainly in a bad way. Oddly though, the dollar has strenghened against the Euro, the British Pound, the Swiss Franc, the Canadian Dollar, the New Zealand Dollar, and the Austrailian Dollar since the crisis broke last fall. Of the major currencies, it is only weaker against the Japanese Yen during that time.
 

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The money supply is contracting, the private sector is not currently injecting money into the economy, so to try to cushion the blow , the gov injects money into the economy.

As far as being worried about inflationary pressures, the gov isn't as deflationary pressures are in force as demand for everything falls,

I think a lot of you guys need to study macroeconomics, the last thing you want to do during such a period of economic contraction is for the Gov to add to the problem by cutting spending and raising taxes. The Gov is suppose to run deficits during downturns, the problem is this should be balanced by surpluses during growth, but we for some reason, we have been running deficits during our last cycle of growth.
True! This is exactly the problem - people see spending and no tax cuts and the uneducated knee jerk reaction is dumb fear. The government must continue to create jobs through spending and mandating those funded projects with clauses that make use of domestic products like American steel instead of Chinese.

Its true, the government could just stop paying out. Not give anyone that is jobless any assistance so they are homeless and starving with their families. I KNOW! lets cut taxes! THAT will make the difference between having no job but being able to pay the mortgage!

Besides an actually profitable war(which won't happen because there is no longer any such thing as a real land war), the only way to get out of this pit is to create jobs by funding the projects that will last for decades. I'd like to know exactly how the bunker mentality of conservatives will help anything at all. Are these people really going to continue to sit and say "Lets wait it out!" I'm sure they are all fine to say that while they have paychecks coming in, but the rest of the country is suffering.
 

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Why is it whenver someone in this administration opens their mouth the dow drops? Seriously, on Jan 27 the dow was at 8400. Today it closed out at 7115... that a -1285 fall in 27 days. WTF mang?

EDIT: They are putting all this thru with the guise of total economic collapse if they dont spend, spend, spend. They promise transparency, yet they say nothing of this....

Get ready for a RAT.....

The RAT hiding deep inside the stimulus bill
By Byron York
Chief political correspondent 2/19/09

The far-reaching — and potentially dangerous — provision that no one knows about.
You’ve heard a lot about the astonishing spending in the $787 billion economic stimulus bill, signed into law this week by President Barack Obama. But you probably haven’t heard about a provision in the bill that threatens to politicize the way allegations of fraud and corruption are investigated — or not investigated — throughout the federal government.

The provision, which attracted virtually no attention in the debate over the 1,073-page stimulus bill, creates something called the Recovery Accountability and Transparency Board — the RAT Board, as it’s known by the few insiders who are aware of it. The board would oversee the in-house watchdogs, known as inspectors general, whose job is to independently investigate allegations of wrongdoing at various federal agencies, without fear of interference by political appointees or the White House.

In the name of accountability and transparency, Congress has given the RAT Board the authority to ask “that an inspector general conduct or refrain from conducting an audit or investigation.” If the inspector general doesn’t want to follow the wishes of the RAT Board, he’ll have to write a report explaining his decision to the board, as well as to the head of his agency (from whom he is supposedly independent) and to Congress. In the end, a determined inspector general can probably get his way, but only after jumping through bureaucratic hoops that will inevitably make him hesitate to go forward.

When Iowa Republican Sen. Charles Grassley, a longtime champion of inspectors general, read the words “conduct or refrain from conducting,” alarm bells went off. The language means that the board — whose chairman will be appointed by the president — can reach deep inside a federal agency and tell an inspector general to lay off some particularly sensitive subject. Or, conversely, it can tell the inspector general to go after a tempting political target.

“This strikes at the heart of the independence of inspectors general,” Grassley told me this week, in a phone conversation between visits to town meetings in rural Iowa. “Anytime an inspector general has somebody questioning his authority, it tends to dampen the aggressiveness with which they pursue something, particularly if it’s going to make the incumbent administration look bad.”

I asked Grassley how he learned that the RAT Board was part of the stimulus bill. You’d think that as a member of the House-Senate conference committee, he would have known all about it. But it turns out Grassley’s office first heard about the provision creating the RAT Board last Wednesday, in a tip from a worried inspector general. It wasn’t until Friday morning — after the bill was finished and just hours before the Senate was to begin voting — that Grassley discovered the board was in the final text. “This was snuck in,” Grassley told me. “It wasn’t something that was debated.”

Snuck in by whom? It’s not entirely clear. “I intend to get down to the bottom of where this comes from,” Grassley vowed. “And quite frankly, it better not come from this administration, because this administration has reminded us that it is not about business as usual, that it is for total transparency.”

Maybe not this time. When I inquired with the office of a Democratic senator, one who is a big fan of inspectors general, I was told the RAT Board was “something the Obama administration wanted included in this bill.” When I asked the White House, staffers told me they’d look into it. So for now, at least, there’s been no claim of paternity.

The RAT Board has all sorts of other things wrong with it. For one thing, it’s redundant; there is already a board through which inspectors general police themselves, created last year in the Inspectors General Reform Act. For another thing, it could complicate criminal investigations stemming from inspector general probes. And then there’s the question of what it has to do with stimulating the economy.

But none of that matters now. It’s the law.

Last Friday, when he learned the RAT Board was in the final bill, Grassley wanted to voice his objections on the Senate floor. But there was no time in the rush to a vote, so Grassley’s statement went unread. “It’s fitting that the acronym for this board is RAT,” he was prepared to tell the Senate, “because that’s what I smell here.”
 

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The money supply is contracting, the private sector is not currently injecting money into the economy, so to try to cushion the blow , the gov injects money into the economy.
Because in large the private sector is overextended and tapped out. We are recovering from many years of borrowing and spending. What will the long term effects of record deficit spending by the government be?

As far as being worried about inflationary pressures, the gov isn't as deflationary pressures are in force as demand for everything falls,
Which is true, however what happens when the public begins injecting capital back into the economy that is already saturated with federal funds? Are you seriously trying to say the trillions dumped into the economy will not have an inflationary effect?

I think a lot of you guys need to study macroeconomics, the last thing you want to do during such a period of economic contraction is for the Gov to add to the problem by cutting spending and raising taxes. The Gov is suppose to run deficits during downturns, the problem is this should be balanced by surpluses during growth, but we for some reason, we have been running deficits during our last cycle of growth.
This sounds like Keynesian Economics, however there are more than one economic schools of thought and not a single one is without fault, Keynesian is certainly not the exception.
 

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Our economy is certainly in a bad way. Oddly though, the dollar has strenghened against the Euro, the British Pound, the Swiss Franc, the Canadian Dollar, the New Zealand Dollar, and the Austrailian Dollar since the crisis broke last fall. Of the major currencies, it is only weaker against the Japanese Yen during that time.
What is odd about it? This recession is far from just a US problem, why would you not expect other currencies to effected as well?
 

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What is odd about it? This recession is far from just a US problem, why would you not expect other currencies to effected as well?
The US, being the world's 800 lb. economic gorilla, would certainly have an effect on the economies of the rest of the world as it went into recession. But I would have guessed beforehand - clearly wrongly - that our currency would have degraded relative to those of other countries showing less willingness to spend their way out of their economic woes by effectively printing money.

The Currency market is by far the largest and most liquid market of any kind in the world, and therefore attracts the biggest and brightest participants to compete in it. One interpretation of the collective wisdom of this market in re the actual currency valuation changes which occurred would be that relatively speaking the US is better off than nearly all other economies on Earth, even as we spend trillions of $ we don't have to jump-start our economy and worry about how to pay for it later. IOW, the market’s expectation is that our vast spending will effectively increase economic activity in the US at a faster rate than other economies with more restrained spending will experience, thus increasing demand for US dollars to transact business in the US in the future.
 
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