Bush Calls for $140 Billion Economic Aid Package

[Balta1701]

Actually, upon reading it again and again, I am finding more quibbles.

 

For example, the interest paid on the national debt last year was vastly more than $1.2 billion.

 

The general concept though, that its entirely possible that the combination of the Federal Reserve and the government itself will simply run out of stimulus bullets of the sort they've used to drag us repeatedly out of every recession since the big one in the early 80's due to the fact that we never really brought the system back into balance after the last recession. We kept piling on the debt in good times, and so that makes it harder for us to use deficit spending as a method of strengthening the economy in the bad times. And the Fed only has so many points of interest rates left that they can drop - if they dropped it the same amount that they did during the 2001 and after recession, they'd hit 0. Which does make it a shame that they couldn't construct a more effective stimulus package, because the system could well just not have enough in it to avert the coming slump.

Edited January 26, 2008 by Balta1701

[Balta1701]

And the interest paid was vastly more on the debt. Fully agree. I'm saying the entire amount of the Federal Income received - 1.2 Billion, was spent SOLELY on the mounting credit alone.

Could you please elaborate on what that means? Because I can't figure out what you're saying there.

[kapkomet]

Our market is and always will be a cycle. You are absolutely correct. But, what you don't understand - unless you are even more vested with knowledge of economics than myself (and no offense because I do doubt it, simply, because I have my Masters in it from Harvard) - what you are missing is that the Feds ability to really "affect" and "do what you're used to seeing it do" is really coming to a halt. The fact is that the Fed has toyed with the market so much, and created "artificial" boom & bust cycles that it has reached a point that it is beginning to not have any control over it. They are, and have, thrown a complete overload of money into the market that we simply cannot sustain it - no matter what we do at this point - because it has caused a ever increasing credit/deficit problem that can no longer be contained. They need to drastically raise the rates, get the foreclosures done, kick people out that have tried to live above their means & get an equilibrium back into the market. They can no longer "lower the rates" to help. They can no longer flood the market with money to help. The economy, based on advanced economic research, has reached a point that it is too late to do these things to help. Putting off the recession is only making the impending recession much, much, much deeper - to the point that we're risking a depression that is worse than our economy can take. We can no longer fund what we do as a nation. The Federal Reserve has lost its ability (which was destined to happen, if you study economics well enough to understand why) to control the market as it could. Its not a result of something in the last few years. Its simply the "snowball rolling downhill" effect that has happened over the past 50-60-70 years. We've tried to "control" something that is not controllable. You can contain it for some time, sure. But in the end, this control is simply an illusion. This stimulus package is just another straw on the already broken camel's back. The War in Iraq is a bag of bricks dragging behind the camel. We simply do not have the funds to pay for what we're doing & that is simply the truth. We, as citizens, paid over 1.2 Billion in income taxes last year & not one penny - not ONE PENNY - was spent on anything to aid the country/citizens. All of it went towards the INTEREST alone that our country owes on its credit. The most basic economic principle: 'When you live above your means, you are destined to live below your means' America, simply, has been living above its means - living on ever mounting credit. Citizens & the country alike. This credit is something that has taken years & years & years to catch up with us as a nation, but the time is nearing when it will break us down & nothing the Federal Reserve creates in terms of market rates, money controls, or government stimulus packages can stop what is happening. Its sad, yes, but it is true. Those folks who live in a class above where they should - with moms/dads working 2-3 jobs will be the hardest hit. They, quite simply, are living above their means - if they need to work this hard to simply pay for their house, their car, their children - they're simply living above where they are 'destined' to live at. That is economic fact. And, when nothing more can be done - a time that is approaching in the ensuing years - these will be the first who will live below their means. It is hard, I suppose, for the younger generations to really understand this - because they've never seen it & are mostly unaware that it really can happen. Not that I'm old by any means, far from it, but with my background in economics - I know the ramifications for what we've been doing as a country. Those who haved lived above their means (which is a SIGNIFICANT portion of the population now about $15,000 in debt) - will be living below their means. Layoffs will reach record highs, unemployment will soar even more, the dollar will eventually crash & in turn, the cost of living will skyrocket & there will be no jobs or money out there for most everyone to keep up. And that means MOST of you/your parents who view this site. The worst things that can happen right now: Fed drops rates, the War in Iraq continues, socialized medicine passes, tax increases, & more stimulus packages. I understand, during these times, its nice to get that check for about $1,000 - but that is part of the problem. You should NOT want the government handing you this check - because it is only going to make matters that much worse in the future. They're going to be bad, but the government, the war, and the Federal Reserve are only making the impending issue that much worse by trying to stave it off a bit longer. We need to simply let it come. People are going to lose their jobs, people's lives are going to be wrecked permanently. People are going to lose their homes, their cars, etc. The problem is - in human nature - we don't want this to happen & rightfully so - but, by trying to put off & escape the problem we are only going to ruin a deeper & more vast group of lives in the end.

ok, nevermind. I'll go for part of this, until my eyeballs pop out.

 

First bold point. I agree with that, but the thing you have to understand that most economic old school theories seem to forget is how intertwined the global economics are now. And, I think you're forgetting that as well... well, not forgetting but not discussing it.

 

Second bold point. Remember, as I just said, the global implications of what you're talking about. And furthermore, do you even understand what the money going through the system will do? It's sort of a dart on an elephant's ass, but it will stop the bleeding at least enough to raise GDP by 1%. That means growth, albeit small. Also, you have to remember that the dollar falling is part of a bigger global balancing act.

 

Look, I can't disagree that we've bitten off more then we can chew, but you have to remember the basic supply and demand rules here and remember the global implications. You can't just focus on the Fed monetary policy and then tell me you are Harvard economics material. I ain't all that, but I certainly can tell you that it's not quite the picture you're painting.

[Balta1701]

Ok...see, small problem. In your 2 previous posts, you said $1.2 billion. $1.2 trillion is a much more believable number.

[NUKE_CLEVELAND]

In FY 2006 we spent 406 billion dollars on interest for the national debt. Certainly no small number but not the 1.2 Trillion that was mentioned earlier. That wasn't even in the ballpark.

 

http://www.federalbudget.com/

[NUKE_CLEVELAND]

Actually, upon reading it again and again, I am finding more quibbles.

 

For example, the interest paid on the national debt last year was vastly more than $1.2 billion.

 

The general concept though, that its entirely possible that the combination of the Federal Reserve and the government itself will simply run out of stimulus bullets of the sort they've used to drag us repeatedly out of every recession since the big one in the early 80's due to the fact that we never really brought the system back into balance after the last recession. We kept piling on the debt in good times, and so that makes it harder for us to use deficit spending as a method of strengthening the economy in the bad times. And the Fed only has so many points of interest rates left that they can drop - if they dropped it the same amount that they did during the 2001 and after recession, they'd hit 0. Which does make it a shame that they couldn't construct a more effective stimulus package, because the system could well just not have enough in it to avert the coming slump.

 

 

One of the biggest disappointments I have with President Bush and the Republicans when they ran Congress was their utter failure to rein in spending. Supply Side policies grew the economy and with it revenues flowing into the Treasury grew very well but spending grew a whole lot faster and between that and Iraq there went the surplus that Clinton left us.

 

The nation's fiscal health is my biggest issue politically. Im not talking about Joe Dumbass who got foreclosed out of a home he had no business trying to buy anyway but the Government's addiction to wasting money. This is to say nothing of how our spending habit is being financed more and more by the likes of China and others like them. I have yet to see a candidate seriously address this issue and I'm really annoyed by that, almost to the point where I might take election day 2008 off this year.

[NUKE_CLEVELAND]

Two things:

 

From how I wrote it (to how I was thinking it in my mind) was two different things.

 

As I re-read it, I said "we paid 1.2 Billion", whereas I meant & was implying we could pay 1.2 Billion (or every penny of our income tax) towards the debt and STILL not pay off the entire debt-interest amount.

 

The other being - by showing that paying 1.2 Billion (or, all of our income tax total) and STILL not being able to pay off solely the debt-interest - was showing how far we, as a nation, have lived above our means. We, as a nation, can not continue to sustain our life quality at this rate, in that we cannot live on our 'borrowed time'.

 

As I said...please, take the economic principles (of which I know much more of than I do other 'policies') and understand that we simply cannot sustain the lives we lead as a nation. We cannot afford the war in Iraq, socialized medicine, stimulus packages, the Fed dropping rates, etc. The Fed simply has run its course & has become obsolete (until the recession/depression comes and goes) in our economy. There is not stopping what is coming and that is an economic fact. We are headed towards a recession, yes, but the fact is - in the long haul - we are not headed for simply 'this' recession we are headed for a much, much, much larger bubble burst in the semi-near future (meaning a few years as it is impossible to pinpoint an exact timeframe) than simply the impending recession & nothing we are 'used to' (Fed dropping rates, influx of money, stimulus packages, etc.) as a society can protect us from that. We have simply lived above our means, bit off more than we could chew, and will eventually be forced to live below our means in due time.

 

 

You and I agree on one thing for certain and that's the living above means point. The average joe schmuck out there either is completely ignorant about handling money or simply does not care. I have absolutely no sympathy for someone who gets wiped out because they spend too much. The government didn't really screw up when they went off the gold standard but when they got rid of the debtors prisons.

 

Speaking of the government, there will come a day when the budget melts down because we're too deep in the hole and that's when the Social Security and Medicare and such will go bye bye.

[mr_genius]

You and I agree on one thing for certain and that's the living above means point. The average joe schmuck out there either is completely ignorant about handling money or simply does not care. I have absolutely no sympathy for someone who gets wiped out because they spend too much. The government didn't really screw up when they went off the gold standard but when they got rid of the debtors prisons.

 

Speaking of the government, there will come a day when the budget melts down because we're too deep in the hole and that's when the Social Security and Medicare and such will go bye bye.

 

don't forget about free health care for everyone. thats could really push things over the edge.

 

From the Wall Street Journal

 

When Louis Brandeis praised the 50 states as "laboratories of democracy," he didn't claim that every policy experiment would work. So we hope the eyes of America will turn to Wisconsin, and the effort by Madison Democrats to make that "progressive" state a Petri dish for government-run health care.

 

This exercise is especially instructive, because it reveals where the "single-payer," universal coverage folks end up. Democrats who run the Wisconsin Senate have dropped the Washington pretense of incremental health-care reform and moved directly to passing a plan to insure every resident under the age of 65 in the state. And, wow, is "free" health care expensive. The plan would cost an estimated $15.2 billion, or $3 billion more than the state currently collects in all income, sales and corporate income taxes. It represents an average of $510 a month in higher taxes for every Wisconsin worker.

 

ouch

[southsider2k5]

Our market is and always will be a cycle. You are absolutely correct. But, what you don't understand - unless you are even more vested with knowledge of economics than myself (and no offense because I do doubt it, simply, because I have my Masters in it from Harvard) - what you are missing is that the Feds ability to really "affect" and "do what you're used to seeing it do" is really coming to a halt. The fact is that the Fed has toyed with the market so much, and created "artificial" boom & bust cycles that it has reached a point that it is beginning to not have any control over it. They are, and have, thrown a complete overload of money into the market that we simply cannot sustain it - no matter what we do at this point - because it has caused a ever increasing credit/deficit problem that can no longer be contained. They need to drastically raise the rates, get the foreclosures done, kick people out that have tried to live above their means & get an equilibrium back into the market. They can no longer "lower the rates" to help. They can no longer flood the market with money to help. The economy, based on advanced economic research, has reached a point that it is too late to do these things to help. Putting off the recession is only making the impending recession much, much, much deeper - to the point that we're risking a depression that is worse than our economy can take. We can no longer fund what we do as a nation. The Federal Reserve has lost its ability (which was destined to happen, if you study economics well enough to understand why) to control the market as it could. Its not a result of something in the last few years. Its simply the "snowball rolling downhill" effect that has happened over the past 50-60-70 years. We've tried to "control" something that is not controllable. You can contain it for some time, sure. But in the end, this control is simply an illusion. This stimulus package is just another straw on the already broken camel's back. The War in Iraq is a bag of bricks dragging behind the camel. We simply do not have the funds to pay for what we're doing & that is simply the truth. We, as citizens, paid over 1.2 Billion in income taxes last year & not one penny - not ONE PENNY - was spent on anything to aid the country/citizens. All of it went towards the INTEREST alone that our country owes on its credit. The most basic economic principle: 'When you live above your means, you are destined to live below your means' America, simply, has been living above its means - living on ever mounting credit. Citizens & the country alike. This credit is something that has taken years & years & years to catch up with us as a nation, but the time is nearing when it will break us down & nothing the Federal Reserve creates in terms of market rates, money controls, or government stimulus packages can stop what is happening. Its sad, yes, but it is true. Those folks who live in a class above where they should - with moms/dads working 2-3 jobs will be the hardest hit. They, quite simply, are living above their means - if they need to work this hard to simply pay for their house, their car, their children - they're simply living above where they are 'destined' to live at. That is economic fact. And, when nothing more can be done - a time that is approaching in the ensuing years - these will be the first who will live below their means. It is hard, I suppose, for the younger generations to really understand this - because they've never seen it & are mostly unaware that it really can happen. Not that I'm old by any means, far from it, but with my background in economics - I know the ramifications for what we've been doing as a country. Those who haved lived above their means (which is a SIGNIFICANT portion of the population now about $15,000 in debt) - will be living below their means. Layoffs will reach record highs, unemployment will soar even more, the dollar will eventually crash & in turn, the cost of living will skyrocket & there will be no jobs or money out there for most everyone to keep up. And that means MOST of you/your parents who view this site. The worst things that can happen right now: Fed drops rates, the War in Iraq continues, socialized medicine passes, tax increases, & more stimulus packages. I understand, during these times, its nice to get that check for about $1,000 - but that is part of the problem. You should NOT want the government handing you this check - because it is only going to make matters that much worse in the future. They're going to be bad, but the government, the war, and the Federal Reserve are only making the impending issue that much worse by trying to stave it off a bit longer. We need to simply let it come. People are going to lose their jobs, people's lives are going to be wrecked permanently. People are going to lose their homes, their cars, etc. The problem is - in human nature - we don't want this to happen & rightfully so - but, by trying to put off & escape the problem we are only going to ruin a deeper & more vast group of lives in the end.

 

That's funny. I had a finance prof, who just happened to have been a Rhodes scholar who went to Harvard, and he seemed to have a completely different point of view, and he wasn't a condesending jerk about it. Then again what do I know. I just studied economics myself.