The Republican Thread

[lostfan]

Obviously big spending and deficits don't work either (aka GW Bush). Surprisingly enough, wasting money doesn't help the economy. You don't want to continue the failed Bush regime policies right? I demand change and hope!

 

I guess we could get a new deal type thing and hope WWIII breaks out and have the rest of the world in shambles except the US; like WWII. Yea lets go for that one. Use the new deal combined with world war blueprint to get us out of this economic downturn; as the new deal alone doesn't work.

It also helps when other world powers owe you a s***-ton of money like they did after both of those wars.

[caulfield12]

If you go into the future, the only things that Bush did that could be considered Republican are cutting taxes on the rich, cutting back regulations further and going to war.

 

Everything else, you'd think he was a liberal Democrat, lol, or WORSE! (I say that as a Democrat).

 

Go back to the 90's when Greenspan, Wall Street and the bond traders pleaded for a balanced budget. Now of all that's gone out the window.

 

If it's not stagflation, it's deflation. We've pumped so much money into the world economy with our low interest rates that it didn't have a final destination, ending up seeking higher return in high-risk areas like derivatives and credit default swaps.

 

Just like the early 80's with the Japanese, the Chinese, Singaporeans, Dubai, etc., have become big holders of US bonds as well as stock market investments and "rescuers" with their sovereign wealth funds.

 

It's a complete mess, to say the least. We can never seem to find that moment when the worst is over, whether it's the stock market, banks collapsing or now the auto manufacturers.

 

One thing is obvious, it will take more than the IMF, World Bank, G7/8, G20....all the countries we need to work together, as problems can't be isolated in just one country or region. There's the destabilizing Middle East situation now....the falling price of oil taking a toll on Russia and the OPEC states. Boom and bust. Look at countries like Iceland, Hungary or Latvia. At least European countries tied into the EURO system have been somewhat isolatd from the problem.

 

So you can point at the lax regulation of Freddie Mac and Fannie Mae, Greenspan's forcing everyone in the housing market...we either have to spend our way out of this (when everyone's grown concerned with debt) or just put our head in the sand and hope the problem goes away. Highly unlikely. Consumer purchases can't drive this recovery now, it has to be driven by government monetary and fiscal policy. Let's just hope they get it right.

Edited January 3, 2009 by caulfield12

[mr_genius]

If you go into the future, the only things that Bush did that could be considered Republican are cutting taxes on the rich, cutting back regulations further and going to war.

 

Everything else, you'd think he was a liberal Democrat, lol, or WORSE!

 

Actually, starting/getting involved in wars is traditionally more of a Democrat tendency. It's a very recent development in the GOP. It's part of the neo-con philosophy that government spending can fix any economic problem, fighting wars and nation building should be top US priorities, and a large overbearing government is good. Many of the neo-conservative principles are heavily barrowed from liberalism. GW even went as far as to nationalize the banks and auto industry.

Edited January 3, 2009 by mr_genius

[EvilMonkey]

The local and state governments could get better right away if they were able to get rid of pensions. Why do a majority of taxpayers have to deal with social security while the people we pay our taxes to get a pension? Especially one that is woefully underfunded and over extended? There is no need to any of them to be getting anything more than the average worker, especially the 6 figure paycheck people. Declare a bankrupcy reorganizatin and eliminate the pensions now. teachers, police, sanitation workers, state reps, all of them on social security. maybe then they might actually give a damn about keeping THAT solvent as well.

[NorthSideSox72]

The local and state governments could get better right away if they were able to get rid of pensions. Why do a majority of taxpayers have to deal with social security while the people we pay our taxes to get a pension? Especially one that is woefully underfunded and over extended? There is no need to any of them to be getting anything more than the average worker, especially the 6 figure paycheck people. Declare a bankrupcy reorganizatin and eliminate the pensions now. teachers, police, sanitation workers, state reps, all of them on social security. maybe then they might actually give a damn about keeping THAT solvent as well.

I am all for the elimination of pension plans.

 

However, I assume you are saying you go off the pension plans with new employees, right? Or stop contributing to them going forward? I hope you aren't suggesting that its a good idea to walk up to teachers, cops and firefighters, who have been out there for us for 20 years, and say "sorry, that whole chunk of money we've said is there for you, and that you contributed to? Yeah, that's gone. Have a nice retirement." Because that would be so beyond s***ty, its indescribable. That is the last thing I'd want to see the government do.

 

[caulfield12]

from salon.com

 

 

 

Are conservatives right? Did the New Deal's "massive government intervention prolong the Great Depression?"

 

Ummm ... no.

 

On deeper examination, I discovered that the right bases its New Deal revisionism on the short-lived recession in a year straddling 1937 and 1938. But that was four years into Roosevelt's term -- four years marked by spectacular economic growth. Additionally, the fleeting decline happened not because of the New Deal's spending programs, but because Roosevelt momentarily listened to conservatives and backed off them. As Nobel-winning economist Paul Krugman notes, in 1937-38, FDR "was persuaded to balance the budget" and "cut spending and the economy went back down again."

 

To be sure, you can credibly argue that the New Deal had its share of problems. But overall, the numbers prove it helped -- rather than hurt -- the macroeconomy. "Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms [while] the U.S. economy grew at average annual growth rates of 9 percent to 10 percent," writes University of California historian Eric Rauchway.

 

What about the New Deal's most "massive government intervention" -- its financial regulations? Did they prolong the Great Depression in ways the official data didn't detect?

 

Nope.

 

According to Federal Reserve chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression." In fact, even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corp. was "the structural change most conducive to monetary stability since ... the Civil War."

 

OK -- if the verifiable evidence proves the New Deal did not prolong the Depression, what about historians -- do they "pretty much agree" on the opposite?

 

Again, no.

 

As Newsweek's Daniel Gross reports, "One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression."

 

[kapkomet]

I think it's very difficult to compare the New Deal to now.

 

There's no way that the New Deal PROLONGED the Great Depression. But, I'm not sure it was the miracle it was percieved to be as only WWII truely brought us out of the Depression.

 

[caulfield12]

Well, maybe every American with credit card debt will join together and refuse to pay off their cards until the government bails them out too....we wouldn't want all the card companies to go bankrupt and be replaced by PayDay loan operations, would we?

 

It is interesting, at the end of World War II, we were a lender to the world...and now we're the biggest debtor nation on earth.

 

About $2.4 trillion of the outstanding US debt goes to the following...

Of the total foreign holdings, Japan owns 24% and China owns 20%. The U.K., Brazil and the oil exporting countries own about 6% each. The Bureau of International Settlements suspects that much of the holdings by Belgium, Caribbean Banking Centers and Luxembourg (8%) are fronts for various oil-exporting countries or hedge funds that do not wish to be identified. from useconomy.about.com

 

http://useconomy.about.com/gi/dynamic/offs..._9YleiDDVkkQqUg

Edited January 3, 2009 by caulfield12

[mr_genius]

I think it's very difficult to compare the New Deal to now.

 

There's no way that the New Deal PROLONGED the Great Depression. But, I'm not sure it was the miracle it was percieved to be as only WWII truely brought us out of the Depression.

 

I agree.

[StrangeSox]

I think it's very difficult to compare the New Deal to now.

 

There's no way that the New Deal PROLONGED the Great Depression. But, I'm not sure it was the miracle it was percieved to be as only WWII truely brought us out of the Depression.

 

Here's something I never fully understood about that. So massive government spending, brought on by the need for military hardware, is what really ended the Depression, right?

 

So why couldn't the government cause the same effect with massive spending on non-military goods that will actually benefit society in the long run (like infrastructure, for instance)?

[kapkomet]

Here's something I never fully understood about that. So massive government spending, brought on by the need for military hardware, is what really ended the Depression, right?

 

So why couldn't the government cause the same effect with massive spending on non-military goods that will actually benefit society in the long run (like infrastructure, for instance)?

That's what they are trying now. The difference is between then and now is we have WAY more debt to start with. That's the dangerous part.

[EvilMonkey]

I am all for the elimination of pension plans.

 

However, I assume you are saying you go off the pension plans with new employees, right? Or stop contributing to them going forward? I hope you aren't suggesting that its a good idea to walk up to teachers, cops and firefighters, who have been out there for us for 20 years, and say "sorry, that whole chunk of money we've said is there for you, and that you contributed to? Yeah, that's gone. Have a nice retirement." Because that would be so beyond s***ty, its indescribable. That is the last thing I'd want to see the government do.

I'm for stopping it as it stands right now. What you contributed/earned up to now is yours, but not one dime more goes in. So nobody new gets any type of pension at all. People still working who have contributed to it get what they put in back to put in their own 401k or whatever. Also, I am sure someone will correct me if I am wrong on this, but I thought I heard that the governemtn employees who contributed to whatever pensin plan it was they had didn't have to pay social security. if that is true, then they would have the choice to take the pensionmoney and apply it to social security, or put it in a 401k and start their social security from now forward. But however they do it, it needs to stop now, on all levels.

 

 

[kapkomet]

Theycould pay out present value of pensions and reduce future value of liabilities in the trillions. Then, roll it over in another retirement vehicle (401K, IRA, etc.). At least at that point they get the present net value. Still s***ty, yes, but that would be a compromise compared to "so sorry, so sad" which is likely to happen anyway pretty soon.

[EvilMonkey]

Theycould pay out present value of pensions and reduce future value of liabilities in the trillions. Then, roll it over in another retirement vehicle (401K, IRA, etc.). At least at that point they get the present net value. Still s***ty, yes, but that would be a compromise compared to "so sorry, so sad" which is likely to happen anyway pretty soon.

Especially here in Illinois with teachers and the admin people. I know a distict admin who in his last 4 years of work got a $12,000 a year raise in each. That boosted his final pay to well over $200k a year. His pension was based on the average of his last 4 years of pay, or his highest 4 consecutive years of pay, so that boost helped his penion greatly. But what alot of people don't realize is that while the local districts pay the salaried, the STATE pays the pensions, so that one distict just screwed every taxpayer in the state by increasing his pay at the end for pension benefits. If he is retiring, why can't he retire on social security and personal 401k's like everyone else? Having to continue to pay this guy 6 figures in retirement is beyond crazy. I don't care if he is a family friend, i don't like it.

[mr_genius]

Here's something I never fully understood about that. So massive government spending, brought on by the need for military hardware, is what really ended the Depression, right?

 

So why couldn't the government cause the same effect with massive spending on non-military goods that will actually benefit society in the long run (like infrastructure, for instance)?

 

A lot more variables to add. The US was not in massive debt then, the US was lending money not sinking in debt, after the war the US was the only major power untouched, other countries needed to rebuild, and history shows that winners of something big like WWII are going to benefit. We are more like

post-WWI Germany right now with our debt levels; their currency collapsed and the country really fell apart.

 

 

Just a question here, how much is too much deficit spending? or is there no such thing. We have already thrown 3 trillion at this mess, I just think we are going to see an absolute financial disaster if we drop endless money into this. We have already surpassed the new deal spending levels, we are going to completely blow away the new deal as far as spending.

 

here's an article stating the new deal was way too small, and this is the kind of thinking that is really dangerous.

 

http://www.csmonitor.com/2008/1209/p01s03-usgn.html

 

When Obama announced those "few key parts" of his plan on Saturday, he called them "the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s." That's when the federal government invested $25 billion and built more than 41,000 miles of roads, highways and bridges over a 20-year period. In today's dollars, that would be the equivalent of $197 billion investment.

How much Obama will spend on infrastructure is unknown. His economic team is still "crunching the numbers," in his words, on the economic-recovery package, which would include far more than infrastructure and could end up costing $700 billion or more

Edited January 3, 2009 by mr_genius

[Balta1701]

A lot more variables to add. The US was not in massive debt then, the US was lending money not sinking in debt, after the war the US was the only major power untouched, other countries needed to rebuild, and history shows that winners of something big like WWII are going to benefit. We are more like

post-WWI Germany right now with our debt levels; their currency collapsed and the country really fell apart.

 

 

Just a question here, how much is too much deficit spending? or is there no such thing. We have already thrown 3 trillion at this mess, I just think we are going to see an absolute financial disaster if we drop endless money into this. We have already surpassed the new deal spending levels, we are going to completely blow away the new deal as far as spending.

 

here's an article stating the new deal was way too small, and this is the kind of thinking that is really dangerous.

 

http://www.csmonitor.com/2008/1209/p01s03-usgn.html

A couple counter-points. First of all...dramatically surpassing the New Deal in spending is the right thing to do. Keynes didn't publish his work on the relations between government spending and economic stimulus until 1936. Most of the New Deal was actually paid for as we went along, rather than paid for by borrowing, which in a crisis is the wrong way to do it. And, around the time of the '36 election, we actually cut back significantly on those programs in an effort to rebalance the budget, and the economy faltered even further as a result. It was only the government going massively in to debt to finance a program known as the 2nd world war which really involved the government increasing its debt load. In terms of the size of the new deal...it's not how much was done in the deal, it's how much of it was done as a government directed stimulus.

 

And secondly, you ask the question...how much is too much deficit spending. There's actually a fairly simple graph out there that helps give an answer to that question...the size of the debt relative to the size of the economy. I made sure to get one that showed WWII on it, because that might give some scale as to how much the government can borrow and how much the government may need to borrow to get past a crisis like the depression.

 

[NorthSideSox72]

I'm for stopping it as it stands right now. What you contributed/earned up to now is yours, but not one dime more goes in. So nobody new gets any type of pension at all. People still working who have contributed to it get what they put in back to put in their own 401k or whatever. Also, I am sure someone will correct me if I am wrong on this, but I thought I heard that the governemtn employees who contributed to whatever pensin plan it was they had didn't have to pay social security. if that is true, then they would have the choice to take the pensionmoney and apply it to social security, or put it in a 401k and start their social security from now forward. But however they do it, it needs to stop now, on all levels.

That's fair enough. Better than just taking the money and running, as I thought you were suggesting.

 

[mr_genius]

I do not agree with this at all. The truth is the spending output during a massive world war is a cataclysmic event, wanting to spend compartively on government waste is epic in it's potential for disaster. Under such a philosophy the government should always spend at highest possible levels, as using a comparison in which the relations of spending are of no equal. By these standards we will easily be 25 trillion in debt by the end of the Obama administration if we spending to levels of GDP during WWII. This is not sustainable and a guaranteed prescription for ruin. If such levels of spending are used we will see a complete collapse in currency. During WWII spending we were not in debt, we were financially sound. Spending levels that high as compared to GDP will make the great depression look like a cake walk.

[Balta1701]

I do not agree with this at all. The truth is the spending output during a massive world war is a cataclysmic event, wanting to spend compartively on government waste is epic in it's potential for disaster. Under such a philosophy the government should always spend at highest possible levels, as using a comparison in which the relations of spending are of no equal. By these standards we will easily be 25 trillion in debt by the end of the Obama administration if we spending to levels of GDP during WWII. This is not sustainable and a guaranteed prescription for ruin. If such levels of spending are used we will see a complete collapse in currency. During WWII spending we were not in debt, we were financially sound. Spending levels that high as compared to GDP will make the great depression look like a cake walk.

Several of your points there are simply false and are proven so by my graph above.

During WWII spending we were not in debt, we were financially sound.

As a percentage of GDP, take a look. The starting point in 1940 pre-war is actually higher than our current public debt as a %age of GDP right now (because a chunk of the other debt is held in assets that have tangible value)

 

Secondly, there is no economic theory at all which states that government money spent on a public project is going to be a less efficient use of money than private money spent on a private project. The thing which is less efficient is when the government spends its money on a private product, i.e. the government decides which car you're going to buy...unless the economy of scale effect winds up being larger. For example, the government spending money on things like a highway or on an improved electricity grid can provide economic benefits that are actually larger per unit money than what you get if the private sector spends a similar amount of money...but that all depends on how effective the decision makers are. On that, we'll see.

 

3rd...the value of the dollar is not solely affected by government spending. A key factor is also the unsustainable trade deficit. That, more than anything else, is what is driving the currency downwards.

[mr_genius]

Several of your points there are simply false and are proven so by my graph above.

 

As a percentage of GDP, take a look. The starting point in 1940 pre-war is actually higher than our current public debt as a %age of GDP right now (because a chunk of the other debt is held in assets that have tangible value)

 

Secondly, there is no economic theory at all which states that government money spent on a public project is going to be a less efficient use of money than private money spent on a private project. The thing which is less efficient is when the government spends its money on a private product, i.e. the government decides which car you're going to buy...unless the economy of scale effect winds up being larger. For example, the government spending money on things like a highway or on an improved electricity grid can provide economic benefits that are actually larger per unit money than what you get if the private sector spends a similar amount of money...but that all depends on how effective the decision makers are. On that, we'll see.

 

3rd...the value of the dollar is not solely affected by government spending. A key factor is also the unsustainable trade deficit. That, more than anything else, is what is driving the currency downwards.

 

No they are not false at all. You are also ignoring a key factor, you must look at the overall increase in spending during WWII as compared to the spending levels at the time. Merely stating percentages while ignoring the base of spending up which the increases are built upon is not a good evaluation. You are suggesting we have a comprable increase in spending as for WWII. You are suggesting very dandgerous spending levsls as our current spending levels are a much higher percentage of GDP than they were pre-1940. You are suggesting a 20% increase in spending compared to GDP which would bring us to 50%. As you can see, WWII increases went from 15% to 35%. And this chart only goes to 2003, our deficit spending has ballooned since then. We can sustain a massive spending increase, it's just not possible.

 

 

Edited January 4, 2009 by mr_genius

[mr_genius]

http://blogs.abcnews.com/politicalpunch/20...elect-make.html

 

Prez-Elect Makes New Pitch, Promises on Job Creation -- Including 600,000 New Government Employees

 

No. 1 goal of my plan ... is to create three million new jobs, more than 80 percent of them in the private sector.”

 

If you do the math: 20 percent of three million means 600,000 new government employees.

 

of course. what a joke this is. the other 80% will be pay to play bulls*** given out to corrupt unions and other organizations that paid enough bribes to the Democrats.

Edited January 4, 2009 by mr_genius

[southsider2k5]

Here's something I never fully understood about that. So massive government spending, brought on by the need for military hardware, is what really ended the Depression, right?

 

So why couldn't the government cause the same effect with massive spending on non-military goods that will actually benefit society in the long run (like infrastructure, for instance)?

 

There is one thing the politicians are missing, probably because it is not in their agenda... WWII biggest effect was to reduce the labor pool so that there weren't so many people looking for work.

[caulfield12]

http://www.nytimes.com/2009/01/04/opinion/...=2&emc=eta1

 

Very good article by Michael Lewis (Liar's Poker) about the current Wall Street disaster...worth reading.

 

Lost amid all these buyouts is the fact that almost nothing at all has been done to help anyone this would be considered below "investor class" Americans. The SEC and FED are more concerned with propping up the stock market than addressing the real endemic problems in the first place. Paulson, in particular, will end up looking very foolish when all this is over and he's called to account for what he's done.

Edited January 5, 2009 by caulfield12

[lostfan]

caulfield, offhand I can't recall if you've read and acknowledged the pinned thread at the top of the Filibuster. If not, please do so.

[mr_genius]

http://www.nytimes.com/2009/01/04/opinion/...=2&emc=eta1

 

Very good article by Michael Lewis (Liar's Poker) about the current Wall Street disaster...worth reading.

 

Lost amid all these buyouts is the fact that almost nothing at all has been done to help anyone this would be considered below "investor class" Americans. The SEC and FED are more concerned with propping up the stock market than addressing the real endemic problems in the first place. Paulson, in particular, will end up looking very foolish when all this is over and he's called to account for what he's done.

 

Paulson and everyone in Congress that voted for that bailout bill.

Edited January 5, 2009 by mr_genius