Quote Originally Posted by Lyle View Post
Quote Originally Posted by Kirkland Laing View Post
If you "let things be" the entire financial system will collapse. If government hadn't stepped in to bail out the banks with the KLGFSRP we'd already be back to the barter system. It may well work perfectly well in North Carolina but in the rest of the world we prefer using hard currency to settle our transactions. I don't want to have to carry round half a pig or a bushel of whatever it is you people make bushels out of to buy something I want.

Bank lending and business investment have come to a standstill. Consumer spending is dropping off a cliff and as more businesses are unable to get credit from the non-lending banks they'll lay more people off, which obviously cuts consumer spending. Business then slashes payroll even more and generally cuts costs so they can cut their prices to attract spending, but as they keep cutting prices consumers wait to spend as they know prices will fall further. We call this "deflation" and it's what happened from 1930 onwards to cause the Great Depression. That's why the government is spending money right now -- nobody else is, and if somebody doesn't keep spending the economy will fall into a deflationary death spiral.

So taking all this into account do you still want the government to just back off and let the market sort itself out? Or would you support at least making an attempt to avoid Depression?
The actions taken in this bill won't do a GOD DAMN THING! The nonpartisan CBO even said so, they said this bill will HURT us in the long run.

How do you get people to SPEND? You cut taxes....simple stuff. The first stimulus bill didn't work why the hell should this one? The market didn't have such a rosey view of the bill.

But you're always right and you're always annoying......well one of the two is 100% true
The nonpartisan CBO said that if the stimulus works it'll cut future GDP growth by a fraction of one percent in a couple of years for a period of a couple of years. But if the stimulus fails or if the government does nothing then GDP will drop by up to 25%. What happened here was that the GOP and the media took the one remotely negative thing the CBO had to say about the stimulus and created a bs narrative about it, how the stimulus would hurt the economy. Anybody who's done Econ 101 knows how ridiculous this is but apparently most of the congressmen and senators in Washington never took Econ 101. Or they're just grandstanding for political purposes.

When you cut taxes, even in normal times, a big chunk of that money is saved and not spent. And the GOP only want to cut taxes significantly for people earning $10 000 a week/day (see above.) Economists, crucially Lyle, people who know what they're talking about, estimate that about 30% of every tax cut is spent. And that's in normal times. In times like this even less. However government spending in infrastructure/unemployment benefits/food stamps etc. is spent and then spent again, creating economic growth. Here's the bang-for-a-stimulus-buck table again, try reading it :




What part of this don't you understand?

I think you just can't bring yourself to accept that anything the other side do could be the right thing. You didn't blink an eyelid while George Bush handed ten trillion in welfare cheques to the socialist bankers but when Obama spends 10% of this to try and save the economy Bush screwed from going into meltdown you suddenly find fault with what he's doing.

Never mind, Obama fucked up the bank bailout today. His new plan is doomed to failure and will eventually have to be scrapped and the banks nationalised. I'll post about this when I know the full story which will take a day or three. But Obama screwed up big time today. It'' now cost trillions more to right the system than it otherwise would have, abd that's the best-case scenario.