The US Economy and Current Financial Crisis

[JPopStarKami 0]

Fucking Liberals.

 

No, fucking conservatives. These pieces of shit killed the fucking stimulus bill by focusing on trivial pork that actually would've done lots more good than harm, cutting out $16 billion in school funding, almost passing $3 trillion in tax cuts (see: completely throwing money away) over the next several years, cut $40 in badly needed state funding, cut out money for food stamps, cut out money for unemployment insurance, but instead, gave a $15,000 tax to affluent homeowners, which will do NOTHING at all to create jobs. Did I mention the multiplier for tax cuts is an astonishing .5? Their return on the economy is 50% of what they cost. That's assuming that Americans decide to spend some of it on things, instead of tucking it in the pillow that they coddle while watching the news. Aside from the fact that the DeMint Amendment already helps the unaffected, the $3 trillion it promises (equal to the size of the hole in the US economy, so says the Congressional Budget Office), its return will be a measly $1.5 trillion, maybe, while simultaneously creating a giant sink hole of a deficit. 87.8% of the Senate Republicans voted for this! A $3 trillion stimulus package would've been a dream come true, but it was almost in the form of tax cuts.

 

Fuck the conservatives, these cock sucking mother fuckers killed the stimulus bill because they couldn't stand the fact that they were problem, and government spending is a necessity right now. They couldn't understand the severity of the problem, and decided to gerrymander and filibuster until their plates were satisfied. They failed to act for the last 8 years, and they've failed to act in the last 3 months. Especially fuck Eric Cantor.

 

The entire Republican economic theory HAS FAILED. It's in shambles, and they're breaking the shambles into smaller shambles. At the time when America needed action the most, they failed. The failed, and they failed, and they failed, and they failed. As an economist, I am infuriated at both parties to falling victim to this kind of bullshit economic theory, and I'm infuriated at how little this bill will now do for the country. The conservatives put policy above pragmatism, tax cuts above sense. Because of them, thousands of Americans will stay out of work, the economy will drag its feet, and the next few years will be much harder than they should be.

 

Marvin, you're a piece of shit too. Go get your own opinions.

 

Honest question here: The bill won't be completely ineffectual because of what they cut out, will it? I mean it won't be as good as it could have been, but it's not completely worthless, is it? What exactly did they cut?

[MarvinisaLunatic 0]

They cut school spending! OMG! they were going to give Milwaukee Wisconsin's school district 90 million over 2 years for school construction despite the fact they have 15 vacant schools.

 

Just one example of the "OMG I CANT BELIEVE THEY CUT X OUT OF THE STIMULUS PACKAGE!"

 

 

[At Home 0]

Honest question here: The bill won't be completely ineffectual because of what they cut out, will it? I mean it won't be as good as it could have been, but it's not completely worthless, is it? What exactly did they cut?

 

Something is better than nothing. What are you referring to, exactly? There are a lot of things cut out of the package. MostHere's a list, from CNN.

 

Here are some of my favorites that got cut out:

 

• $2 billion for broadband

A $2b tax credit to Verizon wireless, essentially, that would have created an internet grid in areas that don't have wireless internet access. Also would've, hopefully, created a 100 mb/s standard with Verizon wireless, and thus, the rest of the industry. We're still horribly lagging behind in this facet. Thai citizens get free 500 mb/s internet. In a world where information is currency, an unplugged population isn't acceptable, especially in this country.

 

• $200 million for National Science Foundation

 

• $100 million for science

 

• $2 billion for Health Information Technology Grants

Speaks for themselves, but I think this also includes the maintenance and upgrading of buildings for the National Disease Prevention Center, which are in disrepair, and the facilities are on the edge of obsolete. So fuck this of course.

 

• $40 billion for state fiscal stabilization (includes $7.5 billion of state incentive grants)

 

This would've been the one of the best parts of the bill. Provides states, the agents that are hurting the most right now, with quick needed money, where it would've been doled out appropriately and in the right parts (we hoped). This would've essentially been the best and fastest means of rapid stimulus consumption. But instead, house Republicans voted instead to let the states cook for a little while longer. This money to the states would've acted as guards against cutting budgets, which could slay GDP. By the way, like I said before, I think this includes $200m to states to improve family planning services (OMG CONTRACEPTION NOT REALLY), which the Congressional Budget Office predicted would save $400m in unwanted pregnancies and such.

 

Krugman:

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

 

• $1 billion for Head Start/Early Start

 

• $600 million for Title I (No Child Left Behind)

 

• $16 billion for school construction

 

• $3.5 billion for higher education construction

 

Again, probably self-explanatory. Not good.

 

Keep in mind, these are only a few. There are many more on here. If they were kept in, many of them were long-term investments, which would've saved money and actually increased GDP. But these GDP-increasing measures consisted of most of what was cut out of the $86 billion. The projects that didn't increase GDP included the public health emergency fund, and a project that bought up foreclosed homes in neighborhoods, fixed them up, and turned them. What a waste of money that would've been! Nevertheless, I don't quite think that this bill should be looked at as a cure-all. American GDP is $16 trillion, but falling; this bill is (now more than earlier) more of a palliative bill to restore confidence in the economy. Confidence and expectation are two important anti-cyclical agents in economics, and turning public opinion around changes investors around. However, as you can see, a lot of the things cut out were also future planning initiatives (see first part of this paragraph), such as investing into schools, while others were necessary clean up jobs for the projects that had fallen behind in disrepair over the last 8 years (broadband, NDPC, national hybrid fleet). If there was ever a time to do this, the time is now. Now. Now. Now. The economy needs an injection of money to both restore our production capabilities and confidence. Also to catch up with the last 8 years.

 

So how good is the bill? Not good. The bill should've been much bigger than this, but I think you get the picture why it's not. The Senate Republicans can't understand economics, multipliers, and common sense. I can't stress the DeMint amendment enough as the surefire sign of total Republican idiocy. Obama addressed this issue as bipartisan, not as an intelligent or economic issue. This bill, to me, is pathetic. It's not close to what it should've been. It's something, but there are serious provisions cut out. Krugman estimates that the $86 billion in cuts cost the economy 600,000 jobs in the next few years.

[BUTT 0]

As an economist,

 

[NoCalMike 0]

The worst part is that now that the bill has had essential funding cut from it, it is going to be an even harder to sell to come back later and try to get that stuff funded.

[At Home 0]

They cut school spending! OMG! they were going to give Milwaukee Wisconsin's school district 90 million over 2 years for school construction despite the fact they have 15 vacant schools.

 

Just one example of the "OMG I CANT BELIEVE THEY CUT X OUT OF THE STIMULUS PACKAGE!"

 

Yeah because they were only required to build new schools, not improve their other ones. Not to mention that 90 million is, according to my calculations, .5625% of the total funds allocated to school construction. Let's not even talk about the condition of a lot of public schools across the nation either. What else did Glenn Beck talk about yesterday, Marvin? Do you just want to link us to his transcript? That would save a lot of time instead of just having to read your posts.

 

[stormy 0]

Nancy was just on don't think she is really done with it yet. She was talking about finding more for the Education deal..Its like a friend of ours said last night Tax credits for what....Till they get the people the jobs first then they can play with Tax credits. Without jobs the Tax credits are actually useless for anyone but the big money people

[At Home 0]

Tax credits shouldn't even be in there at all. Their multiplier is around .5 (that is, the return on the economy will be half as much as they cost, in addition to the fact that this bill is going to need to be repaid at sometime or another), and people will be more likely to save it than spend it, which is exactly what we don't need. It should be government spending totally. The tax cuts aren't even going to the people that are affected, and if they are, chances are they're going to be tax credits on the income tax, which some people pay none of, so therefore no tax credit applied. Of course, you do have the $15,000 tax credit for flipping houses, which is complete Republican blowing of the people who need this stimulus package the least. And what jobs will that create? Right.

 

Education funding and actual shovel-ready projects are going to create jobs, which should be the focus of the package. Investing for the future with certain projects are needed as well. It all sounds all airy and abstract, but these government jobs and projects should come now. For several reasons: a) time to bring America into the 21st century; b) these projects are going to save states money, which means less budget cuts, and more prosperity; c) increases GDP; d) these projects will create JOBS.

[stormy 0]

I would say it hasn't been signed yet.....Senate sent it back to the House and there a voice to and she is already griping about that...Real problem they have a an bunch of Republican Senators who have been in the Senate for years. They need to get swept out the door to retirement...Right now they need Jobs for people and I mean real jobs not part time jobs in fast food they need Industry jobs with some benifits. That would take care of a big deal of the Health Care. Right now and for the last several years about all there has been are partime jobs with no benifits no one has been going anywhere....Education in all levels need it. Have a cousin who just had to take one heck of a pay cut just in order to keep her job...Dallas as big a school system they got what 70,000 money cut the other day...Some teachers got laid off and other teachers with tenur who are getting down graded to teaching 2nd grade when there use to teaching more detailed classes...Nancy P said a little while ago Congress is going to look at it again and she has the votes this time around so will see what happens. I mean they passed there first bill with straight Democratic vote without any darn Republicans

[At Home 0]

The problem isn't that there are Old Guard Republicans (as in from the 1830s) in the Senate, the problem is the entire Republican economic philosophy is wrong. They were wrong about the financial industry, they're wrong about tax cuts, and they're wrong about government's role in this recession. They misunderstand that this is, as their own Milton Friedman put it, "unlike most cases." If you're going to count on the Republicans for things like health care, just look to the Clinton administration and you'll realize how much of a pipe dream that would be.

[MarvinisaLunatic 0]

They cut school spending! OMG! they were going to give Milwaukee Wisconsin's school district 90 million over 2 years for school construction despite the fact they have 15 vacant schools.

 

Just one example of the "OMG I CANT BELIEVE THEY CUT X OUT OF THE STIMULUS PACKAGE!"

 

Yeah because they were only required to build new schools, not improve their other ones. Not to mention that 90 million is, according to my calculations, .5625% of the total funds allocated to school construction. Let's not even talk about the condition of a lot of public schools across the nation either. What else did Glenn Beck talk about yesterday, Marvin? Do you just want to link us to his transcript? That would save a lot of time instead of just having to read your posts.

 

That was actually from Mike McConnell last week. As one caller lamented that its a shame Glenn Beck has a national show and he doesn't (though to be fair, Mike McConnell's show is national on XM 3 times a day and immediately follows Glenn's show on 165, not to mention he has FREE podcasts of his show on the 700 WLW site)

[SuperJerk 0]

I'm not saying I agree with this, but you gotta admit the way Fox reported this story was pretty fucked up:

1) Set the viewer up to hear something crazy by yelling things like "are you ready for this?"

2) Have one guy come out and completely misrepresent the numbers.

3) Have person after person pile on about how dumb this is.

[MarvinisaLunatic 0]

Its just like every other newscast.

 

Sorta like the 10:50 news teasers before the 11pm news "There's something in your home that could be killing you RIGHT NOW! Find out more at 11!"

[At Home 0]

"Obama's killing Wall Street, saying no private bonuses"

 

Fox News

[Big Ol' Smitty 0]

Worst American Birthdays, vol. 46

 

Talk-show host and Incredibly Strange Man Glenn Beck turns 45 today. A former substance abuser and sufferer from adult-onset Mormonism, Beck vaulted into media prominence from the back of Terri Schiavo, whom he had saddled up nearly five years before the Republican Party discovered her in early 2005. After riding the Schiavo case to its inevitable conclusion, the triumphant Beck earned the chance to bring his unique version of methodological schizophrenia to a national television audience in the early fall of 2006. Since then, he has received numerous awards for his work, including the coveted Fistulae Prize for Most Hyperbolic Reaction Ever to Routine Hemorrhoid Surgery (Transparent Drug-Seeking Behavior Division).

 

On occasion, Beck has described himself as a “rodeo clown,” a comparison we might find apt if only rodeo clowns were known for their bizarre, racist tirades about immigrants; their evidence-free insinuations about the loyalties of Muslim Americans; uninformed, documentary-length hypotheses about science; or their dueling preoccupations with Hitler and Antichrist, which provide them with readily interchangeable frameworks to characterize people with whom they happen to disagree. Most rodeo clowns, moreover, possess the additional virtue of not weeping when they consider the life of George Washington, nor do they spend their non-Red/Nazi/Antichrist-baiting moments writing bathetic holiday novels about handmade sweaters:

 

I began writing this story with the intention of sharing it with just my family. But something happened along the way: The story took over and wrote itself. There are things I spent years trying, and eventually succeeding, to forget that just spilled out of me -- events I never intended to share with anyone. It’s almost as if my sweater wanted its story told. Perhaps it had sat silent on a shelf long enough.

 

One might wonder if Glenn Beck’s talking sweater would be more or less of a douchebag than Glenn Beck himself. A living refutation of the principle that low ratings should pose an obstacle to career advancement, the erstwhile star of Headline News was recently offered a make-work position at the Fox News Channel after his contract negotiations with CNN foundered. As it happened, CNN was hoping to replace the late evening re-run of Beck’s program with a re-run of Lou Dobbs or -- in a move that would have actually expanded the 8 p.m. audience -- with a web cam trained upon a tub of guinea pigs.

 

See link for embedded links & picture:

http://lefarkins.blogspot.com/2009/02/wors...ays-vol-46.html

[MarvinisaLunatic 0]

Worst American Birthdays, vol. 46

 

Talk-show host and Incredibly Strange Man Glenn Beck turns 45 today. A former substance abuser and sufferer from adult-onset Mormonism, Beck vaulted into media prominence from the back of Terri Schiavo, whom he had saddled up nearly five years before the Republican Party discovered her in early 2005. After riding the Schiavo case to its inevitable conclusion, the triumphant Beck earned the chance to bring his unique version of methodological schizophrenia to a national television audience in the early fall of 2006. Since then, he has received numerous awards for his work, including the coveted Fistulae Prize for Most Hyperbolic Reaction Ever to Routine Hemorrhoid Surgery (Transparent Drug-Seeking Behavior Division).

 

On occasion, Beck has described himself as a “rodeo clown,” a comparison we might find apt if only rodeo clowns were known for their bizarre, racist tirades about immigrants; their evidence-free insinuations about the loyalties of Muslim Americans; uninformed, documentary-length hypotheses about science; or their dueling preoccupations with Hitler and Antichrist, which provide them with readily interchangeable frameworks to characterize people with whom they happen to disagree. Most rodeo clowns, moreover, possess the additional virtue of not weeping when they consider the life of George Washington, nor do they spend their non-Red/Nazi/Antichrist-baiting moments writing bathetic holiday novels about handmade sweaters:

 

I began writing this story with the intention of sharing it with just my family. But something happened along the way: The story took over and wrote itself. There are things I spent years trying, and eventually succeeding, to forget that just spilled out of me -- events I never intended to share with anyone. It’s almost as if my sweater wanted its story told. Perhaps it had sat silent on a shelf long enough.

 

One might wonder if Glenn Beck’s talking sweater would be more or less of a douchebag than Glenn Beck himself. A living refutation of the principle that low ratings should pose an obstacle to career advancement, the erstwhile star of Headline News was recently offered a make-work position at the Fox News Channel after his contract negotiations with CNN foundered. As it happened, CNN was hoping to replace the late evening re-run of Beck’s program with a re-run of Lou Dobbs or -- in a move that would have actually expanded the 8 p.m. audience -- with a web cam trained upon a tub of guinea pigs.

 

See link for embedded links & picture:

http://lefarkins.blogspot.com/2009/02/wors...ays-vol-46.html

I like the whole bit about ratings. Glenn has the 3rd highest rated Radio show and his show on FOX is getting better ratings at 5 pm than everyone but Hannity and O'Reilly even though they air later at night.

 

But this is getting off topic. sigh

[At Home 0]

The NY Fed released a paper (pdf) explaining another dimension that hasn't been discussed here so far: deflation. Specifically, the role of tax cuts in deflation. If you don't want to read the paper, you can read Justin Wolfer's summarization of it.

Key selections:

This boost to the nation’s productive capacity (from tax cuts) means that a tax-cut-based stimulus doesn’t do as much to narrow the gap between output and what we can produce.

 

Under normal circumstances, this doesn’t present a problem, because the Fed can lower interest rates to close this output gap. But right now, the Fed has set interest rates as low as they can go, and so different principles apply. Eggertsson’s concern is that a big output gap will lead inflation to fall, leading real interest rates to rise in the middle of the recession.

 

Lacking a historical grounding in which Eggertsson bases his claims, Wolfers offers this:

What should we take out of all of this? ...[One] lesson is that policymakers today should view with great deal of skepticisms any empirical evidence on the effect of tax cuts or government spending based on post war US data. The number of these studies is high, and they are frequently cited in the current debate. The model presented here, which has by now become a workhorse model in macroeconomics, predicts that the effect of tax cuts and government spending is fundamentally different at zero nominal interest rates than under normal circumstances.

 

 

 

Jeff Sachs, Five Points on the Critical State of the Economy:

 

What's point number one?

(1) There is no room, nor case, for broad-based personal or corporate income tax cuts or credits or rebates. ... The deficit is hemorrhaging... Despite some ideological claims to the contrary, there will be no scope for sizeable cuts in spending as a percent of GDP... We will ... need increased not decreased taxes. Finally, note that temporary tax cuts are likely to have little stimulus effect, even if they could be afforded;

 

Thanks, Jeff. Point number two:

 

(2) Immediate and sizeable spending increases in the stimulus package should be directed to a few areas: significant support for our crisis-ridden state and local governments, especially for health (Medicaid), education, and other urgent public services; income support (unemployment, anti-poverty including food stamps and child nutrition); health care coverage for the uninsured (as well as adequate Medicaid funding...); and a significant multi-year rollout of infrastructure of all sorts (roads, rail, other mass transit, ports, water, energy, broadband, etc.)

 

What's that, Jeff? Those were mostly things that the Republicans cut out of the stimulus package? Say it isn't so!

[Big Ol' Smitty 0]

U.S. Rep. Steve Austria said he supports a scaled-down federal economic-stimulus proposal, but the Beavercreek Republican told The Dispatch editorial board that the huge influx of money into the economy could have a negative effect.

 

“When (President Franklin) Roosevelt did this, he put our country into a Great Depression,” Austria said. “He tried to borrow and spend, he tried to use the Keynesian approach, and our country ended up in a Great Depression. That’s just history.”

 

Most historians date the beginning of the Great Depression at or shortly after the stock-market crash of 1929; Roosevelt took office in 1933.

 

http://www.dispatchpolitics.com/live/conte...ics&sid=101

 

[stormy 0]

Well like I said it isn't over till its over....Just saw on TV that both house and senate are back in behind close doors over this. They said there ae like 11Democrats who won't go with the Senate version...So it ain't over till its over....Now is the time to get the emails going to to the congress and senators and tell them to get the Darn Tax credits out of there...What good will tax credits be worth when people are losing jobs right and left...There were two GOP senators on this morning one from Tenn and not sure where the other one was...They seem to grab on to that darn thing Bush started that anyone wanting to buy a house should be able to buy one...So now there defaulting on there loans and he says they need to fix that .....Thats what McCain hollered all thru the campaign about buying up those bad loans????? Now why should my taxes and your taxes pay for there bull.... Worry about Tax credits after the people are back to work. No pay checks why even worry bout tax credits for the rich guys....

[NoCalMike 0]

It seems now the the Republican's strategy is to gut this package as much as they can, until it becomes a useless or very minimal package, and then when it doesn't do much because of how much it was modified from the original package, they can jump around slap some high fives and decry how horrible "spend and tax" liberals are.

 

The problem is that Democrats are bending too much and allowing this prophecy to take place. Harry Reid backed down like a spineless jellyfish when Republicans threatended to fillibuster. He SHOULD HAVE dared them to stand there all day and night and filibuster and let the american people witness them being obstructionists to any relief or recovery coming their way.

 

Any tax cuts(if any at all) proposed in this bill should being going to middle-class or lower, because those are the people that spend 100% of their incomes. And that is what stimulates the economy, when you take the cash and go out and buy things, not putting the money in a hedgefund or in the bank.

 

What the economy needs now is stimulation, not stagnation.

 

 

[stormy 0]

Hey NoCal Mike.........Take that post you just made and cut and paste it to your congressman and Senators... Its 3 exactly what they need to hear and read....and more like them...

[At Home 0]

Well like I said it isn't over till its over....Just saw on TV that both house and senate are back in behind close doors over this. They said there ae like 11Democrats who won't go with the Senate version...So it ain't over till its over....Now is the time to get the emails going to to the congress and senators and tell them to get the Darn Tax credits out of there...What good will tax credits be worth when people are losing jobs right and left...There were two GOP senators on this morning one from Tenn and not sure where the other one was...They seem to grab on to that darn thing Bush started that anyone wanting to buy a house should be able to buy one...So now there defaulting on there loans and he says they need to fix that .....Thats what McCain hollered all thru the campaign about buying up those bad loans????? Now why should my taxes and your taxes pay for there bull.... Worry about Tax credits after the people are back to work. No pay checks why even worry bout tax credits for the rich guys....

 

Please go ahead and read Geithner's plan, because I'm pretty sure that you have not.

[At Home 0]

It seems now the the Republican's strategy is to gut this package as much as they can, until it becomes a useless or very minimal package, and then when it doesn't do much because of how much it was modified from the original package, they can jump around slap some high fives and decry how horrible "spend and tax" liberals are.

 

No, the problem is that Republicans have a genuine disagreement about the nature of the stimulus package, hardly with its details. They don't want to see government get expanded into a larger role than it already is. There's also a motive, I'm sure, about the 2010 mid term elections.

 

Any tax cuts(if any at all) proposed in this bill should being going to middle-class or lower, because those are the people that spend 100% of their incomes.

This would've been true a year ago, but now this sentiment is incorrect. People now are virtually guaranteed going to be saving money, and not spending it.

 

And that is what stimulates the economy, when you take the cash and go out and buy things, not putting the money in a hedgefund or in the bank.

Which is exactly what they'll do. They won't spend the money that they get. If they're afraid that they're going to lose their job, they're not going to buy a big screen TV. They're going to save their money, tuck it under their pillow. This is why government needs to do the spending, because people aren't going to be stimulating the economy with their extra dollars, they're going to be stimulating by going and getting jobs that they may have lost. Chances are, these jobs are going to be in the public sector, which is no bad thing at all.

 

What the economy needs now is stimulation, not stagnation.

Really? No shit man. You should forward this to some people, there's real insight in this.

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Two of the smartest guys in the system, Nouriel Roubini and Nassim Taleb, talk about what needs to be done. The MSNBC assholes are pitching them softballs and ask them "SHOULD I PUT MY KID THROUGH COLLEGE," when they should've been talking about, you know, what needs to be done. The two are very intelligent, cipher through those idiots. Also, ten minutes long, but sit through it.

 

http://www.cnbc.com/id/15840232?video=1027496846&play=1

 

[stormy 0]

Well turn on MSNBC................

[At Home 0]

I don't have TV.

[stormy 0]

Well there is another child missing in Florida this morning. Between that and this stimulus package your missing a lot .

Bunch of Senators came on a while ago and reached an agreement with Congress that there going to vote on. They sure don't seem all that happy so they had to give up too..

 

But what ever is wrong with Florida alway losing there kids...This one is a little 5yr old cute thing.

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Half of the post was on some lost Floridian?

[MarvinisaLunatic 0]

200 Economists who don't agree with Obama's claim that Government has to fix the economy

 

Someone should tell them that Obama closed the debate on this already.

 

 

[Big Ol' Smitty 0]