Stop Bashing the Obama Administration's Stimulus Spending Policies

reply to post by KarlG


Firstly this is not Obama's plan. This plan has been going on strong throughout the Bush administration and is simply being taking to the next step by Obama.

Your following an economic illusion as the Elite's entire plan is. Let's just focus on the 800 billion dollar TARP plan for simplicity. Most of our new spending bills are modeled after this anyway.

The idea is that Government can "create" jobs through debt spending. Right?

Wrong. Government spending of debt money does not result in any net creation of jobs at all. It takes wealth from private citizens and forces them to pay for centrally-planned jobs. The government can only take from someone to pay someone else. There is nothing added to the system. Get it?

Here's a short story and the best I've heard it explained.

Consider three people living in an island, running their own tiny economy. Bob, Sarah and Charlie are all farmers who grow their own food, making an honest living by working 8 hours a day to create the food, clothing and shelter they need to survive. One day, Charlie decides he wants to be the Governor of the island. He tells Bob and Sarah that as Governor, he'll bring wealth and prosperity to them both. Initially, that sounds good, so Bob and Sarah agree to elect him Governor. Then it turns out that the Governor is busy governing things on the island (i.e. deciding what everybody else should do), so he has no time to grow his own food. So he initiates a 50% tax on the productivity of Bob and Sarah, confiscating their food, clothing and resources in order to provide those items to himself without actually having to work for them. (This is a key function of government: To confiscate wealth from those who really work and redistribute it to those who pretend to work.) Now, Bob and Sarah each have a choice: They can either work twice as much in order to pay their tax and still have enough to survive, or they can quit working altogether and hope to get aid from the government. Sarah decides to work twice as much, so she starts working 16 hours a day, earning enough to pay the taxes to the Governor while still having some remaining food to feed herself and her family. Bob, on the other hand, decides he doesn't want to work 16 hours a day and would rather do nothing and apply to the Governor for "public assistance." So now on this island of three people, where each of the three people used to work to feed themselves, only one person is working (Sarah), and the other two are living off the wealth that's being confiscated from her efforts. One day Charlie, the Governor, says he has a solution! He says he will write a series of IOUs to Sarah in exchange for an extra portion of her food and other belongings. Using that currency borrowed from Sarah, he says he will "create a new job" for Bob and "end unemployment on the island." Sarah reluctantly agrees and turns over the fruits of her labor to the Governor, who injvents a job for Bob. "Bob," he says, "We need to build a bridge across this island!" And with the wave of his hand, he puts Bob to work creating a bridge (that nobody needs) while getting paid by wealth that has been confiscated from the only person on the island still working (Sarah). So now we have ONE person actually doing productive work, a second person living off the confiscated wealth of that person (the Governor), and a third person working a useless job that's now paid for by the first person as well. This means we have ONE person supporting THREE. And while the island is at "full employment," two out of three people are actually doing jobs that don't materially contribute to the wealth and abundance of island's residents. And the best part? Guess who gets to work even more to pay back the IOUs that the Governor traded with Sarah? Well Sarah, of course, because those IOUs are public debt paid back by taxpayers.

In the end all Obama's plan is doing (As he fires GM's CEO, steals money from Chrysler's bondholders, puts together Public-Private Investment Partnerships) is privatize gains and socialize losses. They are looking to the taxpayer to pay this stuff back. Get it?

Your equation leaves out interest and hyperinflation.

Hyperinflation is not just people raising their prices. Inflation is when the amount of its total money and credit available over a period of time (the demand) grows at a rate in excess of the rate of growth in its total value of goods and services produced over that period of time (the supply), which valuation is based on price levels in effect at the beginning of that period of time. Get it?

We have a central bank called the Fed, and it presides over our banking system, which is a fiat-money, debt-based, fractional reserve system. The Fed increasing total money and credit (M3) at a rate of 18% while our GDP is contracting at a rate of minus 6%. That is a 24% differential, and that means that the amount of goods and services being produced has an ever-growing supply of money chasing after it, money and credit that is growing at a pace that is 24% more than the pace at which goods and services are growing. To understand what that truly means you need to understand fractional reserve banking, and simply how money is created.

[EDIT] Lastly all this government spending is being borrowed. Who's the lender? Future generations, as in our kids and grandkids. They are the ones who will beaten over the head with massive debt from all this trillions and trillions of spending. The interest is compounding, the central banks are licking their chops, we are enslaving our future.

[edit on 8-7-2009 by Xtinguish]

Originally posted by Karl
reply to post by DaddyBare

 

What I want to know from the govt is...

WHERE HAS THE MONEY GONE TO?

Making the plans is one thing. From the academic, economic point-of-view, the plans are sound, indeed. The academics ARE right.

But APPLICATION is a different thing.

And right now, the money is being "eaten up" somehow. Where is it going to? HOW is the money being applied?

Does anyone know?

Instead of focusing on the plans Obama is making - which ARE good, again - let's focus on ACCOUNTABILITY. Which really is the root of all problems we're facing today - accountability.

I cant answer your question until later today when the Government Accountability Office issues their report on where and how the money is being used...

but we do know a few details... some of the proposed projects required states put out matching dollars... want the new high speed rail to come through your state? then you get to split the costs with the feds...guess what's not being built???
we know that four states rejected the money set aside for unemployment altogether, according to ProPublica, a nonprofit news organization. In some cases, states worried that accepting the money would require them to sweeten the benefits they offered laid-off workers at a prohibitive cost to the state. states have to pay that money out of pocket then ask the feds for reimbursement...
We know that sometime today the House Committee on Oversight and Government Reform, which has been investigating the effectiveness of the stimulus. will hear the stories like how In Flint, Mich., for example, new schools haven't been built in 30 years but the school superintendent told auditors that he would use federal money to cope with budget deficits rather than building new schools or paying for early childhood education.
We know 1/3 of the money has already been ear marked but just under half isn't in check form but in tax credits...when you have zero income a tax credit does little good ya know...

Originally posted by mental modulator
reply to post by KarlG

 

Well Karl you jump right in the fooking deep end with this one my man

I appreciate the effort, but you will catch my drift once this thread is visited by "THEM" :lo:

Basically its all political leveraging here, formulas and logic take a back seat to wit and opportunistic pouncing.

Nice work on the OP work wise, you brave person you

Well I'm glad to see that many of you chicken wrestlers have been conducting yourselves as chicken wrestlers do. Hopefully next time there is a Bush on a ticket you guys can refrain from doing it... Unfortunately this would require some looking in the mirror and some level of self accountability. Hardly a strong suit as we trample over a long hard fought mess that the last custodian clocked out upon...

OP comes with formulas and you guys hurl garlic bulbs, but this only serves as a tool, I know the game. Garlic chicken by way of proxy

In some cases it is nice to see a tad bit of civility, otherwise it is great to see emotional flailing that is allegedly only reserved for "librals".

yes sir

reply to post by KarlG


These people look at the national economy like it is a joint bank account you got a free toaster for.

This is what you are up against to explain. They have no idea where the money came from or what it is wrapped in. Or if is even money.

Like the people who make statements: well if a family spends more then they earn they cant borrow money to save their house...

I mean really. Its like trying to explain how to land a shuttle on the moon to a cat.

Anyone who thinks that an economy can be turned around in six months is living in an alternate reality. Talk about unrealistic.

People here expect more out of Obama more then most people expect out of God.

But when this crisis first happened, they were all blaming homeowners for buying loans they could not afford.
obama himself mentioned several times that it will get harder before it will get easier. That it is a long road. But the microwaves society thinks it should of been fixed by 2/1.

All they do is come to ATS and blame blame blame.
Don't offer any solutions or reasonable discussions Just anger.

They like to put up paradoxes: such as you are not allowed to mention Bush's failings anymore but they can continue to compare Obama to Bush. Shows how trustworthy they are, throwing one of their own to the wolves.

They hate every single one of Obama's policies, yet they get angry that he doesn't keep every single campaign promise, like that is ever possible. Like any president ever has. Even though his track record is admirable.

They nitpick on things like teleprompters, ipods, and call him a terrorist, though that tactic helped the GOP lose the election. It is a major sign of insecurity, when they look for every little thing wrong. And make grand sweeping accusations and statements without even looking at the issues.

The reason you see nothing but angry dribble on here is because all the decent debaters have gone. It is nothing but trollish garbage. School being out doesn't help when you have a bunch of bored kids. I don't know why I still try.





[edit on 8-7-2009 by nixie_nox]

Karl,

Only thing I can suggest is reading up on Keynesian economics. Keynes’s only prolonged the inevitable while fueling inflation.

Not only is Obama doing his own form of Keynesian economics, but raising taxes in the same process.

The major flaw in the OP is it's focused on GDP metrics, which is flawed itself. Net Exports reflects commerce and how much buying we're doing. A low import number reduces the GDP less, but retail is directly affected. Just because government spending bumps up the GDP number, it doesn't mean we're better off.

Money spent by the government is hugely ineffective. Each dollar spent in results in pennies of benefit. Money spent by the government is inefficient, and takes money out of the system.

Nationalizing companies ensures the weak dominate the strong, it's very anti-darwin. Overall this makes us weaker and less competitive. This is a negative investment. Imagine your stock broker was investing your money in the worst run weakest companies instead of the profitable companies, you'd call your broker an idiot. That's what this administration is doing.

The amount of debt created by the bailouts and the 'stimulus' plans might not ever be paid off. We have not yet escaped the shadow of the last Great Depression. The same people that established the Federal Reserve pushed for a change to the constitution to allow for a per-capita tax during a congressional Christmas vacation vote, and we ended up with a Federal Income tax on wage-earners. During the days of slavery it was noted there was not much difference between wage earners and slaves. Now most of us are wage-earners, slaves to debt. This administration is binding our slavery to debt, but this time they're creating it and expanding it.

We have the most incompetent Congress in history, and the entire Presidential successorship string is the worst ever in history. Greedy, self-serving, corrupt, incompetent, self-absorbed, power-grabbing, and dismissive of the public will are the bunch.

[edit on 9-7-2009 by Dbriefed]

Well it is clear now Karl... I think Obama needs to resign and let Bush back in there to fix everything. It is obvious now the W was a fantastic steward of the economy and Obama
set this all off last summer!

Viva la Bush redux!!!

Originally posted by marg6043
reply to post by DaddyBare

 

Hear, hear the voice of wisdom

You just nailed the issue right to the spot, my friend, a corrupted system can not be fixed by corrupted entities.

That is why the trillions of dollars already wasted in our nations economy is not working since the fall of 2007.

Too many interest groups and private agendas dipping into the cookie jar.

Like I said before, the "policies" themselves are NOT flawed.

Like all of you have said, it's because too many people are interfering.

Originally posted by Bearack
Keynes’s only prolonged the inevitable while fueling inflation.

Ummm... explain this statement for me, briefly, please?

Originally posted by Xtinguish
reply to post by KarlG

 

[EDIT] Lastly all this government spending is being borrowed. Who's the lender? Future generations, as in our kids and grandkids. They are the ones who will beaten over the head with massive debt from all this trillions and trillions of spending. The interest is compounding, the central banks are licking their chops, we are enslaving our future.

[edit on 8-7-2009 by Xtinguish]

I disagree with that large proposition before your edit... there are some flaws with how the economy works on a larger scale than on an island... I'll get to that tomorrow, and hopefully you'll visit back so we can continue the discussion tmr (not like u can see this reply if you DON'T visit, lol)

But YES, your edit I agree with. The government is currently BORROWING, incurring a deficit and a debt that will need to be repaid later. Again, taxes. The future WILL be enslaved.

There was never doubt about that in this entire post. But I feel that right now what is happening is that we've all fallen into a GIANT TRAP.

Bernie Madoff's liquidity trap, combined with idiots who spent beyond their means, combined with company executives who lack decency, have dug out a pit in which the money flow is somehow jammed - producers aren't producing, business isn't happening, and consumers aren't consuming anymore.

Reason? Any extra money people get go into paying out their debts - those damn idiots who've down-paid for houses and cars even though they earn only $50,000 a year.

Any money made by the firms go into the POCKETS of the darn indecent, (vulgar) executives who take beyond what they deserve, and spend it on their mistresses and estates in other countries.

In order to restart the flow, the government had to INJECT the money into the economy - and that is where you are mistaken. Right now the government isn't taking wealth and giving it back into the economy. That will come LATER, when the taxes go up.

Right now the government is doing three things, 1) printing more money, 2) inducing other countries to spend in our goods and services and 3) spending "imaginary" money - i.e. money that really doesn't exist.

In a twisted sorta logic, I guess it DOES circumvent the problem - printing more money tempts other countries to buy more in our exports and our tourism, etc. since our goods are now cheaper in comparison.

And if other countries spend, there is a high chance a large chunk of that money won't go into large firms, but to the direct suppliers who provide tourism services, exports and maybe even the government, not the executives who siphon the $$ out of the economy.

The LAST one is where I can see a problem - and where our future is enslaved and progressive taxes will be raised across the board. In order to "pay back" the deficit, we'll have to pay out the taxes.

But, then, IS THERE ANY CHOICE?

What other option is there, when the trap has been dug, people still continue to take money out of the economy and to spend it on existing debts and problems? The government, by increasing the spending of their OWN and of FOREIGNERS, results in JOBS created for Americans.

FOR EXAMPLE, Secretary of Energy Steven Chu's creation of a solar energy company (hypothetically) will boost revenue in the country if only for the fact that other countries will want to invest in the technology, and scientists and sellers are needed to market the "green cars" and "solar panels" efficiently. Jobs will be in demand.

By that, foreign spending on these technologies will inject much-needed money into the economy, further creating more jobs in other sectors AS WELL as perhaps paying a little bit of that debt back if the solar energy company is fully nationalized.

But that doesn't seem to be happening now. The policies aren't bad, again, because the solution IS there - but the execution is so clumsy and problematic.

Government spending IS injecting money back into the economy. it's just TAXATION that doesn't - taking $ from the workers. The spending itself DOES - not only does it give some $ back to the workers in terms of cheaper goods, it also helps give $ and jobs to people who NEED work.

More on that tomorrow...

reply to post by KarlG


Of course I come back as good discussion is the only reason I come here.

Reason? Any extra money people get go into paying out their debts - those damn idiots who've down-paid for houses and cars even though they earn only $50,000 a year.

Any money made by the firms go into the POCKETS of the darn indecent, (vulgar) executives who take beyond what they deserve, and spend it on their mistresses and estates in other countries.

In order to restart the flow, the government had to INJECT the money into the economy - and that is where you are mistaken. Right now the government isn't taking wealth and giving it back into the economy. That will come LATER, when the taxes go up.

Read what you just typed. Know what that is? Know what the opposite of all that is? Our republican form of government and capitalist economy could and would succeed because it is based on two principals.

1. You ought to reap what you sow. This is the opposite of moral hazard, such as where banks reap bailouts at public expense when they have sowed the destruction of the entire financial system in fraud.

2. The second principle is that men have been given free will by their Creator to make decisions for good or for ill. This is the opposite of a dictatorship where your decisions are made for you by Big Brother.

Our form of government, when run correctly instead of being transformed into a corporatist, fascist state, creates an open market of ideas and the freedom to choose any of those ideas as each person sees fit.

Granted, not all ideas can be picked, we have what are supposed to be wise, honest representatives who are elected to help choose which ideas should be picked based on a majority rule, which the people agree to support and abide by as part of their social contract with our government, that social contract being our Constitution and Bill of Rights.

Now, you can attach whatever label you like to the quoted stuff above, but any form of government that does not follow our republican form of government based on our Constitution, our Bill of Rights and our capitalist economic system, is little more than a euphemism for dictatorship.

Why do we pay AIG's bills? We are privatizing gains and socializing losses, where does the taxpayer win? In other words let them fail and we take our medicine now.

In a twisted sorta logic, I guess it DOES circumvent the problem - printing more money tempts other countries to buy more in our exports and our tourism, etc. since our goods are now cheaper in comparison.

And our dollar?

And if other countries spend, there is a high chance a large chunk of that money won't go into large firms, but to the direct suppliers who provide tourism services, exports and maybe even the government, not the executives who siphon the $$ out of the economy.

A chance? If? Really? So we are staking everything on a casino game?

What other option is there, when the trap has been dug, people still continue to take money out of the economy and to spend it on existing debts and problems? The government, by increasing the spending of their OWN and of FOREIGNERS, results in JOBS created for Americans.

That is totally false. I look forward as to how government spending creates jobs. No matter how you look at it the money is coming from someone to be given to someone. Government does not create wealth or jobs, the private sector does, and the private sector is whom will be given all this debt.

FOR EXAMPLE, Secretary of Energy Steven Chu's creation of a solar energy company (hypothetically) will boost revenue in the country if only for the fact that other countries will want to invest in the technology, and scientists and sellers are needed to market the "green cars" and "solar panels" efficiently. Jobs will be in demand.

Why can't the private sector do this?

Government spending IS injecting money back into the economy. it's just TAXATION that doesn't - taking $ from the workers. The spending itself DOES - not only does it give some $ back to the workers in terms of cheaper goods, it also helps give $ and jobs to people who NEED work.

The money they are spending COMES FROM TAXATION. Our government borrows money from the FED, money which has to be paid back, so where does it's income come from? Taxes. No matter how you try to spin government spending in the end it comes from someone else hard work. Therefore a government job is nothing more then welfare. It's an expansion on a already large welfare state.

The government is running a Ponzi Scheme.

Look forward to your response.

Originally posted by Xtinguish
reply to post by KarlG

 

Of course I come back as good discussion is the only reason I come here.

Thank you very much. I feel the same way.

1. You ought to reap what you sow. This is the opposite of moral hazard, such as where banks reap bailouts at public expense when they have sowed the destruction of the entire financial system in fraud.

What happens to the economy if these companies crash? The republican system is all about the "self" and the "justice" - in other words, you shouldn't pay for the mistakes of others. Which is what human nature is all about - you feel indignant when you have to pay for someone else's errors.

But what is being done here is for THE GREATER GOOD. If firms crash - through the problems caused by greedy execs - the entire economy would sink even lower. Less spending and less producing will occur, and this takes jobs OUT of the economy as people not only lose the jobs within these crashed firms, but people who depended on, say, GM autos in local car dealerships in small towns and mini-cities in TX, MN, MI would lose their jobs as well.

By saving these companies by bailing them out, the government isn't REWARDING them - please, reward is the FURTHEST thing from anyone's minds - but they are actually BAILING them OUT, i.e. SAVING them so the economy, in turn, is saved, as well. Even though yes, the money isn't spent wisely by the companies (a leopard never changes its spots) but at least they did not crash - which not only would eradicate tens of thousands of jobs in the country, but also lower business confidence so much that foreign and local investors would pull out of the automobile/housing/banking industry ALTOGETHER.

It's not a matter of reaping or not: this is a matter of NECESSITY. Bailing these companies out is NECESSARY, however, REWARDING them in the form of decreased corporate taxes, less federal laws governing their actions, etc... is unnecessary. THOSE are the rewards. Bailing out is NOT a reward.

Legislation is needed, to ensure the bailouts given to these companies are NOT becoming "rewards" - which is the fault of those STILL-greedy executives!

2. Why do we pay AIG's bills? We are privatizing gains and socializing losses, where does the taxpayer win? In other words let them fail and we take our medicine now.

I have no idea why you brought in "the Creator", but whatever rocks your boat.

The taxpayer won in the past. In the past, we have been winning. We have been benefiting from a decent, almost-booming economy in the times after 1970s and before Bush came along, which saw several market failures and issues.

The taxpayer cannot win now because many taxpayers are the causes of problems AS WELL. Buying beyond one's means. Running consumer debt into the ground. Saving up whatever was left after tax rates were reduced a few % a few years back.

Taxpayers are ONE of the causes of problems, so we're taking our medicine now.

And our dollar?

Reducing in value. Which, in economic terms, IS A GOOD THING.

Basically, the reduction in value of our dollar makes our goods and services affordable by foreign countries. It also increases prospects of foreign investments since firms can now afford to purchase capital and land on American soil.

A chance? If? Really? So we are staking everything on a casino game?

CASINO GAME??

That is totally false. I look forward as to how government spending creates jobs. No matter how you look at it the money is coming from someone to be given to someone. Government does not create wealth or jobs, the private sector does, and the private sector is whom will be given all this debt.

Go back to my O/P.

NY (national income) = C + I +G + (X-M)

ALL sectors, consumers, investors (private sector), government and foreign market, contribute to the income of a country.

By spending, the government creates jobs by CREATING occupations that otherwise would not have existed.

For example, roadworks and public building maintenance and construction. The private sector won't invest in these things because they cannot get money out of public buildings. The government, by inducing spending on the construction of these public goods, creates jobs for construction workers, architects, administrative officers and even lawyers. The income from these new jobs will then go into the purchase of other stuff, that will go on to create MORE jobs for other workers.

This is called the multiplier effect.

Why can't the private sector do this?

Where does the private sector get the money from? Consumers are scrimping and saving, for obvious reasons, thus dampening the multiplier effect because they are taking money out of the economy.

Banks are crashing left and right. Loanable funds, which comes from consumer savings, ARE increasing, but investors will be scared to borrow from banks because there are now high interest rates in place.

Also, they will be reluctant to set up new companies because of all the MONEY it needs. This isn't just a few hundred thousand we're talking - we're talking multimillion-dollar Green technology, FOR EXAMPLE. it's a monopoly if ever there was one. Monopolies are companies which the government is more likely to be able to support because they have the money to - taxation, yes.

They have the revenue the private sector DOES NOT HAVE.

The money they are spending COMES FROM TAXATION. Our government borrows money from the FED, money which has to be paid back, so where does it's income come from? Taxes. No matter how you try to spin government spending in the end it comes from someone else hard work. Therefore a government job is nothing more then welfare. It's an expansion on a already large welfare state.

Yes, in the end the deficit has to be paid back by rising taxes. I was never denying that.

The taxation is bad, but it cannot be denied for the sake of the government INJECTING the money back through the multiplier effect - see above.

They are CREATING new profitables, i.e. injecting taxed revenue into industries that need a boost or can earn money in the next few economic quarters, which in turn will boost other fledging industries.

It's hard work being COMPOUNDED into RESULTS...

If the funds don't "disappear" strangely...

[edit on 10-7-2009 by KarlG]

Originally posted by KarlG
reply to post by DeadFlagBlues

 

So the government needs to COUNTER this fall in domestic consumption and AS, by MAKING UP for the fall in domestic consumption by increasing government spending - thus, hopefully, keeping AD constant, maybe even INCREASING it, and thus making sure the AS doesn't fall instead and cause prices to rise.

This was done to other nations, if you want to know the end result
read this book.

Confessions of an economic hitman

Let me make myself clear, these are not Obama's policies, these
are the policies of international pirates that plan to spend us into
hyper inflation like Zimbabwe or the Weimar Republic, or Argentina
as the author of that book explains.

Here is a video of him talking about it:

Confessions of an economic hitman

Ppl have no idea that what we are going thru is by design.

People wake up! The government is colluding with banksters. They hand over a blank check and "demand" they lend out some more money. Some money goes to the ganksters pockets and the rest are lent out to regular citizens with interest rates. The government is to borrow all the money from the blank checks from the FED with interest.

Someone is making an awful lot of money through these deals. Government borrows it's own money with interest and gives to you with
interest.

That way you will always be in debt to the elite. There is no way to dig yourself out of this never ending hole. Unless you abolish the FED and return all money printing presses back to the government (where it is supposed to be). Otherwise, they will keep you in this ball and chain for ever.

[edit on 10-7-2009 by Equinox99]

reply to post by KarlG

But what is being done here is for THE GREATER GOOD. If firms crash - through the problems caused by greedy execs - the entire economy would sink even lower. Less spending and less producing will occur, and this takes jobs OUT of the economy as people not only lose the jobs within these crashed firms, but people who depended on, say, GM autos in local car dealerships in small towns and mini-cities in TX, MN, MI would lose their jobs as well.

RIGHT! They should fail, that is why it's a free market! Failure is a part of life, it teaches a lesson, and one America needs badly. When a government steps in to prop up a failed market in bail outs it is no longer a free market! Instead of taking out medicine NOW we are leaving it to our future generations.

I don't buy the too big to fail. Nothing is too big to fail. Your telling me America won't make it through without GM, Citibank, and AIG? Please. There is money out there, it's just NO ONE is willing to spend because the Elite's are scaring the crap out of everyone.

By saving these companies by bailing them out, the government isn't REWARDING them - please, reward is the FURTHEST thing from anyone's minds - but they are actually BAILING them OUT, i.e. SAVING them so the economy, in turn, is saved, as well.

Really? Where's the save? The credit crisis certainly isn’t over after 23 months and trillons upon trillons of dollars. The residential and commercial real estate markets are still in a state of collapse. WE ARE IN THE SAME SPOT they told us we would be in without TARP. AND In the midst of this fiasco the Fed is monetizing $2.2 trillion in treasuries! The same with Agencies and CDOs, collateralized debt obligation, otherwise known as toxic junk! That's the plan? LOL!

Come on dude, OUR FISCAL DEFICIT for this year ended on 9/30/09, and will be between $2 and $2.5 trillion, FOLLOWED by more than $2 trillion in 2010. You can't count to a trillion in a 100 life times. YEAH LET"S SPEND MORE!

It's not a matter of reaping or not: this is a matter of NECESSITY. Bailing these companies out is NECESSARY, however, REWARDING them in the form of decreased corporate taxes, less federal laws governing their actions, etc... is unnecessary. THOSE are the rewards. Bailing out is NOT a reward.

IT IS NOT!

Why did over 200 leading economists from Harvard, MIT, Northwestern, the University of Chicago, and other institutions signed a petition opposing passage of the bailout?

This is completely false. FOR ONE! Banks do not lend their own money; they lend their depositors funds! Institutions may crash and burn, but their depositors funds are insured by the FDIC, and those depositors will simply place their funds elsewhere. When Merrill Lynch was subsumed by Bank of America, there was no catastrophe: there was simply an efficient movement of resources. That's what the Free Market does! It works!

Secondly YOU DON'T KNOW if they are rewarded. BECAUSE YOU don't know where the money WENT! NO ONE DOES! WHERE IS IT!? Why won't the FED disclose?

Legislation is needed, to ensure the bailouts given to these companies are NOT becoming "rewards" - which is the fault of those STILL-greedy executives!

Where's the money? Billions have been supposedly given to the housing sector, why hasn't it gone up?

The taxpayer cannot win now because many taxpayers are the causes of problems AS WELL. Buying beyond one's means. Running consumer debt into the ground. Saving up whatever was left after tax rates were reduced a few % a few years back.

True, but Taxpayers couldn't do this without the banks help. This is why it needs to fail and we need to take OUR (all of us) medicine now. That's why Capitalism works.

Reducing in value. Which, in economic terms, IS A GOOD THING.

REALLY!?

Pure B.S.

Economics 101. Issuing money and credit hides the defaulting. The US is creating a stealth default on its debt by continuing to issue massive amounts of money and credit and in the process devaluing the dollar. Othe nations know this! Why do you think China, who holds over a Trillion of our debt is so pissed off? THEY ARE ASKING FOR A BACKING! I say we give them California, but that's just me.

Now, of course this is fraud, but other nations have defrauded the US for years by cheapening their currencies and subsidizing goods and services. Why does China have to make a $1.25 trillion effort to keep their growth above 8%? China's $2 trillion in US denominated assets will probably end up being worth $1 trillion and they know it! The Chinese knew 5 years ago they were screwed, but they kept on playing the game. They had to supply jobs or they might have had a revolution.

The dollar is below 80 on the USDX. What happens when it hits 40? What happens when it's dumped by our debt holding nations?

I hope you are aware that as the dollar falls inflation rises. That is because we don’t produce much anymore and as the dollar declines the cost of imported goods rises, including oil. Couple this is higher taxes and a Cap n Trade system where does the TAX PAYER win and Corporate America lose?

CASINO GAME??

Yes, your words included MAYBE and IF! That's a gamble!

By spending, the government creates jobs by CREATING occupations that otherwise would not have existed.

This is the last time I'm going to repeat myself because your clearly not understanding.

THOSE. OCCUPATIONS. WILL. BE. PAID. BY. TAXPAYER. MONEY! It's welfare, distributing wealth in disguise of a pointless job! We need producers not road builders. We need factories not bridges.

Where does the private sector get the money from? Consumers are scrimping and saving, for obvious reasons, thus dampening the multiplier effect because they are taking money out of the economy.

By using the FREE MARKET and LETTING IT WORK!

The taxation is bad, but it cannot be denied for the sake of the government INJECTING the money back through the multiplier effect - see above.

Again, last time I am repeating myself. Who collects this massive amount of tax dollars? The government! What DO THEY HAVE to do with this tax money? Pay back the debt. Where'd the debt come from. THE FED! Who is the FED!? PRIVATE BANKS!

Ran out of room.

End point: The same BANKSTERS that engineered this entire collapse will be the same ones reaping the rewards plus interest in the end.

Originally posted by KarlG
I've done a bit of studies in Econ, and I need to discuss this with some people, because i am very confused that many people do not understand what the Obama Administration is trying to do, when it is clear to me from my textbook that they are doing what is technically right.

As an economics major, your very juvenile in your studies. The economic theory you are discussing is called Keynesianism, in that government spending stimulates the economy. There are so many loopholes in the theory I don't know where to begin. You can definitely say that government spending will increase GDP (because government spending is one of the variables used to measure GDP), but that does NOT mean that it will increase economic welfare. Government spending has a very low multiplier effect and in the current economic situation it will be incredibly low due to projects being short term and the need for capital to pay off debts in the credit market (consumer, business and government), people will horde capital. The actions that needed to be taken were already taken by the Federal Reserve in expanding the money supply (though I fear they expanded it too much) to make up for the monetary contraction and for government to cut taxes.

Government COULD have issued vouchers to consumers instead of direct government spending, that would have actually been much more effective...and I could support it (this is what China did, and it has worked.) It would definitely stimulate the economy and it would keep consumers and workers from hording money. Government vouchers to unemployed workers to go to college, for people to buy new cars, etc etc. The Obama and Bush administration have both failed...and neither have a grasp on economics. Both used false economics to push an agenda on the people...which all further hamper the growth of the economy and grow the dependency on government. Go read a book called "The Monetary History of the United States" by Milton Friedman, it is the book that disproved Keynesianism, and until recently was cited as truth...but of course the agenda setters would have you believe otherwise. In the book Friedman explains how mark-to-market accounting helped lead to the failure of otherwise health bank...in the Great Depression. If you look at the time line of when mark-to-mark was reinstated (2007) it correlates perfectly with the economy collapse. Mark-to-market was suspended during the Great Depression for this reason, and of course mark-to-market accounting is a government regulation.

[edit on 20-7-2009 by yellowcard]