I rarely use DWI as a forum for political debate but occassionally I come across something that I am forced to comment on. I suprised myself and voted for Barack after a lot of back and forth. I am beginning to regret that decision. First of all, it was what I thought a ridiculous economic stimulus plan, which talked about using tax payer dollars to help stimulate the economy. I totally disagree and I would be willing to wager that the economy will almost completely be turned around by the time that money even enters it. I firmly believe instead of government spending to get our economy back on track they should have given tax breaks to allow US citizens to spend there own money to stimulate the economy. As the economy slowly starts to turn around, we are still left with some major issues such as terrible high unemployment rates, and also we are still left with banks owning a great deal of homes in this counrty. To me this should have been the focus of the Presidents stimulas package. That was my first gripe.
My second centers around this link Take a second and check it out, basically Barack is using ABC News as vehicle to push his agenda, in particular his policy on a governemnt ran health care. This is something that I absolutely hate, as I would hope that the biggest media outlets in this country would only push non partisan agenda's. I guess that is what I consider when I think about the news. Journalists covering a story or event by just giving us the facts. That we as American citizens are smart enough to draw our own opinions and conclusions. I am fully against the govt controlling health care in this country. I believe every insurance man, Dr, Lawyer, drug salesman, drug manufacturer, etc have the right to run a business just like I have the right to run any business I would like. I realize there are problems with a free market on health care, but I dont think the govt getting taking over is the answer. Same as I dont think the govt should be running General Motors right now. And I definately dont feel like a major news outlet should use any air time to push the agenda of the democratic party. My whole problem with Barack, is he is proving to be way to fucking liberal. And liberals love to have govt control everything. I know that is about the dumbest way to explain my dissapoint in his first 100 days, but as I get older I get more and more like my father. A conservative S.O.B.
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14 comments:
I agree, big time. Obama is pissing me off. Get off the goddamn TV already too.
I agree the stimulus spending is way too much of our money down the shitter, but I don't think tax credits were the answer either. Spending is way, way down, people actually started saving money and not making any big purchases (cars, homes, electronics, appliances, etc.) out of fear that they might lose their jobs, people who did lose their jobs obviously aren't spending, credit markets were tightened so people couldn't borrow money to spend.
Our whole economic growth projections were based upon people borrowing money to spend more than they earn - which is what has been going on for several years, negative savings figures.
On the ABC News issue, call me skeptical of a scathing critique of the "one-sided" nature of something that hasn't even happened yet. Call me skeptical of the Drudge Report being a major thought-source on anything. Let's see what actually happens. What if ABC News' commentators end up shoving the whole idea up Obama's ass and calling it a disastrous idea? Then, where will the outrage be from the Limbaugh d-bags?
Timmay I have to agree with you it was a bit premature of me to spout of on ABC news before the actually broadcast the special. It just screams of the White House, dictating programming in pursuit of spreading a partisan agenda, something that chaps my ass. I could be wrong but I see a conflict of interest.
Explain to me the growth projections that you are talking about? Are you saying current economic growth projections are based on negative saving figures? I am confused by this. From all that I can tell the economy is starting to show signs of positive growth? Are you reffering to before the time when the stimulas package went into effect?
I some what agree with you that people have a negative effect on the economy when it starts to go south, especially those who have lost there jobs. However as you may know there is that 1% of the population who could have helped the economy out quite a bit, if they were given tax breaks this year. I realize the economy effect everyone, but I doubt many of this countries elite have been stashing there cash inside there mattress, or burying it out back Tony Soprano style.
Yes, I'm talking about what expectations were at the time the crisis began. The crisis itself actually caused Americans to move into a position of spending less than they earn for the first time in quite a while.
This is part of the reason I think a good chunk of the stimulus is bullshit. Our economy had to change. People can't just keep racking up credit card debt and shady mortgages they can't afford to keep pumping money into an inflated economy. It had to pop somewhere. I don't know if we'll really get back to the unbridled consumerism that was driving our economy, as well as the economies of Japan, China, India, etc., who were making all of the shit we bought with our credit cards over the last decade.
With the crisis, some people are realizing they don't need a new car every 2 years. They don't need a bigger home with a bigger mortgage and bigger light bill. They don't need that new apple i-widget hipster fuckface doo-hickey. They went without for a while and they were just as happy as before. Uh oh, the Jedi mind control is over?
I'm not too sure about the ABC News thing, but if you want to know what the President wants to do and why, I suppose the White House is a good place to get that story. I'll be surprised however, if there isn't some presentation of the opposite viewpoint as well. If there isn't, I think it will look pretty pathetic.
Still, who cried foul when Fox News threw an anti-Obama, anti-Democrat tea party? Did Drudge wring his hands over freedom of the press that day? Perhaps it's time that the news-tainment industry just comes clean and announces their allegiances. Then we can all judge for ourselves.
Some pertinent links with some info and dates...
TARP 1 Oct 2008
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=2&vote=00213
American Recovery and Reinvestment act, Feb '09
http://www.investopedia.com/terms/a/american-recovery-and-reinvestment-act.asp
There are common misconceptions about who pushed for Federal spending. The first $700 billion government package (TARP) (biggest usage of highly publicized government 'bailout' money) was voted on and approved in Congress prior to Obama's taking office. While the Obama administration has presided over a large percentage of this money being used for the purpose of bailouts, it was voted on and passed with the prior administration signing off on it. A high percentage of this approved bailout money was utilized in 2008.
The second, the ARR act, was voted on and passed shortly after Obama had taken office and was obviously helmed by him.
While it worries me that with government spending, and the required printing of money to fund(and the purchase and investment from foreign governments), that there is a requisite amount of inflation that will accompany it down the road. But there is alot of evidence that suggests government spending helped to spur a recovery from the Great Depression. It is too late for me to spend a bunch of hours digging up pertinent statistics to back up the claim, but there is some truth to that.
(Cont'd)
Working in banking I am seeing first hand what the pop of the housing bubble has done to the financial industry, large corporations, small business, and the invidual. While we can all argue to death the multitude of reasons that led up to it, the fact remains that it happened, and with it, there has been a huge contraction of liquidity in the entire country, not just with financial institutions. I am working on a number of credits where businesses and business owners had millions of dollars in liquidity that is gone by either the housing contraction, leveraging at the peak of the upswing, stupid personal spending, and personal investments taking a huge shit. For example, one business owner who a year ago had over $3 million in liquid assets now has half of that due to the market taking a huge shit, and with the housing market taking a huge shit, gone is his company's ability to service there debt, and the owner's ability to inject capital due to his personal liquidity being gone. This happened everywhere. Many businesses are still profitable, but those are in areas less effected by the bursting of the housing or financial industry.
Like Tim said, spending is way down, and a big reason for that includes the drop in value of assets in the United States. Retirement accounts, pension plans, liquidity in businesses. Every one of these things has a rippling effect which in turn ends up effecting spending across the country. A tax break is not going to change the fact that alot of money went out the door when the value of the Assets around the globe dropped. What savvy business owner do you know who somehow didn't feel any effect of the market contraction is out there saying, gee, wow, now is the time for me to buy up a bunch of devalued assets when there is no certainty of what the future holds. There are plenty of opportunities, but the dollars being spent to purchase some of this stuff are not going to be felt on a scale where it can really make a difference. There just is not enough private money out there at this time.
Important item to note, the ARR is meant to help improve economic conditions in our country, its infrastructure, etc etc. An example of something which one could argue has done nothing to improve conditions within our country could be some of our recent continued armed conflicts (yes, I am talking about Iraq, and no, I am not going down that road on whether it was right or wrong, blah blah. ARR Act a little over $787 billion, Iraq War as of April '09, $600 billion, and I have no idea where that has climbed too ( http://articles.latimes.com/2009/apr/11/nation/na-iraq-vietnam11 ) .
(cont'd)
And yes, I honestly do believe that Federal and State governments can and often are highly ineffecient with their spending, no argument there. But it is important for there to be continued spending by either government or private sectors. The flow of money is what keeps the whole house of cards intact.
A 5% tax cut to a business or home owner right now will in my opinion have very limited positive economic effect when economic conditions continue to be and will continue to be shit. The government was already floating a massive budget deficit prior to TARP and ARR, the fuck makes you think a tax cut is going to fix the fact that we already needed to be printing money (here comes inflation) prior to the passing of both of these acts.
The intention behind TARP was to prevent the further collapse of the financial industry. Short explanation why Bank of America can't fail? Run on deposits. Big daddy fails, depositors freak, this carries over to the rest of depositors with other banks, deposits get yanked, more banks fail, FDIC does not have the ability to insure dollar amounts above and beyond $250,000 and alot of people lose money, and blah blah blah, Depression 2.0. The government invests in said banks, there is risk involved, but if they survive, the country gets paid back, plus interest. It provides a much needed backstop to keep consumer confidence in the very idea which allows Americans to have such high ownership rates of everything (everything revolves around debt, very few people have the capacity to buy anything of required to survive in America (car, home) without utilizing debt (this is an idea for a much bigger topic on why the Capitalist business model is fucked up here).
The intention behind the ARR is to keep pumping money in when you or I, or Johnny Business doesn't have the capacity too. Am I skeptical of its level of effectiveness? Yes.
Lastly (and I know this is rambling, and I will be happy to debate everything I have typed up until the cows come home), the recession may be far from over. Bank's have not even begun to unwind a number of their fucked up investment vehicles, or taken the write downs on loans that they have out there currently on a multitude of different business lines. The real scary part is that while residential real estate was the first big collapse, followed by the United States auto industry, there is a very real possibility of the commercial real estate market imploding. This means billions more in losses that are waiting to happen that major banks are going to have to somehow absorb. Protracted recession will effect a shitton of small business owners who cannot survive the prolongued economic downturn. This again will effect financial institutions. A 5% tax break to people who are scared shitless of losing their jobs would not be able to change the fact that we are in the process of unwinding a huge financial knot caused by over leveraging. If more bubbles pop, Government spending and a Global cooperative effort(my vote is a nice accounting correction, a global write off) may be the only way out of this.
Lots of good information there, Mac. Nicely done. Thanks for raising the IQ of this discussion.
Great points about Bush spearheading a good chunk of the spending authorization. If it works, Bush deserves some of the credit. If it cripples us with debt service for the next 100 years, I think he deserves some of the blame. Obama is in the same boat.
Great point about the loss in value of assets, equities, etc. For example, in many cases stocks that were worth $50 are now worth $10. The $40 that was lost is imaginary for the most part, but it could have been realized in a sale.
However, that $40 of lost value existed only in the minds of the buyers who were willing to pay that extra $40. That extra $40 goes POOF when buyer confidence is down, when buyers expect the market to continue to shit or are concerned about the financial system collapsing and paralyzing the businesses they might invest in, etc.
I know my parents and parents-in-law, in their retirements, have cut their spending significantly because they are watching their nest egg investments shrivel up like a cock in ice water and they are scared their money will die before they do. Multiply that by few tens of millions retirees - just one of the demographics at issue here. Ouch. And that's just old people who aren't in the job market anymore.
As Mac pointed out, business owners and officers are in the same boat. Lack of access to money, lack of certainty of the future.. the big check books are closed even tighter than my parents'. The effect, without a major player (Uncle Sam) getting some cash flowing, could have been completely crippling.
That's one of the negatives about taking pro-active action that works. Some people will assume there was no danger in the first place and call you a jack-ass for taking action.
I understand what Geigs is saying about the govt stepping in and helping with spending when most others have there hands tied. However I believe we have seen the bottom of this recession. The stock market hit its bottom I believe and we are starting to see a leveling off and in some cases people are even starting to put money back into the market. My feeling is the economy regulates itself over time. I just believe this money being put in the economy is only going to do one thing, like geigs pointed out, that is drive up inflation. I would be willing to put a wager that no more than 10-15% of the stimulus money has actually been put into the economy. The fact is there is a lot of red tape that needs to be cut through before a major bill like this can go through. By the time that number is closer to 75-85% we will damn near be back to the way it was 5 or 6 years ago. My problem with the spending is yeah it may help a bit, but I believe it has much more to do with public opinion, America wants to see action. I just disagree with this course of action. I could be wrong, this spending could be saving the economy, and our parents will be back on track to build that retirement back up, but to tell you the truth it looks like a lot of pork to me.
I agree that a lot of the money hasn't hit the economy yet, but you have strong feelings about the fact that it will be spent, right? Maybe the people that believe it will help also have a strong feeling about it: Confidence.
I don't think you can say that America wants to see action, and then in the same breath pretend that the promise of action has no effect on America.
People need to have confidence to invest. If those people wanted to see action from the government, don't you think seeing that action has something to do with them putting money back in the market?
The economy-is-self-correcting argument is just lazy, in my mind. It's like saying, "Dude, you shouldn't have called the fire department. Yeah, they dumped water on the flames, but it was going to go out anyway without causing any more damage." What can that opinion possibly be based upon?
Timmay,
You make a great point about confidence, i have to admit I didnt really think about that at all. I dont really invest my money besides a 401K that I rarely even moniter its status. So when I look at it like that it makes sense that the government needs to take actions to assure everyone that things will turn around, that they have the answers figured out, and it is safe to put faith in the various markets that make up our economy. It is just hard for me to wrap my simple mind around I guess, because it is hard to see how govt spending does an ounch of difference, when it comes to straightening out the economy. It seem like administering a band aid on an amputated limb. You are probably right it is better than sitting by idol focusing on different issues, but I just dont see how it actually makes a difference, even though you guys have made very strong arguments. You are also probably right that my argument about the economy self correction itself is a lazy one. It is Econ 101 I guess, the worlds markets are based solely on supply and demand, even though you are right that is simplyfying things way to much. I cant argue with the points you guys are making since you are able to articulate them much better than I can, but I still have a problem with the focus of this stimulus package being putting money back into the economy and instead of focusing on the really scary unemployment rates that continue to rise. I was wrong to point this argument at Barack Obama as I believe the economy is out of the control of the president, I just have questioned some of the steps we have taken in the last 6 months, and whether or not they will even be in place by the time we get out of this recession.
I don't think we disagree all that much, just saying different points on the issues.
I can tell you this, I am really tired of hearing the word "trillion" in reference to our future earnings being spent today.
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