board77

It's a shame that the only time Republicans oppose pork spending is when they are out of power. A few months ago there was a catastrophy of a bailout supported strongly by Republicans.

There's a lot in that bill that really must go, but the only way to get enough people to vote for that horrible bill was to add all these pet projects. That bill is, after all, an attempt to implement every Democrat pet project at once - another New Deal or Great Society package.

I stand in awe.

It is like watching a hurricane sweep over a small island. The destruction of the American Economy over the last year and continuing with this new bill has accelerated at a rate that I never thought politicians would be bold enough to put forward. I can only stand back and say "that's gonna hurt" because I know there's nothing I can do to stop this hurricane. I can say to my fellow islanders "take shelter" but I'm not sure any shelter can help withstand the winds and rain that are coming.

I really am in awe.

Actually, most of St. Louis proper is OK flood-wise: it's the surrounding suburbs that got slapped on serious flood plains that irk me. The Chesterfield Valley, west of town, was underwater for a month in 1993. What they do in response? Build the World's Biggest Frikin' Strip Mall there and raise the levee--which wasn't overtopped but undercut in '93.

Flood control money can be spent well or stupidly, as can most of the items on that list. But even so, all those together are a tiny fraction of the sum, and one suspects many are on there specifically so they can be bargained away. That's politics.

Freddy wrote:

-$400 million for the Centers for Disease Control to screen and prevent STD's.
How does this help the economy?

I'd have thought that most preventative healthcare did, in terms of missed work days, lost productivity, the expense of later treatment and so forth.

-Pips-

The mortgage lending to high risk people started under Clinton so the blame starts more than eight years ago. There is enough blame for both parties to share. The president only has so much power when the house and senate want something, they will get it. The congress and house can always cancel the president also, that's the way our system works.

CG, you are correct. Why does it take the Republicans out of power to go back to their roots.

Can anything get us out of this mess? Reagan did it under worse conditions, so it can be done.

As far as flood control goes, the issue is that they continue to build new houses within the flood plains and then complain when it floods. If you move to Texas and Oklahoma you expect tornados so if you move along the Mississippi you need to be prepared for flooding. Ducks Unlimited had an excellent article a few months back on all of the new developments they continue to build along the Mississippi even though they know it's going to flood. This also destroys the natural water filters that clean out the chemicals and polutants before they enter the river system. It's crazy, no it's stupid.

freddy

Pippin4242 wrote:

Freddy wrote:

-$400 million for the Centers for Disease Control to screen and prevent STD's.
How does this help the economy?

I'd have thought that most preventative healthcare did, in terms of missed work days, lost productivity, the expense of later treatment and so forth.

-Pips-

The alleged "purpose" of this plan is to stimulate the economy, which means to create jobs that are long lasting. The long lasting jobs are those in production that supply a good that people want and need. If they want STD control then it needs to be in a different package.

freddy

I see your point, but I think they bear enough relation that the STD control is difficult to justify as pork.

-Pips-

It look like there is some hope of some serious cuts to some of the pork'ier measures. http://www.nytimes.com/2009/02/06/us/po ... us.html?hp

Feredir wrote:

Can anything get us out of this mess? Reagan did it under worse conditions, so it can be done.

I'm not so sure conditions were were under Reagan, but he did do much to get us out of the problems of the Stagflation Recession period of the 70s (although like any good earthquake there were aftershocks in the early 80s).

In his case, there was stagflation. Unemployment and inflation were both high while the economy was stagnant. But on the plus side the Vietnam War was finally over. The unusally high inflation was caused by efforts of Johnson and Nixon to pay for the war without raising Taxes. The Stagnation was caused by the economic controls implemented by Johnson and Nixon. (Remember that it was under Nixon when the Libertarian Party was formed due to Nixon abandoning any pretense at any free market ideology.)

Reagan had the help of Volker, who slammed the breaks on the Federal Reserve's increasing the money supply.

But the country wasn't in the titanic debt it is today. In constant dollars, we owe more now than we did then. Bush has been the biggest deficit spender of any president, and I have constant dollar numbers that can prove that. Reagan also had the help of there not being any realistic competitor to the dollar, keeping it the world's reserve currency. But the titanic debt doesn't end there. The average American is more in debt now than he was then.

Overall I think things are worse now. We've been partying for a long time. The bill is due.

Anything that spends money creates jobs. Buying furniture creates jobs for furniture factory workers and truckers and salesmen. Preventing STDs pays salaries to someone and unless they put everything into savings, they are spending that money which employs someone else, too.

As long as we aren't giving the money to individuals to stash it away under their beds, the money is helping keep someone employed.

The money's got to come from somewhere, though. I'm still at a loss as to where they think that somewhere is.

You mean you're not supposed to write checks when there is nothing in the account?

freddy

I disagree that "anything that spends money creates jobs". But everyone knows I'm not a Keynesian so that's to be expected. You've got to spend it in a way that creates products or services. Paying someone to dig ditches and fill them back in creates nothing, but is paid for by taking money from those who would otherwise use it to actually create value. Governments don't do that. People do.

The problem of recession comes down to two specific views. Keynes would have us believe that we are all panicking into recession, and that all we need to do is get our animal spirits under control and convince ourselves that we're not in a recession anymore and *poof* we will have prosperity again. For unknown reasons we start panicking, thus aggregate demand drops, thus a recsesion starts. He advocates a very loose money policy to put money into the pockets of the people so that they will no longer feel like they are in a recession and thus will no longer act like they are in a recession and thus we will no longer be in a recession.

Bunk.

Mises would have us believe that recessions are caused by malinvestments caused by misleading economic indicators. By the time the recession starts the damage has already been done, the malinvestment have already failed to pay off, and what most people think of recession in terms of unemployment is actually the after effect of the damage that was already done. In the case of the current recession one of the malinvestments is overinvestment in property. A proper cure for malinvestment and inflated prices is liquidation and deflation. Because malinvestments are failing, a recession starts, and aggregate demand falls.

The two views are irreconcilable. What happens is that the government's stimulus always takes the shape of attempting to prop up the malinvestments so that they don't fail. As the sector where the damage was done, a Misean would say that sector needs to fail but a Keynesian would say as that sector is the one dragging down the rest of the economy that sector is the one that needs to be saved.

Saving is not the enemy of recovery. Some MPs in Britain want to tax savings accounts because they have fallen for that fallacy. That will cause the only type of saving that can be considered detrimental - stuffing the money under the mattress. Money in the bank IS in circulation, especially in our fractional reserve banking system. It is really one of the biggest absurdities in modern economics to believe that saving makes you poorer while spending and going into debt makes you richer.

Feredir wrote:

You mean you're not supposed to write checks when there is nothing in the account?

Of course you are. Spending money you don't have stimulates the economy, have you learned nothing from Congress?


I see the logic that spending stimulates the economy, I do. But it seems as though spending money that we didn't have got us into this mess in the first place. By increasing the amount of government debt so substantially now, we are setting ourselves up for enormous interest payments in the future. I remember taking government as a freshman in high school, looking at a pie chart that showed how the federal budget was spent. Nearly 15% went to pay interest on the national debt. I just looked at 2008 and it was either 9% or 21%, depending on which shade of blue corresponded to interest and which to Social Security. Either way, I think that's absurd. Of all the things we could be spending money on, such a high percentage is spent on money that doesn't DO anything. And it keeps getting worse and worse.

I just get frustrated that there are so many people who are capable of maintaining a decent standard of living just by being responsible with the money they make. And I consider "being responsible" to include things like not having kids you can't afford, staying healthy so you don't have needless medical bills, and wearing a damn condom so you don't get HIV. In DC, if you have AIDS, the city government will give you medication FOR FREE if you can't afford it. You know, I agree with the principle that the government should help provide low-cost health care. The principle. But in practice, if that policy is paying for treatment of STDs, which are highly preventable, there is some huge inherent flaw somewhere. It seems as though this culture of bailouts and government funding is encouraging some people to make bad decisions because there will be someone else there to pay for the consequences. And it's not just a small minority of people, either. I accept that people do suffer from genuine misfortune and I don't think society should tell those people, "Fuck off and deal with your own problems." But some sort of line needs to be drawn to distinguish the people suffering from genuine misfortune from the freeloaders.

I promise the $1 billion that I don't have to the person who figures out how to draw that line.

I want want my $1 billion dollars in small bills please, harder to trace.

All you really have to do is talk to the people and you can tell. In another thread Lali pointed out an incident at church the other night in which a man came in asking for help. He gave a long song and dance about how he and his family were about to get kicked out of their apartment because they didn't have money.

Well, do to our own financial issues at church we no longer have a food pantry or a fund to help those in need. (Which we all hope we will again have). So I told the man that we were unable to help him but I could get him the names and numbers of places that could help.

He became very indignant and said that he asked for a help and not for phone number. He said a few other choice and judgmental things and I eventually had to tell him to leave. Bottom line, he wanted a handout not a hand up.

freddy

Quote:

By increasing the amount of government debt so substantially now, we are setting ourselves up for enormous interest payments in the future.

This scares me and, while I am no economists, from my uninformed POV it looks like the biggest real threat to the economy. It bothers me that we get so ultra-freaked out my short-term hardships and pay so little attention to the long-term ones. If can look long-term enough to try and plan how to reduce carbon emissions by 2030, can't we try and plan how to eventually get ourselves out of gigantic crushing debt?

Reagan faced nothing like this. There is simply no comparison.

While the pressure from politicians might very well have had something to do with the subprime lending itself, pressure from politicians had absolutely NOTHING whatsoever to do with the subsequent marketing of those crappy mortgages. That was Wall Street stupidity at its most blatant. The blame for THAT falls completely on the insane ineptness, arrogance and outright reckless disregard for fiduciary responsibility that began with Pres. Reagan's drive to deregulation. No president after him did bugger all to try to fix it, except, oddly enough, Bush 43. Quite ironic.

I always feel like the people who bought the houses they couldn't afford are at least as much at fault as the people who sold it to them (who are at least as much at fault as the people who made doing that profitable; mainly Greenspan from what has been explained to me and what little I grasp). I was "qualified" for a $140,000 house loan. I didn't take. Wanna know why? Because I obviously can't afford a $140K house. Wall Street could of been selling as many "free" houses as it wanted and it wouldn't have mattered if people hadn't bought them. The stupidity and greed on this one falls all over the place. Blaming any one person or party is silly.

From the National Journal article "Obama's Vision, Reagan's Example"

Here, too, President Reagan's experience may be relevant. No sooner did Reagan take office than the economy began to get a lot worse. Unemployment jumped to nearly 11 percent, the highest level since the 1930s. The current unemployment rate is about 6.5 percent.



From Financial Sense Observations:

In the case of Ronald Reagan, who came into office on January 20th, 1981 after a terrible economy in the Carter years, conditions in the broad economy were once again very difficult. In this case, a double-dip stagflationary recession was unfolding with the second truly deep downturn confronting Reagan. However, like FDR, the first contraction seen in early 1980 had already been seen, with many of the worst inflation episodes taking place in late 1979 and early 1980. The price of Gold had already turned down well off the highs by January 1980 and even though the Fed was in aggressive tightening mode (via Paul Volcker) the situation had a certain clarity underpinning it as the curative policy prescription of ‘strangling inflation’ with high real rates was understood as the correct path to stability.

Thus, while Reagan inherited a horrible economy, like FDR, in some ways the worst of the downturn had actually preceded him including the extreme lows in consumer confidence. The previous chart (above) shows the behavior of the stock market before and after Reagan’s inauguration with the dashed vertical line representing his inauguration date. Notice that the stock market never exceeded the March-April 1980 lows (on the lower left side of the chart), despite the fact that the recession, which accompanied the bear market on the right side of the chart was deeper and more protracted.

Just couple of quick searches to show the parallel.

freddy

Not exactly what we're talking about but Liddy's sig...



...is pretty much how I feel about that one. It's like they forced us to buy a million of their cars, except we didn't get any cars out of it.

Feredir wrote:

Dave,
Who do you think made the mess? It's the one's who are trying to clean it up. They forced banks to make high risk loans and guess what?!?!? These people who normally would have been denied a loan because it was too high of a risk, they didn't repay their loans. Hmmmm, funny how loan businesses were fine until the government forced them to make high risk business decisions. Then it all trickled down.

freddy

Freddy, having worked IN the financial services sector up until some years ago, you are sadly mistaken on your take of at least this part of the problem.

No government institution pushed off selling bad loans to unqualified borrowers. The facts were and continue to be that home ownership at least used to be a cornerstone of the economy, and it was the Bush administration that let the oversight lapse, thinking that unregulating stuff would somehow be better. What resulted was the economic mess we have now at least with property values. I worked in the financial markets for over 23 years, and it is ABNORMAL to say the least to state that property values should rise over 5% a year. But, that is what this bubble caused, every lender was game to jump on the speculative bandwagon, and with no oversight, what did you honestly THINK was going to happen? I am tired of this being laid at the Democrats door, not that they are not guilty of complacency and sheer idiocy.

The GOP has not been fiscally responsible as a party since the seventies. When we speak of pork, both parties are equally to blame. When we speak of oversight, the GOP thought letting the economy run on its own would work, and guess what? Surprise, surprise, greed took over, and has become an entrenched way of life now for so many corporations and top execs that I hear excuses now like "Well, if you cannot pay top people, who will come bail out these troubled companies?"

Boo hoo for them, let them fail. Seriously. If things can not come down to some sort of moderate scale, I do not see WHAT hope there is for America.

In the meantime, I wonder where on earth the US is dredging up this trillion dollars, and I am NOT happy about this either, if we are in lean times, then what we do should be the most necessary and critical things, not worrying about new office buildings.

For all those picking on Amtrak, it makes MORE sense to fund something like this as an alternative to expensive airflights in our conjested megametropolitan areas, so that WOULD be something I approve of. Thoughtfully run commuter train travel is much more efficient than hopping on a hour or less air flight to the same destination.

Finally, people are just plain stupid and greedy. When will we EVER EVER learn that there is no such thing as "Free Lunch?" And, most of us average American saps have been taken to the cleaners over the years, by ALL of the irresponsible people we put into office who never had to look twice at what they put through or supported, be it president or representative.

Sometimes, I wish that that Hitchhiker's Guide and some sort of traveling venue would come my way, I would happily get on it...

GAH