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Obama Calls for 'Full-Scale Attack' to Revive Struggling Economy

a typical DP (double post)
 
Goldenboy219 said:
If we were to hit an inflationary bubble, wouldn't we be witnessing growth? Luck? Nope! Inflation is not even in the cards....
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No, not necessarily, the most famous example of this monetary policy is the Wiemar Republic.

Combine it with the massive spending increases of the Administration and it's downright terrifying the tight rope walk they are now taking.
 
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damianvincent said:
I'm pretty sure we were talking about Obama's campaign pledge to lower taxes on 95% of American's.
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Which is BS since 95% od people don't even pay federal income taxes to start with!
 
Harry Guerrilla said:
You want a quick way to stimulate the economy, cut a bunch of $10k checks to the bottom 50% of income earners.
It will be circulated through the economy and it will be done fast.
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Can we say inflation? I knew we could! Notions like this seem like great ideas till you talk to someone that understands how the economy works, how money works, and why just giving people cash ain't gonna do much other then a very short term blip followed by long term repercussions.
 
donc said:
It would help the economy if the Republicans in the Senate would release the bill to increase small business lending. After all the majority of NEW jobs created are created by small businesses.
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Do you really believe that a $30 billion bill will greatly impact a $14 trillion ecnomy. Good for a bumper sticker, lousy economic logic.
 
MrVicchio said:
Can we say inflation? I knew we could! Notions like this seem like great ideas till you talk to someone that understands how the economy works, how money works, and why just giving people cash ain't gonna do much other then a very short term blip followed by long term repercussions.
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If we are still heading towards deflation, a little inflation won't kill us.
But seriously if you had to choose between politicians giving "stimulis" money to their pet programs or just handing the money over to people.

I'd choose the latter, it would have a greater and measurable effect on stimulating the economy.
It would be like the "spring stimulus" we do with tax refunds every year anyway, just a bit greater.
 
damianvincent said:
No, not necessarily, the most famous example of this monetary policy is the Wiemar Republic.
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No, not even close. The Wiemar Republic was printing money and paying war debts, purchasing goods, etc.... Since monetary policy is a directive of the Federal Reserve, we do not have to worry about such scenarios. If the Fed began purchasing bonds directly from the treasury, you would then have a valid point. Since it does not..., well you get the point.
 
damianvincent said:
For those who don't know what quantitative easing means, it's a dangerous gamble the fed is taking now in an effort to save the economy.

The term quantitative easing (QE) describes a monetary policy used by central banks to increase the supply of money in an economy when the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.[citation needed] A central bank does this by first crediting its own account with money it has created ex nihilo ("out of nothing").[1] It then purchases financial assets, including government bonds, mortgage-backed securities and corporate bonds, from banks and other financial institutions in a process referred to as open market operations. The purchases, by way of account deposits, give banks the excess reserves required for them to create new money, and thus a hopeful stimulation of the economy, by the process of deposit multiplication from increased lending in the fractional reserve banking system. Risks include the policy being more effective than intended, spurring hyperinflation, or the risk of not being effective enough, if banks opt simply to pocket the additional cash in order to increase their capital reserves in a climate of increasing defaults in their present loan portfolio.[1]

Quantitative easing - Wikipedia, the free encyclopedia
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The Fed has not started QE2 yet. They are maintaining a stable balance sheet, not letting it shrink. They have not stated they would let it grow yet though.
 
Goldenboy219 said:
No, not even close. The Wiemar Republic was printing money and paying war debts, purchasing goods, etc.... Since monetary policy is a directive of the Federal Reserve, we do not have to worry about such scenarios. If the Fed began purchasing bonds directly from the treasury, you would then have a valid point. Since it does not..., well you get the point.
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They are!!!

http://www.google.com/search?hl=&q=...avclient-ff&rlz=1B3GGLL_enUS377US378&ie=UTF-8

check it out, scary stuff going on out there.

We can't sell our treasury securities on the open market like we where because of the long term debt picture, 10 trillion over 10 years, and the fed is now purchasing them with money printed out of thin air.
 
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Goldenboy219 said:
There is a very direct relationship to spending and inflation. We are approaching deflation with short term rates approaching the zero bound; therefore spending (as a means of facilitating growth) is virtually non existent.
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And so that's a reason to take even more money out of the private sector? If they weren't spending before, how on earth will a tax increase help?
 
MrVicchio said:
Can we say inflation? I knew we could! Notions like this seem like great ideas till you talk to someone that understands how the economy works, how money works, and why just giving people cash ain't gonna do much other then a very short term blip followed by long term repercussions.
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Inflation is ever so desirable in this economic climate. Well, not true. If you do not own anything, have any assets, etc..., then no inflation (or deflation) creates a scenario of indifference.
 
damianvincent

What would help small business is certainty in regards to the Bush tax cuts, will they expire, will they extend them.
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They need the dough now not next April. Besides, the majority of the small businesses wouldn’t be effected one way or the other by the sun setting on the bush tax cuts.



Another thing that would help small business, is to remove the massive costs they are soon to face due to Obamacare.
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Most of obama care doesn’t take effect until 2014,they need help now.

Obama wants to pay for this small business package, a one time shot, with more taxes, a permanent revenue stream.
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SO…they need the money now. Let them fiddle with their Roths in 2011 and 2012; whatever it takes.
 
Goldenboy219 said:
Inflation is ever so desirable in this economic climate. Well, not true. If you do not own anything, have any assets, etc..., then no inflation (or deflation) creates a scenario of indifference.
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I was seriously enjoying the food prices that seemed to be going down during the beginning of the recession, the only problem was that work wasn't staying steady.
 
In essence, what happens is that the Federal Reserve creates money out of thin air and starts buying things like U.S. Treasuries, mortgage-backed securities and corporate debt. But many economic analysts are now warning that further rounds of quantitative easing by the Federal Reserve could end up setting off a series of events that could ultimately unleash economic hell. In fact, there are quite a few high profile commentators who now believe that hyperinflation in the United States is absolutely inevitable.

Will Further Quantitative Easing By The Fed Destroy The U.S. Financial System? | Daily Markets

A central bank does this by first crediting its own account with money it has created ex nihilo ("out of nothing").[1] It then purchases financial assets, including government bonds,

http://en.wikipedia.org/wiki/Quantitative_easing
 
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Goldenboy219 said:
Inflation is ever so desirable in this economic climate. Well, not true. If you do not own anything, have any assets, etc..., then no inflation (or deflation) creates a scenario of indifference.
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If you gave 50% of wage earners 10k, you'd have a situation of too much money chasing too few goods. Inflation. Long term effects would be caused by "Where did this money magically come from? More borrowing? Just printed for fun?"
 
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MrVicchio said:
If you gave 50% of wage earners 10k, you'd have a situation of too much money chasing too few goods. Inflation. Long term effects would be caused by "Where did this money magically come from? More borrowing? Just printed for fun?"
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It would boost direct consumer spending, which is what we are wanting.
Remember that it isn't $10k per person but $10k per family, which doesn't make it as much as you think.
 
The decision by the Fed to buy government bonds and mortgage-related securities is designed to lower borrowing costs for home mortgages and other types of loans, thereby stimulating economic activity. The central bank, effectively, will print more money to pay for the purchases.

Fed to Pump $1.2 Trillion Into Markets - washingtonpost.com



Hopefully we're not missing the 800 pound gorilla in the room guys.
 
MaggieD said:
And so that's a reason to take even more money out of the private sector? If they weren't spending before, how on earth will a tax increase help?
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Let me explain so not to miss anything important.

When an economy is expanding, tax receipts (naturally) increase. When an economy is shrinking, tax receipts (naturally) decrease. During a period of shrinking tax receipts, spending as a whole begins to decelerate creating even greater downward growth prospects. Unless..... someone begins spending. That someone was the federal government; in a half assed attempt to minimize unemployment. Half assed? Why? Because the stimulus (as i have said from Jan 2009) was about half the size needed to meet the presidents prediction(s). It is pretty certain that without another stimulus package of equal or greater magnitude (along with total infrastructure focus), the US economy will slip back into recession within 6-9 months as global stimulus fades.

If private business was spending, there would be no need for fiscal stimulus.

Tax increases are necessary to make up the deficit spending required by government because the private sector was unwilling to step up when needed.
 
Harry Guerrilla said:
It would boost direct consumer spending, which is what we are wanting.
Remember that it isn't $10k per person but $10k per family, which doesn't make it as much as you think.
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Besides this being a silly idea. What would the money be spent on. Recent expeience shows either paying down debt or consumer products mainly helping the Chinese economy.

Not to mention you re just stealing money from future generations to make this group feel better, pretty selfish.
 
MrVicchio said:
If you gave 50% of wage earners 10k, you'd have a situation of too much money chasing too few goods. Inflation. Long term effects would be caused by "Where did this money magically come from? More borrowing? Just printed for fun?"
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That's a bit fuzzy. An $8 trillion spending spree is overkill. But HG's concept is correct, not to mention impeccable timing given current long term interest rates.
 
washunut said:
Besides this being a silly idea. What would the money be spent on. Recent expeience shows either paying down debt or consumer products mainly helping the Chinese economy.

Not to mention you re just stealing money from future generations to make this group feel better, pretty selfish.
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Poor people spend money, doesn't matter if some of it goes to foreign made products as American businesses get a nice cut off the top, it isn't about making low income people better but stimulating the economy.

I don't like these things but I'm not pretending to believe that the American government will magically stop redistributing income.
If my choices are 1. crazy pet projects designed by politicans to stimulate the economy or 2. creating a direct consumer stimulus, I'll choose 2.
It's more effective than 1.
 
Goldenboy219 said:
Let me explain so not to miss anything important.

When an economy is expanding, tax receipts (naturally) increase. When an economy is shrinking, tax receipts (naturally) decrease. During a period of shrinking tax receipts, spending as a whole begins to decelerate creating even greater downward growth prospects. Unless..... someone begins spending. That someone was the federal government; in a half assed attempt to minimize unemployment. Half assed? Why? Because the stimulus (as i have said from Jan 2009) was about half the size needed to meet the presidents prediction(s). It is pretty certain that without another stimulus package of equal or greater magnitude (along with total infrastructure focus), the US economy will slip back into recession within 6-9 months as global stimulus fades.

If private business was spending, there would be no need for fiscal stimulus.

Tax increases are necessary to make up the deficit spending required by government because the private sector was unwilling to step up when needed.
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Taking on that much of a greater debt load will not make things better, the US is in danger of losing it's AAA credit rating, we're seeing concerted efforts to replace the dollar as the currency of trade, international investment in the US through the form of treasury securities are drying up, all because of the dismal long term economic outlook, the biggest problem of which is our enormous debt load.

The private sector needs stability looking forward, to much is up in the air right now.
 
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Goldenboy219 said:
If private business was spending, there would be no need for fiscal stimulus.

Tax increases are necessary to make up the deficit spending required by government because the private sector was unwilling to step up when needed.
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Dude, the Private sector is holding back cause of impending new taxes, regulations and demands from Washington. Cap and Trade, yeah that passes it will hit EVERY business, this Obamacare mess? Impending new expenses. The Bush Tax Cuts expiring? More expenses. CO2 Regulation from the EPA? MORE cost.

Businesses respond poorly to added expenses. And Gov't can't fix that with it's own spending.
 
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