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

danarhea said:
Roosevelt essentially spent our way out of the Great Depression. But this time, we have a problem - We don't have any money left to do this.
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Don't have a World War to spend it on either........... yet.
 
I find it interesting how little discussion went on in this thread. I was hoping that by changing tone in the OP it would inspire more then one sentence responses. A most disappointing, though not really unanticipated outcome.
 
MrVicchio said:
I find it interesting how little discussion went on in this thread. I was hoping that by changing tone in the OP it would inspire more then one sentence responses. A most disappointing, though not really unanticipated outcome.
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I reread the opening of the thread to see if I missed something. Not sure I understand what you mean about the changing of tone.

For me the headline about a full scale attack to revive our economy is junk politics by the President. The note talking about getting the government out of the way lays out the Republican arguement.

I agree with neither arguement, perhaps that is why you got the response you did. My sense is that the type of recession we are in, based on a financial breakdown, does not have any short term fix. Many people probably understand this but can't say it because the public wants instant gratification. So the administration says just spend more money and everything will be fine. The opposition says do nothing and get out of the way and everything will be fine.

The economy needs to find a bottom until we do that we will bounce around and just drift lower. Else we will inflate prices, and get there using cheaper dollars.
 
washunut said:
Please explain how Obama wants to lower Federal taxes on 95% of the people when only 53% actually pay Federal tax. Just goes to basic honesty.
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Not paying federal income tax is not the same thing as not paying federal tax.
 
First you write:
damianvincent said:
Most of the extra spending during Reagan's term was due to the Democrats who controlled Congress, just like most of the rolled back spending during Clinton's term was due to the Republican's in Congress.
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A few posts after, you write:

damianvincent said:
He could, but, he made concessions to get defense increases.
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Can you properly identify the spending increases to back up your statement?
 
Yesterday, Krugman had an interesting article:


Ah: in this post on interest rates and inflation, I neglected to point out that right now we’re not on the Taylor rule line, because of the zero lower bound. The picture looks like this:
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wicksell_trap.png


with the blue arrow pointing to our current position. We got here, of course, thanks to a huge financial shock that shifted the natural real interest rate way down. Now, at this point any Taylor rule fitted to past Fed behavior says that the Fed funds rate should be something like minus 5 or 6 right now, but you can’t do that, so we’re stuck with an interest rate that’s too high given low inflation and very high unemployment.

The crucial thing to understand about this position is that it’s not self-correcting. On the contrary, as inflation falls over time and possibly goes to actual deflation, we sink deeper into the trap.

That’s why the Fed’s wait-and-see policy is so wrong-headed: to the extent that the Fed thinks it can use unconventional measures to get some traction, it should use them now now now, not wait until expectations of below-target inflation have gotten embedded.

It’s also why fiscal policy should have been much more aggressive than it was; even aside from the political dynamics, which said that we’d only get one shot, the economic dynamics also said that not doing enough early on only makes an eventual solution harder.

The sad thing is that policy makers were supposed to know all this. The Fed had studied Japan extensively, and believed that the Bank of Japan could have averted the lost decade if it had reacted very aggressively early on. Larry Summers talked about a Powell doctrine of overwhelming force in the face of crisis. And yet what we actually got was an underpowered response on both the fiscal and the monetary fronts.
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The Trap We're In (Wonkish) - NYTimes.com
 
CriticalThought said:
Can you actually provide evidence that Bush's tax cuts spurred growth and created a significant number of jobs?

Policy decisions should be based on evidence, and if his tax cuts don't work, then extending them seems rather arbitrary. Obama already wants to give taxcuts to the bottom 95% of Americans, so please provide some evidence that adding taxcuts to the top 5% would be worth the extra hundreds of billions that it would add to the federal deficit.
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Your proof is in your own statement: hundreds of billions that it would add to the federal deficit. Leave those hundreds of billions in the hands of private enterprise!!
 
MaggieD said:
Your proof is in your own statement: hundreds of billions that it would add to the federal deficit. Leave those hundreds of billions in the hands of private enterprise!!
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Private enterprise is not spending what it should to justify the "lower the tax rates" argument. If what i have said is incorrect, we would be witnessing both higher inflation and greater lending spreads.
 
While assaulting the economy he can tell his wife to stop dressing like a PROSTITUTE and to WEAR LONGER DRESSES. I dont want to see her couchee.
 
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.
 
Goldenboy219 said:
First you write:


A few posts after, you write:



Can you properly identify the spending increases to back up your statement?
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I don't have the time to comb through the 80's budgets and link who is responsible for what spending increases, that information is difficult to find on the Internet, not that it can't but you have to comb through so many docs for which I don't have the time. Sorry. However my statement was pretty common knowledge, in order for Reagan to get his tax cuts and defense increases he had to make concessions to the Democratic controlled Congress.

Reagan resisted tax increases, and Congress resisted cuts in domestic spending.

Reaganomics, by William A. Niskanen: The Concise Encyclopedia of Economics | Library of Economics and Liberty

I mean this stuff is pretty common knowledge.
 
Goldenboy219 said:
Private enterprise is not spending what it should to justify the "lower the tax rates" argument. If what i have said is incorrect, we would be witnessing both higher inflation and greater lending spreads.
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Not spending what it should? What the heck does that mean?

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GayLibertarian said:While assaulting the economy he can tell his wife to stop dressing like a PROSTITUTE and to WEAR LONGER DRESSES. I dont want to see her couchee.
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Go take a shower.
 
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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What would help small business is certainty in regards to the Bush tax cuts, will they expire, will they extend them. Another thing that would help small business, is to remove the massive costs they are soon to face due to Obamacare. Obama wants to pay for this small business package, a one time shot, with more taxes, a permanent revenue stream.
 
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.
 
MaggieD said:
Not spending what it should? What the heck does that mean?
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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.
 
damianvincent said:
The fed's wait and see policy, are we now ignoring the past 2 1/2 years of reckless fed policy.
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Liquidationism is a pipe dream drawn up by those who have little if nothing to lose.
 
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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Well with the feds quantitative easing plan, we've been lucky not to hit an inflationary bubble.
 
damianvincent said:
Well with the feds quantitative easing plan, we've been lucky not to hit an inflationary bubble.
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If I'm not mistaken most spending done lately has been directed towards debt reduction, which I think is deflationary.
Not a whole lot of luck, just natural consequences.
 
damianvincent said:
I don't have the time to comb through the 80's budgets and link who is responsible for what spending increases, that information is difficult to find on the Internet, not that it can't but you have to comb through so many docs for which I don't have the time. Sorry. However my statement was pretty common knowledge, in order for Reagan to get his tax cuts and defense increases he had to make concessions to the Democratic controlled Congress.
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You made a statement that said democrats were responsible for spending increases while later acknowledging (massive) military spending increases (AKA military Keynesianism). Just found it wildly ironic and wondered if you had a grasp of the fiscal picture. :shrug:
 
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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
 
damianvincent said:
Well with the feds quantitative easing plan, we've been lucky not to hit an inflationary bubble.
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If we were to hit an inflationary bubble, wouldn't we be witnessing growth? Luck? Nope! Inflation is not even in the cards....
 
Deuce said:
Not paying federal income tax is not the same thing as not paying federal tax.
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Please explain. If you want to be accurate, exclude social security and unemployment insurance. Social security is a funded pension plan which most people think has worked pretty well. The unemployment insurance is being supplemented by government help rather than raising the rates.
 
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