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LA Times: Obama stimulus spending: $246,436 per new job

Is credit hard to get now because the government has all the paper though?

Yes, it is.

Private banks are waiting out the government, this is a time of insecurity, no one knows what will come out of congress, H.C, Cap and Trade, the new taxes on the way, etc.
 
Yes, it is.

Private banks are waiting out the government, this is a time of insecurity, no one knows what will come out of congress, H.C, Cap and Trade, the new taxes on the way, etc.

This isn't about banks, it's about their customers. Is there a shortage of money to borrow?
 
And the problem during a recession is that credit is hard to come by right?

A problem? Yes, but not the only problem and providing liquidity (as we can clearly see) is not a magic bullet. We recently experienced the greatest credit crunch in history; not even the one experienced from 1929 compares. Although the GD was more of a liquidity crunch.

Well what would be the function of an increase in savings? With free banking, would that make loans easier to get again?

You are making another error assuming liquidity is currently a problem. The banks are lush with reserves in which to make loans, the problem arises from credit worthy borrowers, possible declines in asset value, among other things. The rational consumer does not want to overpay, just as the rational lender does not want to face default (write downs are all to common now).

The key is jobs! I myself was calling for a stimulus in line with $1 trillion directed primarily towards infrastructure last year.... If you undershoot the first one, it only makes the following stimulus more expensive. Keep in mind the US is auctioning debt at what can be considered a serious discount.
 
This isn't about banks, it's about their customers. Is there a shortage of money to borrow?

It is all about the banks, and the banks are keeping their powder dry.

There are customers, but business is slow, and the government is making it impossible for banks to make informed decisions about whether to lend or not!
 
Excuse me. But I think you knew what I meant. Sorry for being not boring when I write.

So every company is failing during a recession? Realllllllllllllllly?
 
It is all about the banks, and the banks are keeping their powder dry.

There are customers, but business is slow, and the government is making it impossible for banks to make informed decisions about whether to lend or not!

But the claim was that the government was borrowing all the money so private borrowers can't. I was refuting that.
 
So every company is failing during a recession? Realllllllllllllllly?

You knew what I meant. You're not that dumb. It's really petty and pathetic of you to pretend to be stupid just to score a cheap point.
 
But the claim was that the government was borrowing all the money so private borrowers can't. I was refuting that.

That is still the claim, they are.
 
That is still the claim, they are.

The term you are looking for is "crowding out", and due to the low level of business investment being pursued, we are not experiencing it. Crowding out is typically experienced during expansions in which government spending is exceeding government income.
 
Can you back that up with evidence? Link?

I don't need a link, it is really explained quite simply...

The banks are worried about the government spending, they are waiting to see how this turns out first. You then add in the bills before congress, and you have just made this insecurity ten times greater. You also factor in the fed, and the fact that they are trying desperately to control inflation, so the banks are between a rock and a hard place.
 
I don't need a link, it is really explained quite simply...

The banks are worried about the government spending, they are waiting to see how this turns out first. You then add in the bills before congress, and you have just made this insecurity ten times greater. You also factor in the fed, and the fact that they are trying desperately to control inflation, so the banks are between a rock and a hard place.

WTF are you talking about?
 
The term you are looking for is "crowding out", and due to the low level of business investment being pursued, we are not experiencing it. Crowding out is typically experienced during expansions in which government spending is exceeding government income.

What?:confused:
 
WTF are you talking about?

You have the absolute nerve to suggest this...."Crowding out is typically experienced during expansions in which government spending is exceeding government income"

And then double down by asking me "WTF am I talking about"

You are obviously on another planet!:shock:
 
You have the absolute nerve to suggest this...."Crowding out is typically experienced during expansions in which government spending is exceeding government income"

And then double down by asking me "WTF am I talking about"

You are obviously on another planet!:shock:

You must have misunderstood me. We are currently in a recession (which is why deficit spending is not only natural but positive). During times of economic expansion, crowding out by sovereign debt markets is quite real.
 
That is a straw man and you know it.

Nope, it's a point. We want the failing businesses to get smaller and the succeeding businesses to get larger.
 
Nope, it's a point. We want the failing businesses to get smaller and the succeeding businesses to get larger.

You are confusing economic contraction with vertical and horizontal integration. While this type of business behavior can occur in a recessionary climate, the two are not mutually synonymous. The reason businesses fail can be ambiguous, which is why entrepreneurs are not lining up to open shop.

During severe contractions (exogenous/endogenous shocks), business failure rates go way up, where as during mild contractions they closely mimic a steady state.
 
The banks are worried about the government spending, they are waiting to see how this turns out first.

Why would they be worried about government spending?

You then add in the bills before congress, and you have just made this insecurity ten times greater.

Which bills?

You also factor in the fed, and the fact that they are trying desperately to control inflation, so the banks are between a rock and a hard place.

Well, that may be a factor, yes, but the Fed is hardly worried about inflation right at this moment. Deflation is more like it. The Fed has pushed interest rates really really low and lowered the discount rate as well to make it easier for banks to loan out money.
 
Again your error is in regards to time frame. Savings fuels long run growth. :2wave:

No, savings insures a better chance of survival in bad times. You never use your savings to grow your business. You use your savings as security to take out a loan to grow your business because you can see that that growth will be lucritive.

This isn't about banks, it's about their customers. Is there a shortage of money to borrow?

There's is when the banks are afraid to loan money in this economic environment. Ultimately, it's the banks and the consumer. Neither want to make a loan, right now.
 
Why would they be worried about government spending?

Because bankers, like everyone else with some common sense, know that the money that the government spends will have to be paid back by their customers. They're not going to make loans to businesses if theirs a better than average chance that the loan want be paid back. A tax hike will cause that better than average chance to exist. You think banks in Louisiana are making loans on oilfield equipment right now? uh, no!



Which bills?

Cap-n-tax, Obamacare, Pork I and II, Omnibus. The new taxes that will be born out of these bills will greatly effect a businesses bottom line, along with their ability to generate enough revenue to repay a loan, plus still be able to operate.



Well, that may be a factor, yes, but the Fed is hardly worried about inflation right at this moment. Deflation is more like it. The Fed has pushed interest rates really really low and lowered the discount rate as well to make it easier for banks to loan out money.


Haven't we already learned our lesson from that? I thought we had, but maybe not.
 
Because bankers, like everyone else with some common sense, know that the money that the government spends will have to be paid back by their customers. They're not going to make loans to businesses if theirs a better than average chance that the loan want be paid back. A tax hike will cause that better than average chance to exist. You think banks in Louisiana are making loans on oilfield equipment right now? uh, no!

So you think an administration that is doing record deficit spending to save the economy is going to be concerned about the deficit so much in a year or two that they will impose massive tax hikes before we've recovered and risk undoing this expensive recovery? And you think the banks really think that? Right.

Cap-n-tax, Obamacare, Pork I and II, Omnibus. The new taxes that will be born out of these bills will greatly effect a businesses bottom line, along with their ability to generate enough revenue to repay a loan, plus still be able to operate.

Cap and trade will have some costs, yes. Obamacare will end up saving the government a slight amount of money, depending on which version passes. "Pork" and omnibus I presume means appropriations bills, which don't impose any taxes, but rather spending, which is the good thing right now, remember? If you don't, the banks will.
 
So you think an administration that is doing record deficit spending to save the economy is going to be concerned about the deficit so much in a year or two that they will impose massive tax hikes before we've recovered and risk undoing this expensive recovery? And you think the banks really think that? Right.

I know the banks are thinking about that. We're not talking about 90 single payment loans here. We're talking 24, 48, 60+ months loans. Do you seriously think that banks aren't thinking about new taxes that will be imposed 5 years from now?



Cap and trade will have some costs, yes.

No one knows what CnT is going to cost private businesses and no one is going to d anything, till CnT goes away, or we can get a solid fix on how much will come out of our pockets.

Obamacare will end up saving the government a slight amount of money, depending on which version passes.

Yeah, right!! A government program that saves money...:rofl. Besides, business tides don't ebb and flow on whether, or not the government saves money on some BS program.

"Pork" and omnibus I presume means appropriations bills, which don't impose any taxes, but rather spending, which is the good thing right now, remember? If you don't, the banks will.

They have to be paid for, sooner, or later. Hence, the government can't create wealth.

Trust me, the banks don't give a rat's ass how much money the government is pissing away on marsh mice, deer underpasses, turtle tunnels and political payoffs to Hillaries pards.
 
I know the banks are thinking about that. We're not talking about 90 single payment loans here. We're talking 24, 48, 60+ months loans. Do you seriously think that banks aren't thinking about new taxes that will be imposed 5 years from now?

How do you know?

No one knows what CnT is going to cost private businesses and no one is going to d anything, till CnT goes away, or we can get a solid fix on how much will come out of our pockets.

Yeah, right!! A government program that saves money...:rofl.

The CBO says so.

See, this is typical of the debate here - just repeating as gospel simple little cynical statements they hear on the bus. If you disagree with the CBO, present some evidence.

They have to be paid for, sooner, or later. Hence, the government can't create wealth.

There's another one.

Trust me,

:thinking

the banks don't give a rat's ass how much money the government is pissing away on marsh mice, deer underpasses, turtle tunnels and political payoffs to Hillaries pards.

So they don't care that all those businesses getting the stimulus contracts are getting lots of new orders and hiring people and such? Hmmm.
 
How do you know?

I own a business. I'm at the bank every week. I talk to the honchos and that's what they're telling me, besides, I possess an above average level of common sense.





The CBO says so.

See, this is typical of the debate here - just repeating as gospel simple little cynical statements they hear on the bus. If you disagree with the CBO, present some evidence.

Let's see where the CBO says so.


[/quote]So they don't care that all those businesses getting the stimulus contracts are getting lots of new orders and hiring people and such? Hmmm.[/QUOTE]


Sure they would care, if it were actually happening. There just aren't enough businesses prospering from the pork pack to turn the economy around. Sorry!!!! Not here in the real world, anyway.
 
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