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

carlkay58 said:
Speaking from the unemployed state of Michigan, where the last economic growth was in 1997, yep, it is a depression!
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Take a trip to your local mall and tell me if that looks to you like a depression:2razz:

Another note - the point was made that the ratio for banks funds to reserve rate is currently 17:1. That means banks are holding onto 17 times the required funds by law. Do you know where those funds are held that are not out on loan? Federal Reserve Notes - i.e. loaned to the government, where they earn interest.
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Do you have a credible source to match this comment?

So the money is currently on loan to the government rather than the private sector. Without this money on loan to the government, the government would not be able to raise the funds to spend on the stimulus.
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Wrong! The capital to secure deficit spending is handled through the sovereign debt market, of which foreign direct investment (FDI) is currently the primary purchaser of Treasury debt. Of course, other private banks do direct bidding for treasuries to be held in the form of assets, however the big players in the US sovereign debt market are the foreign trading interests that are holding dollars year in and year out. They are the ones who are financing US deficit spending for the most part.

And with all these record level spending projects; guess what? There is record demand and interest from foreigners to purchase our debt. Why? Because of fear. Holding dollars is risky business given the relative currency volatility we have experienced this past year, and guaranteed US debt is the choice by the majority of banking institutions and foreign governments.


So the money is flowing from the private sector to the government sector because the banks are being actively encouraged by the rate on the Fed Notes over the risk of making loans.
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The interest paid on reserves is currently held constant to the FFR, of which is quite close to zero. However, this tool will be extremely helpful years ahead because of the eventual need to drain excess liquidity without invoking a recession ala Volker.

Also remember that an estimated 25% or so of the existing mortgages still outstanding are considered 'at risk'. If the banks do not hold sufficient reserves to handle when these loans go bad, then we are right back where we were in the fall of 2008. So the FED is encouraging the build up of reserves.
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While i certainly agree that capital is needed in the event of further defaults, there are a slew of Fed and government programs (namely TARP and TALF) that facilitate such a need. If banks are so worried about risk, why the scramble to pay back TARP?

Also, do you have a credible source to back up your assertion?

After all is said and done, the government is soaking up capital from the system to be spent in the manner that the government wishes rather than the private sector directing the investment. Since some of this is payments of $6 Million to the PR firm that ran Hillary Clinton's 2008 presidential campaign to save all of 3 jobs, among other abuses, the 'stimulus' is not really stimulating the economy but rather paying off supporters. Not very efficient now is it? Oh, and what type of infrastructure for the benefit of the US is that?
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How much of the infrastructure aspect is has been appropriated, planned, and spent? The above post is really just a rant without sound economic analysis.

Let's also look at the distribution of the stimulus spending. My company applied for a portion to help build high speed internet access for the thumb of Michigan - supplying a high speed internet option to over 1 million people who currently do not have an option short of satellite - at a cost less than one third the cost of satellite. Other companies applied for the same program in Michigan that could have covered the entire state with cheap high speed internet. Michigan, where the growth has been missing for over 10 years and leading the US in unemployment figures, no matter how you calculate it. How much of that stimulus money has reached Michigan? Less than $3 Million over the entire economy. Our project saw no awards in Michigan. There were only four states that got awards in our category: California, Illinois, New York, and Rhode Island. Yep, good stimulus there.[/quote]

Michigan stimulus came in the form of bailing out GM, and Chrysler. However, i have little doubt that the remaining stimulus money, if there is a need, will be appropriated accordingly.

If we actually were spending the stimulus money on infrastructure, I would not be as anti-stimulus as I am. But the stimulus money is being gifted to the Democratic supporters in obscene amounts that are not 'trickling down' or 'trickling up' or anything other than lining the pockets of many rich Democrats at the expense of everyone else in the US.
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My largest qualm was the tax cut aspect, of which represents nearly a third of the entire act. But investing in health care and education is what as known as an indirect infrastructure investment, building more schools, offering more research grants, providing state funding shortfalls due to declining revenue, etc.... If you go back one year, you will see posts of mine arguing for a $1 trillion infrastructure stimulus alone, and my pissedoffness. Here, ill give you an example: http://www.debatepolitics.com/breaking-news/43892-house-oks-787b-stimulus-bill-gop-opposition-12.html#post1057927304

Looking back, March of 2009 changed everything....
 
phattonez said:
I never said that WWII ended the Depression.
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Have you looked at the unemployment rates in that era? Look from 1937-1945 and tell me what you see:2razz:
 
misterman said:
Exactly! They always say "it was WWII, not the New Deal," as if WWII wasn't about government spending too.
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Then as now, only the government has the capacity to spend the money necessary to get our economy moving again. Of course, our debt was much greater this time before the emergency spending began thanks to our two optional wars.

So, after the economy has improved, it will be very important to start paying down our national debt as quickly as possible. Our fore fathers used a war tax to help accomplish this. I think the same thing will be necessary this time.
 
Goldenboy219 said:
Take a trip to your local mall and tell me if that looks to you like a depression:2razz:
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My local mall is over 50% empty and has more employees than shoppers for most of the day. When it does have shoppers, over 3/4 of them are Canadian (I live next to the border). If it was not for Canadian shoppers, my county would be much worse off. As it is we have an official unemployment rate of 24% with the unoffical rate of 39%.

Do you have a credible source to match this comment?
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Yes, check with your local banking sources. As a bank investor I have the bank's annual report in front of me. It tells me that at any one time it could have as much as 90% of its "Cash on Hand" in FED paper. I figure my bank is not too different from other banks and it makes sense. After all the FED is in charge of handling money transfers between banks and by just switching funds in their balances makes it very easy to do.

Wrong! The capital to secure deficit spending is handled through the sovereign debt market, of which foreign direct investment (FDI) is currently the primary purchaser of Treasury debt. Of course, other private banks do direct bidding for treasuries to be held in the form of assets, however the big players in the US sovereign debt market are the foreign trading interests that are holding dollars year in and year out. They are the ones who are financing US deficit spending for the most part.

And with all these record level spending projects; guess what? There is record demand and interest from foreigners to purchase our debt. Why? Because of fear. Holding dollars is risky business given the relative currency volatility we have experienced this past year, and guaranteed US debt is the choice by the majority of banking institutions and foreign governments.
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That may be, but the FED is still holding on to the local banks' money and that helps it maintain credit lines for both private and government. Currently the majority of the out go seems to be Government, but we can't prove or disprove this because the FED is above approach and audit.

The interest paid on reserves is currently held constant to the FFR, of which is quite close to zero. However, this tool will be extremely helpful years ahead because of the eventual need to drain excess liquidity without invoking a recession ala Volker.
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I agree that that is the theory and practice. As to how well it works, that is personal opinion and we probably don't agree on.

While i certainly agree that capital is needed in the event of further defaults, there are a slew of Fed and government programs (namely TARP and TALF) that facilitate such a need. If banks are so worried about risk, why the scramble to pay back TARP?
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So they can continue to collect income over $500,000 per year and maintain their huge bonuses? To get out from under the Government's Banking Czar's arbitrary, populist, and very visible public oversight?

Also, do you have a credible source to back up your assertion?
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Several:

InvestorCentric: Leaked Document Shows Fed Preparing For Next Mortgage Crisis

The Mortgage Lender Implode-O-Meter - tracking the housing finance breakdown, related to Alt-A and subprime mortgages, lending fraud, predatory lending, housing bubble, mortgage banking, foreclosures, debt, consolidation, lawyers, class-action lawsui - although maybe not exactly credible

Pam Martens: Judges Start Nixing Foreclosures - possibly the same

I don't have too much more time to search for more, but I recall reading many MSN Money articles over the past few months detailing the fact that the new wave of foreclosures are people who lost their jobs and can no longer make the payments. Add in the new credit card rules coming up and banks are wisely building up their cash reserves.

How much of the infrastructure aspect is has been appropriated, planned, and spent? The above post is really just a rant without sound economic analysis.
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Yep it was a rant. I think a justified one, but that is personal opinion again. :)

Michigan stimulus came in the form of bailing out GM, and Chrysler. However, i have little doubt that the remaining stimulus money, if there is a need, will be appropriated accordingly.
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Really? Bailout of GM and Chrysler? What bailout? Oh - you mean the forced bankruptcy of GM? You remember, where the President of the US fired the CEO of GM for saying that if the US wanted GM to go bankrupt then why did they lend any money to GM in the first place? In return for the $25 billion bailout money the US now owns about 59% of GM? That was no bailout - that was a straight up purchase of GM at a steep discount. And none of that money came to Michigan, it was mostly spent by the government studying how to break up GM as fast and profitable as possible. Michigan has received less than $4 million from the currently $157 BILLION handed out from the stimulus. Yep perfectly fair there.

My largest qualm was the tax cut aspect, of which represents nearly a third of the entire act. But investing in health care and education is what as known as an indirect infrastructure investment, building more schools, offering more research grants, providing state funding shortfalls due to declining revenue, etc.... If you go back one year, you will see posts of mine arguing for a $1 trillion infrastructure stimulus alone, and my pissedoffness. Here, ill give you an example: http://www.debatepolitics.com/breaking-news/43892-house-oks-787b-stimulus-bill-gop-opposition-12.html#post1057927304

Looking back, March of 2009 changed everything....
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And I would have been there with the same opinion as you at the time. But politics is politics and unless palms are greased and pockets lined, forget it. Both parties are pretty much the same in that regard.
 
misterman said:
Yeah, I'm the one with no clue.
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I am in perfect agreement with you on this issue.


Of course there is an argument. Unfortunately You must have some ethics against taking other peoples money without their permission to see it.
 
akyron said:
Of course there is an argument. Unfortunately You must have some ethics against taking other peoples money without their permission to see it.
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That's another thread, dude.
 
carlkay58 said:
My local mall is over 50% empty and has more employees than shoppers for most of the day. When it does have shoppers, over 3/4 of them are Canadian (I live next to the border). If it was not for Canadian shoppers, my county would be much worse off. As it is we have an official unemployment rate of 24% with the unoffical rate of 39%.
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Are you in the Detroit metro area, or a suburb such as West Bloomfield? I would tend to agree that Detroit in itself is near a depression state, however various social safety nets are keeping the area from entering it.

Yes, check with your local banking sources. As a bank investor I have the bank's annual report in front of me. It tells me that at any one time it could have as much as 90% of its "Cash on Hand" in FED paper.
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That has everything to do with a zero bound federal funds rate, and nothing at all with how your bank operates. In the absence of historic low rates, it is technically impossible for banks to run those type of reserves following a period of unprecedented defaults/instability. Also, lending capability can be achieved via multiple mechanisms utilizing TALF and the discount window simultaneously. However, banks are afraid to loan to the sub prime borrower of which has began to represent more and more of the loan market as of late. But to state that banks will not lend because they are afraid, and wanting to keep "cash on hand" is misleading. The tools to make such loans are there, and the incentive (profitability) to do so has never been higher.

That may be, but the FED is still holding on to the local banks' money and that helps it maintain credit lines for both private and government.
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Care to link/clairify this statement? It seems a little fuzzy.

Currently the majority of the out go seems to be Government, but we can't prove or disprove this because the FED is above approach and audit.
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Are you stating that the Fed is currently purchasing Treasuries? You are aware they cannot purchase them directly from the Treasure?.?.?. So you must clarify this statement as well.

I agree that that is the theory and practice. As to how well it works, that is personal opinion and we probably don't agree on.
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And we will not know until we begin to see some serious inflationary pressure.

So they can continue to collect income over $500,000 per year and maintain their huge bonuses? To get out from under the Government's Banking Czar's arbitrary, populist, and very visible public oversight?
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You side step my question in an attempt to go negative. How about the particular health of their industry? Does their desire to repay TARP say something about their ability to operate without government aid?



Several:

InvestorCentric: Leaked Document Shows Fed Preparing For Next Mortgage Crisis

The Mortgage Lender Implode-O-Meter - tracking the housing finance breakdown, related to Alt-A and subprime mortgages, lending fraud, predatory lending, housing bubble, mortgage banking, foreclosures, debt, consolidation, lawyers, class-action lawsui - although maybe not exactly credible

Pam Martens: Judges Start Nixing Foreclosures - possibly the same
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No offense, but i would not call any of the three credible. Not by a long shot!:rofl

I don't have too much more time to search for more, but I recall reading many MSN Money articles over the past few months detailing the fact that the new wave of foreclosures are people who lost their jobs and can no longer make the payments. Add in the new credit card rules coming up and banks are wisely building up their cash reserves.
Click to expand...

Again, reserves are at their height because of Fed actions, not on their own accord.

Really? Bailout of GM and Chrysler? What bailout? Oh - you mean the forced bankruptcy of GM? You remember, where the President of the US fired the CEO of GM for saying that if the US wanted GM to go bankrupt then why did they lend any money to GM in the first place? In return for the $25 billion bailout money the US now owns about 59% of GM? That was no bailout - that was a straight up purchase of GM at a steep discount. And none of that money came to Michigan, it was mostly spent by the government studying how to break up GM as fast and profitable as possible. Michigan has received less than $4 million from the currently $157 BILLION handed out from the stimulus. Yep perfectly fair there.
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GM and Chrysler were on the verge of liquidation, which is a national security matter as well as economic. Would your city/state have been better off with the two of them dissolved and liquidated. BTW, Michigan gets more than $4 million per week in unemployment benefits; can you explain how? ;)

And I would have been there with the same opinion as you at the time. But politics is politics and unless palms are greased and pockets lined, forget it. Both parties are pretty much the same in that regard.
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I agree. However, do you subscribe to the thought that we should just "do nothing"?
 
more mindlessness from misterman

from the cnn article linked above about obama's "major address" tuesday at brookings on JOBS:

"obama's latest set of proposals includes several BRAND NEW measures"

(emphasis mine)

among these most recent "fluctuations of legislation" obama includes, according to cnn:

"tax breaks for new jobs" (including a "payroll tax holiday")

"boosting investment"

and "lending support"

by that latter, obama means to encourage bankers to put some of that tarp stuff out there for the little guys

after having bailed out all the Too Bigs, and all

the president feels that the the goldmans and morgans kinda owe it to him

"look, you have a responsibility now, now that we have pulled you back from the brink," the chin in chief chafed in allentown

(from the wsj link)

the monday "meeting comes amid a MAJOR NEW push from the white house for jobs creation"

(emphasis mine)

he's really gonna bitch em out on monday, just wait

and they're gonna listen, too

don't they always?

LOL!
 
The Prof said:
"obama's latest set of proposals includes several BRAND NEW measures"
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Like those are the only measures.

It was just a suggestion, get over it.
 
a MAJOR NEW push for JOBS

only now

pathetic
 
thus, even the mindless perceive the failure

it's undeniable
 
Catawba said:
Then as now, only the government has the capacity to spend the money necessary to get our economy moving again. Of course, our debt was much greater this time before the emergency spending began thanks to our two optional wars.

So, after the economy has improved, it will be very important to start paying down our national debt as quickly as possible. Our fore fathers used a war tax to help accomplish this. I think the same thing will be necessary this time.
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Why did the war end the depression and the New Deal didn't?

I think the point ya'll are missing, is the difference between certainty and uncertainty in the private sector. The New Deal, as with the current strategy launched by the Libbos in D.C. created uncertainty.

Without certainly in the private sector, the government can spend gazillions of dollars and nothing is going to improve. Not to mention, the government can't create wealth.
 
misterman said:
Yes, why?

:confused:
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Because the war create a market for war materials and certainty in that market. The New Deal, like the Stealfromus package, didn't create either of those.
 
apdst said:
Because the war create a market for war materials and certainty in that market.
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So? The New Deal created a market too, for lots of stuff. Less certainty, perhaps, but a market. And a war creates lots of uncertainty too.

And are you sure the New Deal did nothing to help? Or was it just that the war was just a much bigger version of the New Deal?
 
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misterman said:
So? The New Deal created a market too, for lots of stuff. Less certainty, perhaps, but a market. And a war creates lots of uncertainty too.

And are you sure the New Deal did nothing to help? Or was it just that the war was just a much bigger version of the New Deal?
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Without certainty, none of the rest means ****.
 
misterman said:
:drink

.........
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History.....isn't cool aid. ;)

source


War transforms the nation's economy

The United States had not fully put its economic woes behind it by the time Japanese air and sea forces punched their fist through America's back door at Pearl Harbor in December 1941. Even near the end of the Depression, unemployment remained high. The 1940 census counted 11.1 percent of U.S. heads of household as unemployed. However, a deep, latent productive capacity existed within American industry.......
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