Thread: Stimulus Plan

Originally Posted by droche

You asked me what I meant by "pork" I told you what I meant by pork. I don't know what there is to refute. You say it is not a large part of the budget. I don't have exact facts and figures, but even some Democrats are becoming concerned with spending in the stimulus bill that will not stimulate the economy. They are not Republican spinmeisters, so I think there is a valid concern about that aspect of the stimulus bill.

There certainly is enough blame to go around for the current crisis and I don't mean to let Republicans off the hook, but Freddie and Fannie were also overseen by Democrats who dropped the ball. You say that they didn't participate in a lot of the sub-prime loans, but they controlled over 50% of the mortgage market in this country and it is the collapse of that market that precipitated the current situation. It was not the only factor but it was the biggest factor.

The oil shocks did not cause the inflation of the 60-70's. They might have aggravated it, but did not cause it. I remember being concerned about inflation as early as 1972, well before it was perceived that there would be an oil embargo. Oil could not have caused that inflation. For me, there is no revisionist history here, I lived it and what I am saying is that respectable economists from across the spectrum at the time acknowledged that it was caused by funding both the War and the social programs without a commensurate rise in taxes. I stand by what I say on this.

I'm not a fan of the total hands off policy of Bush and Reagan, but I also feel that unfettered spending and control by government is just as dangerous and that free markets with some controls is the best way to go. Something tells me I'm not going to convince you of that but that's fine; there are experts out there who agree with you and those who agree with me.

I am no fan of the Republican Party as it is today, although I suspect for different reasons than you, but I feel they have betrayed their core values and George Bush has to take responsibility; it happened on his watch. My favorite Presidents were Eisenhower and Ford. They were not out and out liberals but neither were they as extreme as Bush and Reagan. The current problems were not caused solely by Republicans, the Democrats are culpable as well and in that regard they too can say they are sorry and we can move on.

I have to confess that it gets very frustrating when you don't respond to what I say beyond reiterating the points I've just addressed. I show you categorical evidence that the oil embargoes DID trigger rampant inflation, and you brush it off without evidence. And you've just got Freddie and Fannie dead wrong. They were victims of the lending crisis, not its causes. Look it up. You might try this: Fannie Mae and Freddie Mac were victims, not culprits - BusinessWeek

The Republicans haven't betrayed their core values. They've merely proven that they don't work, at which point everyone pretends they meant something else. I do agree on the point of Reagan and Bush's extremism, however.

I do have exact figures. That's what I've been giving you. You might give me a little credence.

I've always found it helpful to be able to question my own assumptions. I'm wrong sometimes. It's an important thing to bear in mind.

j

And it also gets very frustrating when you can't follow simple logic such as when how could an oil embargo cause an inflation when the inflation existed long before the embargo, and you do not address that?

Anyway, I guess we are at an impass, so I will concede, you are right, I am wrong.

It was Nixon taking us off the gold standard and allowing the dollar to "float" that caused inflation, at that time oil being the commodity it is, became the new monetary standard. Nature abhors a vacuum and OPEC came into being as well as the "petrodollar" at the same time gold was removed as the standard. Oil by itself did not create inflation, it would have happened anyway, the timing of OPEC and their embargo was very well planned and they do enjoy the benifits of being the new barons of wealth.

Girls, girls. You're both pretty

Sorry- couldn't resist- no disrespect meant

Wow, this was a really interesting thread, and I'm glad I waited to read it until it it had developed a bit. I'm too young to know/remember the ins and outs of the economic situation of the 70s, but I think there's a few things we can probably all agree on:

1. Politicians, any party, any country, no matter what ideologies they may have started with, all eventually become douchebags and compromise everything they stand for in the interest of power (see John McCain '08- a guy I rarely agreed with but used to respect as a fairly upstanding guy)
2. We are in deep doo doo- no matter what got us here
3. It it our duty (and extreme privilege as Americans) to get off our duffs and watch these douchebags like hawks until things get better, and then not let up just because it is on the road to recovery.
4. Question everything that comes up in the interest of quick fixing the economy- no matter the source

I personally have always been a staunch liberal (and I'm taking that word back- you can't have it any more- it's not a negative), but I am actually glad for the Republicans, and those few Democrats who are questioning what's coming down. I can only hope that they're doing it for the right reasons and not just for political capital. We're deep in this mess. Nothing we can do now is going to fix it within the year, or even by the end of the decade. I'd rather we take our time and do this right, even if in the process I lose my job and have to go through some tough times. The country, and everyone in it is more important.

$0.02

Thank you to all for your insight on both sides. It's been really interesting and enlightening.

Originally Posted by droche

And it also gets very frustrating when you can't follow simple logic such as when how could an oil embargo cause an inflation when the inflation existed long before the embargo, and you do not address that?

Anyway, I guess we are at an impass, so I will concede, you are right, I am wrong.

Turns out, I think I owe you an apology. The wonderful inflation graph I'd put into my post appears to be errored out. I can hardly hold you accountable for responding to something you couldn't see.

Not sure how it works, but the graph shows up on my home computer, but not in my office. Strange.

What it shows is that inflation went up to an at-that-time horrifying level of 6+% around 1969. That's what got Nixon all in a bunch. But it was down below 3% again in 1972.

Then, when the Arab Oil embargo occurred in late 1973, it shot up to 12+ percent. That declined slowly, to about 5% around 1978. Then, in 1979, when the second embargo hit, it shot up to nearly 14%.

I'm not trying to be nasty about it. What it shows is that there was low inflation through about 1966 (around 2% for years) which edged up to around 6% in 1969. But it was on the run again until the energy crisis. It's pretty clear -- the inflation Carter had to deal with was pretty obviously caused by oil.

Like you, I lived through those days. I was a Republican at the time. And like you, my recollection was that the whole era was one of inflation and stagnation.

But the figures really do show another picture. We really were screwed by the oil producers.

Sorry for the misunderstanding. Sometimes I get too strident.

j

That's fine, thank you, I appreciate it. Well, I've said my piece, everyone knows where I stand. People can disagree and still like and respect one another. That's the way I feel here, but I don't want to hog the thread so I'll give it a rest and let others give their perspectives. Noone has all the answers or a monopoly on truth, so it's time for me to listen and learn.

All the best.

DR

I've got it!

Based on my experience over the last couple of months, if every member here tries to get just one friend in to straights, the ensuing RAD and HAD would completely turn the economy around! Plus, all our collections would exponentially increase in value. Time to buy stock in Dovo!

John Maynard Keynes suggested burying a whole bunch of money in a mine shaft somewhere and taking bids from people to give them the right to dig it up. Said it would be as good as anything else for driving money into the economy.

j

That's one of the reasons the hoover dam was made: to have a big project that would get money going around again.

Its for this reason that it's pointless to cut nasa spending because it costs money. The money is going back into the economy. It didn't magically get lost.
As long as it is going around, it has a positive effect.

For the same reason it would be better to allow easy legal immigration. That way, people settle and they spend their money locally. And they pay taxes. As long as the money goes around, immigrants don't 'steal' jobs, because their spending will pay for more jobs and increase the GNP.
It's only when money leaves the country that there is a problem.

We already have legal immigration to the tune of 138,000 a month in the US. This is not to say that is good or bad but coupled with the illegal immigration there are to many immigrants coming in. In California immigrants cost the state somewhere between 5 and 8 Billion a year depending who you listen to. The Feds lose about another 4 Billion to services rendered. I live in an area that has high unemployment, like 15 or 20%, and illegals have a very deep impact on the social programs in the area. Many illegals work under the table and it is true that they do spend money in the local area but the problem is that for every dollar the government pays in anything they have to collect $9 from the taxpayers to accomplish this. We do need infrastructure improvements that should have been paid for by gasoline, property, and payroll taxes but that is another never ending story.

In closing we need a sane immigration policy not the one that we have. It is breeding gangs and crime at an alarming rate in this state and the rest if the country.


Later,
Richard