Thread: Stimulus Plan

Originally Posted by Nord Jim

I'm referring to the congressional republicans merely voting the whole thing down in a lock-step bloc. "Conservative economists" are the guys who got us into this situation with their elimination of regulation, their tax cuts for folks who won't put the money back into the economy, and their runaway government programs that ran up the biggest national debt since Caligula.

Don't know what you mean by "pork." When somebody improves the roads in a district, that's "pork." Keeping a military base open is pork. Funding a special research project is pork. When a defense plant is kept open in a district rather than throw forty percent of the labor force into the streets, that's pork. It's how special projects get done in nearly every district in America-- things that fall in the cracks between the big projects. True, some dumb stuff gets through, but the whole thing is such a miniscule portion of the budget, it's hardly worth the angst that the right wing demagogues stir up.

To say that government spending caused the inflation of the '70s and early '80s is completely unsupportable. If that were the case, then how do you account for Reagan, who ran up the biggest debts until Bush went him one better? Are you suggesting that the oil embargo had nothing to do with inflation? Energy costs tripled overnight -- and stayed that way.

The object here is to get money back into the economy. There can be reasonable disagreement over how, but the Repugs are merely parroting the same old same old that got us into this. When the economy first tanked, you know what Gingrich suggested? Remember Gingrich? It's his Contract on America that set us down this road. And his solution? Repeal Sarbanes Oxley and eliminate the capital gains tax. Can you believe it? The country is bleeding to death, and these guys are still flogging the same old payoff to the rich and elimination of oversight that caused the whole mess.

If the Repugs had offered a real suggestion, then they could vote no to their hearts content. But they're merely playing politics with a nation that's in real danger. That's unconscionable.

j

Pork is projects and spending that support one small area or sector with little or no overall effect on other sectors. The main reason for pork spending is to increase the stature of a politician as opposed to a real need for the project or program.

Conservatives did not get us into this mess. It is a misnomer to call the Bush Administration conservative. They were neo-conservatives. In addition, the largest thing that caused this economic collapse was the Fannie-Mae/Freddie-Mac collapse, a large part of which was caused by the government forcing financial instituitons into making high risk mortgages, and by Fannie/Freddie, a quasi government organization, controlling a tremendous percentage of the mortgage market.

The fact that the inflation of the 60's-70's was caused by government spending dollars that they didn't have is fully supportable. Even liberal economists acknowledge that; I had one as a professor in 1972. The inflation that occurred then began and was in full gear long before the oil shocks in '74 and '79. At the time it was called "Guns and Butter." In other words, the Lyndon Johnson Administration funded the Viet Nam War and The Great Society Programs without raising taxes to pay for them. They had enough money to pay for one, but not both, and it is widely acknowledged that is what caused the inflation that followed.

Unfortunately, you've picked up a lot of bad information. It's understandable. Ever since Bush's approvals started tanking, conservative "think" tanks have started spinning things to try to salvage the brand. They've come up with such gems as "Roosevelt prolonged the Great Depression by instituting the New Deal," or "After 14 years of Republican control, it's still the Liberals' fault," and my personal favorite, "Bush isn't really a conservative."

Let's look at some facts.

Originally Posted by droche

Pork is projects and spending that support one small area or sector with little or no overall effect on other sectors. The main reason for pork spending is to increase the stature of a politician as opposed to a real need for the project or program.

You never refuted what I said on this, so I'll let this go and simply say that not all earmarks are wastes, and in any case, all the earmarks rolled up in a ball represents less than 1% of the federal budget. So the hue and cry on earmarks is merely an effort of Republican spinmeisters to divert the attention of gullible voters away from real issues and onto trivia.

Originally Posted by droche

Conservatives did not get us into this mess. It is a misnomer to call the Bush Administration conservative. They were neo-conservatives. In addition, the largest thing that caused this economic collapse was the Fannie-Mae/Freddie-Mac collapse, a large part of which was caused by the government forcing financial instituitons into making high risk mortgages, and by Fannie/Freddie, a quasi government organization, controlling a tremendous percentage of the mortgage market.

Fact One: Freddie and Fannie are a small part of the recovery effort
Fact Two: Freddie and Fannie suffered from deregulation and lack of oversight (one "conservative virtue"), and did not participate in a lot pf sub-prime loans
Fact Three: The credit crisis was centered in the private sector -- does the name "Lehman Brothers" ring a bell? -- and was enabled by Republican deregulation which allowed lending institutions to take risks with other people's money, and by the fact that the Bush administration failed to perform its regulatory duties.
Fact Four: Bush was -- and is -- a classic Reagan conservative. He followed the playbook to the letter, with deregulation, tax cuts, wealth redistribution to the rich -- right down the line. To call him anything else is typical right wing weaseling in a last ditch effort to save the brand. (I'm talking about the spinmeisters, not you.)

Originally Posted by droche

The fact that the inflation of the 60's-70's was caused by government spending dollars that they didn't have is fully supportable. Even liberal economists acknowledge that; I had one as a professor in 1972. The inflation that occurred then began and was in full gear long before the oil shocks in '74 and '79. At the time it was called "Guns and Butter." In other words, the Lyndon Johnson Administration funded the Viet Nam War and The Great Society Programs without raising taxes to pay for them. They had enough money to pay for one, but not both, and it is widely acknowledged that is what caused the inflation that followed.

This is more revisionist history. I don't know who told you that "liberal economists" agree to that, but I deal with economists every day and I assure you, it ain't so. At that time, a "liberal economist" may have said that the war was bad for the economy, because during the primary inflationary times of 1967-70, it was costing twice what the Great Society was, and wasn't even the entire military budget.

But to say that the oil shocks didn't cause inflation is simply not true. Here's the facts:



The correlation between the oil shocks and inflation is obvious, indisputable, and complete.

Another cause of inflation at the time, of course, was the Baby Boom generation entering the workplace in unprecedented numbers. Suddenly wages were way up (though marginal wages continued to decline for years), and demand for goods and services (especially housing and energy) was also way up. The result? Inflation. No brainer.

As I said, the right wing spinmasters are working overtime to try to convince a gullible public that they're not at fault. But the truth is becoming painfully obvious: Reaganomics as a concept has been completely, totally, and finally discredited. The sooner the right wing recognizes that, the sooner they'll be viable again.

There comes a time in many lives when honor and integrity demand that a man stand tall and acknowledge his bastards. Believe me, it gives me no pleasure to say that this time has come to the Republican Party. All this think-tank effort at revisionist history and weaseling will not bring the party back.

Sometimes, when the oobleck is falling faster than you can deal with, there's nothing for it but to say you're sorry. Then maybe we can move on.

j

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.

It used to be we had the tax and spend Democrats, since Nixon we have had tax and spend Republicans(GW being the worst). Every President and Congress since LBJ has added to the national deficit. They have all had their favorite pork barrels, for anybody to blame one party in particular for this mess is irresponsible. For far too long we as Americans have done business as usual allowing Washington to do business as usual, we have not watched the foxes as they were gaurding the coop. We have fought tooth and nail for trendy ideologies while forgetting the basics of fiscal responsibility as a people and as a nation. And while we let our money be frittered away we allowed our wealth producing maufacturing base to be shipped overseas to a people who are sworn to bury us. Every President and Congress since LBJ has done their damnedest to cut this country's throat and bleed it off. Both parties are guilty, not one more than the other, but equally, if either party was doing its job as it should, the other party could not have gotten away with it.

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.

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.