the dumb ass; Gingrich Pushes 90s-Era Proposal Calling it ‘A New, Bold idea’ the stupid; Bill O'Reilly uses his own internet poll to absolve himself of his cowardly actions against Helen Thomas
I love the endorsement of the Irish economic/fiscal model, their economy is imploding at a faster rate than ours, and they are running deficits that are as big or bigger than ours in relative terms without the same flexibility to write debt that we have.
more government spending = less private investment. tax cuts aren't the answer. Tax cuts don't help the economy. Spending less does. Keynes was a moron. Digging ditches and filling them again does not grow the economy. Moving money around the economy without producing anything does not grow the economy. If these things did then the solution to all our problems would be to firebomb our cities just so we could build them up again. Nobody gets that. Republicans pretend like they do but then all they do is push tax cuts at the expense of everything else. America = Japan 2.0
This is where you could not be more wrong. What got us out of the Great Depression? 1. The TVA - It put people back to work in droves. The government got some of this money back in the form of taxes on income. Additionally, the materials and equipment needed to be manufactured. This got the factories back producing. This created more jobs. This started the turnaround. 2. WW2 - When we went to war, we needed equipment for war (Jeeps, tanks, etc). The commercial factories started pushing out this stuff. More people went back to work. In recovering from an economic downturn, it starts with resuming manufacturing. Many other things branch out from there.
This post reminds me of our society's collective ignorance as to what causes economic crises. One thing is for sure -- they are all unique. Trying to solve them with a cookie-cutter approach from a crisis from 80+ years ago is beyond stupid. Yes, stupid. People still debate what caused the Great Depression, which by the way, is not comparable to what we are going through today... What led the US out of those economic times is also subject to debate. Some say the New Deal PROLONGED the depression. We don't know. If I don't know, then you, Refman, definitely don't know. I do, however, believe this crisis is unique. As a scholar and an industrialist with business dealings in many countries, I feel well equipped to share my insight on this crisis. As I have stated before, two problems must be solved, prior to economic recovery. 1) Unfreezing of the credit markets 2) Improvement of consumer/investor confidence. The PORKULUS plan achieves neither of these objectives and Barack The Deflator is only hurting consumer/investor confidence with his daily 'we are in a catastrophe' speeches. With these words, The_Conquistador calls upon members of Congress to take the following steps: 1. Erase the capital gains tax. Why? The stock market will soar and the wealth effect will trigger consumer spending and investment. This will cause asset values to increase and thereby will help the collateral value of troubled loans. This, in turn, will lift the banks out of their current state of affairs, which is plagued with marked-to-a-crappy-market asset values. This will allow banks to lend more money and the credit markets will defrost. 2. Lower corporate tax rates. Why? Again, this is a move, similar to Move 1, that makes corporations more valuable -- it's simple math. If you pay less in taxes, then you have more cash to invest and create value with. This increases the value of your business. This, in turn, helps banks b/c their loans are now with better credits and the companies can better afford to pay them back. This increases the value of the loans, which allows banks to lend more, and the credit markets are defrosted. Additionally, the value of stocks will increase, spurring a wealth effect and greater spending and investment. Finally, this move will reduce the incentive for corporations to locate in tax havens abroad, thereby increasing tax revenues. I AM THE TEACHER AND YOU ARE ALL WEAK STUDENTS
Dumb ass and Stupid are great names for this thread. Jorge knows that tax cuts produce less stimulus effect than they cost the government and, in particular, his own brand of suggested tax cuts would do very little to stimulate demand. Of course he also tried to argue that monetary policy alone could be used to fight the crisis - so maybe I'm giving him too much credit. I guess that's why he's now on "Ladders" updating his resume.
Everyone seems to neglect also that they (Ireland) recieved a great deal of stimulation courtesy of the EU. (IIRC, the EU economically helps out the poorer nations under it's umbrella)
And what were those policies? 2 wars and domestic spending that created unparalleled levels of government debt. bailouts Lowering interest rates. In short, creating economic bubbles. Overvaluing assets through bidding wars made possible by too much money in the system. Wait a sec, isn't that exactly what we are trying to do now? Only like, a lot more? Iraq's cost is just going to be replaced by stimulus after stimulus. Nothing has changed. Since the Chinese agreed to subsidize our living for the near future the economy may do better in the next couple of years. The problem is we're just making our future a whole lot worse.
The failed policies of the last 8 years were spending on an unnecessary war while at the same time giving tax breaks to the people in our nation who needed it least. All the while there was not enough funding for education, new greener technology, infrastructure upkeep, deregulation on wall street and investment banks etc. This stimulus helps to address much of that, and isn't a repeat of the past 8 years.
Tax breaks are only bad when you don't reduce spending proportionally to support them. Deficit spending indefinitely is bad. Education funding levels means crap to the economy in the short term. IE where we are. (even if there even is a correlation between funding levels and making ppl smarter.) Green technology funded by the government means crap as well. Even if it were funded, it would not have prevented anything. Deregulated wall street didn't create this problem, the regulated banks did. The federal reserve did. Deregulated wall street responded to the conditions the fed created.
Look at Japan. One of their problems was that their stimulus didn't include education spending. Part of the current stimulus bill is going to bail out states which have had to fund no child left behind in addition to their other educational spending. Passing legislation and then not funding it contributed to helping cause budget deficits in the states. There have been numerous links before talking about how the banking deregulations and wall street helped create the problem. Here's a link to one. http://www.motherjones.com/politics/2008/05/foreclosure-phil Please don't act like deregulation didn't contribute to the crisis and expect to be taken seriously. Knowing all that we know now, that just isn't possible. Investing in green energy most certainly would have helped. It would have employed technicians, labs, scientists, people to educate others on working with the energy, possibly helped the automobile industry, moved the economy forward at a time when it was more affordable to invest in it, than a time like now where money also needs to be spent elsewhere. It would reduce clean up costs as well. The new green companies would have also generated private investments in companies that were complying and utilizing the new technology. It would have been a huge boon to the economy. Saying it wouldn't is akin to saying that investing in the internet during the late 80's wouldn't help the economy. It's silly to suggest that one of the main industries of the future wouldn't have helped the economy had we invested in it earlier. It doesn't take much looking under the surface to see how all of these things are related to the economic crisis we are currently facing.
Problem with TJ's recommendations is that cutting the capital gains tax isn't going to do much for business when most of them are losing money. It might help private investors who are short-selling though. If you really want to encourage investment / capital expenditure - and that's what we really need to do...we need to do two things...increase liquidity so people can afford to borrow and invest into capital improvements which drives the economy, and the gov't can spend on infrastructure and other capital development (except real estate) that will both improve our terrible infrastructure as well as employ people. There's not much else the gov't can do. Unfortunately the massive deregulation allowed for our financial system to collapse which put a screeching break on the economy. That's going to take years to get back on track. The first thing that has to happen is people have to feel we've reached a bottom. And I don't think we have and many people fear it will get worse. Right now everyone is cutting spending and in a consumer driven economy, that's a bad bad thing of course. Gov't spending can help dent the pain but not completely offset it of course. A trillion dollars in a 14 trillion dollar economy is a lot, but still only a few percentage points. Nothing will recover until the labor markets stabalize...and the key indicator is when first time unemployment claims starts to dip below 500,000. I think that's the key metric. As that drops further people will feel that finally corporations have finished cutting jobs and spending is likely to be at a bottom. Then, and only then, can a recovery begin. Job creation is key.
