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Author Topic: So, the economy  (Read 4134 times)

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Offline ZeitgeistTopic starter

So, the economy
« on: May 04, 2009, 10:33:58 PM »
So it seems our economy may in fact not be descending into the pits of an unrecoverable depression. While its not currently great it hasn't gotten markedly worse and in some areas things are improving.

Question is, is the Obama administration to be credited with the turn around or at least stemming the slide into a protracted recession?

I have to wonder. Weren't we told there was not going to be any quick fix, that it would be a long hard road to recovery, where we'd all have to make sacrifices? Surely no one dared hoped we'd be showing signs of recovery 4 full months into the year, right?

Now you may disagree things are looking up. Your situation may be worse than others. Still, it does seem like we've pretty much bottomed out. And yes, there is still a danger things could slip back and go for bad.

Was it all Obama's doing? Does he get 100% credit? 90%?

Offline MercyfulFate

Re: So, the economy
« Reply #1 on: May 04, 2009, 11:39:57 PM »
Obama's following the FDR school of thought, which is good, despite faux-Conservatives bleating that FDR was terrible.

The government has to get credit rolling and jobs opened up, if Obama and company can create a Green Sector for jobs, it could go a long way to helping us. I think we'll recover in a year and be fine, honestly. Although Americans need to change.

Offline Zakharra

Re: So, the economy
« Reply #2 on: May 05, 2009, 03:13:38 AM »
 He'll get credit for 'improving' the economy. We will not know if it worked until the year is over. He'll also skate out of most of any damage he does as well. The media is in his pocket for the most part and won't want to hurt a Democrat President.

 I do doubt future generations will be kindly to someone who saddled future generations with a multi trillion dollar debt.

Offline MercyfulFate

Re: So, the economy
« Reply #3 on: May 05, 2009, 04:28:12 AM »
He'll get credit for 'improving' the economy. We will not know if it worked until the year is over. He'll also skate out of most of any damage he does as well. The media is in his pocket for the most part and won't want to hurt a Democrat President.

 I do doubt future generations will be kindly to someone who saddled future generations with a multi trillion dollar debt.

Bush? Yeah he'll be villified as he should be.

Offline Zakharra

Re: So, the economy
« Reply #4 on: May 05, 2009, 08:31:34 AM »
Bush? Yeah he'll be villified as he should be.

 Obama is piling on that debt more than Bush ever did.

Offline Rhapsody

Re: So, the economy
« Reply #5 on: May 05, 2009, 08:56:39 AM »
Obama is piling on that debt more than Bush ever did.

Jesus Christ no!  Let's not spend money on the American people! Someone impeach this man right now!

Bush siphoned away $500 billion taxpayer dollars into Iraq, a war that was supposed to be "sharp and brief" but in truth had no end in sight.  Obama is spending the large bulk of his budget on housing, public works, and stimulating the economy. 

Right, I forgot.  Socialist-esque approaches are goddamn evil.  Dear lord, let our children not have health care, good education and an economy that potentially isn't in the crapper.  We don't want to spend money on ourselves or each other; let us instead piss it all away on foreign soil we have no business being on in the first place, and you won't hear a peep out of us.  Ay-men.

Are you just not used to a president who wants to spend money within his own domestic borders instead of bankrolling senseless, pointless conflicts in the Middle East?

Offline Zakharra

Re: So, the economy
« Reply #6 on: May 05, 2009, 09:18:55 AM »
 At the cost of trillions in DEBT, yes. The Democrats have acknowledged that it will take many years, if not decades to pay off, and it cannot be repayed without very large tax increases on the american people. bush -had- the greatest debt run up of all time. Obama is surpassing that. Civen that most government programs run overcost, it'sd likely the debt will soar even more as the Democrats in Congress and the White House find more things to spend money on and do not cut the budget spending. 

 I can bet you money both debt and spending will only increase, not go down.

Offline Rhapsody

Re: So, the economy
« Reply #7 on: May 05, 2009, 09:22:23 AM »
Out of curiosity, how much do you pay now in taxes? 

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Re: So, the economy
« Reply #8 on: May 05, 2009, 09:43:15 AM »
Wow, not even a page in and I feel I should run to staff before this becomes any more uncivil. Keep that in mind guys.

Offline Rhapsody

Re: So, the economy
« Reply #9 on: May 05, 2009, 09:45:32 AM »
It's an honest question.  Personally, I pay 13% tax, so my idea of "very large tax increases" might not be the same as Zakharra's.

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Re: So, the economy
« Reply #10 on: May 05, 2009, 10:01:56 AM »
Wow, not even a page in and I feel I should run to staff before this becomes any more uncivil. Keep that in mind guys.

The all seeing Eye of Sauron issued to each member of staff helps us keep track of things :)

I'm sure that things here will be kept in a civil enough tone that we won't be needing to step in.

Offline Zakharra

Re: So, the economy
« Reply #11 on: May 05, 2009, 10:05:44 AM »
 Me personally? Currently nothing, since I do not have a job. I cannot get unemployment benefits either. I do want to work, but without a driver's licence, insurance and vehical registration, it makes it hard to find work. :(

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Re: So, the economy
« Reply #12 on: May 05, 2009, 10:57:39 AM »
It's an honest question.  Personally, I pay 13% tax, so my idea of "very large tax increases" might not be the same as Zakharra's.
I would be careful it can easily and honestly be misconstrued as a very rude question to ask. Sort of like how much do you make. Things like that. 

Offline Caity

Re: So, the economy
« Reply #13 on: May 05, 2009, 11:07:52 AM »
I don't think Obama can be credited solely with the 'turn-around' anymore than Bush can be vilified 100% for the mess we're in, and don't get me wrong, I love Obama and hate Bush. 

I think a lot of things have contributed to the economy starting to climb out of the hole, having "hope", as corny as it sounds, really helps I think.  I think that some people may actually be more willing and eager to go to work in a country where they don't feel like they're being screwed over from every direction. 

As for the trillion dollar deficit, I refuse to place any blame on Obama for this one.  Bush started it with absolutely no concept of where the money was coming from and where the funds to pay it back would come.  Obama is taking a big leap and investing in the country he's running, it's up to the American people to do good things with it. 

Let's hear it for Socialism!*

*not sarcasm

Offline MercyfulFate

Re: So, the economy
« Reply #14 on: May 05, 2009, 01:34:09 PM »
At the cost of trillions in DEBT, yes. The Democrats have acknowledged that it will take many years, if not decades to pay off, and it cannot be repayed without very large tax increases on the american people. bush -had- the greatest debt run up of all time. Obama is surpassing that. Civen that most government programs run overcost, it'sd likely the debt will soar even more as the Democrats in Congress and the White House find more things to spend money on and do not cut the budget spending. 

 I can bet you money both debt and spending will only increase, not go down.

True, but under Bush's regime the markets were intentionally de-regulated which led directly to our current crisis. The free-marketeers blindly believed that an untested system of no checks and balances could work, which I don't think it can because of human greed. Obviously the housing crisis and greedy banks and uninformed borrowers also did this, but out boom/bust system no longer works.

A truly, or even attempted free market doesn't work.

Offline RubySlippers

Re: So, the economy
« Reply #15 on: May 05, 2009, 01:47:25 PM »
Excuse me they are not using FEDERAL money for anything all this relief is on the backs of American taxpayers and leading to the biggest Federal power grab in history. They are taking over businesses, they are telling states how to run their internal affairs like offering unemployment to part-time workers, they are attacking the states soveriegn rights to education, they are making moves to tax energy with a Carbon Scheme just like Europe and pissing away my money on private areas of research such as Green Technology. Where will this end in doubling our national debt unless we stop it here and now yet your all happy with this.

Did I have to mention he is already talking about military expansion into Afghanistan and Pakistan which will cost more money than Iraq and not one tax to pay for it.

Nudging the economy with regulation changes and some targeted funds might be a good thing but making states grovel to the Federal government for handouts, and in so doing taking away their sovereignty is not. I wish McCain got in he might have not been perfect but damn it we at least might now be down this road to the destruction of our nation from debt and abuse of Federal powers.

Offline consortium11

Re: So, the economy
« Reply #16 on: May 05, 2009, 02:41:10 PM »
True, but under Bush's regime the markets were intentionally de-regulated which led directly to our current crisis. The free-marketeers blindly believed that an untested system of no checks and balances could work, which I don't think it can because of human greed. Obviously the housing crisis and greedy banks and uninformed borrowers also did this, but out boom/bust system no longer works.

A truly, or even attempted free market doesn't work.

Em, the direct cause of the crises was government inteference.

HUD forcing Fannie mat and Freddy mac to purchase loans for people to buy houses they couldn't afford and then the Democrats of the Senate Banking comittee prevented any serious regulation of them occuring (on partisan lines to make it even worse). The government forced two semi-private groups to do something that made no commercial sense, but then refused to take the responsibility for dealing it. The market loved every second of it and sub-prime loans, which should always have been a fringe sector, came to dominate almost all of the commercial vehicle's sold on. CDO's became glutted and with retrospect, high risk, but at the time... these were instruments backed by two of the most respected mortgage finance firms, both federally chartered. What could go wrong?

Sub-prime was always a mugs game, but the logic that the higher interest you could recieve for high risk makes logical sense and is still the basis for nearly all buisness deals. The problem was that the governments own acts lowered the percieved risk allowing the sector to expand far beyond where it should and allowing the toxic debts to filter up the food chain.

In a true free market subprime would have never expanded beyond the small fringe sector it was. But political pressure to open up housing to poorer groups and the lack of politcal will to deal with the fallout (made worse if the donations Freddie and Fanny made are taken into account) meant that a deeply uncommercial system became embedded and within roughly 3 years shattered the market. Now we're in an even stranger time when some companies are supported and others aren't seemingly on whim, failure is unpunished, but the reward for loyalty is to get stabbed in the back (look at the AIG execs who stayed on and tried to work through the crises... on nominal pay only). Corportism has replaced the free market as the dominant way of thinking.

Free market capitalism has many sins and does require some regulation. It helped set up the dominoes so they tumbled as they did. But the group who flicked that first one over and set off all the rest was the state going for political points.

Economics doesn't follow a 5 year election cycle. Politics, by its very nature does. Economic theory is all about thinking about situations long term, whatever school you follow. Politics prevents long term thinking... which is one of the reasons governments were so unprepared to deal with this.

Whether it was right or wrong for the government to step in and do these bailouts is still up for debate. Looking at it through economic terms I'd suggest not, but we're still in the woods. Japan using a similar plan had seen both the good and bad sides of huge bailouts. But on practical terms allowing the banks and finnancial institutions to fail would be crippling... as would allowing the Detroit 3 to fail in one go (and the millions who are dependant on them for work), both causing huge human suffering.

But the US government (and others to an extent) cannot wash its hands of this crisis and its causes and blame it all on the evil free market and those heartless capitalists. It wanted to play politics with the economy... and it lost. Badly.

Offline MercyfulFate

Re: So, the economy
« Reply #17 on: May 05, 2009, 03:48:38 PM »
Em, the direct cause of the crises was government inteference.

HUD forcing Fannie mat and Freddy mac to purchase loans for people to buy houses they couldn't afford and then the Democrats of the Senate Banking comittee prevented any serious regulation of them occuring (on partisan lines to make it even worse). The government forced two semi-private groups to do something that made no commercial sense, but then refused to take the responsibility for dealing it. The market loved every second of it and sub-prime loans, which should always have been a fringe sector, came to dominate almost all of the commercial vehicle's sold on. CDO's became glutted and with retrospect, high risk, but at the time... these were instruments backed by two of the most respected mortgage finance firms, both federally chartered. What could go wrong?

Sub-prime was always a mugs game, but the logic that the higher interest you could recieve for high risk makes logical sense and is still the basis for nearly all buisness deals. The problem was that the governments own acts lowered the percieved risk allowing the sector to expand far beyond where it should and allowing the toxic debts to filter up the food chain.

In a true free market subprime would have never expanded beyond the small fringe sector it was. But political pressure to open up housing to poorer groups and the lack of politcal will to deal with the fallout (made worse if the donations Freddie and Fanny made are taken into account) meant that a deeply uncommercial system became embedded and within roughly 3 years shattered the market. Now we're in an even stranger time when some companies are supported and others aren't seemingly on whim, failure is unpunished, but the reward for loyalty is to get stabbed in the back (look at the AIG execs who stayed on and tried to work through the crises... on nominal pay only). Corportism has replaced the free market as the dominant way of thinking.

Free market capitalism has many sins and does require some regulation. It helped set up the dominoes so they tumbled as they did. But the group who flicked that first one over and set off all the rest was the state going for political points.

Economics doesn't follow a 5 year election cycle. Politics, by its very nature does. Economic theory is all about thinking about situations long term, whatever school you follow. Politics prevents long term thinking... which is one of the reasons governments were so unprepared to deal with this.

Whether it was right or wrong for the government to step in and do these bailouts is still up for debate. Looking at it through economic terms I'd suggest not, but we're still in the woods. Japan using a similar plan had seen both the good and bad sides of huge bailouts. But on practical terms allowing the banks and finnancial institutions to fail would be crippling... as would allowing the Detroit 3 to fail in one go (and the millions who are dependant on them for work), both causing huge human suffering.

But the US government (and others to an extent) cannot wash its hands of this crisis and its causes and blame it all on the evil free market and those heartless capitalists. It wanted to play politics with the economy... and it lost. Badly.

That's the same mindset that says FDR's New Deal prolonged the Depression, something I can't fully believe. Perhaps government intervention played a role, but de-regulation and greed caused it to explode.

Offline RubySlippers

Re: So, the economy
« Reply #18 on: May 05, 2009, 03:58:41 PM »
As a Libertarian I think I can state the obvious if people got too greedy, had unrealistic expectation of what the housing market would do and took out or offered risky loans - then punish them by NOT bailing them out. Then next time people will logically be more cautious and banks for example would stick to tested lending practices with people having good credit and down payments.

I don't blame de-regulation but the government for also not matching that with legally strong disclosure so that investors and the borrowers knew exactly what each investment or loan entailed. If say the government insisted that mortgage swaps which I would love to point out were illegal in several states were to be treated as insurance, they would not have been likely a risk. If the government said those mortgage derivatives were full of junk and not doing more than saying they were extremely speculative in cases where they were, would people have invested in them?

There is plenty of blame to go around but I blame the people taking out bad loans, investingin things they did not understand and buying more home than they could afford, where the blame ultimately belongs.

Offline Vekseid

Re: So, the economy
« Reply #19 on: May 05, 2009, 04:34:48 PM »
The Enron Loophole was closed in June of 2008 and it would take a special class of moron to say that returning oil prices to sane values had no positive effect on the economy (despite Bush's veto, it was overruled). This was proposed by Senator Carl Levin of Michigan, so the democrats arguably 'own' that part of it, though the desire for the final bill it was attached to was fairly bipartisan, though it certainly did lean democratic. Obama's support for it is moot - he wasn't responsible for that and it was a big one.

That said, the economy is still hemorrhaging jobs. April's report isn't due until May 8th.

We'll see what April has to say, but stimulus money is beginning to filter into the economy. Something more interesting to note is the continued decline in the US trade deficit. I know Obama said he would do something about that, but I don't know offhand if he influenced any bills regarding those issues as president - a big part of it is rising oil prices, and the US is a net exporter of services, so that certainly works in our favor.

Heaven help the Republican party if the US has a net trade surplus come 3rd quarter and job recovery follows, whether Obama deserves credit or not.

Offline MercyfulFate

Re: So, the economy
« Reply #20 on: May 05, 2009, 05:22:31 PM »
The Republican party needs help regardless, they were hijacked long ago by faux-Conservatives who care more about Terri Schiavo then small government.

Offline Vekseid

Re: So, the economy
« Reply #21 on: May 05, 2009, 05:58:39 PM »
Em, the direct cause of the crises was government inteference.

The basic premise of the trade was the espousal that property values would always increase - not everyone making these decisions believed this, but that was what was frequently proposed. Thus, it didn't matter if the person who got a liar's loan shoved down their throat would eventually get foreclosed on, couldn't afford an ARM, etc. The bank would still turn a profit on the foreclosure sale.

Wells Fargo is solvent because it refused to pull that crap. Likewise, Washington Mutual, etc. failed because it did. This isn't a matter of guesswork in any sense - the policies behind loan underwriting are directly responsible for Wells Fargo's success and WaMu's failure.

Government interference did not cause WaMu to fail, though it could have prevented said failure. Alan Greenspan made the claim that banks would do fine with deregulation because banks would not engage in self destructive behavior like that.

Except, banks do not magically run on their own - they are run by executives.

Offline ZeitgeistTopic starter

Re: So, the economy
« Reply #22 on: May 05, 2009, 06:16:40 PM »

There is plenty of blame to go around but I blame the people taking out bad loans, investingin things they did not understand and buying more home than they could afford, where the blame ultimately belongs.

That there is more to blame for the downturn in the economy IMHO. What's needed isn't more credit but less debt and more cash, you know, real money.



Let's hear it for Socialism!*

*not sarcasm

You did read Animal Farm, didn't you? You know it doesn't end well right?

Striking the flint ;)

Offline Rhapsody

Re: So, the economy
« Reply #23 on: May 05, 2009, 08:13:36 PM »
Let's hear it for Socialism!*

*not sarcasm

I like socialism.  Then again, that should come as no great shock to anyone who knows me.  I believe in universal health care and the government spending tax dollars on its own citizens and domestic stimulus packages and federal family-oriented programs that you don't have to jump through hoops for.

Then again, I grew up in this sort of system, so maybe that's why I don't get anyone who immediately shies away from the benefits of it, just because it has the "socialist" label slapped on it.

Offline Rhapsody

Re: So, the economy
« Reply #24 on: May 05, 2009, 08:15:58 PM »
I would be careful it can easily and honestly be misconstrued as a very rude question to ask. Sort of like how much do you make. Things like that.

I don't get it.  Perhaps I phrased it wrong and something got lost in translation, but what I asked was how much the tax rate is in her area (city, state, province, whatever).  Not her income bracket.