We Are About To See Something Happen Economically No One Dreamed Of...

[Blackhatjack]

The total numbers being thrown around are varying from $700bil to $4.2tril, but any way you look at it, the Obama Administration intends to correct the FDR problem during the Great Depression --they are going to make the Government Spending Big Enough to keep the Economy from tanking, deficits be damned.

The idea that 2 decades of 'market driven capitalism' would be the preferred choice and offical policy of the US Government is being taken out with the trash --we are watching Government reassert power over regulation and finance of the economy.

Will it work to avoid a disasterous depression? The bet has been placed ... and the size of the bet indicates that the Obama Administration believes we are on the precipice of a huge disaster, and therefor must 'go all in.'

For those of us who remember the times before the US became a 'debtor nation', and before Reagan's 'trickle down economics' was sung by the choir of conservative cult leaders, this direction is a sharp departure which appears headed back toward a Government regulated and managed economy.

Who saw this coming 6 months ago? I know there were warning signs, but the truth is most economic experts did not even dream that we would be where we are today and considering the remedies we are about to experience.

IF there was ever any doubt, we living out the (alleged) ancient Chinese proverb and curse, "May you live in interesting times..."

Indeed.

[Doityourself]

1. Indeed..

In my local paper, there are tons of stories today about people suffering and unable to meet their monthly debts. People I thought were financially sound have, or are on their way to going under. Had a friend lose his house, last week.

Interesting times indeed.

[shanti]

14. i work with two people

who are losing their houses as we speak too. :(

[Blackhatjack]

2. Economic numbers are not officially reported for at least one trailing quarter...

... but raw economic data is available long before official reports are required to be filed.

There are thousands of companies which have held on to get through the Holiday season in hopes of capturing enough sales to survive, since many have historically garnered over 40% of yearly sales during the Holiday season.

However, those companies are not likely to make it AFTER the Holiday shopping season is over.

The bellwether moves of Walmart and Target should be a clear indication of the downturn in Holiday purchasing this season. They began cutting prices to the levels initially planned for last minute shopping and post holiday liquidations.

The loss of jobs and the economic drag of these companies going under will further exacerbate the housing and employment markets for months to come.

IMHO it is going to be close whether the Obama Administration will be able to divert the worst of the disaster, especially since the Bush Administration has 'checked out' as to taking any kind of remedial action before Obama takes office Jan 20.

[niceypoo]

3. American style capitalism has run its course

It has become self destructive. The fact that the Republicans cannot admit it when it fails (blame Obama) tells us that they are doomed to repeat it over and over and over again.

Reagan instituted 'supply side,' doubled national debt.

Bush I continues supply side, doubles the debt again.

Bush II reinstitutes supply side, doubles and most likely triples the national debt.

See the pattern here? Blame the Democrats, do it again.

Same with deregulation. Deregulated the S&L's, collapse.
Deregulated the airlines, collapse.
Deregulated energy in california, collapse.
Deregulated banking, collapse.

Again, repeating the same thing over and over, always getting the same result, always blaming the Democrats thus dooming themselves to doing it all over again.

American GOP style kleptomaniac capitalism is a failure

[FKA MNChimpH8R]

10. The biggest economic problem Repigs have is that they never acknowledge

that there are lots of totally unethical and fanatically greedy people in the world who will steal everything that isn't nailed down (and pry up and carry away what IS nailed down) if given even the slightest window of opportunity to do so. Largely because those people are the financial backbone of the party. Thieving and exploitation are principal building blocks of Repig DNA.

[mtnsnake]

4. I just hope that people stop taking so many loans for things they can't afford

and start living within their means, not above them.

We really need to become more cash oriented and pay as we go along. Hopefully Obama will instill that into everyone, too.

[trashcanistanista]

5. They will be forced to. There are no loans to be had

at this point.

[Runcible Spoon]

9. yes shame on the lower classes!

they should really think about CEO compensation packages before they charge this week's groceries because wages have remained static for a decade. Do I really need :sarcasm:?

[mtnsnake]

17. Leave it to someone like you to invent drama where there isn't any

What you don't understand is that too many poor people are swayed by the corporatist elite into taking loans for things that they cannot afford, and they get into further financial difficulties because of those loans. Nobody is trying to deny anyone from living a good life, but unnecessary loans are more harmful to poor people than beneficial, so save your drama for somewhere where it's more relevant. Only you could possibly interpret my post as being a put-off to poor people when it was the opposite. Shame on you.

[Runcible Spoon]

19. someone like me?

what kind of person would I be? I was merely pointing out how you chose to blame those who take out loans they can't afford when the majority of the blame should be shouldered by the massive looting of our economy by greedy corporatists. So my fear for the future of American middle and lower classes is drama. Ok good to know.

[abumbyanyothername]

13. I think this concept needs to go much further than this mtnsnake

We not only need to eliminate debt, we could probably create wonderful lives for ourselves working only 2-4 hours per day (on average).

Our whole economic model needs to shift from "growth" to "subsistence."

And as a boomer, I can tell you that our "acquisitional tendencies" are wearing out. I am instructing people to make a donation to my favorite charity (Solar Electric Light Fund) in lieu of gifts this Christmas.

[shanti]

15. yes

like someone making $30 grand a year buying a $40 grand luxury sports car on the proceeds of a refi. stupid, stupid, stupid.

[mtnsnake]

18. Exactly

or someone who just has to have that huge beautiful over-sized house right now instead of when they can actually afford it or instead of starting out with a decent, more affordable starter home.

[Pale Blue Dot]

16. "Hopefully Obama will instill that into everyone"

How's he showing that he's going to do that? By spending much more than we have? By possibly extending tax cuts for the wealthy? I haven't seen anything from Obama yet that shows he's willing to lead by example on this.

[mtnsnake]

20. This is off topic, but Obama has at least been trying to instill in parents that

they need to take way more responsibility with their kids than what they do. I heard him several times suggesting that too many parents leave the parenting up to teachers. So, I'm hoping that Obama does the right thing when it comes to suggesting financial responsibility, too. Just hoping.

[Skwmom]

27. Oh yes, it's the little people that have led this country to financial and economic ruin.

:sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm:

[Skwmom]

6. Are you really sure about that?

So givings trillions of dollars to financial companies is reasserting power over regulation and finance of the economy? And exactly what are the requirements for those trillions of dollars which demonstrate that the govt is asserting this power?

Wow, I never new Larry Summers was such a defender of the middle-class. Who would of thunk it. :rofl:

Oh, these are indeed interesting times. I laugh, because if I didn't laugh I'd cry.

[Blackhatjack]

7. Yes, I believe that the Obama instituted 'stimulus' will have government regulation attached...

That will be the difference between the Bush and Obama actions to rescue the economy.

[Runcible Spoon]

8. exactly. there is no government assertion over "free" market economy..

just a massive injection of capital to keep an already floundering greedy beast alive still without actually healing it. We ARE in for "interesting times", as in job loss, recession, perhaps even depression, but the severity and duration depends entirely on the next administration's ability and willingness to create massive government programs for restructuring the economy and reining in globalization, "free" trade/plutocracy, and corporate greed. Larry Summers SUCKS, so I'm not entirely optimistic unless he has some sort of populist epiphany. Might take stepping on hoards of homeless and starving citizens, but it could happen. Sigh.

[Alcibiades]

11. Who is Christine Romer?

Well, it's worth knowing that she's made a study of how FDR turned the country around economically in the 30's up to WWII. Similarly, Obama has announced that the books he's been reading have been on FDR.

Nothing conclusive there, of course, but how will he spend all that money? We know what the Republicans do with it: give it to their rich corporate friends. I am hopeful we'll see a new alphabet of organizations dedicated to increasing state capacity in the public interest.

[Pale Blue Dot]

12. The problem with the economy is that we are all massively in debt.

Creating more debt is the worst possible reaction.

Bookmark this and tell me I'm wrong in a year. Go ahead, I dare you.

[CalGator]

21. I agree with you.

We aren't going to borrow and spend our way out of a problem created by.... borrowing and spending.

This is a problem with only one long-term solution.... fiscal responsibility. you know, the thing Republicans like to preach and Democrats generally like to practice (at least when in the executive branch. Congress, not so much).

This "throw money at it" approach is pissing me off like nothing else.

[Odin2005]

31. Trying to stop deficit spending in the middle of a recession is a recipe for disaster.

Hoover balancing the budget instead of engaging in stimulatory spending was part of what could of been a "Recession of 1930" into the Great Depression.

[Spike89]

32. spent my money on whiskey, woman, and gambling...

the rest I wasted. Old joke, but the point is that spending isn't a single thing you do. There is a huge difference between investing and consuming, yet in the sense of the federal budget, both fall very much under the title of spending. We could stop spending and raise the spector of a devastating depression. We could spend the money on zero-return (consuming) things like we have for the past decade or so and possibly delay a depression--most likely falling into a very long and deep recession. Finally, we can spend on national investments, the spending would have the same delaying effect as wasteful spending, but could actually help reduce the extent and depth of the recession.

[Jennicut]

23. Yeah, but we will be in even bigger debt if the economy won't grow

where will we get the money to pay off our debt then?

[Pale Blue Dot]

There's the rub, and the reason why people won't admit that debt is the problem.

There is no way out of this mess that does not involve years and years of pain. I'm sorry, but that's the truth. Putting us more into debt now puts off the worst of it for months (at best) and prolongs the down side by years. We are mortgaging future generations so that we can continue to live in denial for a few more weeks.

It's disgusting, IMO.

[Jennicut]

25. Debt is a problem but simple economic pain it will not be

We will never get out of debt or it will take years. Shrub essentially doomed us with tax cuts plus war. Either way we are screwed. I doubt Obama wants to just throw way money but paying down the deficit will be easier if the people you tax actually make enough money to spend in the economy and give you revenue. Just taxing and paying down the deficit get you nowhere if the people do not have jobs to even get you revenue. My question is the same, where will the money to pay the deficit let alone the debt come from?

[calmblueocean]

26. The worth of debt depends on what you spend it on.

If you go into debt to get a degree that doubles your earning ability, for instance, you're taking on debt, but increasing your ability to pay it off. It's a smart choice that only gets smarter if you start deeper in debt.

If you go into debt to go on vacation, though, you're squandering money and will only be worse off.

Likewise for Obama's all-in plan for the federal government. Right now, we're the equivalent of a high school dropout. If he is able to use that money to get the US on a track where our national wealth is based on real productivity again, it will be worth it. If it is used simply to bail out the old economy, we'll see a societal collapse.

[Whisp]

22. i've been telling people to keep some cash under their mattress

and buy extra food and don't spend on stupid stuff for about 2 years now. they rolled their eyes and I am now the crazy ole lady. we;ll see whose crazy.

but I don't think my little remedies are going to help much tho.
sometimes I thinkit would be better not to see it come.

[WinkyDink]

29. My 84-yr-old mother never put her money anywhere but banks. Guess who hasn't lost any?

NOT her smart-as-a-tack-I-wish daughter, who INVESTED hers.

[Blu Dahlia]

24. I'm hoping that 700billion stimulus = 30grand for every tax payer

One can only hope

[leftofthedial]

28. Welcome to Argentina,

except we can write our own bad checks

[Odin2005]

30. "Big Government" has returned, and it's about damn time

I'll dare say this: Obama is our only shot. If he fails there will be a violent revolution in this country.

Obama is sending FDR-like vibes and THAT makes me hopeful in these dark times...