Not a single Republican vote. Heard that before.

He meant billion

Cycloptichorn

They haven't voted on the exact amount of the stimulus plan yet, but yes, both the House and the Senate versions are in this neighborhood.

It won't work in my view because I don't see how raising the limit on the credit card and going on a shopping spree is going to make the problems go away.

This no different in my mind than Bush going out after 9/11 and telling the country to go shopping.

The only problem now is that the country has wisened up and realized that it has been living beyond it's means. There is NO DEMAND for anything right now. The American consumer living within their means for the first time in ages. We might actually see an increase in personal savings this year.

If it's going to get worse no matter what then why increase the national debt by another 10%. Beyond this 'crisis' we still have Medicare, Medicade, Social Security, Healthcare, etc that we're going to have to start dealing with soon. BORROWING 1.3 TRILLION now (on top of the 300 billion for last years tax rebate, and the 800 billion for TARP 1, and the 800 billion for TARP 2, and whatever else is next when this doesn't work) is going to make it EVEN MORE challenging to deal with the problems we'll face in just 10 years.

I had hoped that Obama meant what he said by fiscal discipline and responsible spending. This isn't it. This isn't what I'd hoped for. This isn't the change I envisioned.

Actually, what's changed? Now we're looking at leaving Iraq in 2 years time, spending is even more out of control, we have tax cheats in cabinet positions, we have lobbyists in cabinet positions, and Obama would commit to allowing reporters to photograph our fallen heros and finally allowing the public to see the cost of the war. Additionally, FISA is still going strong.

Not a good day for me.

Oops! Of course I meant 800 billion, not 800 thousand. Thanks, Cycloptichorn.

Well, mostly b/c there's a good chance that this plan - combined with changes to our banking and financial system - will help the economy turn around a lot faster than it would otherwise, with less lost jobs.



Uh, for a variety of reasons, I sure wouldn't bet on that. All these people who are losing jobs are spending their savings just to stay afloat.

Cycloptichorn

No, that piece about personal savings was a little much.


But I still don't see any reasoning that would tell me that we can spend our way out of this.

What our country needs is a good recession. We're going to have one regardless (as you said), why in hell would we FINANCE one?


And I haven't seen a SINGLE proposal about changes to the banking system. Maybe THAT would ease my mind somewhat, but you go ahead and keep trusting the government to stand by their word.

Why? And what does a good recession look like, as opposed to a bad one?

Because 70% of our economy is based on consumer spending and consumption. It's not sustainable in the long term (as we're seeing now).

And I don't know that there's a such thing as a 'bad' recession. There have to be ups AND downs in the economy (and in life).

In your opinion, what should the economy be based on?

Production. Innovation. Investment. Savings. Science. Education.

Production and is not an alternative to consumer spending. It's a requirement for consumer spending. Investment, in libraries, highways, bridges, schools and other public infrastructure, are a major component of the stimulus package. They are being reduced in favor of tax cuts.

Production is an alternative to consumer spending when you export the items you produce.

And those things are NOT the major component of the stimulus package. I'd bet that it was less than 1/4

You may want to take a look at the content of the package. The Wall Street Journal, for example, has an overview.

http://online.wsj.com/article/SB123202946622485595.html

That stuff sounds good, but unless there are transactions of some type, it doesn't generate any economic behavior.

I think our country's economy should follow the expansion model and focus our time and efforts on increasing our space presence. But that's just me. Other people see America as the ultimate widget producer, or something else.

As for the financial system, we really haven't come to terms with the sorts of changes that need to be made to avoid these problems in the future. The flux you see in the talks about how to structure the TARP program reflect this.

At this point I think Nationalization of the banks is really the way to go. And plenty of economists are right there with me on that one.

Stiglitz - http://www.commondreams.org/headline/2009/02/06-0
The Krug - http://www.nytimes.com/2009/02/02/opinion/02krugman.html?_r=1
The Roubster - http://www.bloomberg.com/apps/news?pid=20601087&sid=a7.lUqwQLxw8&refer=home
Dj Jazzy Taleb - http://www.bloomberg.com/apps/news?pid=20601087&sid=a7.lUqwQLxw8&refer=home
The Bake - http://www.huffingtonpost.com/dean-baker/the-banks-have-stolen-eno_b_160677.html?page=2

But instead, we're going to have a 'bad bank,' because, well, I guess that's what happens when you hire a wall street guy to figure out the best way to get more money to his old partners.

http://www.nytimes.com/2009/02/10/business/economy/10bailout.html?pagewanted=1&_r=2&hp

Cycloptichorn

Cycloptichorn -- I think you are confounding two separate questions. Question 1 is, how do we get the financial system solvent again? Here the alternatives are a) a government takeover of failing banks vs b) government bailout of the banking system by buying toxic assets way above their market value.

This is different from problem 2): Given that the financial system threatens to shut down, thwarting investment and consumer spending, how can we save the economy as a whole from collapsing for lack of spending and investment? This problem is addressed by the various stimulus bills making their rounds through Congress.

These are separate questions; it's important to discuss them separately, so as to avoid unnecessary confusion.

Yes, I know. I changed subjects mid-post. Was considering Maporsche's request to know who is proposing systemic reform right now, which I had said was a critical component of moving forward from the crisis in addition to stimulative spending.

Did anyone watch the Obama press conference on the stimulus? He did a pretty good job, I thought, but a little windy on some questions. He should have brushed off the A-Rod steroids question and moved on to serious ****.

Cycloptichorn

He was pretty general, and he still pushes the idea of bi-partisanship, which I think is not helpful. I'm curious what hard choices, if any, he will make by the end of his first hundred days, and I'll withhold my judgment on him until then.

Thomas and Cyclo: Thank you for the links. Very informative.

Joe("What a revolting predicament this is!" Life of Reilly, 1955)Nation

Here's a big surprise..... no.

House votes YES ...No Republican Votes

http://www.nytimes.com/2009/02/14/us/politics/14web-stim.html?_r=1&hp

Joe (way to lead GOP)Nation

I just saw this article today and it reminded me of my forecast back in Feb.

http://finance.yahoo.com/tech-ticker/article/265576/%22Herculean-Effort%22-by-U.S.-Consumers-Only-Making-Small-Dent-in-Debt-Mountain?tickers=XLY,%5EGSPC,%5Edji,SPY,DIA,EEM,FXI?sec=topStories&pos=9&asset=&ccode=