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The Library => The SGA => Topic started by: JohnDeere on February 03, 2009, 08:27:32 AM
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http://www.iht.com/articles/2009/01/30/bus...;WT.mc_ev=click (http://www.iht.com/articles/2009/01/30/bus...;WT.mc_ev=click)
World worries how U.S. will pay for stimulus
By Nelson D. Schwartz Published: January 30, 2009
DAVOS, Switzerland: Even as the U.S. Congress looks for ways to expand President Barack Obama's $819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all.
Few people attending the World Economic Forum question the need to revive America's economy, the world's largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the U.S. government, and its potential to drive up inflation and interest rates around the world, seems to be getting more attention here than in Washington.
"The U.S. needs to show some proof they have a plan to get out of the fiscal problem," said Ernesto Zedillo, the former Mexican president who helped steer his country through a financial crisis in 1994. "We, as developing countries, need to know we won't be crowded out of the capital markets, which is already happening."
Zedillo said that Washington, unlike most other countries, had the option of simply printing more money, because the dollar was a reserve currency for the rest of the world.
Over the long run, that could force long-term interest rates higher and drive down the value of the dollar, undermining the benefits that come with its special status.
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The focus in Washington has been on putting together a stimulus package that will attract broader political support when it comes up for a vote in the Senate. But here in Davos the talk has been about the coming avalanche of Treasury debt needed to pay for the plan, on top of the bailout measures approved last autumn, like the $700 billion Troubled Asset Relief Program or TARP
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Even before Obama walked through the White House door, there were plans for $1 trillion of new debt," said Niall Ferguson, a Harvard University historian who has studied borrowing and its impact on national power.
He now estimates that $2.2 trillion in new government debt will be issued this year, assuming the stimulus plan is approved.
"You either crowd out other borrowers or you print money," Ferguson added. "There is no way you can have $2.2 trillion in borrowing without influencing interest rates or inflation in the long term."
Ferguson was particularly struck by the new borrowing because the roots of the current crisis lay in an excess of American debt at all levels, from individual homeowners with subprime mortgages to Wall Street banks who let their balance sheets balloon.
"This is a crisis of excessive debt, which reached 355 percent of American gross domestic product," he said. "It cannot be solved with more debt."
Ferguson is skeptical about the Keynesian thinking behind Obama's plan - rather than borrowing and spending to stimulate the economy, he favors corporate tax cuts. But even supporters of the plan like Zedillo and Stephen Roach, the chairman of Morgan Stanley Asia, have called on the White House to address quickly how it will pay for the spending in the long term.
read the rest
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I had made the statement last week or so on here, get ready for the ride and not mention the double digit inflation and interest rates. This guy is well on his way to making Jimmah Carter look like a decent president. "Neo" nor his advisers have a clue. I read something yesterday that they were going to cut defense spending (we are laying off already here in H'ville out of fear that we will have no Army funds) and I can live with that. I work in the IT field so I can go to work in the hospitals, banks, different places. What I can't live with is this party wanting to cut defense spending and then wanting to divert that money to buy rubbers for teenagers or some dumb socialist shit. The only way out of this fiasco is to cut spending, especially where it is not needed and give tax cuts to businesses and the people so that investments are made and people can spend more to stimulate the economy. You would think that the fucks in DC have never took ECON 101. For Christ sake, it's not that hard.
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What I don't understand is that a private business that faces tough economic times must look to cut every non-essential expense in order to weather the storm.
However, government not only refuses to cut back on non-essentials they spend more money than ever in tough times. Makes no sense to me.
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What I don't understand is that a private business that faces tough economic times must look to cut every non-essential expense in order to weather the storm.
However, government not only refuses to cut back on non-essentials they spend more money than ever in tough times. Makes no sense to me.
The liberal way = spending your way out of debt, of course the more you spend the more debt you acquire. You, I, several on this board and a good majority of Americans know this, but it seems that a majority of our elected officials don't.
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The liberal way = spending your way out of debt, of course the more you spend the more debt you acquire. You, I, several on this board and a good majority of Americans know this, but it seems that a majority of our elected officials don't.
These clowns don't even know how to pay their taxes. Do we really expect them to do the right thing when they take office??? :sad:
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What I don't understand is that a private business that faces tough economic times must look to cut every non-essential expense in order to weather the storm.
However, government not only refuses to cut back on non-essentials they spend more money than ever in tough times. Makes no sense to me.
The liberal way = spending your way out of debt, of course the more you spend the more debt you acquire. You, I, several on this board and a good majority of Americans know this, but it seems that a majority of our elected officials don't.
The fucking, liberal elitists in DC are so constipated with Keynesian economic thinking so far up their collective asses it gives new meaning to the term "full of shit"! This kind of economic policy basis is exactly what put most of Europe into the collectivist shape that it's in now! I don't care what anybody says it's basically socialism light.
Reagan had it right with supply-side economics...cut taxes, cut spending...the free market (that is, private enterprise and individuals using more of their hard-earned money the way they want to use it) will pull us out of this 'crisis'.
I wish that Milton Friedman was still alive to yell at these fucking idiots on Capitol Hill (and in the White House) and tell them EXACTLY how fucking stupid they are...it's his economic model we need to be using but these damn socialists won't have any of it because it takes power and money out of their hands to spend on their Porkapalooza bills!
As I've opined before and other have in this thread...our government cannot spend our way back to a healthy economy.
:mad:
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Well with Keynesian economics the state controls economic growth and stability in the private sector by constantly screwing with interest rates, taxes and creating public projects.
Notice the bold and that is all that you need to know why it is so popular with the socialist.
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Well with Keynesian economics the state controls economic growth and stability in the private sector by constantly screwing with interest rates, taxes and creating public projects.
Notice the bold and that is all that you need to know why it is so popular with the socialist.
And remember too that Keynesian economic policies were being used during much of the awful 70's too. Welcome back, Carter.