The Government Is Doing Everything Wrong to End the Recession

dtan1e, I could not agree more. The present administration and Fed are attempting to deal with the disastrous situation created by the failure of the SEC and Fed under Bush/Greenspan to regulate the securities, mortgage, and banking industries. The situation now is obviously extremely dire for many.

Bernanke is not Greenspan, Obama is not Bush. You are correct Re the hidden tax of inflation that hits the poor and lower middle classes much harder than it does the wealthy. Very few people understand the relationship between deficit spending and inflation and hence the relationship between "low" income tax rates and inflation, or the relationship between military spending and inflation. If wars were paid for on a cash basis, there would be no wars.

We often hear, especially in these ET forums, that ~50% of U.S. Tax filers pay no Federal income tax. Certainly that's true. Then one reads statements such as this: (from the CBS news website)

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education.

Nothing could be further from the truth, because all of these households pay the indirect tax portion of inflation, as well as local and state sales, property and excise taxes, and also Federal taxes other than the income tax. And part, not all by any means, of that indirect inflation tax that everyone pays is due to deficit spending. (There are many other factors of course that figure in the overall inflation rate, but one factor is the portion of Federal debt that is monetized).
 
yes, piezoe, you brought up some good points, we all forgot abt the wide range of taxes that already existed. I don't know abt whether Bernanke or Obama not being Greenspan or Bush, but I do know one thing, those banks that f**ked up, they sh take a real haircut, nor do you see them taking a paycut of meaningful amount say 40% across the board afterall they mgmt and employees alike did run them co.s to the ground, instead u see them taking bonuses for profits, a major portion is gifts from the fed's handling of treasury lending at 1% and paying 4, not sure if that was a deliberate or a misstep by fed, also the gov't they did screw up too, have they taken a serious paycut too for having messed up, u see them and their families taking vacations, what right do they have given such performance, just a thought, if they gov't employees cut down all their vacations and various perks, i suspect u see the gov't expense budget reduced drastically, guess unlikely to ever happen
 
Quote from olias:

George Soros disagrees with you: http://www.bloomberg.com/news/2010-...hreaten-europe-with-deflationary-spiral-.html

"Soros said more government spending is needed in the U.S., in lieu of monetary stimulus, to sustain the country’s budding recovery and avoid chocking off growth. "

I agree with you that monetary policy and regulations are part of the problem, but just google 'lessons from the Great Depression' and consider whether stimulus spending was the right decision.
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Soros is wrong.
 
Soros is a Socialist and OBAMA FAN. He is dead Wrong.

Soros abanded capitalism after he made it to the top. Typical Assclown in his group of "Wealth". They all dodge the bullet and speak as if "Printing" money is the proper way to go.

Idiots.
 
Quote from dtan1e:

yes, piezoe, you brought up some good points, we all forgot abt the wide range of taxes that already existed. I don't know abt whether Bernanke or Obama not being Greenspan or Bush, but I do know one thing, those banks that f**ked up, they sh take a real haircut, nor do you see them taking a paycut of meaningful amount say 40% across the board afterall they mgmt and employees alike did run them co.s to the ground, instead u see them taking bonuses for profits, a major portion is gifts from the fed's handling of treasury lending at 1% and paying 4, not sure if that was a deliberate or a misstep by fed, also the gov't they did screw up too, have they taken a serious paycut too for having messed up, u see them and their families taking vacations, what right do they have given such performance, just a thought, if they gov't employees cut down all their vacations and various perks, i suspect u see the gov't expense budget reduced drastically, guess unlikely to ever happen
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I think Soros agrees with you on the way the banks were handled. I believe he has said that they should have been forced to write down their assets and take losses rather than shifting the burden of devalued assets to the Federal Reserve.
 
Extremely well said and spot on!

Quote from S2007S:

Exactly, they didn't let the free markets take care of it, they intervened with programs, stimulus, tarp, 0% interest rates and trillions of dollars to help stave off any long term recession. The problem is they never let the pieces of the puzzle fall as they were supposed to. Anytime there is a bit of a slowdown in this economy it is looked down upon as something terrible, that no matter what GDP needs to grow at 3-4% a year. Too much intervention as we have now is going to be more problematic moving forward for our economy as a whole. The reason for the credit crisis were in now was because of the step taken by greenspan in 2000-2002, to reduce interest rates and flood the markets with easy cheap credit, that was the answer to the last recession. Fast forward to 2010 and bubble ben bernanke is doing the same exact damn thing. He is pushing trillions in spending to create an economy thats not ready for another bubble. The only way this economy has grown over the last 2 decades is through bubbles and expansion of credit. No one is taking into consideration that this is not to grow an economy.

They can say all they want about the recession being over but its clearly not over, forcing trillions in stimulus and propping up the GDP is not considered growth, too many fucking fools out there consider the last 18 months of gdp growth to be real, its not real, it was propped up through the stimulus programs. Find me something real, something that is going to bring true organic growth to this economy. All they are doing is printing money to create what they think is a real economy, its not and wont be for many decades to come.
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Quote from S2007S:

Exactly, they didn't let the free markets take care of it, they intervened with programs, stimulus, tarp, 0% interest rates and trillions of dollars to help stave off any long term recession. The problem is they never let the pieces of the puzzle fall as they were supposed to. Anytime there is a bit of a slowdown in this economy it is looked down upon as something terrible, that no matter what GDP needs to grow at 3-4% a year. Too much intervention as we have now is going to be more problematic moving forward for our economy as a whole. The reason for the credit crisis were in now was because of the step taken by greenspan in 2000-2002, to reduce interest rates and flood the markets with easy cheap credit, that was the answer to the last recession. Fast forward to 2010 and bubble ben bernanke is doing the same exact damn thing. He is pushing trillions in spending to create an economy thats not ready for another bubble. The only way this economy has grown over the last 2 decades is through bubbles and expansion of credit. No one is taking into consideration that this is not to grow an economy.

They can say all they want about the recession being over but its clearly not over, forcing trillions in stimulus and propping up the GDP is not considered growth, too many fucking fools out there consider the last 18 months of gdp growth to be real, its not real, it was propped up through the stimulus programs. Find me something real, something that is going to bring true organic growth to this economy. All they are doing is printing money to create what they think is a real economy, its not and wont be for many decades to come.
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It seems most would agree with you, the preset economy is propped up with government spending. There is not real growth, it is due to the government leveraging up as the private sector leveraged down. Even Paulson, Bernanke, and Geithner would, I think, agree. But they might say they chose the lesser of two evils. What would have happened had the economy not been propped up? Hoover did nothing during the great depression, as he believed things would return to normal on there own. We had breadlines, and deflation, and banks failures. We still have some banks failing, but now there is the FDIC. We don't have many breadlines, and there is no deflation in the economy overall.

I don't have any answers, just questions. But I have a strong belief that had the Gramm Leach Bliley act not been passed, and had Greenspan not ignored the many warnings he got regarding the mortgage industry, and had the SEC not rubber stamped everything the investment banks wanted to do, including leveraging up to 30 to 1, this entire mess might have been avoided.
 
Actually Hoover was very interventionist. Tom Woods has done a lot of work on this topic. FDR actually ran on a platform of laisez faire as a contrast to Hoover. Had Hoover truly left the economy alone the great depression probably would have been a lot likt the non depression of 1920 which lasted 18 months and then was forgotten.
 
Quote from Sammysouth:

Actually Hoover was very interventionist. Tom Woods has done a lot of work on this topic. FDR actually ran on a platform of laisez faire as a contrast to Hoover. Had Hoover truly left the economy alone the great depression probably would have been a lot likt the non depression of 1920 which lasted 18 months and then was forgotten.
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That's news to me! Are you sure about that? I guess all those history books are wrong. I've been lied to. I was taught that the programs initially put into place by the FDR administration did not work as intended, but that programs introduced later, and particularly entering the War, were helpful in putting folks back to work and bringing the country out of depression.

It is my understanding that the Hoover administration did become more activist toward the end of his term when it was recognized that things were not getting better on there own as Hoover had thought they would. To characterize Hoovers administration as "very interventionist," however, seems like a stretch to me.

And if, as you say, FDR ran on a laisez faire platform, then he has been done a disservice by all those neo-cons who think of him as the devil.:D
 
It's the revisionist conservative line.
They have a big problem: October 1929 was six months after Hoover's inauguration, meaning he had three and a half years to prove that relative non-intervention would work.
Since it didn't, the only alternative modern day conservatives have is to show that he was, in fact, interventionist.
To some limited extent it was true: he came up with the Federal Home Loan Banks to try to encourage mortgage lending again.
The Bank of United States (sic; they were actually prohibited by law from putting "The" in front of "United States", so that people wouldn't think they were official) went belly up late in 1930, in circumstances eerily similar to Lehman. That put final nail in the coffin, and he was clueless as to what to try after that. The FHLB was a bit of desperate flailing; it didn't work.
 
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