The incredible sadness of austerity

[Specterx]

Quote from Covertibility:

I don't see in the charts the so called runaway spending of the welfare states of Ireland, Italy and Spain.

And yes, the markets are always the cause of speculative booms and busts. The government doesn't issue a list of Winners of the New World or that the market has reached a permanent plateau and it's safe to keep on shoveling that money in.

Blaming the govt for low rates as a cause for the housing boom is like a gunman who shoots up a church blaming walmart for selling him the bullets. If the private sector can't control itself, then regulations need to be imposed or strengthened.

21% of Spain's debt is held by local governments. As for Italy, you think a debtberg of over 100% of GDP doesn't indicate overspending?

In any event, I wholeheartedly agree that regulations need to be imposed. Abolish the Federal Reserve - a vast fount of moral hazard and glaring example of regulatory capture if there ever was one - and transfer some of its emergency-liquidity functions to the Treasury, operating within strict statutory limits. Increase TCE requirements on banks and BDs to 20% at a minimum. Implement a strict balanced-budget amendment to the Constitution. Problem solved.

 

[Specterx]

Quote from Covertibility:

There is no cherry picking of the data. Frank Luntz nor any FOXNews employee had any involvement in the above mentioned or any other empirical study. I haven't seen Heritage, Cato or AEI refute the findings. I'll have to go back and take a look at the 90's again but this past crisis wasn't govt programs.

Low rates made the banks want to loan more but it was the duty to not make loans to people who couldn't afford them. We all know the stories of how easy it was to buy a house with no money down and how no income verification was done on many loans. This is private sector's fault. Just because money becomes cheap doesn't mean you do stupid things with it.

It's at the very least intellectually dishonest to drive interest rates down to zero, watch a bubble inflate, then throw up your hands and say "but we didn't force anyone to speculate!" when it all comes crashing down.

It was quite transparently the objective of government policy to boost demand for housing by increasing the availability of mortgage credit - through low rates, direct subsidies and market support in the manner of FHA/FNM/FRE, and regulatory forbearance. This really can not be disputed. If the private sector had not responded to these measures in the manner desired by government planners, they would have simply kept throwing 'stimulus' at the problem until the market did respond. This is more or less exactly the situation we're in now.

 

[ammo]

we are responsible and we need to think about who we put in charge,we need to vote,run the dems and reps out .only way to break the machine,before it's too late,

 

[MarketMasher]

Quote from syswizard:


Why take risks or work hard when Big Govvie has got your back covered ? Then this thinking spreads like a disease.

And why not take HUGE risk speculating when gov't has your back and will bail you out if you implode the company and the economy with you?

Too Big To Fail is the biggest Socialist scam of all because those in it get the biggest amount of payoff. You think teachers have it good? Try killing the world economy and pocketing millions (or hundreds of millions) for it.

 

[adadadog]

Similar topic:

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[baro-san]

Quote from adadadog:

Similar topic: ...

Nah! He's way off. He thinks that's not the thief to blame, but who shouted "Thief!". The Asian names in the US colleges comment is stupid too. That made me stop watching: waste of time.

 

[ammo]

too bad baro, was a good piece,thanks addadog

 

[RewriteQuran]

Quote from Scataphagos:

Especially when everyone finally accepts the fact that there is NO FIX.

1. Too many people on the planet. Not a decent job for all of them.

2. Too many jobs outsourced to Chindia for low labor costs.

Unless US/EU aligns Migrant/Immigrant Visas and Outsourcing to Caste system in India and Human Rights in China, their middle class will be destroyed.

http://www.rediff.com/business/slid...forced-to-sign-no-suicide-pledge/20110504.htm
http://news.rediff.com/report/2009/sep/29/un-says-indias-caste-system-a-human-rights-abuse.htm

 

[syswizard]

Quote from MarketMasher:

And why not take HUGE risk speculating when gov't has your back and will bail you out if you implode the company and the economy with you?
Too Big To Fail is the biggest Socialist scam of all because those in it get the biggest amount of payoff. You think teachers have it good? Try killing the world economy and pocketing millions (or hundreds of millions) for it.

Great comment....and now the basis of the Occupy Movement.

 

[MKTrader]

Quote from syswizard:

Great comment....and now the basis of the Occupy Movement.

No, Occupy has no real basis--other than a bunch of slackers who want their own bailouts. Very little of it is about the real issues.