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Bill Clinton: U.S. Must Spend Its Way Out of Crisis

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posted on Dec, 5 2008 @ 04:23 PM
www. S. F. Examiner

KUALA LUMPUR, Malaysia (Map, News) - Former President Bill Clinton said Friday the U.S. government has no choice but to spend its way out of its worst economic crisis in decades.

With the U.S. economy in a recession, Clinton said President-elect Barack Obama must also shore up plummeting property values.

"The big risk now for America and the world is deflation, contraction, dropping asset prices. We have to stimulate the economy which means in the short run, he has to take America into even more debt. There is no alternative," Clinton said at a lecture organized by the Sekhar Foundation, a philanthropic group that aims to foster an understanding of different cultures.

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Clinton is just the latest in a long list of economists who believe we must avoid deflation and a very possible depression through more government spending. This, of course, was Bush's and Treasury Secretary Paulson's objective in asking for the 750B stimulus package, though it looks like rescuing some financial institutions will not be all that's necessary to get the economy back on track.

Obama has endorsed the 25B bailout requested by the big three automakers, and has pledged to advocate another big stimulus package when he gets into office, so he and his economic team appear to agree with Clinton and many others on the need for them. In this way he will be taking the road used by FDR in guiding the country through the great depression of the 1930's. Obama's advocating of the creation of jobs to work on the infrastructure and other needed projects resembles Roosevelt's CCC (Civilian Conservation Corps) in scope and ambition.

To many Americans, however, the staggering amount of debt these stimulus packages would entail simply makes them unacceptable. Why not just let the failing institutions go bankrupt and allow the free market make the necessary adjustments? The automakers, for example, could be bought up by many other solvent companies and the result might be ten small automakers instead of three big ones.

I, reluctantly, tend to believe the massive spending is probably necessary. Many Americans do not remember the depression of the 30's but my grandparents went through it and it's not something we want to see again in this country. Still, if there's a better way I'd like to hear it.

posted on Dec, 7 2008 @ 11:30 AM

Originally posted by Sestias
I, reluctantly, tend to believe the massive spending is probably necessary.

And I, very reluctantly, agree with you.
We can either spend a LOT and let the government get us out of the mess they put us in and let our children and grandchildren pay it back OR we can piddly-dink around, spending a few million here and a couple million there in a sort of half-assed attempt to keep us from going entirely under all at once. Unfortunately, I believe this will just prolong the inevitable... which is the third option: Letting the nation slip into a depression that will REALLY have some MASSIVE repercussions throughout nearly all classes of Americans.

I disagree with Clinton that the government has NO choice. But if they choose not to "Spend their way out" of this, we're going to have a massive depression.

The money needs to go to creating jobs, energy efficiency, health care, new forms of energy creation and infrastructure. And I believe that's exactly what Obama has planned.

I HATE the idea of the government bailing everyone out. But they shouldn't have let all our jobs be sent overseas. SOMEONE (besides ATS Members) should have seen this coming.

I get so frustrated when I see people, companies, corporations and government thinking SO short-term! For the past 30 years, they've had the attitude of "Hey, if it works today, who cares about tomorrow"? And here we are in "tomorrow". Now, we have to pay for all that short-sightedness.

I hope we learned the lesson...

posted on Dec, 7 2008 @ 01:24 PM
reply to post by Sestias

The problem is our infrastructure was built a very long time ago and is falling apart. We need to shore up bridges and build better roads. The need for more public rail systems also can be done. The stimulus package should be a national and public works program like the one FDR started that electrified and built roads to the rural areas.

If we do allow the Big Three automakers to fail (Ford would be the only one to survive as it is in the best shape), millions of people would lose their jobs. Not only the auto workers, but the parts makers and other support jobs (steel for the cars, etc). I do find it interesting they never asked the bank executives how they got to the capitol or what they were going to do with the money. They also scream at the unions (who pay $28 an hour as opposed to $25 an hour for non union foreign owned car makers in the US) for making too much money, but never asked about what the AIG financial workers made. An argument can be made of indifference to those who shower before work than those who shower after work.

While I do not like the debt, I do not see any other way to help us get out of this mess. Hoover let things ride, and they got worse over his four years. It is time to fix America, both financially, and physically.

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