Barack Obama accused of making 'Depression' mistakes

In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House’s plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.

Telegraph

I agree with this statement.

Instead of tightening their belts and reducing spending the government has done the exact opposite any normal person would do in a Depression.

What idiots.

[edit on 9/7/2009 by Tentickles]

Believe it or not, it's government's job to spend in a recession. If government doesn't increase liquidity by spending in a recession, it's a sure way to create a depression.

We all like to criticize Obama for his stimulus plan but forget it was backed by Republicans and leading economists at the time. It was also not the first but the third government stimulus this decade.

Bush spent an equal amount in just the last few months of his term, but that money went directly to the bankers and the Treasurer (Paulson) refused to let any of that money be used to help manufacturing companies or create jobs. In contrast, Obama's stimulus is going to the people with tax cuts for those who need it most and money for job creation.

Apparently, most republicans would prefer to just give all our tax money to the banks.

reply to post by mythatsabigprobe


I do agree that it is the governments job to spend during a recession but the flip side of that and the only way Keynsian political-economic thought works is for the government to save money during the good times. EPIC FAIL on that one. The only other way is to find a bigger sucker to loan you the money and pray that things turn around before torches and pitchforks come out and the bigger sucker stays the bigger sucker. SO FAR SO GOOD on that one-thanks Red China, Japan, and Pension Funds of the World.

Originally posted by mythatsabigprobe
Believe it or not, it's government's job to spend in a recession. If government doesn't increase liquidity by spending in a recession, it's a sure way to create a depression.

We all like to criticize Obama for his stimulus plan but forget it was backed by Republicans and leading economists at the time. It was also not the first but the third government stimulus this decade.

Bush spent an equal amount in just the last few months of his term, but that money went directly to the bankers and the Treasurer (Paulson) refused to let any of that money be used to help manufacturing companies or create jobs. In contrast, Obama's stimulus is going to the people with tax cuts for those who need it most and money for job creation.

Apparently, most republicans would prefer to just give all our tax money to the banks.

Your assesment is wrong, despite what you heard in your economics class. Liquidity is a very loose term these days. Pumping the markets full of free money is not enabling companies to produce capital, all it enables them to do is operate on borrowed time.

First off the government in not spending Tax dollars. It's spending freshly loaned money, something completely different. The taxes will come much later. But only after the money supply has increased because of Government need to spread "liquidity". An increased money supply is the very definition of inflation.

With zero government intervention, millions would have lost thier jobs, banks would close, businesses would shut down, yes. But it all would have happened within a few months. And by now, we'd be on our way to recovery.

Instead, the Government thought it had to "do something", for no other reason than "we can't just do nothing". So now we get to enjoy a nice long and grueling depression, coupled with a fair amount of inflation. Which, will exacerbate the problem and actually lead to more job losses and business closures.

as a side note.... not one single republican I knew supported Bush's bailout. Not one. And there where a TON of economists that said these bailouts where a horrifying idea, no one listened to them.

And for the record, Obama's bailouts spent far more money than Bush's.

I have no dog in that political BS. I am a political Atheist for the most part, I just wish people would get their facts straight before they spew a bunch of opinionated BS all over the interents.

reply to post by mythatsabigprobe


Sorry but that is not true, Obama has spent, and keeps spending more money than any president ever before him. Even at his inauguration, with the Roman/Greek temple idiocy, he spent more money for his inauguration, during a time of economic crisis, than any other president.

Then there is the $9 trillion dollars lost under his watch, which went directly to the bankers, but which the president claimed on television "went into a black hole".

The president, and his administration seem to have their minds made up to spent as much money as possible to put us deeper into a depression.

I know some people love him, and would never admit to the president and his administration doing anything wrong, but that is the truth.

reply to post by Tentickles


It's amateur hour in the White House.

It's "drop acid, tune in, and turn out," in Congress.

No other explanation.

reply to post by aravoth

I have no dog in that political BS. I am a political Atheist for the most part, I just wish people would get their facts straight before they spew a bunch of opinionated BS all over the interents.

In your opinion. Given:
1. the money supply doubled in the first three months of 2009,
2. the recent bond sales were "slow"
3. Obama is looking for yet another bailout
4. Germany and other countries are asking the physical gold stored in the USA be shipped to them.

Is the USA looking at National Bankruptcy and a World Bank/IMF bailout with the attached SAPs?

My background is chemistry not economics but I sure do not like the looks of things right now.

reply to post by aravoth


S and F, An incredible analysis of what is wrong with the current approach.......We have seen an idiotic interpretation of basic economic principles put into place, some beginning in Fall 2008, but most since January.....

My question is was and is it planned destruction of the economy or pure and blind stupidity?

Stop trying to find an excuse for what has been done and is being done.
It is not idiocy or a mistake. It is not a failure to understand the economy or the basics of money.

Obama is going to destroy the dollar and it is intentional.

reply to post by Tentickles



Why don't you see what the money is going towards -

no one will know -

www.fbo.gov...

BTW Hoover, stopped spending, that created the depression, it created a systemic failure.

The reason the depression reversed is because public works provided jobs which stimulated commerce again...

Originally posted by mental modulator
.............
The reason the depression reversed is because public works provided jobs which stimulated commerce again...

And jobs keep being lost, the president and the administration want to pass new CO2, and other Global Warming hoax laws that will make the depression worse than the one in the 1930s....

Originally posted by badgerprints
Stop trying to find an excuse for what has been done and is being done.
It is not idiocy or a mistake. It is not a failure to understand the economy or the basics of money.

Obama is going to destroy the dollar and it is intentional.

Ya I actually thing Bush did it intentionally to, decrease faith in the government which could begin a massive lassez faire movement, starve the beast-

www.fbo.gov...

Originally posted by ElectricUniverse

Originally posted by mental modulator
.............
The reason the depression reversed is because public works provided jobs which stimulated commerce again...

And jobs keep being lost, the president and the administration want to pass new CO2, and other Global Warming hoax laws that will make the depression worse than the one in the 1930s....

Yes in the private sector this is true, but if you would click the link you will see 1,000's of bid contracts, regionally administered on a state by state county by county basis, hopefully offsetting some of the loss in the private sector. I tis better than spending money on unemployment as it is work and thing are produced.

Where did you go?

[edit on 8-9-2009 by mental modulator]

reply to post by mythatsabigprobe

In contrast, Obama's stimulus is going to the people with tax cuts for those who need it most and money for job creation.

I wish that were true...

More Stimulus Money Goes To ACORN Organizations Than To Roads/ Bridges

Congressional economists say only $4 billion of the $850 billion stimulus bill will go to roads and bridges in the next two years. Huh? Wasn't Obama's Recovery & Reinvestment Act all about stimulating our infrastructure, stopping those nasty bridge collapses??

House Republican leader John Boehner reports $4.19 billion will go to “neighborhood stabilization activities” with another $750 million for "community stabilization" organizations. This could go to the Association of Community Organizations for Reform Now (ACORN).

Obama really likes ACORN. His campaign donated $800,000 to ACORN. He represented ACORN in court. He trained ACORN employees. He worked with ACORN as a "community organizer"

What did they do for him? ACORN hired people to go door to door to tell people to vote for Obama. This organization, which already gets billions in federal funds, has been accused of voter fraud several times.

Newsbusters reveals where else the stimulus tax cash is going:

* For every dollar that is spent for small business tax relief, $4 are being spent for the maintenance and new grass in Washington, D.C.
* $360 million for sexually transmitted disease education
* $50 million for the National Endowment of Arts
* $726 million for an afterschool snack program
* Office furniture for the public health service
* More money for Amtrak

I wish we could just realize that blaming Bush/Obama/Republican/Democrat isn't solving anything. We could go back and forth with this night and day.

At what point do we start uniting and demanding that all politicians, regardless of party, address the issues in a mature compromising manner. Neither left or right will ever be able to solve the issues by themselves.

We are where we are and nothing about the past is going to change that. We need to focus on the present and the future.

Hell, I am even man enough to admit that I am to blame. When things were going well I barely said a word. Did anybody have any problem with spending the stimulus money the government sent you?

I know I didn't.

Sorry about the rant

Continue with your left/right

Originally posted by mental modulator
reply to post by Tentickles

 

Why don't you see what the money is going towards -

Beer and cigarettes-

But many states aren't taking advantage of the windfall because state officials say they can't afford the requirement that they put up 20 percent of the costs. Six months into the stimulus, only 27 states have applied for the money.

In New York, Gov. David Paterson came up with a creative solution that has been praised by economists and advocates for the poor. Unable to make the 20 percent match on its own, the state teamed up with philanthropist George Soros, whose Open Society Institute contributed $35 million so the state could access $140 million in stimulus money.

The money went straight to low-income families, who received $200 per child for back-to-school supplies and clothes. About 800,000 children were eligible.

But the chaos and allegations of abuse that followed illustrates how, in the heated debate over the stimulus, even the most lauded program can turn into the most lampooned overnight.

Critics say the state bungled it when it put no restrictions on how the money could be used. It also deposited it into the debit accounts of food stamp and welfare recipients without telling them it was there or what it was for until days later.

Rumors percolated that the money had to be taken out and spent right away. And store clerks began complaining that people were using the money for beer, lottery tickets, iPods and flat-screen TVs.

"They said, 'Well, we have to get our money out of the ATM to buy school supplies,'" said Diane Goly, who owns a Sunoco gas station in Syracuse. "But as we were watching, people were taking the money to buy beer and cigarettes."

Noah Lebowitz, spokesman for Monroe County in Rochester, said social-services investigators found that some people in its drug treatment programs received large amounts of cash.

"They have a very difficult time not spending it on drugs," he said. "We were seeing people with drug abuse problems getting $1,000 in their bank account."

link

Originally posted by ElectricUniverse
reply to post by mythatsabigprobe

 

Sorry but that is not true, Obama has spent, and keeps spending more money than any president ever before him.

Obama has been in office just 7 months. The total outlays from the stimulus package and the second half of the TARP funding have been about $400B in that time. So you are saying that $400 Billion is more than any President ever before him has spent. Oh OK, I'll believe that. When winged pigs shoot out my ass.

Then there is the $9 trillion dollars lost under his watch, which went directly to the bankers, but which the president claimed on television "went into a black hole".

Nine Trillion Dollars lost and you're the only person that knows about it...? Yeah.

Sorry but that is not true...

. ...but that is the truth.

reply to post by mythatsabigprobe


The stimulus only benefited the ones on the top, the tax payer and the workers in America are getting reap off.

Look at the clunkers programs we are going to get the hit with the loses because the program benefited foreign car makers they are the one that make the profits at the expenses of a program paid by tax payer.

Most of the banks that took tarp money are using the money to keep lobbying in Washington for more favors again at the expenses of tax payer money.

While the job force keeps shrinking tax payer money is been promised for more spending, but is not tax payer money been generated to support that spending, after all what we are paying is the interest of the promise of debt.

TARP recipients spent $114 million on lobbying last year as the financial crisis emerged. In just the last quarter of the year eighteen bailout recipients spent $14.8 million to influence the government, as the TARP funds were distributed.

The lobbying has paid off. According to the Center for Responsive Politics, "The companies' political activities have, in part, yielded them $295.2 billion from TARP, an extraordinary return of 258,449 percent."

www.opednews.com...

Then the America only clause was lobbied away by our foreign investors in Washington, nobody cares that America lies in decay so they can prosper and our corrupted politicians that sell themselves for anything just decided to screw America.

Lost in all the hullabaloo surrounding the $787 billion stimulus package was the fact that the most vital part of it, the “buy American” clause, was watered-down and rendered nearly impotent due to complaints, both foreign and domestic.

Led by the Chinese government, American multinational corporations such as General Electric Co. and Caterpillar Inc. and interest groups such as the U.S. Chamber of Commerce, opponents of the provision were able to effectively influence Congress and the White House. In the end, the “buy American” provision proved to be completely ineffective.

www.economyincrisis.org...

Even our own government is working against the labor force in the nation in favor of foreign owned manufacturing so the industrial base in the nation doesn't get up and running to give necessary work to the American workers.

How can a nation prosper without manufacturing while increasing the debt?

Others makes money while our nation falls in decay.

www.opednews.com...

Sorry but this time around we are in such a hole that spending is the worst thing a government can do when is not support for jobs to generate taxable income.

Originally posted by mythatsabigprobe


Obama has been in office just 7 months. The total outlays from the stimulus package and the second half of the TARP funding have been about $400B in that time. So you are saying that $400 Billion is more than any President ever before him has spent. Oh OK, I'll believe that. When winged pigs shoot out my ass.

Total Deficit under Bush when he left, 400 billion
Source : www.usatoday.com...

Total Deficit under Obama in just the first 3 months, 1.8 trillion
Source: www.pbs.org...

I think in total Obama's budget for this fiscal year alone was just over 2.5 trillion, and about 3/4 of that was used to line the pockets of billionaire executives at AIG, "rescue" banks, and stop the unemployment level from rising........ROFL, you can see how well that Idea worked out here...www.bls.gov...

Originally posted by mythatsabigprobe
Nine Trillion Dollars lost and you're the only person that knows about it...? Yeah.

I believe he is referring to the 9.3 trillion dollars of obligations over the next ten years that Obama's budget called for. All of which is over budget, which puts the American taxpayer another 9.3 trillion in the hole.

In fact it's gotten so bad that congress and the president need to raise the debt ceiling..... again! This time to 12 trillion...thehill.com... The national debt is just north of 11 trillion, that is only on one government balance sheet mind you. The public debt does not include Social Security in it's figures, nor does it included Medicare, or Medicare part D.(this was done by Bill Clinton in the 90's, by moving those 3 budgets to different balance sheets, it gave the false impression of a surplus, since only the "public Balance sheet was reflected in the national debt.) Factor it all together and you have somewhere in the area of 55 trillion dollars of unfunded obligations. Which is literally more money than the Land Mass of the Entire United States is worth. Anyway.....

11.5 trillion dollar public debt, and a Budget deficit of 400 billion. Most projections estimated that it would take 5 or more years to reach 12 trillion on the public debt if spending had remained steady that is. And yet here we are, 8 months later, already beyond 12 trillion.

Of course congress says this is all because Bush left a staggering deficit of 400 billion. Which is substantial don't get me wrong. But How exactly do you pay off a debt of 400 billion by taking out a loan for 1.8 trillion? You don't...

Bloggers, the news, talk radio, they all spin lies to support the Regime, but numbers? Numbers do not give a damn, and they do not lie.

Congress and President Obama are solely responsible for the current deficit, period.

Originally posted by mental modulator


BTW Hoover, stopped spending, that created the depression, it created a systemic failure.

The reason the depression reversed is because public works provided jobs which stimulated commerce again...

The Federal Reserve contracting the Money supply is what caused the depression. Had nothing to do with Hoover. In fact Ben Bernanke, the current chairmen of the Federal Reserve said this in a speech on Milton Friedmen's 90'th birthday....

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

Best wishes for your next ninety years."
- Ben Bernanke, Chairmen of the Federal Reserve

Read the whole speech here.... www.federalreserve.gov...

Additionally, Public works did nothing to get out of the depression, in fact the only thing it did was prolong it. The only thing that got us out of the Depression was World War II.

While there is always a bunch of philosophical grandstanding going on as to whether or not the War ended the depression, one can easily see past the opinionated BS and again turn to the numbers.

In 1928 the Unemployment Rate was 4.2%

In 1930, one year after the crash, it was 8.7%

In 1932 the unemployment rate was 23.6% (this was the year FDR was elected)

In 1934 FDR initiated the first "New Deal", Unemployment at 21.7%

In 1936 FDR initiated the second "New Deal", which gave birth to Public works, Social Security, and federally protected the rights of Workers to unionize and strike. Unemployment at 16.9%

In 1938 FDR creates Fair Labor Standards Act(Minimum Wage) Economy begins to fall apart again. Unemployment at 19%

In 1940 FDR Re-elected to a third term, unemployment at 14.6%

In 1942 The United States was neck deep in World War II. Unemployment drops a staggering 9.9 percentage points down to 4.7%

By 1944, one year before the War ended, Unemployment was a jaw dropping 1.2%.

The American War machine, fighting a two front war is indisputably what ended the Depression. Again... numbers are not prone to political propaganda, and they never lie. Unless those numbers come from the Federal Reserve Board of Governors that is.

Edit to included source for statistical info : www.bls.gov...




[edit on 9-9-2009 by aravoth]