Krugman : Let congress pass another 800 billion $ stimulus

Look i totally agree with this guy. I think the US economy is absolutely screwed and there's no way to fix it. It WILL go bust. Why not borrow as much money from the rest of the world as you can, and invest in things like infrastructure, and real world hard things, that will help your country when it goes bust. Then when the country declares bankruptcy, just have it start a new monetary system, like the Amero, etc ;-P

Originally posted by xxshadowfaxx
Stimulus did not fail It helped keep the economy afloat for the past two years. Now that money has run out, and everything is falling back into the pit it was in. I don't think there is any other solution other than to do another bailout. Yes, the bottom will fall out eventually, but its so far gone now that we can't fix it. So all we can do, is last as long as possible. The next bailout might last us another 2 years. Either way, the economy is doomed, its just a matter of when.

I live in the Hamptons (East End of Long Island, NY). For fun, we often drive along the ocean front road (Gold Coast) on a weekend in the middlle of the summer. There is one 20+ million $ house after another.

You would think that a wk end in the summer was the time such "vacation homes" would be used. Wrong. 19 out of 20 homes are not used AT ALL.

Isn't this a beacon telling us where to get money to save our economy. Get it from the filthy rich. People should not be allowed to have that much money.

reply to post by DaRAGE


Thanks to neo-liberalism, they own the rest of the world, too..

Well, except for some places, like Iran/North Korea.. I think that's about it, actually. G, wonder why they're both on America's hit-list.

reply to post by samkent


Boy have you been sold a bill of goods by the crooks who run/own our country. Shame on you.

reply to post by etcorngods

Originally posted by etcorngods
Isn't this a beacon telling us where to get money to save our economy. Get it from the filthy rich. People should not be allowed to have that much money.

I disagee. Get it from the filthy rich only if they got their money in an unethical & unlawful manner (like most of Wall Street). If they did ethically & legally and deservedly, leave them alone.

www.lwlworldwide.com...-1976

“How Much is Too Much?

“Bet you’ve heard that more than a few times. But picture this…

“Someone says, ‘Just look at that George! He has perfect health. High energy, no diseases, and he hasn’t even had a sniffle in months. Don’t you hate greedy people like that? Poor Elizabeth has the flu, and George is hogging all the health!’

“You’d never say that about health. Or love. Or happiness. So why would you say it about money?”

A much better solution has popped up here on ATS recently:

www.abovetopsecret.com...

# That the Treasury Department issue U.S. Notes (exactly like Lincoln's Greenbacks) to pay off the National debt.
# The reserve ratio of private banks be increased from 10% to 100%, thereby terminating their ability to create money, while simultaneously absorbing the funds created to retire the national debt.

These two relatively simple steps, which Congress has the power to enact, would extinguish the national debt, without inflation or deflation, and end the unjust practice of private banks creating money as loans (i.e., fractional reserve banking). Paying off the national debt would wipe out the $400+ billion annual interest payments and thereby balance the budget. This Act would stabilize the economy and end the boom-bust economic cycles caused by fractional reserve banking.

[edit on 1-9-2010 by TheBandit795]

Doing the same thing over and over again expecting a different outcome is the definition of insanity unless you have an agenda behind it.

[edit on 1-9-2010 by Battleline]

Originally posted by FiatLux
Yep, and when that is gone, it`s back to the same old same old debt. What you are saying, will take one great deal of time. Time we don`t have if we don`t want to dump this debt on our future generations.
[edit on 1-9-2010 by FiatLux]

You overlooked or ignored a basic element of this - If your credit has been dinged in much the same way as bankruptcy, you wouldn't be able to get credit. Better yet, if you took the bailout, you'd be mandated to be excluded from credit offers. This would then force the consumer to live within their means.

Your argument about nobody holding a gun to the consumer's head is meaningless... We bailed out the banks - who was holding a gun to their heads to loan it to us? Nobody. Who is paying that debt back? You and I. Who is benefiting from the stimulus? The banks and corporations - NOT you and I.

I am not saying that this needs to be done now - it should have been done first. Instead they elected to give our money to the banks. The end result would not have been more debt - it would have been increased consumer spending due to increased personal wealth (due to not making debt payments...). Once they run out of money, they stop spending, or adjust their spending habits because credit would no longer be an option for them.

Either way, it would have dumped billions into the economy immediately. The biggest problem with O's stimulus is that the banks in-turn stopped lending and have instead simply sat on the money. The projected uptick in lending to corporations never appeared. Were the money in the hands of the people, it would have been spent and it would have had widespread positive economic impacts.

Look at it this way - the stimulus cost the taxpayers $838 billion dollars. At the end of 2009, Americans held $755 billion dollars in credit card/unsecured debt. Wipe out the $755 billion (already an $80bn cheaper option than the original plan...) and it would have effectively given each person with credit card debt a rather large monthly raise, which is essentially tax-free since it isn't "wages earned".

What do Americans do with extra money? A few would save it, but the vast majority would SPEND, and spend a lot. This increase in personal income would have impacted nearly every facet of the economy. Manufacturing, farming, professional services, the automotive sector, etc.

Oh - and the banks would have benefited as well because the debt payoffs would have been made directly to them, NOT the consumer. Of course, in order to have been really effective, these payoffs would have strings attached for the banks. Strings like "DON'T MAKE STUPID LOANS"

[edit on 9/1/2010 by atlguy]

Originally posted by xxshadowfaxx
Stimulus did not fail It helped keep the economy afloat for the past two years. Now that money has run out, and everything is falling back into the pit it was in.

So... you're saying it failed?

The only way to stop the downfall of the economy is to bring back jobs. The only way to bring back jobs is to STOP allowing US Corporations to send jobs overseas.

We bailed out GM. GM went and closed American plants and opened new ones in Mexico. We bailed out AIG who went and paid their CEO's billions in bonuses. These types of stories go on and on and on.

Yes people lived beyond their means. This is true. But not everyone. I totally blame the outsourcing of jobs and industry on the failure of the system. America went from an industrial nation to a service nation. And now even the services are leaving the country. How can "I" as a computer programmer living in New York compete with someone from India who thinks $25 a day is a fortune???

I just read a story today about how HP fired something like 10,000 employees. And yet the CEO and other top brass had their salaries increased to the highest level yet. What does that say about this economy? This nation will NEVER ever recover with things like this going on.

Throwing another $800 billion in "play money" out there will do nothing but bottom out the dollar even more. Fiat money needs to be done away with period. The Federal Reserve needs to be shut down. There is nothing "federal" about them. They are thiefs plain and simple.

Let me ask this. Lets say we do kick another $800 billion into the economy. Where is it going to go? To the people? No. It will go back into the pockets of the elite.

I'll leave you with this. We've already handed Fannie / Freddie Mac somewhere around $400 BILLION. Now they are asking for MORE money. Do they deserve it??

reply to post by TheBandit795


None (maybe almost none) of them got it by ethical means. In any event, the fact that you have wealth is no reason for extreme excess/waste.

I live with those arrogant guys. They go to Dartmouth, take some punk course, meet lots of other students with connections, graduate, get a job with a hedge fund (maybe after geting a MBA) and make over a $ Million within 5 years.

Laws (and taxes) should be fair. Ours aren't. Too many free loaders making, and controling, most of the money.

reply to post by TheBandit795


Ya, you get rich by cutting wages and increasing work load. That's called efficiency.

and if anybody has a problem with it, then they can join the other 30 million people on the street looking for a job -- good luck getting employed in THIS economy.

And if the owner/CEO/management, or whatever, happens to pocket the extra change he/she/it makes from your extra work and lower wages, then why not let him keep it? The CEO of comcast made approximately 100 million dollars last year, and clearly he needs that much money to survive, so taxing it would be an injustice.

reply to post by Kaytagg


reply to post by etcorngods



What's stopping you from becoming financially literate and being able to use your money to earn more money (it can be done from scratch, but that you never learn in school)....

What's stopping you from using the above to actually become financially independent instead of relying on forfeiting your precious time and freedom on a J(ust) O(ver) B(roke)??


What I am saying is, get rid of the "I am a victim" mentality, it will do you no good, and it never will. We can solve this in two ways, financial reform on a global scale and especially financial reform on a personal scale.

www.womensradio.com...

Today our elective officials are struggling with what financial reform looks like. However, dealing with our personal financial reform is essential to financial reform and stability in our homes. According to the CFO's monthly magazine, 45% of Americans are spending less, however; 53% of Americans polled believe they will continue their previous spending habits after the economy returns. This is not financial reform.

Financial reform is not forgetting what we learned in the past. It is embracing our lessons and changing habits. Following a recipe for financial reform is a must.

And it starts with a simple formula:

www.lwlworldwide.com...

>> When you produce more than you consume, your monetary VALUE increases.

>> When you consume more than you produce, your monetary VALUE decreases.

[edit on 1-9-2010 by TheBandit795]

reply to post by TheBandit795


I am doing all that.. but i'm never going to be pulling in 100 mill a year, and I'm mostly okay with that.. what I'm not okay with is the inequality in the country, and the fact that it's not shrinking -- it's growing.

That's not good. Too much capital in too few hands leads to tyranny, imo. And who's going to stop it, exactly, when our political system is greased entirely by money? The candidate which raises the most money always wins -- so when the top 10% of wealth in this country owns 90% of the assets, then the top 10% of the wealth will be deciding who gets elected and what laws are going to pass.

I'm not against mega-wealth, although I hope you realize that past a certain income bracket, money no longer means what it does to the rest of us. It's used solely as a score card.

reply to post by Vitchilo


WTH!?

Isn't this kind of what American's were doing in the first place - borrowing and hedging against debt - with all of the mortgage and derivative shenanigans? Have we learned nothing?

Originally posted by xxshadowfaxx Yes, the bottom will fall out eventually, but its so far gone now that we can't fix it. So all we can do, is last as long as possible. The next bailout might last us another 2 years.

Holy smokes. That's some short term thinking there. Why must we continue to burden the next generation with the sins of the previous generation?

It's all just smoke and mirrors. The bill will eventually come due.

This is the part where I get livid when I think of the trillion dollars we have spent on endless war, it would come in handy right about now.

reply to post by atlguy


And when it`s done falling, it`s over, finished. No more need for credit(over use of credit is what helped to ruin this country), no more interest to sap your money. So in the end, i didn`t over look a thing. End this garbage system we have, and bring a new system on line that ALL the people can live with, one that doesn`t cater to the greed of just a few.



[edit on 1-9-2010 by FiatLux]

Originally posted by Kaytagg
reply to post by TheBandit795

 

what I'm not okay with is the inequality in the country, and the fact that it's not shrinking -- it's growing.

I completely agree...

That's not good. Too much capital in too few hands leads to tyranny, imo. And who's going to stop it, exactly, when our political system is greased entirely by money? The candidate which raises the most money always wins -- so when the top 10% of wealth in this country owns 90% of the assets, then the top 10% of the wealth will be deciding who gets elected and what laws are going to pass.

I completely agree!!

I'm not against mega-wealth, although I hope you realize that past a certain income bracket, money no longer means what it does to the rest of us. It's used solely as a score card.

That's when it can be used to help bring change and improve the lives of others... True selflessness IMO. Coming from your heart... Not imposed on you by a nanny state.

but i'm never going to be pulling in 100 mill a year

This I don't agree with It's not impossible, difficult yes... But not impossible.

reply to post by samkent

You are not thinking through the entire set of consequences that would have happened if we had let GM and Chrysler fail. It wouldn’t have been just the assembly plants that would close. It would have been: The plants. The sub assembly plants. The parts manufacturers Tire factories. The parts suppliers. Trucking companies. Dealers Family restaurants next to the plants and dealers. Bank branches

Again, I refer to my earlier analogy. Would letting them bankrupt hurt immensely? Certainly. Would the pain have been much shorter lived? Definitely. Have we done our fellow citizens, particularly in those industries, a great disservice by "slapping another bandaid" on the problem, and continuing to ignore it? You betcha.

The Federal Reserve should set up a national investment fun to pay for all kinds of new projects in energy, infrastructure, the space program and so on.

I think this depression is very serious and has the potential to become a total catastrophe like the 1930s. They should probably start considering major debt forgiveness for ordinary people who are about to sink, and maybe a negative income tax financed by the Federal Reserve: just send everyone a check to spend how they like.

Conservative or conventional policies are never going to fix a situation as bad as this. Too many people are too far under.

Obama has been a disappointment in dealing with this, but I don't believe that any of the Republican ideas will make any difference either and will probably make the depression even worse.

It often seems like the elite groups have just written off the common people in this country, and left them to sink or swim as best they can.

You can’t have it both ways!

The banks didn’t loan the money because the rules have changed. Most of the new home owners no longer qualify for a mortgage.

Look the US no longer manufactures most of the goods consumed here. Everything from little trinkets to autos. That combined with the flattening growth of the US population there is no way to expand the economy. But expansion is what is expected by the population. The only thing left for us to produce here and consume here is housing. Economists realized this 20 years ago and that’s where the administrations have focused their efforts.
If you lower the standards for mortgages you can put another percent of the population into a house.
That means the other 79% can move up a level in houses.
That means more washers and dryers and furniture.
That means more new cars and mini vans to get to the new neighborhoods.
That means more stores and banks.
Everybody wins!

But eventually we used up the people who would actually pay back a loan. It eventually lead to paying unqualified people to buy a house. A true housing bubble.

Now the government is doing everything it can to prevent the price of houses from falling to correct levels. Why because people have been told to consider their house an investment. And no one want their investment to fall. But it will.

But a far worse bubble is being ignored by almost all government officials.
It’s the government bubble! Not just the size but more importantly it’s the pay scale and benefits. Some cities in CA are catching on but the rest of the country hasn’t noticed.