How Obama's Cave In To GOP Extremists Will Devastate The Economy

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The deal Obama struck with GOP leaders last week will cost our moribund economy around 400,000 jobs. It was a tragic compromise with an unyielding ideological opposition, yet Obama hailed it as “historic,” prompting the Wall Street Journal's plutocratic editorial board to crow that the president has now “agreed to a pair of tax cut and spending deals that repudiate his core economic philosophy and his agenda of the last two years.” They painted it as proof that “Republicans in Washington have reversed the nation's fiscal debate.”

Then came the news today that Obama will introduce a long-term deficit reduction plan, which might include “reforming” (read: cutting) Medicare and Medicaid.

The economics are pretty simple. A healthy economy is fueled by consumer demand for good and services. A high rate of employment and wages above starvation level spike consumer demand, give more buying power to the population and increase the amount of money circulating. The more money is in circulation, the healthier the economy. Government stimulus and spending contribute a great deal to our economy, more than most people realize until that spending is sharply curtailed.

Cutting spending reduces the amount of money in circulation and contracts the economy rather than boosting it. If there is enough contraction you have a depression. This is what Herbert Hoover did in the Great Depression of the 1930's. He sharply curtailed government spending. The result was the economy shrunk even further than it already had and deepened the depression. The tent cities erected by the millions who lost their jobs were called "Hoovervilles" in his honor.

What Herbert Hoover did is what the Republicans are trying to do. Many people don't know history and therefore do not learn from it.

We have had "trickle down" economics for over thirty years. It has resulted in the doubling and tripling of the wealth of the top 2% of the population. Meanwhile wages for the middle class have remained flat, if you take inflation into consideration, and the poor are poorer. They have not increased in thirty years. The large middle class, once the pride of America, is rapidly disappearing. More and more people are dropping down into poverty, which is increasing rather than decreasing.

The millionaires and billionaires are supposed to increase employment levels and overall prosperity for all. They have had trillions of dollars thrown at them through government tax cuts. They have not improved the standard of living for the other 98% of Americans much at all. They have "created jobs" in third world countries by offshoring their production. Not here, though. They have invested a great deal of their money overseas. They have caused the recent world financial collapse through greed, recklessness and lack of regulation.

"Trickle down" economics has not worked for anybody but the top 2% It never has. Those of you who worship Ayn Rand are either bootlickers of the rich, enormously rich yourself, or -- as on ATS -- too young and naive to understand how the world really works.

reply to post by Sestias


Off with Boehner's head, that smug, tan, good ole boy bastard. What the heck, do em all.

Oh noes 400,00 jobs lost!!
Other companies will pop up everywhere to fill the vacuum.
If there is a market there will be a supplier.
I don't care for barryO but i don't worry about big companies death throws either.

All this talk of budgets and spending and republicans and democrats is moot.

When they raise the debt ceiling, when Soros sells short on the dollar, you'll wish your computer was edible.

doom.

i was going to write something witty and profound, but the facts are so blatant and publicly available that the bottom 95% of the american population is in decline, that it isn't even noteworthy. nothing is going to change except the speed at which the middle class vanishes into poverty.
wait till medicare and social security are hacked away, millions of americans are going to be destitue with no place to go but the streets.

has any one seen the movie "Eat the Rich"?
heh heh...the nosh

I don't think this is partisan cloisterfolks
I think until people realize it is non partisan
and how and why that is...
there will be NOE solution

The upper 50% pay 97% of all taxes.
I guess that isn't enough.
Damn those rich bastages!

Originally posted by beezzer
The upper 50% pay 97% of all taxes.
I guess that isn't enough.
Damn those rich bastages!

And the top 10% of those people own HALF of the economy

They need a lot more

look how skinny they're getting???

in Canada they published the stat a couple of years ago
that that year
350 who earned over 250,000 paid NO income taxes

Originally posted by Janky Red

Originally posted by beezzer
The upper 50% pay 97% of all taxes.
I guess that isn't enough.
Damn those rich bastages!

And the top 10% of those people own HALF of the economy

They need a lot more

look how skinny they're getting???

And there you have it folks!
Grab your pitchforks and torches, fellow knaves! Lets get 'em!

Originally posted by beezzer
The upper 50% pay 97% of all taxes.
I guess that isn't enough.
Damn those rich bastages!

false data comparison....what is THE PERCENTAGE OF INCOME PAID, not PERCENTAGE OF TAXES PAID.
...if i made 10 million last year and paid 1 million in taxes...that's 10% of my income
.. if you made 50 thousand and paid 10 thousand in taxes that's 20% of your income

total taxes paid for both...1,010,000

my percentage of total taxes paid 99%
your percentage of total taxes paid 1%

Originally posted by Sestias

Cutting spending reduces the amount of money in circulation and contracts the economy rather than boosting it. If there is enough contraction you have a depression.

Let me stop you right there.

This is a false statement and concept.

The U.S. economy does not and should not depend on government spending for its health.

The second part of this false concept is that if the government is not taxing and spending, then that money is still available for consumers and businesses to spend as they choose - which would be on things much more likely to stimulate the economy than the entitlements and pork barrel spending the government likes to use our money for.

They reveal that the budget cuts, while historic, were significantly eased by pruning money left over from previous years, using accounting sleight of hand and going after programs President Barack Obama had targeted anyway.

AOL


Well, it appears to me that their is alot more money in many government programs than is actually needed.
What we will never know is how much money is wasted so departments can keep their spending at the same level, even when it isn't needed.
I can't find the article, but I remember gates proposing spending cuts for the military and the budget just passed did not utilize all of the cuts Gate's proposed.
One other overlooked and not talked about much is fraud within welfare programs, Medicare/Medicaid.
Also,if we would get all of the illegals aliens of the government programs, I believe we could cut even more without any harm to the country.

Originally posted by mugger

Well, it appears to me that their is alot more money in many government programs than is actually needed.
What we will never know is how much money is wasted so departments can keep their spending at the same level, even when it isn't needed.

Good point.

I forgot to mention all the waste in government spending.

reply to post by Sestias


You made a few valid points but there are a couple of things that need to be addressed. You posted and I quote:

The more money is in circulation, the healthier the economy

This is not always true. What many people dont understand, is the demise of our economy was a lack of sound monetary policy. When the Fed's Chairman Ben Bernanke went at full speed at the printing press, Allowing the Fed Reserve to pump millions of dollars into the system, that created inflation. When inflation occurs, it devalues the dollar, and that purchasing power is now lower than it was. The housing bubble, investment fraud etc, was a catalyst. We had so many back door deals with mortgages and reinvestment of those very same funds from Goldman Sachs that eventually they knew what they were up too. TPTB only solidified GS's plan by getting backed by the Federal Reserve.
It turned out to be a game of poker, except where the player never loses, because they have a never ending supply backing them.

Cutting spending reduces the amount of money in circulation and contracts the economy rather than boosting it. If there is enough contraction you have a depression. This is what Herbert Hoover did in the Great Depression of the 1930's. He sharply curtailed government spending. The result was the economy shrunk even further than it already had and deepened the depression. The tent cities erected by the millions who lost their jobs were called "Hoovervilles" in his honor.

I would agree with the above had very same instances, ( living, wages etc ) where the exact same as today. But that is not what we have here. We have a larger population, more small businesses, more Unconstitutional social welfare programs etc...the list goes on and on. Point being, your trying to compare apples to oranges, when the timeline doesn't permit it.

We have had "trickle down" economics for over thirty years.

You said it yourself, we have had trickle down economics over thirty years, and wouldn't it be safe to assume that all parties are involved, not Obama bowing down to the GOP?

The millionaires and billionaires are supposed to increase employment levels and overall prosperity for all. They have had trillions of dollars thrown at them through government tax cuts.

The rich you listed above, please show me the law or the text within the Confines of the Constitution that states that the millionaires are required to provide jobs? It doesn't, nor does Congress create jobs, that is not there job.
Further, you stated above referencing the tax cuts. You do realize that the top 2% of the richest people in America pay the most in taxes per year right?

The latest data show that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.

www.american.com...

I dont disagree that these big corporation owners should not have outsourced there materials and labor, but once again, your OP statement, claims " economics are pretty simple". With that, simple business ownership within our economic system suggest, if you can get parts or labor cheaper..then you make that move. Businesses are in business to do what? make money right. Turn a profit right? The means on how the company owner makes his money is no concern to you. Yes it may cost you your job, but if you were the owner, and YOU saw the overhead, as opposed to what your overhead could be if you outsourced, YOU too would make changes within YOUR establishment.

They have caused the recent world financial collapse through greed, recklessness and lack of regulation.

I would tend to agree with you, but as I briefly noted in the above text, theres more to the story than just a few guys being greedy. There was corruption from the highest levels govt all the way down, including back door deals, fraudulent investments etc etc.

Those of you who worship Ayn Rand are either bootlickers of the rich, enormously rich yourself, or -- as on ATS -- too young and naive to understand how the world really works.

You comments are very opinionated which suggest to me, you have not read any of the works of Any Rand. This country was founded on the principles of Capitalism. You obviously embrace government intervention, rather than promote individualism. Many like you would prefer to have your little hands held, and told what to do and when to do it, by our beloved USG. And thats you prerogative. But I suggest you ACTUALLY read one of her 25 million books still in circulation today, and educate yourself for once. Another person you may look into who promotes individualism is Ludwig von Mises. Economists who have based their entire career from the basic fundamentals of Austrian economics have shown why government intervention ( ie stimulus, bailouts, etc ) never work. They only prolong the problem, which we are currently experiencing had you looked out your window?

Peter Schiff, Capital President, predicted the housing crisis and the financial crisis of 2007-08, when virtually all the " experts " were saying just the opposite, further, they were denying any problems on the horizon. We are living and breathing they very thing you wish to decry. And yet, I'm willing to bet, you haven't taken time to read all available source mad available to you, and make your generalization based off MSM outlets...

Sucha a waste of intelligence.

the bailout gave more money then you could ever save
to FOREIGN entities
also you have QE 1,2 ,3 etc

for instance
leaving the US oil capped and causing wars
to keep the price of oil up
as well as charging the US for the cost of driving the price of fuel up...

glass stiegle
allowed the derivitive and mortgage fiascos

which all the recent presidents
not just bush and obama
are resoponsible for

you have made a very small handfull of people OTHER then yourselves quite rich
they thank you
now die.

Originally posted by g146541
Oh noes 400,00 jobs lost!!
Other companies will pop up everywhere to fill the vacuum.
If there is a market there will be a supplier.
I don't care for barryO but i don't worry about big companies death throws either.

Yes, if there is a market business will try to fill it.

But you are failing to take into account something that is already happening - many of those companies filling the demand are now overseas due to high labor costs in the U.S. (blame the unions and all the government regulations and red tape).

Originally posted by jimmyx

Originally posted by beezzer
The upper 50% pay 97% of all taxes.
I guess that isn't enough.
Damn those rich bastages!

false data comparison....what is THE PERCENTAGE OF INCOME PAID, not PERCENTAGE OF TAXES PAID.
...if i made 10 million last year and paid 1 million in taxes...that's 10% of my income
.. if you made 50 thousand and paid 10 thousand in taxes that's 20% of your income

total taxes paid for both...1,010,000

my percentage of total taxes paid 99%
your percentage of total taxes paid 1%

edit on 12-4-2011 by jimmyx because: SPELLING

So, by your example you (i.e. the "rich") are paying more than your fair share?

OK, thanks. Got it.

reply to post by centurion1211

they passed laws that gave tax breaks to companies who off shored the labour
blaming the peeps for this
is a non stater

they are to asleepy to listen anyway

Originally posted by Sestias


Cutting spending reduces the amount of money in circulation and contracts the economy rather than boosting it. If there is enough contraction you have a depression. This is what Herbert Hoover did in the Great Depression of the 1930's. He sharply curtailed government spending. The result was the economy shrunk even further than it already had and deepened the depression. The tent cities erected by the millions who lost their jobs were called "Hoovervilles" in his honor.

I have a slight problem with your history lesson: you say that Hoover curtailed or reduced the spending, and tent cities called Hoovervilles sprung up. But Obama INCREASED spending and tent cities still pop up called Obamavilles.

So maybe there are more factors then simply the government starting up the printing presses. If anything that has no effect on the economy except rising prices caused by inflation.