Not sure How to Read this Default Scenario

[longfisher]

I was unimpressed with G.W. Bush Administration's bleeting that the big banks needed to be bailed out or the world would come to an end...within days...which resulted in TARP and the squandering of untold hundreds of billions of tax dollars. I was unimpressed when Obama went along with it and expanded it to the auto industry.

I am especially unimpressed now as Wall Streets revels in an unprecedented and, to the common man who saw the tax dollars thrown at the banksters at least, unimaginable rebound in fortunes on Wall Street while main street does not merely languish, but also, sinks ever-deeper into recession (depression?). But I'm having trouble settling in on a concrete impression of the debt situation.

Those of you who have read my posts, know that I once thought the Tea Party would be wholly coopted by the Republicans and that especially their dare to not increase the debt ceiling (increased without significant debate 7 consequtive times by the G.W. Bush Adminstration) would not hold. You know that I said this would be an early test of their independence or fealty to the Republicans or to the cooption of Michelle Bachmann.

Well, it seeems I'd have done better betting on their zeal and radical adhesion to their principles...torpedoes (consequences) be damned. They, as part of the Republican party, have brought the country to the brink of default. And, there seems to be no flexing of their rigidity as the deadline nears (only 20 days left). Many, including Bernanke today, have predicted that default would be cataclysmic for the economy and that we would undoubtedly be plunged into a depression.

So, my questions to you guys is are you OK with what may be the Republican party's apocalyptical actions re: the economy. Are you really digging the idea of breadlines for all but the very weatlhy? Or, are the government scare-mongers like Bush et. al. before TARP just provoking our emotions?

LF

[Robja]

I for one do not blame the Republican party for holding the line(I am a unaffiliated voter).

What I do not understand is how does the current administration think that you can spend your way out of debt which is what they are trying to do. Instead of raising the debt limit why not just cut out the fat and entitlement programs.

[longfisher]

I for one do not blame the Republican party for holding the line(I am a unaffiliated voter).

What I do not understand is how does the current administration think that you can spend your way out of debt which is what they are trying to do. Instead of raising the debt limit why not just cut out the fat and entitlement programs.

I think the arguement is that sane policy would include cuts and new revenues. Taxes on the wealthy are at a lower rate today than they were in the 30's (I've read) and taxes on the middle class are at high and ever heightening levels.

I've seen graphs and heard many pundits say that despite the economic downturn we would not have a deficit problem if the Bush tax cuts for the wealthy had never been enacted and that we'd be in a much better circumstance today if Obama had not extended them for two years.


Seems like a simple solution to me without kicking granny out of the nursing home onto the streets.

LF

[longfisher]

I for one do not blame the Republican party for holding the line(I am a unaffiliated voter).

What I do not understand is how does the current administration think that you can spend your way out of debt which is what they are trying to do. Instead of raising the debt limit why not just cut out the fat and entitlement programs.

My history might be a little foggy here, but wasn't it Hoover who, like you, recommended austerity for the great depression and that this course only deepened the depression (some say caused a severe recession to become the Great Depression). And, wasn't it FDR who created all the work programs and spent our way out of it?

Finally, wasn't it Bush who said during the light recession he enherited from Clinton (at least, light compared with today's recession) that we should "go shopping". No austerity there, huh?

Maybe history has a lessen you and the Republican have forgotten?

LF

[Robja]

I would say your history is pretty good. Austerity was Hoovers policy but I don't think his policies are what made it worse. At the end of WW 1 our European allies and Germany owed a lot of money to the US(kind of like we owe China now) Without the war keeping our factories going unemployment went to 25%. As for FDR and his WPA projects sure it put people to work back when construction was much more labor intensive than it is today but that is not what really brought us out of the depression. It was the start of WW 2 in 1939 that got our factories back going and unemployment down to 15%that year.

[HOLWACHAGOT]

My history might be a little foggy here, but wasn't it Hoover who, like you, recommended austerity for the great depression and that this course only deepened the depression (some say caused a severe recession to become the Great Depression). And, wasn't it FDR who created all the work programs and spent our way out of it?

Finally, wasn't it Bush who said during the light recession he enherited from Clinton (at least, light compared with today's recession) that we should "go shopping". No austerity there, huh?

Maybe history has a lessen you and the Republican have forgotten?



LF

Inherited..... Lesson.
Holwachagot

[Deep C]

I just love "tax the rich..." Its not enough that the top 1 % pay 42 of all tax or the top 10% pay roughly two thirds... The blood suckers want more... Hmmm.

Lets looka something for a second if you will. Our stimuli packages have cost to this point? Roughly two TRILLION? Lets say the nit wit in chief is telling the truth that "We have created 2 Million jobs" (We know that the net loss is several times that but lets just continue to go with this and pretend that it did create 2 million jobs).

Simple math says that works out to about 1 MILLION bucks for each job created... Do you think you could create a few more jobs that one for that kind of money? I'm pretty sure I could employ 20-30 pretty well paid people for a million bucks.

So go ahead and siphon more off the "Rich" . For each $40,000 or so that they do, thats one less job that the "Rich" will offer up. Thats a job that in turn wont return even more tax revenues. Instead that will be another hungry mouth to feed. As demonstrated the way this "leadership" whizzes money away. It will cost 25 jobs to "create" 1.

Now my numbers are a but fuzzy but right now we have higher tax revenues than ever in history... (Even adjusted for inflation that they say we don't have) Yet here we sit with a DEBT equal to the entire GDP... I don't know about you but if I'm tight on an upcomming mortgage payment I don't go out and borrow more to buy a new car and eat Kobe steaks... I knuckle under and stop whizzing money away. It aint rocket science...

Without looking at hard facts and figures. I am under the impression that the Bush tax cuts (now extended) have resulted in roughly a five hundred billion total revs not received... Stack that against 14.2 TRILLIOn and I think you'ld have to agree that aint the real problem... SPENDING IS!

Thank you... Now back to your regularly scheduled stream of nonsensical thoughts...

[GALAZIO]

Simple... the POS Administration in there now and in prior years marched to the same drum....

[seapower]

The monetary system as I do about splitting atom's, not much! What I have been able to do for the last 35 years is to make a living working for myself in a couple different area's. No sir, I'm no financial wizard by any stretch. But what I have do know is you can't get out of debt by borrowing more money. Make good on your current debt's, scrimp, save, cut luxury's, etc.... and don't borrow another dime till you can see daylight. I know that sounds simple, but again I don't understand the current system. Maybe that's part of the problem! Frank