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Republican Economic Policies

888888

Council Member
The statement by Craig is 100% correct, that all things equal, only inflation can get rid of the debt. Deflation, lower wages and cost of products does not provide you with the added resources to pay down debt. Either we need to put all people to max work, raise wages or we will at some time have to write down debt, default other words.
 

Lukey

Senator
The statement by Craig is 100% correct, that all things equal, only inflation can get rid of the debt. Deflation, lower wages and cost of products does not provide you with the added resources to pay down debt. Either we need to put all people to max work, raise wages or we will at some time have to write down debt, default other words.
Good to know that's where you lefties are taking us! Asperational default. Spoken like a true Euro-socialist!
 
You may be right because when they start in on fractional reserve banking, they never seem to grasp that this is what a bank does for a living. There is no other reason to open a bank unless you make loans. Why would anyone take in your 1000 bucks, protect it for you and not try to make some money off it? They could charge you to store it meaning that you give it to them expecting it to start withering away over time but why not just build your own safe to protect it or better yet, spend the stuff as fast as possible to protect the dough? Having a gold standard is not going to fix anything because whether you are backed by gold or the full faith and credit of the USA, you still have to come up with a way of expanding the money supply to service the economy and grow. Lukey did not like my example of a fixed amount of folks sharing a fixed amount of dough. He said money was not static and he is right within a fractional reserve system or a global economy insofar as you are fighting for a piece of a pie that appears to be growing. But in reality, every single dollar or currency out there is nothing more than a future promise of value which means that at some point in time, there has to be some relationship between all that perceived value and the amount of money in circulation. Grains of sand are not good substitutes for money.
 

moddem38

Council Member
You have to place the blame on failed Republican economic policies. In other words, you can't really blame GWB directly. You have to place the blame on failed Republican economic policies. What you see this year among all the major Republican candidates is a rehash and a doubling down on the same failed disastrous policies that were promoted by Republicans during the Bush years.
Exactly true. Mitt Romney is George W. Bush redux--more tax cuts for the rich (excuseme, I mean job creators), more military spending, deregulation, etc...
 

Bruce

Council Member
Good to know that's where you lefties are taking us! Asperational default. Spoken like a true Euro-socialist!
Lukey, I get a large charge out of the labeling (euro-socialist - lefties) When a company need's a bailout from the taxpayer it's American and the right (patriotic) thing to do. If a solid american worker needs help or a living wage it's socialism euro style.
These labels serve those that invent them but have no purpose in reality. All americans are capitalist's in their own right except for a few. The american worker is a capitalist in the sense of wanting and working for a better lifestyle and continuously fighting the very employer that would enslave them. The last 30 years have proved that the system works for the few that can buy their way to more riches and kill off their competition ( I give you Mitt Romney) as an example. I often use the term carpetbagger to describe those that create very little in their community while robbing the locals blind and securing passage elsewhere. You may label the american working class anything you like but the gist of it is that the fight will continue.
CarpetbaggerFrom Wikipedia, the free encyclopediaJump to: navigation, search
For the 1961 novel and 1964 film, see The Carpetbaggers.
Look up carpetbagger in Wiktionary, the free dictionary.


1872 cartoon depiction of Carl Schurz as a CarpetbaggerIn United States history, carpetbagger was a pejorative term Southerners gave to Northerners (also referred to as Yankees) who moved to the South during the Reconstruction era, between 1865 and 1877.

The term referred to the observation that these newcomers tended to carry "carpet bags," a common form of luggage at the time (sturdy and made from used carpet). It was used as a derogatory term, suggesting opportunism and exploitation by the outsiders. Together with Republicans they are said to have politically manipulated and controlled former Confederate states for varying periods for their own financial and power gains. In sum, carpetbaggers were seen as insidious Northern outsiders with questionable objectives meddling in local politics, buying up plantations at fire-sale prices and taking advantage of Southerners. Carpetbagger is not to be confused with copperhead, which is a term given to a person from the North who sympathized with the Southern claim of right to Secession.

The term carpetbaggers was also used to describe the Republican political appointees who came South, arriving with their travel carpet bags. Southerners considered them ready to loot and plunder the defeated South.[1]

In modern usage in the U.S., the term is sometimes used derisively to refer to a politician who runs for public office in an area where he or she does not have deep community ties, or has lived only for a short time. In the United Kingdom, the term was adopted to refer informally to those who join a mutual organization, such as a building society, in order to force it to demutualize, that is, to convert into a joint stock company, solely for personal financial gain.
 

moddem38

Council Member
Bruce, I agree with most of of your 10 points. Not sure about this one:
3. "Unemployment soared after Reagan’s 1981 tax cuts. Unemployment jumped to 10.8 percent
after Reagan enacted his much-touted tax cut, and it took years for the
rate to get back down to its previous level."

I'm not sure there's cause and effect here. Paul Volcker was raising interest rates to reduce inflation at this time; that probably had more to do with the unemployment rate than Reagan's tax cut.
 

Bruce

Council Member
Bruce, I agree with most of of your 10 points. Not sure about this one:
3. "Unemployment soared after Reagan’s 1981 tax cuts. Unemployment jumped to 10.8 percent
after Reagan enacted his much-touted tax cut, and it took years for the
rate to get back down to its previous level."

I'm not sure there's cause and effect here. Paul Volcker was raising interest rates to reduce inflation at this time; that probably had more to do with the unemployment rate than Reagan's tax cut.
While these are talking points of the failed republican policies I can only assume that Reagan had the power and the will to engage. While Volcker may have been an economic tool the responsibility still remains with numero uno. The republicans as much as they dislike Obama know that Obama's only alternative to keep the entire nation and very well the world from disaster was to keep printing money. The repubs will make hey with Obama on these issues in the coming month's but they go to church every Sunday and say a silent prayer for the O and thank him for bailing out their sorry asses
 

Bruce

Council Member
I'm not talking about 2005, I'm talking about his chairmanship which preceeded 9/08.
9/08 was already unpreventable as of 7/05.. that's the point of the graph. by 7/05 fully 50% of all "non-conforming ARMS" had been written. by the time Frank was sworn in as Chair in 2/07 75% had been written... There was simply nothing Frank could have done to prevent the crash. Unless you ascribe time travel to his skillset[/QUOTE] The real estate boom was set in motion early on as Daddy Bush kissed up to the poor minority groups in order to buy votes. with a shortage of jobs and incomes it was logical to bring in another group that would ultimately fail but boost his possibility of a second term.

In 1992, President George H.W. Bush signed the Housing and Community Development Act of 1992.[15] The Act amended the charter of Fannie Mae and Freddie Mac to reflect Congress' view that the GSEs "... have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return;"[16] For the first time, the GSEs were required to meet "affordable housing goals" set annually by the Department of Housing and Urban Development (HUD) and approved by Congress. The initial annual goal for low-income and moderate-income mortgage purchases for each GSE was 30% of the total number of dwelling units financed by mortgage purchases[17] and increased to 55% by 2007.

In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the CRA of 1977.[18] Additionally, institutions in the primary mortgage market pressed Fannie Mae to ease credit requirements on the mortgages it was willing to purchase, enabling them to make loans to subprime borrowers at interest rates higher than conventional loans.[18]

In 1999, The New York Times reported that with the corporation's move towards the subprime market "Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s."[19] Alex Berenson of The New York Times reported in 2003 that Fannie Mae's risk is much larger than is commonly held.[20] Nassim Taleb wrote in The Black Swan: "The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events 'unlikely'".[21] In his 2006 book, America's Financial Apocalypse, Mike Stathis also warned about the risk of Fannie Mae helping to trigger the financial crisis: “With close to $2 trillion in debt between Freddie Mac and Fannie Mae alone, as well as several trillion held by commercial banks, failure of just one GSE or related entity could create a huge disaster that would easily eclipse the Savings & Loan Crisis of the late 1980s. This would certainly devastate the stock, bond and real estate markets. Most likely, there would also be an even bigger mess in the derivatives market, leading to a global sell-off in the capital markets. Not only would investors get crushed, but taxpayers would have to bail them out since the GSEs are backed by the government. Everyone would feel the effects. At its bottom, I would estimate a 30 to 35 percent correction for the average home. And in ‘hot spots’ such as Las Vegas, selected areas of Northern and Southern California and Florida, home prices could plummet by 55 to 60 percent from peak values.”



Read more: http://www.answers.com/topic/federal-national-mortgage-association#ixzz1maucxL2p
 

Bruce

Council Member
Days this is a meaningless comment. the "capitalism that funded new activity" - was capital that was expanded using fractional reserve banking. New value was created based on the "booked value" of the loan provided. So when John Hancock signed debenture notes to partners as a way of raising cash to buy Tea in india for import, each of the lenders did not consider themselves "poorer" by the amount of money they lent to Hancock. They considered that debenture note to be AN ASSET. And it was. It was an asset that could be sold, borrowed against etc.

Now within their "locality of reference" when Hancock's ship returned and sold the tea, these notes were paid off with interest by cash taken from the buyers.

This is where it gets complicated.

As I pointed out in my response to SgtStaples - in the aggregate the net assets of the economy had increased, but the money supply had not. So theoretically deflationary spiral should have kicked in immediately. So why did it not?

The answer comes in the notion of the Velocity of Money. I as "paul revere" sell some silver to John Hancock. And then use some of that cash to buy tea from him. He in turn uses some of that cash to pay his debenture notes to say "John Adams". Adams then uses some of that money to buy some pewter plates from me. and I use that cash to buy more tea. And as long as the rate of trade can execute faster than the economy can grow - we are all fine since we all perceive ourselves to be gettng richer and richer.

But here is the catch. The faster the money flows, the more "assets" are being created. The more assets that are created, the faster the money flows. This accelerates. The classic "boom". but pretty quickly in a specie based currency system, the speed of economic growth outpaces the increase in the velocity of money. And shortly after that, you start to have more assets than cash in the system and delfation kicks in. And once deflation kicks in, you have a rapid and deep deep crash.

And if you look at the economy of the USA for the first 130 or so years, the average panic took 2 years to develop and 2 years to recover from. And mostly the net increase in the wealth of the USA came from "westward expansion" and unfettered immigration associated with that. Essentially stealing land from other sovereign entities and people from Europe. There was very little net wealth creation within the FISCAL system. Sure there were fortunes that were made and land in the East kept appreciating in value - but largely because of the assets being added in the west.
Exactly! Your real wealth is determined by your asset's at any given time. As you loaded the market with tea the price deflated because the buyer's dried up. Stocks are an asset but change on a daily basis. Most stock's are valued on a projected earnings multiple but market conditions determine the price. Gold is no more than a commodity that some people feel safe holding but it has nothing to do with our dollar since we left the gold standard. All commodities have shotup and some people feel safer with copper.LOL Our present situation is not so much value as it is liquidity. Banks stopped the flow and all hell broke loose. Good bye value. If the entire economy were to disappear I'd feel better holding a sandwich than gold.
 

degsme

Council Member
you're 75% right.

the last 2 years of Bush's administration was with a democrat congress
And the relevance? Sincee the crash was foredoomed as of 2005 when the foreclosure rate of "non conforming" ARMs started its explosion and 50% of them had already been written?

AND revenue to the USTreasury was the highest in our history during his administration. on the heels of the tax cuts.
Not normalized as a percnet of population or GDP. Our GDP after the crash was many times higher than 1790. But that's not a meaningful comparison unless you normalize the data.

MATH MATTERS
(btw, the 9/11 "recession"? Didn't exist. It was a 2 month slump and that's not a recession.)

FACTS MATTER
 

degsme

Council Member
Chart's and graph's is well and good but the play for this period in time was written long ago. The world will inflate it's way out of any recession (depression) and the winners will remain the same. It started some time ago and will continue for the forseeable future. The middle class and poor may see a raise in dollars but they have already lost it when going to the store. Hope and change still remains the same for the masses. Commodities have soared and if the manufacturer of a product want's to sell it he'll have to pay the worker just enough to buy it.
Well I'm not as pessimistic as that. Raise the top tax rate to 50% marginal rate, close loopholes so the EFFECTIVE top rate is around 35% (and the middle class Effective rate is around 14%) and the middle class starts doing OK again.

What we need is some long term basic R&D investment - like the kind in the 60s and 70s that gave us PC and Internet revolutions.

Yeah it will take 10-15 years to start paying off but that's the price we pay for the middle class being stupid enough to elect Happy Happy Joy Joy Reagan
 

Lukey

Senator
Ahh so we should engage the world economy with both hands tied behind our backs... you know... kinda like Somalia....
That's more like what big government does (which is why so much of big businesses', you know, business, is done overseas).
 

Lukey

Senator
No your claim is that deficit spending is a deffered tax increase and therefore businesses ignore CURRENT marginal tax rates.... And the economics and the math say that's bullshite

And there was no "Clinton Miracle" - Clinton engaged in MOSTLY rational economic policy. A bit on the conservative side (Nelson Rockeffelar and Nixon and Ike would never have eviscerated the social safetynet) and sometimes economically ineffective (welfare reform)

but mostly solid (though he made the mistake of not understanding the implications of Gramm-Leach-Bliley).
Your goofy economics and your suspect math maybe. Are you suggesting business decisions routinely consider future returns but only focus on current tax rates? That doesn't pass the laugh test!

And Clinton's rational and moderate restrictions on the safety net are precisely what led to the "miracle" of widespread prosperity in the late 90's.
 
Nope. Not in a Gold Reserve requirement system (ie Specie currency). Because the very definition of this is that $1 == X amount of Gold. Thus the "price" of gold is artificially pegged.
So, according to liberals the value of money IS not what it can buy. Brilliant.

Back in the 'old days' when we used to be a free nation, and didn't practice wealth redistribution, the currency was very stable.

For instance, a $5 Gold Piece in the year 1900 would buy you a pretty decent suit. So would Five One dollar bills. And a $25 dollar gold piece had the same value as twenty five one dollar bills

Today, that same $5 Gold piece will still buy you a pretty decent suit, but it would now take three hundred and fifty one dollar bills. And a $25 gold piece now 'costs' about sixteen hundred one dollar bills.

If the currency isn't tied to something such as gold, silver or even copper, the government can print as many dollar bills as it wants to. And its proven fact that, the more dollar bills that you have in circulation that aren't backed by something of actual value, the less each dollar bill is worth.

An guess who loses the most when that happens. YOu guessed it "the little guy."
 
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