Sunday, February 28, 2010

MAKES SENSE

The right has managed to scare people into rejecting their own beliefs and desires for jobs, more affordable and better healthcare, secure Medicare and Social Security, etc. with the idea that the debt ran up by the previous rightwing Republican administration, and compounded by their destruction of the economy and neutering of regulatory agencies and laws, is the new administration's fault and our biggest worry.

Most economists disagree. Many believe the problem was and is that the stimulus package was not big enough. Some on the right (see the comments threads on any political posts I've made here in the past few months) point to China as some kind of example (!) of how to grow an economy, when in fact the Chinese government made a much greater investment, i.e. stimulus package, in their country's economy (including infrastructure projects that will end up giving this recently "third world" power better bridges, faster and more efficient trains and railway system etc.) than we did!

In light of that, and the fact that often the McClatchy news service has been scooping the mainstream press, including The Wall Street Journal and The New York Times, I thought I'd share this editorial on the national debt that makes a lot of sense to me.

[Here's a more recent article by the Nobel economist Paul Krugman from this morning's, Monday's, NY Times]

13 comments:

JIm said...

The premise of the McClatchy argument is wrong. They postulate that that government spending a'la FDR can lead us out of a severe recession/depression. History does not support that premise. The post WWI depression was cured by lowering taxes and government spending. The Hoover/FDR Depression was excellerated by higher taxes and tariffs. JFK lowered taxes and we had a brief spurt. Reagan lowered taxes and we had a great decade plus. Clinton raised taxes but metigated the harm by signing NAFTA. Bush lowered taxes after the Dot Bust Bubble and 9/11 but failed to control spending. Obama proposes to raise taxes and has quadrupled government spending. Rating agencies threaten to lower our credit rating. We are facing a Greco California like melt down. Hopefully adults will win in November.

Butch in Waukegan said...

“Obama proposes to raise taxes and has quadrupled government spending.

Government spending has quadrupled? Quadrupled?? Is there a better word than “bullshit” to describe this comment?

I don’t support Obama’s economic policy. He’s pretty much handed the economy over to Goldman Sachs and their pals. And I fear Obama’s “bipartisan” advisory committee on the debt will lead to drastic cutbacks on programs that actually help people.

We’re in for a rough ride.

harryn said...

agree or disagree, rather than trying to apply the formulas of recoveries from the last century to our current [and much more complex dilemma] - lets just focus on the last ten years ...
before 9/11, everyone who doesn't want to conveniently forget, should recall the slogan people were chanting to Bush; "Its the economy, stupid" - far too much disparity and pork between elected representatives was already beginning to frustrate middle America's dream of the future ...
then the 'war on terror' started with abundant blind patriotism and we turned a lot of unemployment figures into military and security statistics along with supplying a war and extravagant government contracts while joe american was forced to downsize and shop at Walmart ... meanwhile, Wall Street was going to the bank/tank and anger grew about the disparity as it usually does during a republican administration but by this time the g.o.p. figured out how to convert that anger with disinformation and derisive tactics through the patriot act and christian right thinking that says you are with us or against us - the closest thing to McCarthyism we've seen in decades, and it still persists ...
so by the time the elections came, the real majority was tired of politicians who contrive; Hilary's double-talk and alienation, McCain's weasel-like shenanigans and Dr. No proclivities, Palin's stupidity - Obama seemed like the voice of reason in the asylum on his promises for health-care reform, ending a war, implementing meaningful diplomacy, creating real and enduring jobs using using infrastructure and clean energy as a plan, and attempting to end the grid-lock type partisanship that has paralyzed america while global competitiveness has mobilized ...
Obama, for these reasons, got elected to do this job - that's what the expectation is and was - but after seeing last week's live forum with key lawmakers - it only reaffirms the bitchy, child-like behavior we've come to expect from from our friends on the right - and the 'people' these fools represent are exasperated by their nonsense - especially when they hear the silence when Obama asks, "would you feel the same way about your proposal if you only earned 40k" ? ...
i think, with unanimity - people don't like the way this country is heading or the debt we're accumulating - but the options are to either work together by creating opportunities or protect the status quo by deepening the chasms that led to the problems in the first place - economic recovery and healthcare reform are good places to start because you need health for productivity - not more bankruptcy, catastrophic loss, and devastation - a little hope and change is what people need ...
at this point, we can work out the financials with debt reform later - but we've got to give a little to get from the majority of citizens who have seen nothing but depreciating values for a decade ...
the option, of course, is to launch a mass campaign on teaching Chinese as a primary language ...
at this point, i think people want Washington to do something, anything - rather than just watch it sink - and all this talk of fiscal responsibility means a lot less to people who have no fiscals ...

Ed Baker said...

it all started to go down-hill in a hand-basket 12 minuets AFTER we went off The Gold Standard and began to PRINT MORE AND MORE green-backs

that the more paper we print the less each unit is worth so

now we issue paper (bonds, loans, IOU s,
etcs) which now one anymore wants to "buy" because the present dollar ain't worth the
paper it's printed on.

Heck, it costs 6 cents to print ONE PENNY

and a hundred pennies ( a dollar) equals about $.47! go figure... we got economists and politicians who are GREEDY MORONS...


solution? go back on the gold standard and only spend what gold can back!

remember the NAZIs? they funded their crap via the gold taken from the teeth of millions of dead!

meanwhile

I am off to buy a shovel so that I can dig a hole in my back yard to shit in... as our sewer lines here in D.C. are falling apart.. I can use the N.Y. Times and Wall Street Journal for toilet paper.. instead of my left hand!

The Kid said...

Very funny Ed, and so right on!
Our dollar is so far removed from the object(s) it was meant to represent- I.e., gold, property- that it's become meaningless and therefore valueless. And as man has increasingly tied his self-worth to the dollar, so has his life become more meaningless.
If this country doesn't start producing something real and worthwhile soon, instead of re-packaging and exporting debt, we'll all be needing shovels.

Anonymous said...

Echoing The Kid's comment:

The value and integrity of the dollar is definitely a problem. I believe a bigger problem, not easily is solved, is jobs. The bipartisan support for “globalization” — exemplified by Clinton’s NAFTA treaty — has gutted our industrial base.

Because of my circumstances I look at help wanted postings every day. A couple of weeks ago I came across an ad for a “Circuit Board Solderer”. I assume this job requires a fair amount of skill and training. The ad was placed by an agency, i.e. it was contract work, no benefits. The pay rate was $10 - $12 an hour. Try raising a family on $20,000 - $24,000 a year, no benefits.

epaminondas said...

instead of allowing our financial institutions to invest money to make more money, we should begin to invest money to produce wealth. in the past year the financial institutions received money at 0% interest made oodles of money for themselves and not one god damn new bus can be seen going up a city street. they made money and yet nothing of value was added to our society.

JIm said...

Many of the financial institutions paid the money back and government/taxpayers made a substantial profit. AIG,the GSEs and the auto companies remain and owe the government huge amounts of money. Hopefully the financial reforms will remove the too big to fail concept and provide for orderly bankruptcy. If the risk takers have more skin in the game, they may be more judicious. It would good to see a return to the partnership struture in many financial firms so that the partners would be personally responsible. Private industry would contribute considerably more tax dollars to government if the tax rates were reduced which would allow greater profits, employment and tax receipts. History is a great instructer on the subject tax rates and government total tax receipts received, which could pay for a bus or two.

Butch in Waukegan said...

Perhaps this is relevent.

Lally said...

Not bad Butch. If a little broad.

JIm said...

Butch,
Cute but not relevant. I am unaware of any socialist society that has lasted long term other than convents and monasteries. Perhaps you could enlighten us. Eventually, as Margaret Thatcher said they run out of other people's money.

epaminondas said...

it's our money. when money achieves a greater value than anything else it becomes very costly

JIm said...

The point of socialism is that money and assets do not belong to the individual but to the state for the greater good of society.