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Japan set stagnant blowing billions waiting for their improvement. We either do that or go through deflation. Propping up until we catch up isn't an option.
Japan's big problem was that they didn't clean up their banking mess until they were 7 years into their deflationary spiral. The faster you clean out the bad loans and get the banking system functioning again the faster the recovery begins. Right now most national banks are technically bankrupt (yes even after the bailout because when you have $1.2 trillion in assets and you experience $3.5 trillion in loses $700 billion doesn't cover the whole short fall) so what we need is something like the 1987 asset clearing house used to clear up the Savings and Loan Crisis which, coincidentally, was also caused by deregulation.
The idea being that all of these assets which there currently is no market for should all go to one government run clearing house in order to get them off the bank's balance sheets and allow them to start lending again. The government can then do an orderly long term sell of these assets in a way designed to bring maximum return. Why is that important? Because if you don't then all those banks will be forced to sell these assets at the current market rate (currently selling for an average of about $0.25 on the $1 with the very best AAA rated stuff only selling for $0.32 on the $1) []FT.com / Markets / Insight - Insight: Time to expose those CDOs which would be loses so large the banks would all go bust. If the government buys them for say $0.50 on the $1 and holds them until the recovery and then sells them in an orderly way then it will likely get something like $0.70 on the $1 but it will take 10-15 years in order for that to happen and a private institution can't wait that long.
That was how the 1987 S&L crisis was solved and ultimately that is how this banking crisis will be solved and the longer we wait to do that the longer we will be in a recession.
The answer to the question is "no" but apparently the federal government thinks otherwise...
I may be incorrect but there's always been a federal deficit and hasn't there always been one reason or another the government has found to raise the debt ceiling? Also, as both political parties have raised the ceiling from time-to-time - blaming one party or another is pointless, yes?
from the citizen on up to DC, we need to live within our means. debt is slavery, we are selling ourselves & children into slavery. men who have been sued for divorce understand this concept.
Deficit spending? We are bargaining on our possibility of production while at the same time telling the people with the best ideas they should be hampered. Problems anyone? We live in a system where the more we borrow the better we becomes. Our basis is that no one can touch us. We are the economic power of the world and if we fail they all do also.
That is abject to the system built in 1933.... What gold standard? It worked to get us out of the Great Depression. But it amounts to nothing more than selling our soul to the devil. One day the margin is called.....
By the way Herbert Hoover asked the states to start fulfilling all those states government contracts and start building infrastructure (he intervened quite a bit). The myth he was hands off is not as true as Keynesians would like it to be.
I haven't read anyhting that backs that up. Not even the links you provided during our exchanges.
The answer to the question is "no" but apparently the federal government thinks otherwise...
I may be incorrect but there's always been a federal deficit and hasn't there always been one reason or another the government has found to raise the debt ceiling? Also, as both political parties have raised the ceiling from time-to-time - blaming one party or another is pointless, yes?
Always. It was actually folly to think the Clinton years would pay that off. What? We pay it off so we have 0 dollars. Zilch with no leverage? If I have enough debt to destroy Citigroup if they marginally call me will they really call me on my debt or just continue with status quo and figure out another way to report earnings?
Herbert Hoover did reverse course the closer he got to the 1932 election but by then it was to late. His original moves to cut spending during a very bad recession put turned the recession into a depression then starting in 1931 Hoover tried to correct his mistake and increase spending in a very modest way but it was to little to late.
I haven't read anyhting that backs that up. Not even the links you provided during our exchanges.
The Duncan Group - Interviews (http://www.duncanentertainment.com/interview_reich.php - broken link)
Indeed, while Hoover fulminated against "socalled new deals," it was Roosevelt who accused the President of "reckless and extravagant" spending, and of thinking "that we ought to center control of everything in Washington as rapidly as possible." Roosevelt's running mate, Congressman John Nance Garner of Texas, 63, even claimed that Hoover was "leading the country down the path of socialism." Eleanor Roosevelt best summed up her husband's uncertain command of the future when she wrote at the time of his Inauguration: "One has a tremendous feeling of going it blindly, because we're in a tremendous stream, and none of us knows where we're going to land."
The Duncan Group - Interviews (http://www.duncanentertainment.com/interview_reich.php - broken link)
Indeed, while Hoover fulminated against "socalled new deals," it was Roosevelt who accused the President of "reckless and extravagant" spending, and of thinking "that we ought to center control of everything in Washington as rapidly as possible." Roosevelt's running mate, Congressman John Nance Garner of Texas, 63, even claimed that Hoover was "leading the country down the path of socialism." Eleanor Roosevelt best summed up her husband's uncertain command of the future when she wrote at the time of his Inauguration: "One has a tremendous feeling of going it blindly, because we're in a tremendous stream, and none of us knows where we're going to land."
I guess thats depends on what part of the picture you look at. While you do have a point I'm not sure its applicable to the issue at hand.
[SIZE=2]
Quote:
[SIZE=2]Hoover did not want government to manipulate business too much. He did not believe in regulations. He assumed that business in association with government, working collaboratively with government could come up with most of the answers to most of the problems that business and the economy faced. He was the one that came up with the notion of putting companies together in associations. The associationists' movement was Herbert Hoover's idea. You create associations in every industry and they help government understand what the industry needs to perform better. Herbert Hoover also understood that in many industries there had to be common standards, common weights, common measures. New industries were developing, the aircraft industry, applications for electricity and if there weren't common weights and measures and standards then there's no way that the industry could develop. So he again, voluntarily thought about putting industry panels together to come up with the voluntary standards. The National Bureau of Standards, for example, was his invention in the Department of Commerce. [/SIZE]
That's where I say we are repeating history on a slightly different level. Bush = Hoover (abandon free market ideals).... Obama = FDR. We keep going through this cycle where innovative ideas are rewarded followed by a scolding of those ideas by the next generation. All the while adding just a few more socialist programs. I'm sure you can see the end game.
The Duncan Group - Interviews (http://www.duncanentertainment.com/interview_reich.php - broken link)
Indeed, while Hoover fulminated against "socalled new deals," it was Roosevelt who accused the President of "reckless and extravagant" spending, and of thinking "that we ought to center control of everything in Washington as rapidly as possible." Roosevelt's running mate, Congressman John Nance Garner of Texas, 63, even claimed that Hoover was "leading the country down the path of socialism." Eleanor Roosevelt best summed up her husband's uncertain command of the future when she wrote at the time of his Inauguration: "One has a tremendous feeling of going it blindly, because we're in a tremendous stream, and none of us knows where we're going to land."
I read the first page of the second link at it is very insightful of the politics of the day. I will read more of it tomorrow when I can more properly digest it.
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