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Among the reasons for the new optimism: a significant easing of the credit crunch, improvement in consumer spending, a potential bottom in housing, a less-grim jobs picture and expectations that the government's massive stimulus spending could start boosting economic growth sooner than later.
The CBO is predicting that the 0bama budget and stimulous will result in a short up tick in the economy, and then it tanks. We cannot sustain any of this, and simply printing more money will only make things worse.
This begs the question: If the economy is doing this on it's own, then why the need for the "massive stimulus spending [that] could start boosting economic growth sooner than later?"
I've held all along that the free marketplace will work itself out. These things you boast of are independent of the stimulus, at least as it is stated here. What gives?
It's NOT done it on it's own.
The credit crises has eased because of the money Bush and Obama have pumped into the banks.
The stimulus spending is to ensure that the recovery doesn't sputter and fade.
True enough the economy WOULD have recovered on it's - the questions however is HOW SOON - and how robust would the recovery be?
Would the recovery have come in 5 years?
10 years?
There have been historical recessions that have lasted DECADES.
It is nice to see that people are optimistic about the economy, as not all of us are.
Job loss continues to be rather high, and has not slowed down at all despite the stock market recovery. Even when the stocks go back up, it does not guarantee the jobs will be recovered, the slow return can sometimes take years.
In the past, few situations have pulled us out of recession. Generally wars have pulled us out of recession in the past, other than that only radical economic policy changes, and a boom in specific sectors (technology, dot com, housing, etc.) have pulled the economy out of recession in years past.
In any case, it makes you wonder what real impact the stimulus will have if the economy recovers while only <13% of the spending has begun. Does not bode well for Obama's public image if it turns out the situation was not as 'dire' and the results 'catastrophic' as we were told.
It is nice to see that people are optimistic about the economy, as not all of us are.
Job loss continues to be rather high, and has not slowed down at all despite the stock market recovery. Even when the stocks go back up, it does not guarantee the jobs will be recovered, the slow return can sometimes take years.
In any case, it makes you wonder what real impact the stimulus will have if the economy recovers while only <13% of the spending has begun. Does not bode well for Obama's public image if it turns out the situation was not as 'dire' and the results 'catastrophic' as we were told.
That will no doubt be the GOP argument - and whether true or not, most people will still give the credit to Obama.
Personally, I don't think the situation needed to be as bad as it was - and now people are starting to realize that. By that I mean, that - while the financial crisis was/is bad, I think the "deer in the headlights" image Bush conveyed during the height of the crises back in September/October panicked the markets. While there was no doubt the markets were headed for a correction anyway, I think Bush made the the crises a whole lot worse by the way he behaved. Whereas Obama appeared calm and collected in the crises, Bush seemed just the opposite (as did McCain to a certain degree) - triggering the massive slide in the market that occurred during that 2 week period.
The massive market crash in turn panicked businesses (and the American people in general) - which put the economy into an even steeper dive than it was headed for anyway. Now, I think folks are realizing that much of it was an over-reaction - hence (in part) the recovery of the markets and the signs of hope for economy in general.
Don't get me wrong. The economic crises was/is bad - but not QUITE as bad as it seemed.
Yup.
I've been saying for weeks that things are starting to turn around - much to the likely irritation of this boards' Obamabashers. The stock market is already well into the recovery - with both the DOW and the S&P pretty much recovered back to the point that they were at when Obama was sworn in (and the NASDAQ already recovered well beyond that and in positive territory for the year) we are now well over 20% up from the lows of early March. The NASDAQ has had 8 SOLID weeks of gains, and the S&P and DOW have been up 7 of the last 8 weeks - and so far look to be up again this week.
This is not because of some fluke - there are good reasons behind it. While the economy is still in recession, there have been a LOT of indicators over the last few weeks that are suggesting that we are either at or very, very near the bottom - and the markets has been responding appropriately.
There is no doubt this is going to be a very tough year, but by the end of the year, the picture will likely look very different and I expect next year to see a LOT of improvement.
All of this is very bad news for the Obamabashers of course, who were frantically hoping for a total collapse of the economy so that Obama could be shown to be failing and the door re-opened for the GOP.
Unfortunately for them, I doubt that either of those things are going to happen.
Ken
Good to see you around here Ken, I was hoping you would chime in. The market has shown lots of resiliancy lately. I think we still may see a summer drop, but there is a lot optimism all of the sudden.
Of course the folks who back Obama will swear up and down that everything is looking better because of what Obama has done, but there are two problems with this:
1. He hasn't been in office nearly long enough to actually make change.
2. The CBO said that things were going to get better WITHOUT any additional government spending.
Of course no Obama supporter is bothering to talk about the fact that the U.S. government is broke for the year and is now operating on borrowed money until October 1st (That means they have already spent all taxes collected from 2007). And even when told about this, they still insist that they will never have their taxes raised, and they are probably right, all the government has to do is to start taking away tax credits to increase revenue, but they can stand right there and say "But we kept our promise, we didn't raise your taxes!"
The end result is the same, each year all of use will be writing bigger and bigger checks to the IRS, the government has no other choice, it is spending money way to fast for any other plan to work.
I linked the CBO testimony, I suggest reading it in its entirety.
It is critical of the stimulus but is supportive of it overall. The CBO clearly states that its estimates for the recovery without the stimulus are a ROSY scenario. It says that the recovery estimations without stimulus are "if" the recession runs a normal course and further states that this recession shows no signs of doing so and the recovery could be much worse.
Since none of the stimulus has even kicked in yet and considering the CBO said in Jan 2009 the recession would end late this year, early next - it has little to do with obama.
This begs the question: If the economy is doing this on it's own, then why the need for the "massive stimulus spending [that] could start boosting economic growth sooner than later?"
I've held all along that the free marketplace will work itself out. These things you boast of are independent of the stimulus, at least as it is stated here. What gives?
Yep it's getting better alrighty!! Chrylser's in the tank (which lost us billions) and GM will most likely follow soon (more lost billions). Banks need more money (which they'll get) and may still fail and eventually inflation will have to kick in.
Of course Turbotax Timmie and the Fed are looking at negative interest rates which will be great for you and me short term but when the bill for all this spending comes due all you Obamaites will be singing a different tune.
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