How Reid, McConnell, Boehner, Pelosi and Obama could shove us into another recession

[Bluebear]

It's criminal the way politicians in Washington are ignoring the very real possibility that this budget deal could plunge us into another recession (just in time for Obama to lose re-election and Democrats to lose the Senate). From Bloomberg:

Congressional agreement on budget cuts could cause troubles of its own. Less spending by the Federal government would be “a real problem” for the economy, Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia, said in a July 29 interview on Bloomberg Television.

“We could see a growing risk of recession in the fourth quarter, early 2012, if in fact the federal government gets it together and makes aggressive budget cuts,” LeBas said.

(T)here's some pretty direct evidence that the stimulus did help the economy grow, and cut backs in federal spending helped the economy shrink (or at least grow at a smaller rate).


http://www.americablog.com/2011/07/how-reid-mcconnell-boehner-pelosi-and.html

[MadMaddie]

1. Who demanded the small stimulus and the cutbacks?

It was not the Democratic Party.

The Republicans ran on job creation and other economy building platform and the only thing they have done is attack social issues. They not the Democrats are the ones that have made the Debt Ceiling the crisis it is.

No, I don't accept that both parties are responsible. This is Right Wing talking bullshit....

[Bluebear]

3. Yeah, Aravosis is a rabid right-winger.

:eyes:

[MadMaddie]

5. I never made such a claim

I said that the point being made is a Right wing Talking point. President Obama wanted a much larger stimulus and that's a fact. The Republicans have stopped any opportunity to give jobs bills through....because gasp in the short term it will cost money.

[Bluebear]

6. "the stimulus did help the economy grow" - how is that a right wing talking point?

Confused.

[MadMaddie]

22. The Right Wing talking point "up is down, down is up"

They claim that the stimulus was a failure because not many jobs were created, when in fact jobs were created. Even more jobs would have been created if the stimulus would have been much bigger.

It's insanity.

[Karmadillo]

2. GDP tanking, jobs still disappearing. I know! Let's cut non-defense spending! I wonder

what Paul Wellstone would be saying about all of this.

[badtoworse]

4. The government is out of bullets in fighting recession

It's time to accept that

[DJ13]

9. That was the GOP position in the 1930's

[badtoworse]

10. This isn't the 1930's

The government is basically broke and our credit is going down the crapper.

[girl gone mad]

11. A sovereign currency government can't "go broke"

[badtoworse]

12. That's not the risk to the currency.

Why don't you explain what will happen if and when the world stops using the dollar as its de facto reserve currency

[girl gone mad]

13. Being the world's reserve currency issuer is a mixed blessing.

Check out Japan, though if you really want to know what will happen.

The Yen is not a de facto reserve currency, it's a partial reserve currency at best.

[badtoworse]

14. I'll interpret your answer as follows;

It would, at best, be ugly, but I don't want to deal with it.

Maybe it wasn't a game changer for Japan, but as you pointed out, they are not a major reserve currency. If you know anything about currencies, I think you you know the risk is huge. I also think you would agree that anyone who denies that is either naïve or disingenous.Further reading; Look up the Weimar Republic

[girl gone mad]

17. I know a great deal about currencies.

The risk is not serious.

Not sure why you think Weimar Republic is relevant.

[badtoworse]

19. You're not paying attention

The Chinese, Russians, OPEC countries have been discussing alternatives to the dollar for a while. If we don't clean up our act, it will happen.

[girl gone mad]

21. It would be for the best if they did so.

When foreign countries acquire reserve dollars, the US is automatically forced to run a corresponding current account deficit. As a reult, our trade deficit is baked in to the dollar's reserve currency status.

Globalization coupled with an economic model in the US that encouraged asset inflation and debt accumulation over production only exacerbated large trade imbalances. Unless we want another crisis, it's past time to start reforming the system.

[blueclown]

18. The government was never given an adequate chance to fight the Great Recession.

Republicans did the best they could to weaken the stimulus.

[CBHagman]

7. Paul Krugman and, if I'm not mistaken, David Leonhardt...

...of The New York Times have pointed out something similar.

Here's a link to Krugman's "Myths of Austerity" from last year.

http://www.nytimes.com/2010/07/02/opinion/02krugman.html

[girl gone mad]

8. k & r

[madrchsod]

15. when did we get out of a recession?

[Bluebear]

16. Good point

[SoCalDem]

20. another???

we've been IN one for a long time and more or less permanently since the 760's.. the In & out-ness has all been manipulated by our fearless leaders:puke:

It's easy to see for those of us who were working "back in the day".. We may have had fewer gadgets, but most of us could afford to live quite comfortably on what we made, and we could buy cars, houses, take vacations, and save money.

and if someone got sick, we could also afford medical care..

Perhaps there is just more "stuff" now that we think we need, but the basics of life are now totally out of whack when it comes to affordability...and it probably will only get worse.