With all due respect, there was a time in our history when we did not have the Fed and the government never intervened, and we had huge booms and busts. You make it sound like we've always had the fed. And the truth is that our economy has been more stable since we've had the Fed, and particularly when the Fed has been more skillful.

 

 

I hate to agree with prinmemito (im kidding of course), but what has been happening is definitely due in part to government overregulation. However, history does show that in a more laissez-faire system, like the one we had in the second half of the 19th century, the market would go into major booms and then major busts, and it would fluctuate as it is supposed to do.

 

For better or worse, what government regulation has done is to regulate in order to lessen the severity of the depressions/busts by making them mere recessions that we climb out of. The problem being that it also hinders the ability to boom. When it has boomed its been mostly artificial, which is what we saw with the dot.coms and the mortgages. The boom was too high so it comes crashing back down, but there won;t be a Great Depression type of bust because thats the way our system is set up. This is much more like 1987 than it is like 1929.

The author of the article in the OP is a right-winger spouting the same tired Republican talking points that have been used for years.

 

1) Clinton raised the top marginal tax rate from 31% to 39%, yet the economy was great in the 90s

 

2) Bush cut the top tax rate to 35%, yet the economy has been generally bad.

 

Correlation does not equal causation

 

As for the tired free-market-deregulation discussion: AIG, Freddie Mac, Fannie Mae, Merryl Lynch, Subprime Mortgage Crisis

Clinton also jacked up the capital gains tax, which happened upon the dot.com boom. That's why the economy appeared to boom. The bubble burst before Bush was elected.

With all due respect, there was a time in our history when we did not have the Fed and the government never intervened, and we had huge booms and busts. You make it sound like we've always had the fed. And the truth is that our economy has been more stable since we've had the Fed, and particularly when the Fed has been more skillful.

 

 

I hate to agree with prinmemito (im kidding of course), but what has been happening is definitely due in part to government overregulation. However, history does show that in a more laissez-faire system, like the one we had in the second half of the 19th century, the market would go into major booms and then major busts, and it would fluctuate as it is supposed to do.

 

For better or worse, what government regulation has done is to regulate in order to lessen the severity of the depressions/busts by making them mere recessions that we climb out of. The problem being that it also hinders the ability to boom. When it has boomed its been mostly artificial, which is what we saw with the dot.coms and the mortgages. The boom was too high so it comes crashing back down, but there won;t be a Great Depression type of bust because thats the way our system is set up. This is much more like 1987 than it is like 1929.

 

I agree with most of what you said.

 

However, what's going on now is a once in a century phenomenon, which is to say it is MUCH MUCH worse than 1987. I'm not sure it's like 1929, only time will tell. But this is a very serious financial meltdown.

With all due respect, there was a time in our history when we did not have the Fed and the government never intervened, and we had huge booms and busts. You make it sound like we've always had the fed. And the truth is that our economy has been more stable since we've had the Fed, and particularly when the Fed has been more skillful.

 

 

I hate to agree with prinmemito (im kidding of course), but what has been happening is definitely due in part to government overregulation. However, history does show that in a more laissez-faire system, like the one we had in the second half of the 19th century, the market would go into major booms and then major busts, and it would fluctuate as it is supposed to do.

 

For better or worse, what government regulation has done is to regulate in order to lessen the severity of the depressions/busts by making them mere recessions that we climb out of. The problem being that it also hinders the ability to boom. When it has boomed its been mostly artificial, which is what we saw with the dot.coms and the mortgages. The boom was too high so it comes crashing back down, but there won;t be a Great Depression type of bust because thats the way our system is set up. This is much more like 1987 than it is like 1929.

 

I agree with most of what you said.

 

However, what's going on now is a once in a century phenomenon, which is to say it is MUCH MUCH worse than 1987. I'm not sure it's like 1929, only time will tell. But this is a very serious financial meltdown.

 

 

Only time will tell. In 1987, the structure was damaged and people seemed to have lost faith in the economy completely. What's happening now is the result of years of bad business practices and was inevitable. However, oil is still going down and the dollar is gaining steam. So, I'm not sure yet that it'll be worse than 87.

A strengthening dollar is the last thing you want right now, as the export sector has kept the economy afloat.

A strengthening dollar is the last thing you want right now, as the export sector has kept the economy afloat.

 

A stronger dollar could double a middle class family's expendable income due to gasoline alone and a national consumption tax would help exports by removing imbedded taxes from the cost of exported goods and help domestic sales of US goods by putting them on equal footing tax-wise as opposed to our current tax system that favors imports.

A strong dollar is not possible, when you have to borrow 1 trillion bucks to get started with the economy "recovery" plan.

 

I believe the dollar is going to continue to weaken here.

I am normally in favor of a strong dollar, but our weak dollar is what has kept us from going into a full blown recession. Our exports are relatively strong, and that's really one of the few bright spots in the economy.

Here's the thing, I want a recession. If severe hyperinflation is going to be the end result at some point (it will be if the government's solution is simply to absorb the losses), then it is completely inevitable. A temporary minor catastrophe or recession will allow us to remove the dead-weight of the system, assuming we approach it in practical means. We would need to look at the colossal failures of our monetary policy and the Federal Reserve. We would need for many people to lose their jobs. Otherwise we are merely prolonging the inevitable and making it far worse when the day finally comes.

 

If you are concerned about the economic situation in a vacuum for only this quarter, then Bernake, Paulson, et al probably did the right thing. If you think intelligently and realistically over the long term these policies are incredibly damaging. A weak dollar is hardly beneficial.

 

I'm concerned about another great depression.

 

I think we're going to get hyperinflation as a result of the proposed solution. The question is how bad it will be. I am personally afraid of hyperinflation and a great depression. If we can just have a severe recession, I would be okay with that, but I fear we may be headed for a catastrophe.

I have often thought a good way to eliminate some of our debt would be to sell Naval ships that are being phased out due to newer designs to our allies. Instead of striking from the registry and stripping Kitty Hawk class super carriers(among others), sell them at a reasonable price to allies that are actively taking part in the war on terror, specifically ones who cannot afford new weapons systems. Netherlands, Australia, Canada, etc.

I have often thought a good way to eliminate some of our debt would be to sell Naval ships that are being phased out due to newer designs to our allies. Instead of striking from the registry and stripping Kitty Hawk class super carriers(among others), sell them at a reasonable price to allies that are actively taking part in the war on terror, specifically ones who cannot afford new weapons systems. Netherlands, Australia, Canada, etc.

 

No other nation (that we would want to sell to) will purchase a supercarrier, they cost too much to operate. We could sell off f-15s slated for replacement by F-22s, but those are probably the oldest versions and will not get all that much money.

 

I think a good way for the US to eliminate its debt would be to stop borrowing.

I have often thought a good way to eliminate some of our debt would be to sell Naval ships that are being phased out due to newer designs to our allies. Instead of striking from the registry and stripping Kitty Hawk class super carriers(among others), sell them at a reasonable price to allies that are actively taking part in the war on terror, specifically ones who cannot afford new weapons systems. Netherlands, Australia, Canada, etc.

 

No other nation (that we would want to sell to) will purchase a supercarrier, they cost too much to operate. We could sell off f-15s slated for replacement by F-22s, but those are probably the oldest versions and will not get all that much money.

 

I think a good way for the US to eliminate its debt would be to stop borrowing.

The super carriers I am speaking of would be relatively cheap to operate. The reason we dont operate them is because they are obsolete by our standards. And either way, I am not just talking about supercarriers but cruisers, destroyers, etc.

 

The F-15 also isnt getting completely phased out anytime soon, as they have roughly 17 more years of service slated. Not to mention that most of the countries I am talking of use primarily European aircraft.

We are headed for a catastrophe. It's a nearly fact.

 

We spend too much as a country and take on too much debt. The government needed to stay out of this mess and let the companies go bankrupt. We need to re-institute a sense of discipline within the marketplace.

 

I fear you may be right, but we have to try to avoid a catastrophe. I'm not really enthusiastic about Hoover Tents appearing in 2009 as Bush Tents.

The carriers I am speaking of would be relatively cheap to operate. The reason we dont operate them is because they are obsolete by our standards. And either way, I am not just talking about supercarriers but cruisers, destroyers, etc.

 

No they wouldn't. No 1070 foot long ship that requires 5000+ men to operate and can carry 80 (or so) multi-million dollar aircraft is cheap. The operating budget for a full super carrier group would cost more than most country's defense budgets.

The carriers I am speaking of would be relatively cheap to operate. The reason we dont operate them is because they are obsolete by our standards. And either way, I am not just talking about supercarriers but cruisers, destroyers, etc.

 

No they wouldn't. No 1070 foot long ship that requires 5000+ men to operate and can carry 80 (or so) multi-million dollar aircraft is cheap. The operating budget for a full super carrier group would cost more than most country's defense budgets.

I think you are really underestimating the defense budgets of some nations.

We are headed for a catastrophe. It's a nearly fact.

 

We spend too much as a country and take on too much debt. The government needed to stay out of this mess and let the companies go bankrupt. We need to re-institute a sense of discipline within the marketplace.

 

I fear you may be right, but we have to try to avoid a catastrophe. I'm not really enthusiastic about Hoover Tents appearing in 2009 as Bush Tents.

 

The problem is that since the Great Depression, fear of people losing their jobs has been the primary concern. So, the government puts bandages on economic crises instead of finding solutions.

 

What happens now when taxpayers actually have to start paying off these debts that the government is incurring. The thing is we are not currently headed for a depression. And there won;t be Bush tents, there will be Obamavilles or McCainvilles in about 3 or 4 years. The stop gap will hold the economy at bay in the meantime, but if no solution is found the problem will happen in the near future.

True, but we all know who will be to blame for this, and it's not Obama or McCain.

whoever wins is going to have to deal with the worst economic conditions since the great depression. it is going to be a tough 4 years

whoever wins is going to have to deal with the worst economic conditions since the great depression. it is going to be a tough 4 years

 

yeah. also, very high likelihood whoever wins is going to be a one term president.

True, but we all know who will be to blame for this, and it's not Obama or McCain.

 

The fact is this mess was created because of policies that pushed home ownership among deadbeats who had no business owning homes and Carter, Clinton, Raines, Greenspan and the Democrats in the senate deserve more blame for these policies than Bush.

whoever wins is going to have to deal with the worst economic conditions since the great depression. it is going to be a tough 4 years

 

Actually, I expect once the downward pressures of the campaign are removed from the economy we should return to modest growth. The dollar is coming up, and oil is dropping. Once gas prices come down a bit it will be like Christmas wrapped in happy fun candy.

True, but we all know who will be to blame for this, and it's not Obama or McCain.

 

The fact is this mess was created because of policies that pushed home ownership among deadbeats who had no business owning homes and Carter, Clinton, Raines, Greenspan and the Democrats in the senate deserve more blame for these policies than Bush.

 

The Dems are to blame for everything, we know already.

True, but we all know who will be to blame for this, and it's not Obama or McCain.

 

The fact is this mess was created because of policies that pushed home ownership among deadbeats who had no business owning homes and Carter, Clinton, Raines, Greenspan and the Democrats in the senate deserve more blame for these policies than Bush.

 

Please. The real fault belongs to the banks that gave out these loans to people they either knew didn't really qualify for them or people they didn't vet. This lack of vetting is an issue - and they're paying for it now.

 

The other issue is lack of transparency - it is incredible that the regulations allow these banks and other financial institutions to hide some of this bad debt off their books. If they had been forced to show this bad debt on their books, shareholders would have held them more accountable and made them institute more careful policies on lending.

 

You are so full of it. How do the Democrats in the Senate deserve much blame? Republicans were in control of Congress from 1994-2006, with a one year period in 2001 when Democrats controlled the Senate 51-49.

 

Forget Raines, this falls squarely on the banks for not doing their jobs correctly, a regulatory system that allowed them to make bad loans and hide bad debt off their books, and bad management by Greenspan.

 

The key is transparency. We need it. I don't know how the hell you could disagree with that.

IMHO, this problem goes beyond politics.

True, but we all know who will be to blame for this, and it's not Obama or McCain.

 

The fact is this mess was created because of policies that pushed home ownership among deadbeats who had no business owning homes and Carter, Clinton, Raines, Greenspan and the Democrats in the senate deserve more blame for these policies than Bush.

 

Please. The real fault belongs to the banks that gave out these loans to people they either knew didn't really qualify for them or people they didn't vet. This lack of vetting is an issue - and they're paying for it now.

 

The other issue is lack of transparency - it is incredible that the regulations allow these banks and other financial institutions to hide some of this bad debt off their books. If they had been forced to show this bad debt on their books, shareholders would have held them more accountable and made them institute more careful policies on lending.

 

You are so full of it. How do the Democrats in the Senate deserve much blame? Republicans were in control of Congress from 1994-2006, with a one year period in 2001 when Democrats controlled the Senate 51-49.

 

Forget Raines, this falls squarely on the banks for not doing their jobs correctly, a regulatory system that allowed them to make bad loans and hide bad debt off their books, and bad management by Greenspan.

 

The key is transparency. We need it. I don't know how the hell you could disagree with that.

Under Clinton banks were forced to make deadbeat loans because of the CRA. The GOP tried to reform Fannie / Freddie in '05 but the Democrats blocked it. We already went through this. You should step back and try looking at things objectively every now and then.