[enderwiggin]

Apparently there wasn't a single Republican vote for it...

http://www.nytimes.com/2009/01/29/us...ma.html?ref=us

Can we expect this divide to continue to a degree close to this?
Thoughts on the situation?

[khanaris]

I think it will depend on whether or not it works. If things improve, they will jump on the bandwagon or face further erosion in two years. If things stay the same or get worse, they will stick to the same message. I think it is a positive step that Obama still went to Congress to try to sell the plan even though he didn't really need any Republican support for this vote.

The Republican Party is in a tough spot right now. They don't want traditional Reaganomics to be blamed for the current woes and dismissed in the future. So any plan that doesn't involve their ideology is a threat. If it doesn't work, the country and their constituents continue to suffer. If it does work, their influence suffers and their constituents abandon them. When times get bad on their watch, a party that is only recently in the minority has to hedge their bets. They have to fight, but not so hard that the majority can simply blame failures on their reluctance. If that happens, and the public believes it, their influence just erodes further.

[GeekyGator]

I think you'll see this attitude for the next two years from Republicans, a "**** it, let's see YOU do better" type of attitude. If it works well (which I highly, highly doubt), then we'll see congress shift even more Republican, if it fails, we'll see them claim some old ground.

[Tyndmyr]

Honestly, I think a large part of it is simply the republicans not used to this level of minority. It's a long time since the democrats have had this kinda lead.

[crazedmongoose2003]

As most of you know I'm a diehard liberal but I don't expect these stimulus packages to work. They're just to soften the decline until we can settle on a new global economic order (or crash and burn, whichever).


I'm actually kind of glad this entire finance dominated economy starting from the 1980's is dying. It wasn't sustainable, it was like the dot com bubble but a whole lot more retarded and dangerous. Instead of having each country's best and brightest become doctors, engineers, scientists, economists, law makers and academics and such, we just had all the Harvard and Yale high achievers go off and start managing hedge funds once out of business school. The government in Australia spends hundreds of thousands of dollars on higher education for these guys and for what? For them to manage mergers and acquisitions straight out of college and put nothing substantial back in society? There's less and less people innovating, designing, researching, producing, developing, ie. stuff that actually drives economic growth like in the 90's, as opposed to financial maneuvering.


I think if we recover from this mess, we'll see the death of several things:

reaganomics

a culture based on greed and self achievement for the upper class

a culture based on mindless spending and borrowing for the lower and middle class

an unsustainable societal dream of luxury for the average western nation citizen

investment banking as a substantial force in the economy

increased vigilance, both governmental and public, against banks and investment firms and more transparency in the financial sector


And really I'd be lying if I said I don't welcome every one of those things.

[ForbiddenKnowledge]

a culture based on greed and self achievement for the upper class

a culture based on mindless spending and borrowing for the lower and middle class

an unsustainable societal dream of luxury for the average western nation citizen

investment banking as a substantial force in the economy

increased vigilance, both governmental and public, against banks and investment firms and more transparency in the financial sector

This has been whats hit the UK so hard. Greedy banks that were taking and taking, and massive debt from the middle/lower classes who were encouraged by the banks to spend without thought t consequence.

Its not helped by our government claiming we must spend our way out of debt, that to me just seems retarded.

I'm all for free markets, but free markets have to have something to keep an eye on them, otherwise you end up right back in this kind of situation.

[BloodiedFangs]

Originally Posted by Rafe

Its not helped by our government claiming we must spend our way out of debt, that to me just seems retarded.

This actually makes sense...Domestic spending stimulates growth of the local economy (more imports, more jobs created in both manufacture and service industries, which in turn will boost the higher ups, so on and so forth.

At least, that's my limited understanding of it. I may be way off.

[crazedmongoose2003]

Rafe: The governments are right in conventional economic wisdom in encouraging we spend. Theoretically. However as many economic theory skeptics will tell you, a one time cash injection will stimulate local economy for the small terms but nothing of the substantial demand needed to actually create jobs.

But the most important part of these money injections is to not let foreign investors lose confidence and pull out. When that happens you're going to start having real problems. The timely actions of governments around the world these past few months (an initiative lead by Gordon Brown no less, who I know you hate :P) in my belief has stopped the type of bank runs and such which would have been even worse. Not that for one second I imagine simply draining the budget surplus (for those countries like Australia that still has a budget surplus) for these stimulus packages is actually doing anything to help the economy.

These aren't vaccines or even antibiotics, these are painkiller pills.

[BrownKnight]

Originally Posted by Crazedmongoose

As most of you know I'm a diehard liberal but I don't expect these stimulus packages to work. They're just to soften the decline until we can settle on a new global economic order (or crash and burn, whichever).

And on this topic:

Kiplinger, a management newsletter, has predicted problems for corporations seeking funding from the sale of corporate bonds... Specifically, the competition from treasury bonds being sold to fund this "stimulus package" is robbing them of the market of foreign investors. :

The government is making things worse even as it tries to make it better.

Originally Posted by Crazedmongoose

I'm actually kind of glad this entire finance dominated economy starting from the 1980's is dying. It wasn't sustainable, it was like the dot com bubble but a whole lot more retarded and dangerous. Instead of having each country's best and brightest become doctors, engineers, scientists, economists, law makers and academics and such, we just had all the Harvard and Yale high achievers go off and start managing hedge funds once out of business school. The government in Australia spends hundreds of thousands of dollars on higher education for these guys and for what? For them to manage mergers and acquisitions straight out of college and put nothing substantial back in society? There's less and less people innovating, designing, researching, producing, developing, ie. stuff that actually drives economic growth like in the 90's, as opposed to financial maneuvering.

The sad part is that nobody in the government is changing the system. If Obama's plan works, the bubble will just get bigger and harder to control.

Originally Posted by Crazedmongoose

I think if we recover from this mess, we'll see the death of several things:

reaganomics

a culture based on greed and self achievement for the upper class

a culture based on mindless spending and borrowing for the lower and middle class

an unsustainable societal dream of luxury for the average western nation citizen

investment banking as a substantial force in the economy

increased vigilance, both governmental and public, against banks and investment firms and more transparency in the financial sector

And really I'd be lying if I said I don't welcome every one of those things.

Agreed. But how many of the wealthy make money on the above? Answer: A lot. And they will do everything they can to keep the system as is.

It all comes down to personal responsibility and accountability. Very few U.S. citizens want to be "burdened" with these things. Until that changes we are in for rough times. It will only change with education, and nobody in power wants to have the masses think for themselves. I see any "solution" that does not destroy the credit bubble to be little more than a bandage placed over a severed artery. It may slow the bleed, but we will still die from the loss in the end.

Originally Posted by BloodiedFangs

This actually makes sense...Domestic spending stimulates growth of the local economy (more imports, more jobs created in both manufacture and service industries, which in turn will boost the higher ups, so on and so forth.

At least, that's my limited understanding of it. I may be way off.

Agreed to a limited extent, If it was just a economic slowdown, you would be completely correct, but it is a lot more.

I see the underlying problem to be the masses who believe they can use credit to live forever above their means. After all, they are the ones who took out the sub-prime mortgages that were (eventually) to blame for the start of this whole thing.

If you have a teenage child, and they run up a $20,000-30,000 debt on credit cards, do you as the responsible parent just tell your child that it is all right, pay the debt, and not punish the child? No. Because they will just go out and run up more debt.

The government is the parent here, and the people who go into debt they cannot afford are the teen. The government is doing everything in its power to not punish the people. Nor are they punishing the banks that pressured people into these mortgages in order to make more money. Instead they are trying just to eat all of the debt themselves.

This means that as a responsible taxpayer, I have to pay to help the irresponsible, and the unfortunates that got caught in bad spots because of the irresponsible. Meanwhile, the government goes further into debt, and does not do anything to solve the real root of the problem.

ergo, this will repeat, and when it does, the government takes on even more debt.

and it will continue to repeat...

Until the government cannot take on any more debt, and crumbles.
(Worst case, of course)

I really hope people wise up first.

[khanaris]

I think there is a fairly important difference though. A lot of our current problems are derived from an economy based on promises, not on created value. We removed the controls and allowed people to spin money out of nothing. Value came from risk itself, rather than anything we were producing.

If the government spends money on creating infrastructure and laying the groundwork for an expanded tech economy, we have the ability to create more value. And ultimately that is the only way we can pay off a debt.