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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: RMF who wrote (5420)	1/24/2009 10:27:18 AM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 103300

Re: "What do you think of this proposed "stimulus" package? I'm beginning to think it's gonna be as much "pork" as stimulus." Well... we are in a world of hurt (all around the globe... not just the US). And, the Federal Reserve is practically out of ammunition --- they realistically can't push Fed Funds rate below zero... they are 'pushing on a string' with interest rate policy. No matter how low they take Fed Funds they can't force the banks to make loans when they don't want to. So... the only tool left is FISCAL policy. Government spending and tax rates. (Curiously enough... once these kind of banking panics catch hold and morph into a deflationary economic environment, it can take massive efforts to break the grip of the decline. A good example of that is that we were not truly out of the Great Depression until the government started spending like mad for WW II.) Now... I am not arguing that massive government spending is a 'good thing' (far from it), but that - facing the serious conditions that we are facing - it is the 'least bad' option at this juncture. (And this from a life-long deficit hawk! PS --- in this era of increased deficit spending, this would be the IDEAL TIME to finally push the Balanced Budget Amendment to our constitution through for it's final approval! No better time!) Re: "The KEY to all our problems right now is still this housing mess. Wouldn't it be better to put $800 Billion into a "clearing house" (bank) to buy up all these bad mortgages to some extent to try and put a floor under real estate values?" Yes. The "bad bank" solution we used during the Reagan era S&L crisis. (I fear we are likely to come to this... possibly in combination with explicit nationalizations.) Re: "$500 tax cuts for the poor and middle class isn't going to stimulate much of anything." Well... since they are talking about IMMEDIATE reductions in the withholding taxes deducted from paychecks... it should have a positive effect.