Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (117408)	7/24/2012 3:27:37 PM
From: RetiredNow	Read Replies (1) \| Respond to of 149317

Wow. A few things I don't agree with in your post. The US has ENABLED only one thing and it is not a recovery. In fact, all the key high level metrics on our economy are looking abysmal and are pointing to a new recession. The one thing our policies of money printing and low interest rates have enabled is unparalleled deficit spending and mountains of new debt that our children will never be able to pay off and will guarantee slow to no growth in this country for many years to come. How did we achieve low rates? The Fed sets the rates low at their window and they manipulate Treasury auctions by being the buyer of last resort so no auction fails. What does that do? It means that Congress NEVER has to improve their fiscal planning skills and it means massive deficits and debt. The result is stubbornly high unemployment that refuses to go down, record numbers of people receiving government aid and food stamps, the lowest labor participation rate in recent memory, recessionary signs at every quarter, and an out of control Federal Reserve engaging in massive money printing to prop up the stock market for the top 1%. BTW, what is austerity? Is it a bad word? I looked it up. Wiki has a great definition, as follows: In economics, austerity refers to a policy of deficit-cutting by lowering spending often via a reduction in the amount of benefits and public services provided.[1] Austerity policies are often used by governments to try to reduce their deficit spending[2] and are sometimes coupled with increases in taxes to demonstrate long-term fiscal solvency to creditors. http://en.wikipedia.org/wiki/Austerity Based on the definition above, austerity is something that responsible people to do get their finances in order. So austerity in and of itself is not a bad thing. In fact, it is a very healthy thing to do. It strikes me that the anger over austerity is misplaced. Really, the anger should be directed at HOW FAST austerity is implemented. If the US tried to balance its budget next year, with deficits running at 10% of GDP currently, that would by definition mean a 10% hit to GDP in one year....in other words, a massive Great Depression. So that's not smart. The consequences are too severe. But if we were do balance our budget over 10 years and take a 1% per year hit to GDP, then it might be doable without too many major dislocations. So let's stop getting angry at Austerity, but rather at the pace of Austerity. In this regard, I think Americans are more practical. We're trying to embark on long term Austerity and short term stimulus. These are the right policies actions. The problem is that we haven't made any progress at all at implementing that long term Austerity. Eventually, we have to demonstrate fiscal sanity. Otherwise, we are not just dooming our generation to a shitty economy, but that of the next as well.