The United States is going to go bankrupt...thanks President Obama.

[Jim Jeffries]

If the New Deal and FDR were so bad, how did we experience such economic growth. The war isn't the only answer as the economy grew even after that. And every time we fell into recession ever since similar policy reversed the situation and helped to expand the economy. Even Bush had some sucess in 00 - 01 using Keynsian type methods to battle recession. There are many examples of it working and only theory of it not.
I would rather the Government stay out of the economy as well as anybody, but damn, if it works.

If the New Deal was so great, why did it take FDR two full terms to get us out of the Great Depression? Especially when the rest of the world was happily recovering about the time he took office? The economy grew after the war, yes, but FDR was gone by then, no?

As for the thread, not all Obama's fault, but he's not exactly helping matters either. And the only change I've seen in my area, has been for the worse.

[KingDosia]

If the New Deal was so great, why did it take FDR two full terms to get us out of the Great Depression? Especially when the rest of the world was happily recovering about the time he took office? The economy grew after the war, yes, but FDR was gone by then, no?

As for the thread, not all Obama's fault, but he's not exactly helping matters either. And the only change I've seen in my area, has been for the worse.

You are a dumb **** who has no idea what I am talking about. **** FDR I'm talking monetary and fiscal policy ******

[Jim Jeffries]

You are a dumb **** who has no idea what I am talking about. **** FDR I'm talking monetary and fiscal policy ******

So you weren't trying to convince us of the merits of socialist policies?

Looks like you need a "Does not play well with others" T-shirt.

[-PedoBear-]

http://www.backwoodshome.com/articles2/wolfe97.html

[KingDosia]

So you weren't trying to convince us of the merits of socialist policies?

Looks like you need a "Does not play well with others" T-shirt.

Good ole jefferies, Everybody is a marxist.

I don't believe big government and government intervention is the answer at all. However, the government exists to serve the public, so if it has powers to assist in an economic crisis, use those tools. If by spending some of it's money, stimulating the markets and what ever else can be done can help hasten an upturn let it be.
True the market, in theory will return to equilibrium, but when?

[!! Shawn]

You want to blame the president for a financial crisis that began well before he took office. Then use side effects of curing the problem as a tool to chastize him? And you call for educated responses? Interesting.

Economists’ answer to this question is very similar to the answer a doctor would give to a patient who has a heart attack. First, stabilize the patient. We will call this the triage stage. It is similar to what a heart attack patient would get from an EMT at the scene of an accident or while in the ambulance on the way to the hospital. This involves doing what one can to stop the patient from dying. After, and if, you have stabilized the patient, you can turn to the treatment stage. This might involve bypass surgery
or angioplasty. For the economy, this might this involves expansionary monetary and fiscal policy.
We better understand the proper actions to such financial distress since we did go through a much worse financial meltdown in the 30's. You may have heard of the great depression Mizzou. Since then, and I'm sure even a midwestern lawn mower would agree we have successfully avoided, even with points of recession still posing threats to the economy, such disaster.
"
"In both the 1930s and 2008 government engaged in
financial triage, but it was much stronger and quicker in 2008. In part this was because
of the lessons learned in the 1930s. But the inter-connectedness of the modern financial
system (through the blending of derivative securities) also made the problem more serious
in 2008 than in the 1930s.
When financial markets seemed to be seizing up in 2008, the Fed and the U.S. government
took unprecedented actions to try to prevent a modern version of the bank run
that had thrown the U.S. economy into a depression in the 1930s. Ben Bernanke, the
chairman of the Fed, is an economic historian, who studied the 1930s and saw the parallels.
Fearing the worst, he put aside textbook theory, and started financial triage, doing
whatever he could to provide liquidity to the system. The government loaned billions
to banks and insurance companies. It introduced quantitative easing—expanding credit
in the economy through non-traditional monetary tools. The Fed loaned approximately 1
trillion dollars directly to the private sector, through novel mechanisms, including accepting
lower quality assets as collateral, opening its lending facilities to non-commercial
banks, and directly purchasing short-term bonds from money market mutual funds.
In addition, Congress passed legislation authorizing the Troubled Asset Relief Program
(or TARP) which permitted the Treasury to spend up to 700 billion dollars to buy distressed
assets and recapitalize financial institutions.
All these triage actions were undertaken to prevent a complete meltdown of the
U.S. financial system. Some felt it was too much; others felt it was too little. I’m not
sure who was right. The important point for this argument is that all these policies
were emergency, or triage, policies, and have to be seen as such. Their goal was very
short-run—to prevent a financial meltdown. One could get political consensus on them
because a financial meltdown would throw the economy into a depression." (Colander, et, al; 2009)

You have to fully understand expansionary monetary and fiscal policy for any of whats going on right now to make sense. Such policy takes aim at stimulating and growing the economy through means of reducing interest rates, and increasing the aggregate demand, increasing government spending and lowering taxes. The well known side effects of such policy are

a Increase in possible inflation
b Increase in budget deficit
c Captital outflow

There are people with a lot more skin in the game than you my friend. They are very aware of the current state of the game. And if you know how things work, you know that we are where we are supposed to be. It's a ****ty place, but these things happen. They have before and will again.

If the solution results in an inflationary rate that is higher than the growth rate, is it a solution?

No. If your currency loses value faster than your economy grows, you are at a net loss.

[KingDosia]

If the solution results in an inflationary rate that is higher than the growth rate, is it a solution?

No. If your currency loses value faster than your economy grows, you are at a net loss.

True inflation is a problem with expansionary policy. The whole point of the post was to shed light on why certain moves have been made. I'd rather deal with inflation than depression if I had to chose one of the two evils.

[!! Shawn]

That bull**** got us out of the depression in the 30's and kept us out of similar problems since. Call it what you want, the fact is the markets don't react quick enough to avoid complete economic meltdown. I don't necessarily believe the Government and the Fed should constantly manipulate things, but in times like these such policy has proven effective.

Thats not true. What brought the world out of the depression was World War II, anyone that tells you different has a bridge to sell you in Brooklyn.

[!! Shawn]

True inflation is a problem with expansionary policy. The whole point of the post was to shed light on why certain moves have been made. I'd rather deal with inflation than depression if I had to chose one of the two evils.

No you wouldn't... Inflation is the most devastating force an economy can be gripped with...

With a depression eventually everything regains its value. With inflation, the loss is permanent.

[KingDosia]

No you wouldn't... Inflation is the most devastating force an economy can be gripped with...

With a depression eventually everything regains its value. With inflation, the loss is permanent.

Laisez fair huh?
That will work?