Economics

Just How Much Stimulation Can One Man Economy Take?

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Plenty, at least now that possible recessions are equated with The Great Depression and cannot be tolerated in any way, shape, or form. Federal Reserve Chairman Ben Bernanke has, as the AP puts it, "breathe[d] life into another stimulus bill." This one (to be honest, I'm not even sure which number we're on) will "follow a $168 billion stimulus measure passed in February and a $700 billion Wall Street rescue plan passed 2 1/2 weeks ago."

Sen. Charles Schumer, D-N.Y., predicted Congress would return after Election Day to work on a measure equal to or exceeding February's $168 billion stimulus package, which included $600 tax rebates for most individuals and tax breaks for businesses….

House Speaker Nancy Pelosi of California and fellow congressional Democrats are pushing a package that could cost as much as $150 billion or more.

As part of that package, Pelosi wants to resurrect a $61 billion House-passed measure that included about $37 billion in public works spending, $6 billion to extend jobless benefits, $15 billion to help states pay their Medicaid bills and $3 billion in food stamp assistance for the poor.

Democrats also are considering a second round of tax rebates to follow the $600-$1,200 checks most individuals and couples got earlier this year. That money, going directly to consumers in hopes they would spend it, could push the price tag much higher.

"Democrats hope Bernanke's endorsement will help bring Bush around," says the AP, "and they predicted that congressional Republicans would warm to the idea as well."

Whole thing here. Politicians talking about giving money to voters during an election season? What a brave show of principle and leadership!

How fiscally responsible has Washington become since the change in Congressional leadership? Alas, not so much, especially since the Dems, who made a very strong display of pushing for pay-as-you-go budgeting, in which new expenditures are matched by reductions elsewhere, and other forms of "fiscal discipline" gave up that ship without a fight.

But screw it. Just stop and smell the flowers in Pelosi's office.

Or dig into USA Today's menu of spending this year on saving the economy thus far:

The federal government has already spent, pledged or put on the line more than $1 trillion to rebuild the nation's financial system. Among this year's major commitments:

$700 billion to invest in banks and acquire troubled assets.

$300 billion to back cheaper mortgages for troubled homeowners.

$200 billion to back assets of Fannie Mae and Freddie Mac.

$123 billion to bail out American International Group.

$29 billion to help J.P. Morgan Chase acquire Bear Stearns.

Writes the editorial board of USAT:

Something Obama said Monday captured the put-it-on-the-tab mentality: "Once we get past the present emergency, which requires immediate new investments, we have to break that cycle of debt."

That's like saying you'll go on a diet, after a few more trips to the all-you-can-eat buffet. Or quit drinking, after a few more benders.

More here.

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  1. Or I’ll quit the amphetamines after the millions of federal overlords I’m carrying on my back have gotten to their destination. They are the ones pumping them into me, after all.

  2. They forgot to add the $25 billion for the Detroit automakers…

  3. Congress, like journalism, runs on bad news. Both entities have a vested interest in presenting doomsday scenarios. Good news doesn’t sell newspapers and it doesn’t get bills made and passed. I can tolerate sadomasochism in the private sector. That business model is based on voluntary trade. The relationship today between Congress and major news media is more complicated. The scandalously shoddy, superficial reporting of this present economic crisis makes we wonder which player is the sadist and which is the masochist.

  4. give me my money back, give me my money back, you bitch . . . and don’t forget to give me back my black tee-shirt!

  5. Warren’s summation of our national situation grows more relevant by the day. (You know the one… It starts with a “D”.)

  6. DATELINE: STEVO’S BUNK

    *fervently trying to find out how much stimulation*

    GO ‘WAY. BATIN!

  7. “That’s like saying you’ll go on a diet, after a few more trips to the all-you-can-eat buffet. Or quit drinking, after a few more benders.”

    Actually it’s like saying “I’ll get a handle on my debts, but first I need to use my credit card to get my car fixed so that I can get to my job so I can earn the money to pay down the debts.”

  8. I think the “junkie economy” is the right description. Just one more hit to make it thru today and then I will quit. Honest.

    We are going to have to face the DTs sometime. The sooner, the better.

    Hmmm…Im thirsty for a Belgian Beer now.

  9. Jon H,

    I think the heron analogy is better than either the buffet or the car.

  10. heroin….unless we are freebasing sea birds now.

  11. Where does the money come from? Serious question: do they (FedReserve) just print more?

    And if so, why place any limits on it? Why not another trillion? Is fiat money all just a mass delusion?

  12. A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury.

  13. We keep bailing out these big companies, and that’s not fair! Where’s MY bailout?!

    Oh, there it is

  14. We should just go ahead and pay off everyone’s mortgages and pay for everyone to go to college so everyone can get a good job developing green energy and nobody has to work at McDonalds.

  15. oink oink oink

  16. A A,
    Macdonalds will be a good gig if we can just get the federal minimum wage up to a liveable amount. That, in partnership with affordable insurance, will be very very good for America.

    We can’t be overdrawn. We still have checks left!

  17. I’m getting a pony
    I’m getting a pony
    I’m getting a pony
    Yay!!!

    I knew they knew what I really want and need.
    Spend Spend Spend Buy Buy Buy
    Consumerism = Salvation

  18. “Once we get past the present emergency, which requires immediate new investments, we have to break that cycle of debt.”

    I never knew Barack Obama had so much in common with Tom Delay.

    im n yr bujjit, strvin yr beest!

  19. Cool, I can pay off a little more of my credit card with another stimulus check.

  20. Devil’s advocate time:

    Is there still a free market out there to fall back on in the absence of all these multiple bailouts?

    “Let companies fail and let the free market sort it out,” is advice that presupposes that a free market still exists to do the sorting.

    What if there’s no there there?

    Is it possible that maintaining our current fiat currency / statist / overinvestment in financial services economy requires greater and greater bailouts merely to remain minimally functional, and the other choice is a complete collapse? And I mean a complete collapse. That’s one possible reading of the Austrian School’s analysis.

    What if getting back to an “honest” free market system required an intermediate period that was a literal Dark Age? Could we still advocate it? Do we really have that kind of Galt-ian detachment?

  21. phalkor,

    You were already getting a pony two weeks ago. Now you get another pony.

    We will see where the ponies come from when the new Congress is sworn in. If it swings one way, then each pony will be purchased under the competitive bidding process, unless there are only a few pony suppliers who can deliver 300 Million of them.

    If it goes the other way, each entity posessing more than one pony will be taxed ‘fairly’ until we achieve pony equity throughout our society.

    Don’t blame me, I voted Barr/Root.

  22. Um, hold on, let’s not get all excited just yet. Maybe we should look at more of the details. Has anybody done that yet? If you have do you already know: IF a person pays almost no or almost no income tax on whatever their salary happens to be, do they still get these ‘earned income’ handouts? Does it kick in before Feb. 2009?

    Just curious 🙂

  23. That’s like saying you’ll go on a diet, after a few more trips to the all-you-can-eat buffet. Or quit drinking, after a few more benders.

    BINGO!
    We’re running a junkie economy. We’ll “get well” when we inject enough heroin liquidity. We keep trying but it takes more and more to feel good for less and less time. May be if we just do one really massive bailout all at once, that will make us feel good forever. Yeah, that’s the ticket

  24. That’s too weighty for me, Fluffy.

    No sane global marketplace could knowingly commit itself to a dark age in promise of a golden future. The problem with a complete collapse of a free market is that it would be much more than an econmic issue. It would have vast social and political ramifications that would result in not too few violent events.

    You could advocate it, but no popular leader ever could. That said I wonder if these direct shots of stimulation must continue to escalate until we get to that collapse. Should we be on a slow drip rather than this hard stuff? It’s gonna be a motha to quit this bitch.

  25. Fluffy-

    People have, do and always will, trade. To the extent that political interests distort and restrict trade, we suffer.

  26. Do we really have that kind of Galt-ian detachment?

    See unknown’s post above.

  27. Cool, I can pay off a little more of my credit card with another stimulus check.

    I, too, will be socializing my private sector debt.

    Stupid helicopter money. How many times does this strategy have to fail before they stop trying it?

  28. I just heard on npr the govt. is looking into buying, “credit paper on short term money market accounts.” Can someone explain that to an ignoramus like me?

  29. Hello,

    I don’t know very much about economics.

    I’m interested, though, to pose a couple of questions to posters here. I read the Reason print edition now and then, but have not checked the comments section until today.

    There seems to be lively discussion.

    I work as in the healthcare/biotech industry, specifically as a pharmacologist. Before I got a better paying job I was a researcher in the area of neuropharmacology, which is a field I find intensely interesting.

    I enjoy a lot of the writing in Reason, when I pick it up, and I like the emphasis on having a ‘free mind’.

    (For those interested in the science of the ‘mind’ and discussion of neurology and the pharmaceutical industry from a broader social standpoint, an excellent resource is the BrainWaves blog, found at brainwaves.corante.com. The is incredibly absorbing for those curious and interested.)

    I moved to United States not so long ago, and as such have only recently become very curious about US domestic politics.

    I don’t know much about finance and the economy, nor about politics. I don’t pretend that reading a political magazine amounts to political knowledge.

    I try not to form solid political judgements. This is a fallacy on my part I suppose. But I just don’t feel inclined to strong political opinion.

    I’ve never felt comfortable with the intense marriage of ideology and emotion that seems to follow.

    That is my biography, I suppose, if anyone cares. I apologise for being long-winded.

    The resource here, though, is a good one for someone curious about the most ‘reasonable’ approach to politics espoused by this magazine.

    I’ve noticed this election reaching fever pitch in the newspapers but also in the opinions of some of my friends and colleagues.

    I would like to know why.

    So I have some questions related to the article, and to a ‘free mind’ political approach. I hope this is a good place to post them.

    The government has, according to the article which itself accords to USA Today, 1 trillion dollars on fixing financial issues.

    Why?

    If this money were not spent, how would the markets react?

    I read somewhere that the US government has spent a trillion dollars on the Iraq conflict since 2003.

    I don’t know if this is true, as I read it in a newspaper some time ago and I don’t know where to find the precise figure.

    Presuming it is true, how will that money have affected the economy?

    Again I have a limited understanding of these issues. I know people who say excessive government spending is bad.

    It seems logical to me then, that the spending in Iraq might have had a negative impact on the economy.

    This comes from a very narrow knowledge of the economy. I’m curious though and would like to know whether that logic is true or false.

    Lastly, I’ve today seen people comment here on Barack Obama as a socialist candidate. What does this mean?

    I know socialism was espoused by the Bolshevik revolutionaries after the Russian Civil War.

    This was adopted as a political, rather than solely economic term, by the Bolshevik party, I think.

    I remember reading in Simon Sebag Montefiore’s biography of Stalin, that the word communism came to reflect Stalin’s policies of collective farming and the famine and savagery that went with Stalin’s purge.

    I read that Stalin associated Trotsky with liberalism. Stalin killed many of Trotsky’s followers during the purge, some because they were liberals, some because they liked Trotsky, some because they were liberals who liked Trotsky or had at some stage had something vaguely to do with him.

    The value of individual liberty never sat well with Stalin.

    I read that communism also came to encompass, as a term, the brutality of the revolutionaries, including Lenin and Trotsky (who was far from a liberal).

    But as the term ‘socialist’ is applied today to Barack Obama, how do you suppose this would manifest in practical terms?

    Thanks for reading, I apologise for the long message but I am quite interested to hear answers to some of these questions and would appreciate any at all,

    Peter

  30. Fluffy,

    A free market isnt something you have to worry about being there – it exists whenever it isnt specifically being shut down.

    As long as there are 2 people left in the world that mutually want something the other person has, a free market can exist.

  31. What if getting back to an “honest” free market system required an intermediate period that was a literal Dark Age? Could we still advocate it? Do we really have that kind of Galt-ian detachment?

    I doubt it. Yes. Yes.

    See my DTs comment above. I meant it. Some people die during withdrawal.

  32. robc, can we also die from an overdose?
    (is this analogy still holding together?)

  33. They’ll keep this up until no one in their right mind will buy US debt.

    But the stupid Social Security system is one of the biggest buyers of US bonds.

    Shit – we’re fucked.

  34. phalkor,

    can we also die from an overdose?
    (is this analogy still holding together?)

    I think the analogy holds together. Yes, we can do OD. We can damage other parts of the “body” so badly that the whole thing shuts down.

    Im not sure if Zimbabwe or Weimar Germany are good examples but they might be.

  35. A pony won’t fix this; I need a unicorn.
    I’ll call him Weimar Willy. And I’ll feed him hundred dollar bills.

  36. Peter, wow – long post…

  37. PB,

    You need to wait for the next package. Try after January.

  38. Looks like I picked the wrong week to stop sniffing glue.

  39. $700 billion to invest in bail out banks and acquire lose money on troubled assets.

    $300 billion to back cheaper mortgages for troubled irresponsible homeowners.

    $200 billion to back assets make good the poor investments of Fannie Mae and Freddie Mac.

    $123 billion to bail out the reckless American International Group.

    $29 billion to help bribe J.P. Morgan Chase [to] acquire Bear Stearns.

    I realize that this is small potatoes but you neglected

    25 billion downpayment to the big 2.5 welfare program.

  40. robc,

    I dont think Zimbabwe or Weimar are at all analagous. Hyperinflation is a very very different animal than inflation and catagorically cannot result from sterilized liquidity injections like the ones the Fed undertakes. Hyperinflation results from literal printing of money to fund radical spending by the government, usually in a reletively anarchich state, in lieu of enforeable taxation. The US fails on all counts.

    In order to have a real discussion of the current situation without looking like nut jobs, people have to take the tin foil hat scenarios off the table.

  41. And, still, nothing for the strippers- not even a voucher.

    Won’t someone think of the strippers?

  42. I propose they bailout sex workers. I will take their services for my stimulation. Vouchers will apply as follows: Individuals who pay taxes get a BJ, Married couples 2 fucks and a massage for each additional child. Those who don’t pay taxes but had at least $3000 in income get a handjob.

    Oh, food stamps? Jobless benefits?

    Those “benefits” are already too easy to qualify for. I can probably qualify for food stamps as it is, and I’m in no danger of going hungry. I also know MANY people who collect Unemployment 6 months out of every year. Extension, for what?

    Just give me my blowjob vouchers or as part of a combination stimulus/bailout please provide me with a voucher for a Free American Automobile with lifetime service included. Thanks.

  43. Is it possible that maintaining our current fiat currency / statist / overinvestment in financial services economy requires greater and greater bailouts merely to remain minimally functional, and the other choice is a complete collapse?

    You can die frrm heroin withdrawal too. That doesn’t mean continued mainlining is the prudent course of action.

  44. They forgot to add the $25 billion for the Detroit automakers…

    They also forgot to mention the tens of billions in obscure tax breaks the Treasury and IRS have created for their Wall Street Welfare Queens.

    Of course, the small businessman is being offered no tax relief whatsoever in these hard economic times. Why do they hate us?

  45. We need to spread the blowjobs around.

    And everybody who’s nobody gets it in the ass.

  46. domo,

    Did you even get the point of my reference to Zimbabwe and Weimar? They were examples of ODing, not a comparison to the US situation.

    They were, in fact, a contrast to the US situation, which is merely a junkie.

  47. Jay,

    And, still, nothing for the strippers interpritive dance artists- not even a voucher.

    Won’t someone think of the strippers women in the arts?

    Okay, fixed in more ways than one. I, in fact, Mr. Montag evil greedy Capitalist, was supporting ladies in the arts just the other week at Rachel’s in Orlando, FL.

    I do provide suppoer on a sliding scale, with uninked performers earning 5x the donations that I give to artists with body illustrations. I just happen to be a naturalist at heart.

    However, I must give fair warning. If the Socialists insist on redistributing my wealth for me I will have to stop my patronage of Ladies Interpritive Dance Theaters.

    Pretty simple, leave me alone and artists won’t starve.

    This has been a public service announcement from Guy Montag, evil Capitalist.

  48. Honestly, isn’t it time to stop these pathetic half-measures?

    Surely the treasury is capable of loading their valuable printing presses onto B-52s, where they can run 24×7, flying over the U.S. shoving wads of cash out the bomb-bay.

    I’m sure Zimbabwe could give some advice in this regard.

  49. thats fine, no need to get testy. I contend that we are not on the same drug. They are mainlining heroin and OD’ing. We are Tussing. Dumb, but certainly not the same thing.

  50. Of course, the small businessman is being offered no tax relief whatsoever in these hard economic times. Why do they hate us?

    Because, in general, you don’t give them enough money to warp the markets in your favor and you make enough money not to be subservient to the public teat. They hate you because you don’t need them.

    The surest way to create a libertarian is to have someone run a small business for three years.

  51. Democrats (actually) want “pay as you go” about as much as Republicans (actually) want Social Security reform. IOW, “not much.” Fiscal responsibility is the ugly girl at the dance (or maybe stripclub) every time.

  52. JMR,

    Democrats implemented Pay As You Go when they controlled the White House and both houses of Congress.

  53. thats fine, no need to get testy. I contend that we are not on the same drug. They are mainlining heroin and OD’ing. We are Tussing. Dumb, but certainly not the same thing.

    Gosh that sounds familiar. Maybe it’s because I’ve heard addicts justify their drugs use with,

    – At least I don’t do crack (junkies).
    – At least I don’t do blow (crackheads).
    – I only drink, it’s not like I’m on drugs (alkies).

    Of course they are all ending up in the same gutter.

  54. Wasn’t this year’s stimulus check just an advance on this year’s rebate?

    Will this one be the same?

    Will this mean that all this stimulus really means a 1200 dollar tax increase in 2010?

  55. Would a full scale worldwide economic collapse really be a bad thing? A loss of 90% of the population in 1st world nations would solve a lot of the stupidity and chaos happening now. Interestingly enough, I think less developed countries would suffer less as they practice more subsistence farming and gathering than the U.S. and others. At some point, even in a high tech society, so called survival of the fittest has to happen. A culling of the herd is long overdue and this financial meltdown just might be the trigger.

  56. I ate my last pony already. I’m still hungry!

  57. How much stimulation? That my friend is not the question, but the challenge.

  58. brotherben,

    That is a hefty scenario. In your world gone mad, we won’t spank the monkey. The monkey will spank us.

  59. brotherben,

    Most of the 1st world are food exporters. I dont see population crashing here. Heck, it aint like population isnt already declining in the 1st world (ignoring immigration).

  60. Buddy Holly – thought we were the party of drug legalization? Anyway, I should have known better than to assent to the strawman comparison to drug use. It’s complete BS.

  61. Where does the money come from? Serious question: do they (FedReserve) just print more?

    Me. I didn’t get one red cent from the last stimulus. Apparently making 85K means you are part of the upper class.

  62. Peter,

    Welcome. Your post is a little bit too long to properly address here. You will probably get more responses by following the discussion and posting small, discrete questions.

    I will try to answer one aspect of your post, though. Basically, our take is that the federal government needs to live within its means and stop spending like there’s no tomorrow. And, instead of taxing everyone and then sending everyone a check, it should just let everyone keep the money they earned.

  63. Where do people get the idea an economic recession, or even depression, will result in widespread death and destruction? Economic recession is not the fucking Ebola Virus, for crying out loud.

    If you go to a third world country and look around, you might say, “Boy, I wouldn’t want to live like that” but it’s not like the streets are stacked hip-deep in bodies. Get a grip.

    Maybe some of you read too much post-apocalyptic fifties (PKD, for ex) sci-fi.

  64. On CNBC this morning, they were talking about how many billions of dollars of paper (or real, in the case of Ford) losses Kirk Kerkorian has taken in the past year. Somehow, I think he’ll manage to survive without having to wander the streets barefoot, pushing a shopping cart.

  65. http://denver.craigslist.org/grd/883529977.html

    Oh, you wanted a figurative pony? Those, my friends are NOT for sale.

  66. P Brooks, probably just wishful thinking on my part. I find most of the human race, myself included, to be a waste of oxygen.
    Being the complete moron that I am, I underestimate the ability of the economy to be self sustaining even given the stupidity of the largest players and the willingness of governments to meddle without boundaries in it’s fluctuations. A complete breakdown of the economy, with subsequent loss of government services and utilities is clearly impossible.

  67. I want a magical pony.

  68. Ah, fiscal responsibility. When will people realize than neither party has any? Except, of course, when they aren’t in total control of the government.

  69. brotherben-

    In my opinion, one of the most important aspects of libertarianism (small “L” variety) is optimism, and the belief that people can and will adapt to new circumstances.

    The statist mentality is that people are too stupid and helpless and pathetic to make it without the assistance and guidance of BigNanny.

  70. “When will people realize than neither party has any?”

    Wasn’t the budget balanced under the last Democratic President?

  71. Two words, “Labor Britian”

  72. “Wasn’t the budget balanced under the last Democratic President?”

    Only because he had a Republican Congress to stop him from going on a bender.

  73. P Brooks,

    Philip K. Dick only wrote two novels that can properly be classified as “post-apocalyptic,” Dr. Bloodmoney, published in 1963, and his collaboration with Roger Zelazny, Deus Irae, published in 1976. Neither are set in the Third World, and neither feature “hip-deep bodies in the street.”

    Isn’t it more likely that Americans have negative images of the Third World from the fact that the only international news we get of those areas are of tsunamis and Janjaweed machete massacres?

  74. MNG,

    Wasn’t the budget balanced under the last Democratic President?

    Nope.

  75. Buddy Holly – thought we were the party of drug legalization?

    Yet proposals for the government to saddle children with debt so junkies, crackheads, alcholics and Rush Limbaugh can remain high is not something that most libertarians woulld support.

    Anyway, I should have known better than to assent to the strawman comparison to drug use. It’s complete BS.

    “I’ll feel good today, and ignore the inevitable disaster that is coming in the future. I can get better next week”.

    I think “junkie economy” is a very apt analogy. The piper will have to be paid.

  76. MNG,

    The smallest deficit of the Clinton budgets was ~18B. That was for the fiscal year running from 10/1/1999 to 9/30/2000.

    Thats pretty damn tiny, but balanced it aint.

  77. Just to clarify, my suggestion that 1st world nations would be more harshly affected by a worldwide economic collapse is based upon this: imo, the populations of highly developed nations are much more dependant on government and commerce to provide daily sustenance. Folks in undeveloped places are better at living off the land, so to speak.

  78. Ah, fiscal responsibility. When will people realize than neither party has any? Except, of course, when they aren’t in total control of the government.

    Never. Fiscal responsibilty is sometimes the result of gridlock. Don’t expect any in the near future.

  79. As an aside, fiscal year 7/1/1956 to 6/30/1957 was the last one in which the US ran a surplus. About 2.2B.

  80. You seem to be unaware of what caused the crisis. The crisis was caused by the system of implicit and explicit government guarantees to intervene in a crisis such as the current one. That explains the clear record of otherwise inexplicably risky investment. It’s easier to risk when you’ve a backup.

    Here’s the problem. It was actually a system of explicit guarantees, but apparently nobody told you. And now we’re left dealing with these guarantees, because, well, see, they’re guarantees, which means you back them up.

    The most important issue facing us going forward is debating, in public and beforehand, whether we want such guarantees in the future, and a clear accounting of what they are if we do.

    Otherwise, keep the headlines, we’ll just change the details next time.

  81. robc,

    this site says a surplus occured twice under Clinton.

  82. That line of argument is becoming less and less tenable, as the confidence of the private parties who bought MBSs becomes more and more apparent.

    The Whiz Kids really did think packaging mortgages the ways they did controlled risk. They didn’t expect those things to fail, and get bailed out. They had a formula, dammit, and they “knew” how to manage risk.

  83. The problem with predicting collapse and handwaving over ever increasingly dire scenarios is that eventually things get better. Then you lose all credibility. Much better to be realistic and offer practical solutions and analysis.

  84. Surely the treasury is capable of loading their valuable printing presses onto B-52s, where they can run 24×7, flying over the U.S. shoving wads of cash out the bomb-bay.

    Quit thinking so efficentially and inexpensive. This could be a solution to the unemployment problem, especially with illegal undocumented workers and voters!

    Anybody without a job, or just not satisfied with their current job, could be issued a GSA vehicle to deliver money door-to-door, with a promise of commercial flight training as negotiated with the Union.

    Remember, jobs is a three letter word!

    And you people think I am kidding when I tell you I came from the Beltway to help out.

  85. MNG,

    joe has suggested that, too. Clinton never had the benefit of total control (even before 1994, given the slim margin in Congress), the economy was producing greater tax revenues, and we had for most of his tenure the lovely, lovely state of gridlock. There’s also the fact that much of the budget is off the books. Not to mention that one wonders what would’ve happened to the budget if nationalized healthcare had been implemented.

    So, sure, you can say they were committed to balanced budgets. While it is true that the Democrats have criticized deficit spending since the Reagan years, it is not true that they have exercised any true fiscal responsibility. Honestly, does anyone expect an all-Democratic executive and legislature to be all fiscalish in these trying times? We must make the teats of the federal government larger and larger and more difficult to escape from, after all, and the various bailouts, stimulations, and socializing of certain industries will take money, and gobs of it.

    Unfortunately, the GOP is equally pernicious in this regard.

  86. Anybody without a job, or just not satisfied with their current job, could be issued a GSA vehicle to deliver money door-to-door, with a promise of commercial flight training as negotiated with the Union.

    Don’t laugh, this is basically how USAID works overseas. Seriously, I’ve lived it a couple times.

  87. PL,

    There’s also the fact that much of the budget is off the books.

    Not trying to speak for you, but I beleve the appropriate phrase is off budget, not “off the books”. Off budget items are mearly perminant appropriations and do not have to be “asked for” by various committees and the Executive. They are still on the books as far as anything else is.

  88. Pro Libertate,

    Clinton had a Democratic Congress for the first two years of his presidency. It was during that time that the budgetmaking rules that were behind his first two budgets were written. The Republican Congress merely adhered to these rules when they took over. The partisan arguments were about how to spend within these limits, not whether.

  89. OM,

    Thank you. Now that we already have a program in place, we can just change some wording and apply it here. Just don’t begin deliveries until after the election.

  90. My point was that nothing will stop either party from spend-spend-spending. The Democrats would commit suicide if they raised taxes to cover all of their (and the GOP’s) current and planned initiatives. So the only options left are to (1) seize other nation’s assets or (2) utilize deficit spending. I’m rather thinking that the latter will occur.

    Where’s that balanced budget amendment these days?

  91. PL,

    I did my part, so stop yelling at me! Or are you yelling at them?

    Anyway, I did make sure to photocopy my ballot and send is certified mail.

  92. Guy,

    I’m just yelling.

  93. PL,

    Ah, very well then. Carry on.

  94. Today’s daily brickbat, Waiting for Uncle Sugar,

    An auction for 56 foreclosed properties in Utah fell through when the owners rejected the bids. Auctioneer Eric Nelson says the banks and private lenders who owned the properties decided to wait and see if they might get a better offer from the federal government.

    deserves an H&R posting.

  95. Between the stock market, housing market, foreclosures and debt defaults, USA has already lost about $10 Trillion in wealth since 2006, and can expect to lose an additional $5 – $10 Trillion before this crisis is over.

    $700 billion for Paulson’s bailout.
    $150 billion in goodies to get congress to approve Paulson’s bailout.
    $300 billion for mortgage relief.
    $350 billion to bail out Fannie Mea, Freddie Mac, AIG, Bear Sterns.
    $300-400 billion between 2 separate stimulus packages.
    Adds up to about $1.9 Trillion.

    So we just need to do all of the above for ten years and everything will be back to normal, right?

  96. plus $540 billon for the Money Market Investor Funding Facility

  97. CLEAR!!!

  98. The Zimbabwe/Weimar scenario is probably unlikely. However, keep in mind that the feds have only three ways to continue their ongoing bender:

    1. Raise taxes dramatically
    2. Sell lots more of those delicious U.S. Bonds
    3. Print mountains of fresh new dollar bills

    Unless the foreigners want to keep gorging on U.S. bonds, we’re screwed. A massive tax increase (much larger than Obama’s proposal) would sink the economy, and speeding up the printing presses leads to…Weimar/Zimbabwe.

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