Double dip Recession?

[Elif Godson]

in-sourcing can be just as bad. I should learn a new trade..

[Lord of Alcohol]

Originally Posted by Elif Godson in-sourcing can be just as bad. I should learn a new trade..

Try construction! oh wait.....

[Felix The Assassin]

Originally Posted by Elif Godson in-sourcing can be just as bad. I should learn a new trade..

How about the automotive industry, I hear GM has some long term financing.

[Elif Godson]

y'all are too much.

[Timber Loftis]

I don't see how a prolonged recovery is avoidable. The bailout and stimulus monies were too little (or they went to the wrong party, rich bankers - who should have in all fairness gone bankrupt - instead of shovel-ready projects) to give much of a kick-start, and the stupid sheeple have been beaten into believing that balancing the budget is the smart thing to do in a recession -- so the follow-up stimulus funds that should have been approved were never approved. This not only caused jobs that were currently underway to stop mid-project (leaving lots of Chicago's roadways standing with permanent construction barriers everywhere) but also resulted in many people losing their construction jobs.

You either buy into Keynesian economics or you don't. If you believe the government should inject money into the economy, then you don't half-ass it, you go whole hog and do it. Otherwise you risk a horrible double-whammy: more debt plus no recovery.

Just remember that the last person who tried to balance the books in a recession was named Hoover, and we know how well that went.

As for the mid-term elections, the Republicans have certainly engineered enough failed legislative efforts that they will probably pick up some seats. They've also been real good about spinning the legislation that has passed, such as health care, into some big scary commie boogie-monster that's gonna kill us all.

It will be sad. And if they pick up enough seats to get a majority, and then oust Obama in 2 years, we'll face a real crisis. I don't see how more money can be pushed upward to the rich. After 3 republican presidents and congresses that spent all their time pushing money from the middle class to the wealthy, I just don't think we can take any more. If you're not a millionaire and somehow you find yourself voting Republican, you should know that you are NOT voting for yourself, but if the last 30 years didn't prove that to you, nothing will.

[Firestormalpha]

So you're saying that spending money you don't have is the way to get out of debt?

[SpiritWarrior]

Originally Posted by Firestormalpha So you're saying that spending money you don't have is the way to get out of debt?

Bit of on oversimplified way of putting it. If you froze all spending entirely the moment the economy crashed, do you honestly think things would get better?

[SpiritWarrior]

Originally Posted by Timber Loftis It will be sad. And if they pick up enough seats to get a majority, and then oust Obama in 2 years, we'll face a real crisis. I don't see how more money can be pushed upward to the rich. After 3 republican presidents and congresses that spent all their time pushing money from the middle class to the wealthy, I just don't think we can take any more. If you're not a millionaire and somehow you find yourself voting Republican, you should know that you are NOT voting for yourself, but if the last 30 years didn't prove that to you, nothing will.

So true. These people think they are voting for the "common man". Like I was saying in another thread, the Tea-Baggers think they are rallying for the common man. The sad and horrible truth is they are not, and never were. And I agree, if people haven't gotten the message by now, they never will. But they're busy doing the rest of us in at the same time.

[Timber Loftis]

Originally Posted by Firestormalpha So you're saying that spending money you don't have is the way to get out of debt?

Well, Keynesian economics has a twofold proposition. You see, people can't run deficits like the federal gov't can. Neither can states. So, when the money flow stops people and the states can't really do much other than wait for jobs to pick up. But the federal gov't can run a deficit. So, back to this twofold proposition:

- When the economy is in recession, the gov't runs a deficit and injects money into the economy (via direct stimulus or lowered taxes) to spur job creation, lending, investment, etc. It's like kick-starting an engine.

- And when the economy is doing well, the gov't raises taxes, lowers the handouts, and pulls the money back out of the system.

Thus balancing out the extreme in the natural ebbs and flows of an economy.

Ideally. In a nutshell.

The real downfall is that during times of progress the gov't never keeps up the second half of the Keynesian economic system. Why? Because no matter how good the economy is, raising taxes never gets you votes.

So, you can judge the system on its merits for yourself. But, if you are going to undertake the idea that stimulus is needed in a recession, then you better damn sure make sure you inject enough money to actually get that kick-start you're looking for.

This recession we're in could look a lot like Japan's through the 90's, loooong with a slooow recovery. It's a major crisis of the very foundation of our economy that the US is suffering. We lost most all our production, farming it out to overseas locations. Now we've lost huge sectors of our services industries, such as computer services, also gone overseas. At some point we have to ask ourselves what it is we actually make or do that will bring money to us.

Cause right now all the money we have is getting pushed up to the rich, who just invest it overseas where deals are making money these days.

[Timber Loftis]

Defining Prosperity Down
By PAUL KRUGMAN
I’m starting to have a sick feeling about prospects for American workers — but not, or not entirely, for the reasons you might think.

Yes, growth is slowing, and the odds are that unemployment will rise, not fall, in the months ahead. That’s bad. But what’s worse is the growing evidence that our governing elite just doesn’t care — that a once-unthinkable level of economic distress is in the process of becoming the new normal.

And I worry that those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is “structural,” a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.

Not long ago, anyone predicting that one in six American workers would soon be unemployed or underemployed, and that the average unemployed worker would have been jobless for 35 weeks, would have been dismissed as outlandishly pessimistic — in part because if anything like that happened, policy makers would surely be pulling out all the stops on behalf of job creation.

But now it has happened, and what do we see?

First, we see Congress sitting on its hands, with Republicans and conservative Democrats refusing to spend anything to create jobs, and unwilling even to mitigate the suffering of the jobless.

We’re told that we can’t afford to help the unemployed — that we must get budget deficits down immediately or the “bond vigilantes” will send U.S. borrowing costs sky-high. Some of us have tried to point out that those bond vigilantes are, as far as anyone can tell, figments of the deficit hawks’ imagination — far from fleeing U.S. debt, investors have been buying it eagerly, driving interest rates to historic lows. But the fearmongers are unmoved: fighting deficits, they insist, must take priority over everything else — everything else, that is, except tax cuts for the rich, which must be extended, no matter how much red ink they create.

The point is that a large part of Congress — large enough to block any action on jobs — cares a lot about taxes on the richest 1 percent of the population, but very little about the plight of Americans who can’t find work.

Well, if Congress won’t act, what about the Federal Reserve? The Fed, after all, is supposed to pursue two goals: full employment and price stability, usually defined in practice as an inflation rate of about 2 percent. Since unemployment is very high and inflation well below target, you might expect the Fed to be taking aggressive action to boost the economy. But it isn’t.

It’s true that the Fed has already pushed one pedal to the metal: short-term interest rates, its usual policy tool, are near zero. Still, Ben Bernanke, the Fed chairman, has assured us that he has other options, like holding more mortgage-backed securities and promising to keep short-term rates low. And a large body of research suggests that the Fed could boost the economy by committing to an inflation target higher than 2 percent.

But the Fed hasn’t done any of these things. Instead, some officials are defining success down.

For example, last week Richard Fisher, president of the Federal Reserve Bank of Dallas, argued that the Fed bears no responsibility for the economy’s weakness, which he attributed to business uncertainty about future regulations — a view that’s popular in conservative circles, but completely at odds with all the actual evidence. In effect, he responded to the Fed’s failure to achieve one of its two main goals by taking down the goalpost.

He then moved the other goalpost, defining the Fed’s aim not as roughly 2 percent inflation, but rather as that of “keeping inflation extremely low and stable.”

In short, it’s all good. And I predict — having seen this movie before, in Japan — that if and when prices start falling, when below-target inflation becomes deflation, some Fed officials will explain that that’s O.K., too.

What lies down this path? Here’s what I consider all too likely: Two years from now unemployment will still be extremely high, quite possibly higher than it is now. But instead of taking responsibility for fixing the situation, politicians and Fed officials alike will declare that high unemployment is structural, beyond their control. And as I said, over time these excuses may turn into a self-fulfilling prophecy, as the long-term unemployed lose their skills and their connections with the work force, and become unemployable.

I’d like to imagine that public outrage will prevent this outcome. But while Americans are indeed angry, their anger is unfocused. And so I worry that our governing elite, which just isn’t all that into the unemployed, will allow the jobs slump to go on and on and on.