Smurfysmiles
Ideal_Rock
- Joined
- Sep 30, 2007
- Messages
- 3,938
Have you guys heard anything about this? Think it''s a good idea or not? Supposedly it would happen around Christmas time.
We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.
To see what I’m talking about, consider the implications of the latest piece of terrible economic news: Thursday’s report on new claims for unemployment insurance, which have now passed the half-million mark. Bad as this report was, viewed in isolation it might not seem catastrophic. After all, it was in the same ballpark as numbers reached during the 2001 recession and the 1990-1991 recession, both of which ended up being relatively mild by historical standards (although in each case it took a long time before the job market recovered).
But on both of these earlier occasions the standard policy response to a weak economy — a cut in the federal funds rate, the interest rate most directly affected by Fed policy — was still available. Today, it isn’t: the effective federal funds rate (as opposed to the official target, which for technical reasons has become meaningless) has averaged less than 0.3 percent in recent days. Basically, there’s nothing left to cut.
And with no possibility of further interest rate cuts, there’s nothing to stop the economy’s downward momentum. Rising unemployment will lead to further cuts in consumer spending, which Best Buy warned this week has already suffered a “seismic” decline. Weak consumer spending will lead to cutbacks in business investment plans. And the weakening economy will lead to more job cuts, provoking a further cycle of contraction.
To pull us out of this downward spiral, the federal government will have to provide economic stimulus in the form of higher spending and greater aid to those in distress — and the stimulus plan won’t come soon enough or be strong enough unless politicians and economic officials are able to transcend several conventional prejudices.
rest of the piece here
excellent points Trillionaire!!! I agree on every one of them.Date: 11/14/2008 9:23:00 PM
Author: trillionaire
*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.
I think this is the starting point, with more to develop further...
Me too!Date: 11/14/2008 9:40:54 PM
Author: Skippy123
excellent points Trillionaire!!! I agree on every one of them.Date: 11/14/2008 9:23:00 PM
Author: trillionaire
*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.
I think this is the starting point, with more to develop further...
Date: 11/14/2008 10:52:19 PM
Author: Smurfysmiles
They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn''t afford to go to college as it was before and it''s just getting worse.Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.
Although I also agree with everything trill said Very good points
Date: 11/15/2008 1:07:00 AM
Author: trillionaire
Date: 11/14/2008 10:52:19 PM
Author: Smurfysmiles
They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn''t afford to go to college as it was before and it''s just getting worse.Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.
Although I also agree with everything trill said Very good points
Smurfy, addressing student debt is SO IMPORTANT! I''m so glad you brought it up, it''s really like modern day slavery to let 18 yr olds graduate with 100K+ of debt, the sign up for it before they have ANY IDEA of what that means, what the repayment plan will be like, etc. It''s tragic, and needs to be addressed, otherwise we are going to see a huge class divergence in education levels, with the middle class being the first one squeezed out!
Thritto!!!!!Date: 11/14/2008 9:55:16 PM
Author: LAJennifer
Me too!Date: 11/14/2008 9:40:54 PM
Author: Skippy123
excellent points Trillionaire!!! I agree on every one of them.Date: 11/14/2008 9:23:00 PM
Author: trillionaire
*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.
I think this is the starting point, with more to develop further...
Date: 11/15/2008 12:33:21 PM
Author: KimberlyH
Thritto!!!!!Date: 11/14/2008 9:55:16 PM
Author: LAJennifer
Date: 11/14/2008 9:40:54 PM
Author: Skippy123
Date: 11/14/2008 9:23:00 PM
Author: trillionaire
*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.
I think this is the starting point, with more to develop further...
excellent points Trillionaire!!! I agree on every one of them.
Me too!I can''t applaude you enough for this post. We, as a society, have such a bad relationship with money.
I don''t think another round of stimulus checks will do a thing to help us. We need need to become better savers/investors/money managers, not wait for the gov''t to give out more money it doesn''t have as a quick fix; it''s like putting a bandaid on a brain injury.
My thoughts exactly.Date: 11/14/2008 7:51:51 PM
Author: strmrdr
could use the money but have to say no because it would not help the economy and hurt the country in the long run.
This happened to me. My loan was 60k. When I had graduated, the economy was starting to tank (right before 9/11), so there really was not much out there for my in what I studied. Had to take a crappy job for 5 years, not related to what I wanted to do. It kinda paid the bills, but I could not pay enough toward my loan, so I had to live at home, which I hated. I moved out after 4 years when I got an ok increase in pay, but it has been slow going and I finally paid it off last month (I am 31). It definitely was a burden and I paid way more than the minimum balance to get it out of the way. However, I really did not do anything. Minimal spending, no movies, no car, nothing. I wanted it paid off fast because I consolidated when the rates were 6% and I had no idea that 1 year later they would crash down to the 3-4% range. My brother''s interest rate is 2%, he got lucky.Date: 11/15/2008 1:07:00 AM
Author: trillionaire
Date: 11/14/2008 10:52:19 PM
Author: Smurfysmiles
They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn''t afford to go to college as it was before and it''s just getting worse.Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.
Although I also agree with everything trill said Very good points
Smurfy, addressing student debt is SO IMPORTANT! I''m so glad you brought it up, it''s really like modern day slavery to let 18 yr olds graduate with 100K+ of debt, the sign up for it before they have ANY IDEA of what that means, what the repayment plan will be like, etc. It''s tragic, and needs to be addressed, otherwise we are going to see a huge class divergence in education levels, with the middle class being the first one squeezed out!
Date: 11/15/2008 12:39:36 PM
Author: equestrienne
Date: 11/15/2008 12:33:21 PM
Author: KimberlyH
Thritto!!!!!Date: 11/14/2008 9:55:16 PM
Author: LAJennifer
Date: 11/14/2008 9:40:54 PM
Author: Skippy123
Date: 11/14/2008 9:23:00 PM
Author: trillionaire
*Americans need to start saving. A lot. Can you say 1929? To a great degree you are exactly right. However, DO this and you get an added factor that is exacerbating our problems. This is exactly why the Great Depression was so "Great". Like us, those people had been living beyond their means, and when it all started to fall apart, they pulled back. They SAVED and lived within their means. Then as now, from the way things are shaping up, there was a surplus of goods that were produced using projections that said that good times would never grind to a halt. Our entire economy is built on massive consumption - stopping that, in essence overnight, is going to be devastating.
I think this is the starting point, with more to develop further... I too could develop further, but I''m off to consider some "consumption" of goods...(jewelry of course!)
excellent points Trillionaire!!! I agree on every one of them.
Me too!I can''t applaude you enough for this post. We, as a society, have such a bad relationship with money.
I don''t think another round of stimulus checks will do a thing to help us. We need need to become better savers/investors/money managers, not wait for the gov''t to give out more money it doesn''t have as a quick fix; it''s like putting a bandaid on a brain injury.
Quadritto. Trill, you rock.
And "rewarding actual work" would also mean not putting policies in place designed to encourage the funneling vast streams of money into the STOCK MARKET over SAVING. What is making money in the stock market if not "something for nothing"? You don''t EARN it, you pick a stock, and hope it gains in value. Sounds like gambling to me. Is anyone with a 401K or IRA still unclear on that now?Date: 11/17/2008 6:16:43 AM
Author: crown1
it is time to get out of this ''false'' economy mindset. if they want to give out money maybe build some manufacturing plants and actually create some jobs and products. how about encouraging people to live within their means instead of continue to expect someone else to support them? i think we need to reward actual work and not schemes to get something for nothing. grants, entitlements and give aways have not made us economically healthy or happy it''s time to take the correction and start working for a living.