Ron Paul: Stimulus Packages Will Turn Recession Into A Depression

[Agathon]

aggie's back!

I never went away for good. I just avoided this place during the war and the canonization of Saint Obama, because I knew I'd get banned.

[Felch]

It's like they cut the best bits out and stuffed the worst possible things in their place.

Exactly why I'm a libertarian. Government isn't managed by the best and brightest. It's managed by Congress. And the only problem that a Congressman ever tries to solve is getting reelected.

[Victor Galis]

Exactly why I'm a libertarian. Government isn't managed by the best and brightest. It's managed by Congress. And the only problem that a Congressman ever tries to solve is getting reelected.

I concede that point. I will also add that the only thing most corporate executives worry about is how to get a bigger bonus next quarter. Our society seems to be plagued by a lot of principal-agent problems.

[Felch]

Our society seems to be plagued by a lot of principal-agent problems.

Well, luckily Congress and the captains of industry are hard at work fixing all of our problems.

I'd recommend you stock up on canned food, water, and fuel for a portable generator.

[Ramo]

Darius, it looks like today Obama reiterated the statement, "come on guys, deep down we all know that earmarks are inevitable."

This bill does not have a single earmark in it, which is unprecedented for a bill of its size.

http://thepage.time.com/2009/02/09/off-to-elkhart/

[snoopy369]

I concede that point. I will also add that the only thing most corporate executives worry about is how to get a bigger bonus next quarter. Our society seems to be plagued by a lot of principal-agent problems.

At least Corporate executives' compensation usually has SOME tie to corporate performance.

It seems like Congressional likelihood-to-be-reelected is negatively correlated with the US' bottom line...

[Naked Gents Rut]

We are so ****ed...

Spending More Than $800 Billion Is the Easy Part

By DAVID E. SANGER
Published: February 8, 2009

WASHINGTON — The easy part is coming to an end.

Ask just about anyone in Washington involved in the $800-billion-plus economic stimulus legislation churning its way through Congress and they will tell you it is a milestone — but without question the less expensive, and politically and technically less chancy, part of the Great National Bailout of 2009.

This week, President Obama and his Treasury secretary, Timothy F. Geithner, will prepare the country for the next, and far more difficult, step: another attempt to fill the huge hole blown in the center of the nation’s financial system.

No one has yet put a price tag on that effort. But the administration’s diagnosis of what went wrong with the first attempt to right the financial system — that it was too small, and that the problem has ballooned in recent months — suggests that the next effort will almost certainly entail a far bigger commitment of taxpayer dollars than the $350 billion left from last year’s $700 billion effort to right the system, and probably far more than the stimulus package.

http://www.nytimes.com/2009/02/09/us/politics/09econ.html

[Ramo]

Looks like the Senate plan scales back aid to states, unemployment benefits, and even middle class tax cuts in favor of incentives to buy homes and cars. We're so screwed.

To clarify, it's COBRA health care, and not unemployment insurance which was cut (which is also a bad idea). And food stamps. But Ben Nelson and Susan Collins believe that we should give a several thousand dollar tax credit to middle class folks buying a new house. What a ****ing mess.

Hopefully, the House can axe the AMT fix and similar bull**** in favor of aid to states and food stamps in Conference. I'd like to see the "centrists" publicly try to make the case that benefits to the relatively affluent are more stimulative.

[snoopy369]

How about they just hand us all checks for $50,000 and say, "Okay, go buy **** with this please."

180m taxpayers * 50,000 = less than we'll end up spending on this ... (okay, maybe $5T is a bit high, but not THAT high... sigh ...)

[Naked Gents Rut]

I can't believe so many people are convinced we need to spend trillions of dollars to get out of this recession a bit sooner...

What do we learn? So far the fall in employment is comparable to that in 1974-1975 and 1981-1982. If the comparison holds, the declines should end within the next four or five months. But we of course have no idea whether the comparison will hold. Past performance is no guarantee of future results.

http://curiouscapitalist.blogs.time.com/2009/02/09/comparing-this-recession-to-the-last-five/

http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm

It's been clear for a while that our society has lost all sense of perspective, but this is really ridiculous.

[snoopy369]

I don't actually think we should spend the money ... I'm just saying instead of the money they already seem set on spending, the rebate would be faster and easier

I will also note that I strongly oppose the 'give people buying houses/cars money' idea, and I'm probably going to be in the market for both in the next 12 months. It's still a stupid idea, even if it will benefit me (in the short run)

[Naked Gents Rut]

I wasn't addressing you. I was addressing the "OMG! We need to spend trillions or we'll end up in another Great Depression!" folks. You know who I'm talking about. Obama, Krugman, etc.

[The Mad Monk]

When is the last time we had a bill of this size?

[DinoDoc]

I can't believe so many people are convinced we need to spend trillions of dollars to get out of this recession a bit sooner...

Selling thier children into slavery to spare themselves a few months of pain seems to be en vogue atm.

[DanS]

It's too late for a full response, but I'll just say that I don't understand why you seem so sure that a depression is in the cards if there isn't a massive stimulus. Obama, Krugman and others who want to scare the public in order to get their spending priorities passed have said this, but less partisan sources (including members of Obama's own economic team) don't seem to think this is the case.



Even without the stimulus, Romer and Bernstein estimate unemployment will approach its natural rate around the end of 2012. Given that unemployment lags behind growth, this means the recession will have ended well before that time. That's a depression?

This is an interesting chart, especially with regard to the timing of the unemployment juxtaposed on the political calendar.

Further, it strikes me as overestimating the short-term impact of the spending plan as relates to unemployment, and underestimating the long-term ill effects of the spending plan as relates to unemployment (the scenarios converge, which I don't think would happen in reality).