BF2S Forums Double-dip recession imminent

Government bails out the banks.

Who bails out the Government?

Dilbert_X wrote:

Harmor wrote:

What this country needs is a good dose of Reaganomics right about now.

Insert facepalm gif.

So stimulating the economy wouldn't be a good idea now then?

Dilbert_X wrote:

Instead of increasing unemployment benifits how about making permanent the Bush Tax cuts?

Er, you know thats why the govt has a deficit right?

I believe it was reckless spending and increased regulations that caused all this.  When the government spends faster than than the amount of taxes they generate then we're all in a heap of trouble.  Its only a matter of time before interest rates go up and then we'll be in a heap of trouble (rising interest rates slows down economic growth).

Oh and before you say, "its the lax regulations that caused the mortgage crisis," might I remind everyone that when you tell a bank that they must loan to someone who can't afford a mortgage, forcing risk on the bank, then when they fail you shouldn't be surprised.

Dilbert_X wrote:

Instead of bailing out AIG how about removing the requirement that banks need to loan to people who are not qualified or able to pay for a home?

How about just make companies responsible for their mistakes?

This we both agree on.  I think we should had let them fail.  What would had happened is the companies would had gone into bankrupcy and other companies and investors would had bought up the pieces.  That's the natural cycle...but what we got were companies like AIG (and there are 90 companies that are late on their TARP payments still), spending lavishly on executive vacations with tax payer money.

Dilbert_X wrote:

Instead of Obamacare how about making health insurance portable across state lines?

Don't tell companies what to do.

No right now we tell them they can't make their plans portable.  This actually has more to do with the states - each has a different set of rules and regulations.  Normalizing this across all states would help decrease our costs in health insurance.  As it stands now with the new rules in Obamacare the increases in taxes and regulations will cause many private insures to go out of business.  Your employer will no longer be able to offer you private insurance.  It'll really hit us in 2013.

Dilbert_X wrote:

Instead of blaming BP for the oil spill (lawyers will figure all that out later), how about lifting the Jones Act and giving Governors control over the cleanup?

Pretty sure BP would be glad to hand it over.

You're missing the point. Right now the Federal Government is making it difficult for State agencies to do their work efficiently.  For example, in Louisiana they stopped barges sucking up oil for 48 hours because they the barges paperwork for life vests and fire extinguishers were out-of-date. 

It should be a cooperation and I believe the big things, yes keep the Federal Governemnt involved (like coordinating with other countries or getting the military assets involved), but its the Governors who are more involved in the local cleanup effort.

Salazar, the guy Obama put in charge of the oil cleanup is only working on it part-time by the way.

Dilbert_X wrote:

Instead of putting a 6-month moratorium on drilling (that'll put 100,000 people out of work), why not lift restrictions on domenstic production and exploration (especially some of the arcane EPA requirements Solar plants here in California - fucking turtles).

Because, as we've seen with BP, Transocean and Halliburton, they don't have a plan B if there is a leak > Big donfckn oil spill.
They need at least six months to figure one out.

Yep and they're going to pay.  But doing the witch hunt NOW while we are in the middle of a disaster is not helping matters.  Besides putting a strain on our relationship with Great Britain (and we know how Obama likes being liked by Europeans), we should be cooperating with whatever assets we have to get the oil cleaned up and the hole plugged.

After that THEN we can do all the demonizing on BP.

Dilbert_X wrote:

If instead of spending $2 TRILLION dollars so far, I bet the economy would be doing alot better if we were to keep 15% more of our income right about now.

Govt spends $2trillion, people spend $2trillion, whats the difference?
Let people keep money and they spend it on imported goods, plasma tvs and graphics cards - ask lowing.

Sure, give your all your money to the government and have them run your life for you.  There's a huge difference in that the money in the hands of its citizens would be spent much wiser than the government.  When the government spends its wrot with bureaucracy and inefficiencies that dilute whatever they were trying to achieve with it.  Need I only give as an example the TARP fund...it worked so well they are drafting a THIRD stimulus package right now in congress.

So yes, I would rather the citizenry spend their money on pet rocks than the government to spend $4 million dollars on a bus stop.

Dilbert_X wrote:

If you think this is bad, wait till 2011...

Why, is Obama plannin to start another two unwinnable fronts in the war of terror?

Sorry, that quote was out of context.  Because the Bush Tax cuts are expiring at the end of this year economic activity will artifically rise between now and the end of the year as people and investors shift their tax liabilities into this year to limit their taxes next year.  Thus economic activity will be lower and expected to be anemic the beginning of the year.

Dilbert_X wrote:

Oh, and clean up the Minerals and Management agency that oversees oil companies...that thing is ripe with corruption.

Just make corruption a crime.

It should always be.  But when the government agency is complicit and there is no one in Congress overseeing them ( *cough* the Democrats are in charge of everything right now *cough*), then they are have been getting away with it.  And I'm not giving Bush or Clinton a pass on this either...they too had a blind eye to all this.

AussieReaper wrote:

Government bails out the banks.

Who bails out the Government?

IMF funds.

Harmor wrote:

I believe it was reckless spending and increased regulations that caused all this.

Then lay the blame where it belongs, at Bush's feet.

Reciprocity wrote:

I think living in California screws up your perception of reality.

California is the land of wing nuts, both the left and right variety.

Update: Payrolls drop by 125K, jobless rate falls

via http://www.michaelsavage.wnd.com/

Summary:

• loss 225,000 temporary jobs for the 2010 U.S. Census
• Private businesses gained 83,000 workers, an improvement from May (economists expected 110,000)
• There are 7.9 million fewer private payroll jobs than it did when the recession began in October 2008
• unemployment rate fell from 9.7% to 9.5% as 652,000 people gave up on their job searches and left the labor force

---
Anemic growth in the private sector.  Its unsettling that 652,000 gave up looking for work.

The economy needs to generate at least 100,000 jobs per month to satisfy those entering the job market.

What's happening in Wall Street right now from now til December 31st of this year people will sell their stock because Capital GAins is going from 15% to 39.4% on January 1st, 2011.

We could very likely be at the lows in the DOW that we saw in March 2009...it won't be pretty.


EDIT: San Diego Real Estate negative

Why would I as a business risk my capital right now in this economy?  You incentivize businesses by lowering taxes and making a better climate to do business, not tax and regulate them more.


EDIT2: Democrats in a jam as economy slows

via http://www.drudgereport.com/

Last edited by Harmor (2010-07-03 21:47:53)

Harmor wrote:

Here's a little tidbit...seems the following companies we may not see ever again sometime in the next 18 months because of this awesome economy we are in:


http://img80.imageshack.us/img80/4109/1 … 672442.jpg

ZALES JEWELERS
The value of Zale Corp has dropped from $1.3 BILLION in 1999 to $78 MILLION today

http://img80.imageshack.us/img80/9623/1 … 672443.jpg

READERS DIGEST
Circulation is WAY down and the companys US branch has already had to declare bankruptcy once

http://img80.imageshack.us/img80/9370/1 … 672444.jpg

BLOCKBUSTER
Netflix Redbox and On Demand are killing their stores They may live on by copying those companies but the stores could all disappear

http://img80.imageshack.us/img80/5713/1 … 672445.jpg

DOLLAR THRIFTY RENTAL CARS
There are six major rental car brands and not enough demand to support all of them And this ones the most likely to go

http://img571.imageshack.us/img571/1854 … 672761.gif

TMOBILE
Its the number four cell phone provider in the US Theyll probably have to merge with another company like Nextel did with Sprint.

http://img80.imageshack.us/img80/6310/1 … 672772.png

BP Obviously

http://img80.imageshack.us/img80/5323/1 … 672773.gif

RADIOSHACK
It looks like theyll either get taken over by Best Buy or just disappear completely
Also they just announced all their phones for $0.01 til June 21st with a 2 year contract.

http://img37.imageshack.us/img37/7654/1 … 672784.jpg

KIA MOTORS
Hyundai owns Kia and they'll probably just get rid of it Its a weaker brand name than Hyundai and there's really no reason for them to keep it alive

Maybe if Radioshack had better prices on bulk components and put some effort into employee training and hobbiest promotional campaigns, they wouldn't be in this position. They turned into a cell phone accessory shop, basically.

Well with these new rules requiring all businesses to issue a 1099 from every vendor they do more than $600 in business per year will definally increase the cost of doing business (you can thank a little rider to Obamacare that we just now found out about).

Source: http://money.cnn.com/2010/07/09/smallbu … 099_flood/

So instead of issues say 10 1099 forms per year some businesses could see an increase to over 200!  You'll probably have to hire someone just to fill out the 1099 forms.../sad.

Diesel, as I told you via PM during my... absence... companies are sitting on a trillion in cash because they are terrified of what the current administration will do next. If they're going to push cap and trade, push it. If they're going to push an expansion of card check, push it. Get it out of the way. Companies are still digesting Obamacare, the new financial regulations and the other stuff that's been passed over the last year and a half.

In order for businesses to function, they need a stable marketplace in which to conduct business. The government monkeying around creates massive instability. Laissez-faire has come to mean something other than what it originally represented when the words were spoken a few centuries ago. When it was spoken, it simply meant that the government should set whatever rules it wished, and then bind itself and limit its interference beyond that. Can't keep changing the rules and expect people to play the game. Why? Because in a time of uncertainty and instability like we are currently in, what would be considered an investment during stable times, is now nothing more than a gamble.

If you were to sit down for a game of poker where the winner of the last hand was allowed to change or create a rule would you be willing to play that game for money? Or, would you rather play at a different table where the rules are stable and you know what to expect?

JohnG@lt wrote:

Diesel, as I told you via PM during my... absence... companies are sitting on a trillion in cash because they are terrified of what the current administration will do next. If they're going to push cap and trade, push it. If they're going to push an expansion of card check, push it. Get it out of the way. Companies are still digesting Obamacare, the new financial regulations and the other stuff that's been passed over the last year and a half.

In order for businesses to function, they need a stable marketplace in which to conduct business. The government monkeying around creates massive instability. Laissez-faire has come to mean something other than what it originally represented when the words were spoken a few centuries ago. When it was spoken, it simply meant that the government should set whatever rules it wished, and then bind itself and limit its interference beyond that. Can't keep changing the rules and expect people to play the game. Why? Because in a time of uncertainty and instability like we are currently in, what would be considered an investment during stable times, is now nothing more than a gamble.

If you were to sit down for a game of poker where the winner of the last hand was allowed to change or create a rule would you be willing to play that game for money? Or, would you rather play at a different table where the rules are stable and you know what to expect?

agree, stabilty is needed. Make the changes quickly and leave it alone. I posted somewhere about taxation needing to be fix and the govt adjusting spending. perhaps even constitutionalizing the tax rates so that there would be stability. As it stands now, tax breaks, like the bush tax cuts, were really a spending measure like welfare. The govt might as well have cut them all checks.  The money was taken from govt coffers and replaced with debt. In reality, its stuff like that that is a political payoff for party supporters that is disguised as economic policy.

BTW I don't watch MSNBC, I watch CNBC. and another interesting point being raised is the hedge funds should have start to return money to clients because they are sitting on the cash and not investing it. So people are get not return on that money. One reason is the lack of will to invest in PBO's economy, the other might be that the downward trend is still downward. Everyone is hoarding cash right now and consolidating debt. And one of the problems of the depression was that people hoarded cash, and when the fed starts to tighted monetary policy the cash hoarding problem will be amplified.

IMO taxes need to be raised to a sustainable level that will allow us to run a balanced budget. and the govt needs to stop using the tax system to incentivize or pay back people from political support.

On you PM, the only thing I would disagree with that we won't see a recovery until housing rebounds and that's not going to happen until 2015. I was looking a graph that was shown on CNBC but this is the closest one I could find, sorry for the size


you can clearly see the housing bubble in the graph, the plateau in the drop in prices in January 2009 is the result of stimulus, and more to the point the first time home buyer credit which expired on June 30, 2010. Meaning that everyone is holding cash because the house prices should start to decrease again.

One thing that I am not exactly sure is whether this downward trend should be termed deflation, because deflation means that real prices are decreasing. Where this is a bubble popping and prices are coming down to their real price. Anyway it took us 7 or 8 years to get into the mess and it will take just as long to get out. The quicker it happens the better, and money spent to prop up prices is tax money that is being wasted to help the politcally connected. And IMO it has a destabilizing effect.

Diesel_dyk wrote:

... As it stands now, tax breaks, like the bush tax cuts, were really a spending measure like welfare. The govt might as well have cut them all checks.  The money was taken from govt coffers and replaced with debt. In reality, its stuff like that that is a political payoff for party supporters that is disguised as economic policy...

Taken from government coffers?  Its not the government's money its ours. 

You're violating the 5th principle of Reagonomics and making the assumption that the economy is static, its not.  When you lower taxes your generate more wealth and simulate economy growth/activity; this, in turn, increases revenue to the government.

I would rather they lower taxes for everyone so that 100% of the money goes to economy growth, rather than run that money through some government program and redistribute to whom they want at 43 cents on the dollar.

Democrats controlled congress and spent faster than the doubling of the tax revenue to the government as a result of the tax cuts.  Also the tax cuts grew the economy out of the enemic late 70's economy the second worst president, Carter, brought us.

It wasn't until 1993 when the Republican's took charge under Bill Clinton that we got surpluses.  Granted, in 2005-2006 when Bush was in charge he took those surpluses and turned them back into deficits.

The current depression is a result of regulators insisting on giving homes to people who could not afford them (i.e. Urban Renewal projects and homes for the poor).  Banks were forced to make these loans or else face fines.

Then when this all blew up your side blames the degregulation that Democrat's put in place.  In 2003 the Republican's tried to fix some of this but were blocked by Democrats.


You can not tax yourselves into prosperity.  If that was true we would be living in a panacea by now.