What is Digg?153 Comments
- deckard1, on 01/11/2009, -10/+54Replace "could worsen without heavy government spending" with "will worsen because of heavy government spending" and you'll have an accurate sentence.
- hugolp, on 01/11/2009, -7/+46Depression. Call it by its name. Its not a recession, its a depression.
And goverment spending will allways make it worst. You can not spend your way out of a depression. You have to work and produce. - winterus, on 01/11/2009, -7/+25If you're bankrupt because of overspending, more spending is rarely a good solution. This truth applies on both countries and individuals. The only solution is to start saving and living within your means.
"Economists" (not all though, just mainsream statists) look at the Great Depression and note that the economy was getting better at the same time as FDR introduced his New Deal. What they fail to see is that the economy was getting better even before FDR started spending, so it would have happened anyway, because of the 3 year "medicine" that was the Great Depression, where people were forced to save money.
Our policy is now based on the classic "correlation = causation" fallacy and we'll probably have a Japan-style 15 year period without real growth, instead of a quick remedy. - jasonalangraves, on 01/11/2009, -2/+19Ladies and gentlemen, save as much money as you can. Pay off all of your existing debt! Help and be human to your fellow neighbor because we will all need to pull together to get through this catastrophe. I posted this comment 3 times before, so I will recycle it for the time being. Because I posted this comment before, I don't expect anybody to digg it. I'm not looking for diggs, I just want people to realize what is happening. To be fair, I'm not an economist, accountant, banker, etc.
If you are one of the people that took out a mortgage you knew you couldn't afford, or didn't understand the principle of the adjustable rate mortgage, you deserve to lose your house. There is not, and has never been any shame in renting an affordable apartment. If you can't afford a mortgage, you rent, and while you are renting, you SAVE until you have 20% as down payment for a home you like, plus 12X your monthly income and expenses.
If you are a banker who approved a loan for somebody your existing risk models told you they couldn't afford, you deserve to lose your job.
This recession won't be pretty. And actually, it's not going to be a recession for much longer, but rather a depression. People are up to their eyeballs in debt, much or most of it built up, along with this phony decade of prosperity, because of that debt.
A decade of prosperity based, by and large on debt, consumer and government, and not real production and saving, will take at least a decade to unwind. Unfortunately, now that the government is committing so much money to solve this problem, and thus to try to re-inflate the economy, with yet more debt, the problem only grows far worse.
The problem is that over the last 10 years more actually, people were buying so much *****, and with money that wasn't earned, but rather taken from home equity, or credit cards, etc., that the economy grew, thrived on all of this debt and credit money that really didn't exist at all. Enter 2007, mortgage rates rise or reset, and instantaneously, a huge chunk of the population "discovered" they could no longer afford their payments. The decompression begins. This deflationary spiral is necessary. The free market simply needs to reset itself, and the only way for the free market to find the balance where it should be at, is to let it work it's course, without government intervention. All of these banks that got bailouts should have failed. The free market was screaming loud and clear that it needed to purge all of the mal-investment of the past decade.
Lack of credit is exactly what NEEDS to happen. People need to save, and pay off all all of their debts they created during the boom. The government shouldn't be cutting interest rates, they should be increasing them to encourage people to save their money and not spend it like a kid in a candyshop. Stating that though, I do think government, at this point, should directly refinance all of these mortgages, and with zero or minuscule interest because there can be no winners when so many people face the prospect of losing their home. Direct government refinancing also recapitalizes banks because they will at least get back the principal plus some of that interest.
Ultimately, real regulation is what is needed. I take the contrarian bear view in that I believe more regulation is needed. More effective regulation is needed, but on the front end to prevent these bubbles from growing in the first place. Intervene to prevent these bubbles, but let the free market work when they pop. Sound monetary and industrial policy is an absolute necessity. Fair trade, not only free trade, because there is not a modern industrialized country in the world that can compete against slave wages.
Letting these banks fail would have been painful for all of us, extremely painful, but, far less painful than what is to come. We have not seen ***** yet. The worst is yet to come, and it will be far, far worse than the stories you heard from your Grandfather and Great Grandfather about the depression.
Unemployment is hitting 25%, at least, sometime between now and June of 2010. If we are lucky, unemployment will not jump close to 40%. Lucky because let's hope when unemployment hit's 25%, the government will realize it just needs to let the free market take it's course and not exacerbate the problem by creating more debt. It's debt which inflated the economy up into this giant unsustainable monster to begin with, and it's this financial crisis, aka, the free market, telling us that the economy was not based upon sound money, but debt. Though the Dollar is paradoxically, debt, it doesn't mean that the economy can thrive based upon it.
I doubt that the government will even be able to raise another 800 billion to 1 trillion Dollars. Who is going to monetize it? Countries around the world are all, at the same moment, trying to raise capital by selling bonds. At some point, there will not be any buyers with extra cash left to buy all of this government debt. The Chinese most likely are not going to do it anymore. They have their own economic problems now. The Japanese, maybe, but they are in the same boat as us. It leaves Russia and Saudi Arabia. The Russian's are chomping at the bit for us to collapse, and the Saudi's are too busy buying up cars made of solid gold, they could care less.
So don't go start giving each other hand-jobs just yet, if that stimulus cash can't be monetized in some way or another, it isn't going to come. Secondly, even if the federal reserve / treasury manage to come up with an extra trillion in such a short period of time, expect that you'll be pay $100 for a loaf of bread, because hyperinflation is coming, and it's coming with a vengeance.
Buy gold, buy silver, buy platinum, to protect against inflation, and maybe actually, buy guns and ammo. This ***** could get straight medievil in a big ***** way.
Clearly, there is no question great sums of money have been created / spent by the treasury / federal reserve, and that amount is already at least 1 trillion, and at least another trillion or so will soon be headed out the door.
While I have no doubt this will stimulate the economy, it will be short lived, and after this money is gone, yet another stimulus will be needed, and on into perpetuity, until eventually, 1 Mexican Peso or 1 Indian Rupee will buy 10 US Dollars. So there is absolutely no doubt we will see hyperinflation, it's just a question of it's magnitude, and if the folks we sent to represent us in government realize they were wrong, and finally just let the free market work.
As I said before, I'm not an economist, but practically speaking, I look at the economy from a biological perspective, of course adulterated with some knowledge I have acquired in life, prime being managing my money well, managing my stock portfolio to grow even when the DOW has been falling, etc; my point is, in a very, very simplistic, uncomplicated example.
I can grow bacteria in a petri dish. They will thrive, up until the point when these bacteria consume all the nutrients contained in the growth media of that dish. Soon, what where once large colonies of bacteria decrease in size. Equilibrium is reached, whereby the number of bacteria equals the amount of nutrients to sustain whatever number survives. BUT, if I add "sugar" or some nutrient back into that dish, the colonies grow once again. Ultimately, that growth is unsustainable; being based on an entirely artificial situation, me adding stimulus. I can keep "feeding" these bacteria, but it doesn't change the ultimate unsustainability of their growth. A number of things can happen. I could run out of sugar, or I could work someplace else. The bacteria could decide they don't like or accept the food I give them anymore. The point is, the bacteria, that system, is perfectly capable of finding it's zone of sustainability. The bacteria do the job and or jobs they need to do to survive. When times are tough, they cut back on their metabolism, for example. They don't "breed", so to speak, as they once did. They migrate towards the available opportunities in that dish, that is, moving toward the source of food, light, chemical stimulus, whatever it is that they need.
I view the economy, by and large, as a system, with a great number of parallels in nature. I know not if you believe in natural selection so please forgive me, I am not trying to insult you in any way; but, exists also this idea of social selection, or maybe a better term, socio-economic selection, and the modus operandi is, miraculously, exactly the same. A man-made social system perfectly, yet unintendedly mimicking a biological system. - anonymiau, on 01/11/2009, -4/+21So are these the same economists who a year ago laughed at Peter Schiff at every major TV-channel for predicting economic downfall? And now that they all finally realized that Americans have reached their spending limits, where do they propose the government takes their money from? More debt to China? More printing and devaluing of the dollar? Booty from Iraq?
- thecatcantalk, on 01/11/2009, -10/+24I blame those damned hippies who've controlled the White House and Congress for the past eight years.
Those dang liberals have been building free schools, hospitals, roads, dams and reservoirs all over Iraq, while American bridges tumble into rivers, killing commuters, and our schools can't even afford textbooks. It's the damn hippies, I tell you. And those left-wing pinko freaks at General Motors, Ford and Chrysler destroying hundreds of thousands of jobs by moving their factories to Third World countries.
/s - mrASSMAN, on 01/11/2009, -0/+14The good news just keeps on coming.
And holy ***** the guy above me just published a novel on digg. - ShindeKudasai, on 01/11/2009, -3/+16"Infrastructure programs" is just a euphemism for pork and don't create jobs. As soon as the pork project is complete the job disappears and we're back where we started. No government has even been able to spend itself out of an economic crisis. If it's serious about getting out of this mess, rather than mortgage my great-grandkids' futures, the government should quit spending money we don't have and lower taxes to encourage saving and investment.
- painted82, on 01/11/2009, -3/+15You guys are all idiots if you think government needs to spend even more money. That's pretty much the complete opposite of what government should do.
- hugolp, on 01/11/2009, -1/+13And when the bailout or stimulus money ends, those people go again unemployed and the debt is a lot bigger what?
Why are politicians just trying to patch it like if this depression came randomly out of nowhere and nobody acknoleges that the economic system is flawed? - hugolp, on 01/11/2009, -2/+14Depression has been defined as different things:
- When GDP goes 10% down.
- Like 5 continuos quarters with a loss of GDP.
- Like 7 continuos quarters with a loss of GDP.
Choose the one you want, but besides how you want to define things, what is coming is way worst than anything the US has seen since 1929 and probably bigger, cause the US is now not a big producer but just a consumer.
PS: Last time I check 22 banks had gone bankrupt in USA during the last year. And if you calculate unemployment the way it was calculated back in 1929 the present unemployment its arround 16% (theres a digg about this in upcoming). - sheeplescareme, on 01/11/2009, -2/+13same keynesian hacks whose ideas have led us into this mess are the ones who are calling for more government spending and stimulus packages. the politicians are listening to them and not the ones who called this mess because their ideas benefit the big corporations who bankroll them.
- zeblith, on 01/11/2009, -1/+12A depression is when everybody's losing jobs.
A recession is when everybody's losing jobs, except you. - phreak79, on 01/10/2009, -6/+16I can't see how big government spending is ever going to happen. Infrastructure projects are noble enough but these usually take years to get going due to the red tape and planning procedures in place. So the worthwhile projects probably won't see a bean leaving the government to waste money on 'roads to nowhere' just to spend some cash somehow and somewhere.
- sheeplescareme, on 01/11/2009, -0/+9the policy is not caplitalism.
- hagbard72, on 01/11/2009, -1/+10There are no surprises in any of this for followers of Austrian economics. Its also pretty easy to see where all this "stimulus" is heading.
- BassMastr, on 01/11/2009, -3/+11Shovel ready programs will get first priority. There are tons of them ready to go out there. You are correct that some very worth while projects won't get the money they deserve and there will be some pork. Although we are foolish to think that they have our infrasturcture in mind rather than creating jobs.
- pinchduck, on 01/11/2009, -0/+8China is already lessening their purchases of our U.S. debut. Who will fund the binge? If the government raises income taxes to support their spending, the result will be to strangle the economy. We are in a pretty bad catch-22 here. I'm afraid that President Obama will have to be more clever than "borrow & spend".
- whorunbartertwn, on 01/11/2009, -7/+14Pointing at one cause for the recession is surely an exercise in oversimplification of a complex event, but inflation economics isn't at the top of the list.
Then again the anti-Fed/gold types tend to have their conclusion on anything macroecon in set in advance and will see patterns proving their mantra no matter what, so I'm likely typing to a brick wall here. - inactive, on 01/11/2009, -5/+12Yes, Its not a recession, its a depression.
- ABEL3616, on 01/11/2009, -0/+7How do you produce, without spending? (mentioned in post above)
- BESTenemy, on 01/11/2009, -0/+7Correct. The government is one entity that produces nothing. It cannot create jobs. It can allocate jobs by taking money out of the efficient areas of the economy - from those that generate real profit that could be taxed, to those that are unprofitable. As the government does not normally know how to run a business most efficiently, it ends up punishing the sustainable in order to revive the unsustainable for a short duration. The government does not produce, but it does spend. In order for it to spend $100 it has to collect $130 to cover the administration fees, further decreasing the resulting economic output of the undertaking. Government sector is the last place you want to see the job growth. Those are the only jobs that have been growing in the last year. Every other sector shed jobs.
The government relies on borrowing and taxing to get money. With the decrease in economic activity and the housing market deflation, they've been losing 2 of their major sources of revenue - income tax and land tax. The unemployed don't buy houses, they loose houses. They also quit paying the income tax and essentially default on the rest of their obligations. Being unable to tax, the government borrows from the 3rd world and from the issuers of currency - the FED and the Treasury. The interest generated on the loans eventually eats up all of the positive economic activity in the country.
It was the excessive spending that got us into this mess. More excessive spending cannot be the solution. Unfortunately the government can only spend, and can spend nothing that it either hasn't extorted out of the working class or borrowed to pay for through inflation. - painted82, on 01/11/2009, -2/+8Wow, reading all these comments, I'm so happy that there are so many Austrian free marketers here on digg. I thought digg was all obamabots? Maybe the tide is turning. :P
- flair1, on 01/11/2009, -0/+6Once Obama becomes President the media will start to change its tune and try to say the economy is picking up. Hopefully it works.
- inactive, on 01/11/2009, -2/+8It took people how long before they would admit to recession? You're doing the same thing now. Maybe if we admit that we are in a depression, we can pull out of it that much sooner?
- THETEH, on 01/11/2009, -0/+6GalacticXenu: The wartime spending in WWII went to manufacturing HERE in America. It employed people. It employed a lot of people. It was also funded by tax increases on the wealthy rather than irresponsible and excessive borrowing of funds from overseas.
Hugolp: yeah, good point. Evaporating was probably the wrong word to use there. The money certainly doesn't end up where it should end up, anyway. - scamper22, on 01/11/2009, -1/+7And where we these vast majority of economists during 2002-2007 to tell us of the upcoming doom in 2008?
Indeed, let us trust the very people who couldn't predict the current crises. Indeed, let us trust the people who got it all wrong before. Let us trust the very people who caused much of the problems.
Meanwhile, a lot of regular people and some economists that the majority of economists would call quacks, were warning of this problem for a long time. But let's not trust the people who got it right. Let us trust the people who got it wrong!
It's not a matter of trusting an MBA or a PHD, it's a matter of trusting the right one. Yes, the ones that got it wrong could have learned a thing or two. - sheeplescareme, on 01/11/2009, -0/+6if you're asking me, i would say that i am basing that on study and career. to say that the vast majority of economists agree is untrue. many are against the idea that spending now will do anything to help the economy, particularly in the long term. what might be seen is a quick burst of consumerism, which provides only a momentary illusion of economic prosperity. one need only to look at stimulus programmes of the past to see how ineffective they were (the small ones of the bush administration or the larger ones of fdr and the new deal) for the average individual. they are quite good for large corporations and private banks who profit from subsidies and government intervention, though.
- inactive, on 01/11/2009, -0/+6It will last 10 years. the lost decade of America. and its youth.
- BotchaMcCoola, on 01/11/2009, -0/+6I am inclined to agree with your early point. I have a house mortage down to less than $50,000. I was going to buy a CD but it appears smarter to me to pay off the 5% mortgage than to get a CD at low interst rates. Something still doesn't add up. If there really is a credit crunch why is no bank offering me a good interest rate for savings?
- BESTenemy, on 01/11/2009, -1/+6It's called living within one's means. It's not producing without spending, but spending less than producing. The difference is called "saving". Investment in a capitalist society should come out of savings, not debt. Else the whole system eventually tears itself apart.
- Achaean, on 01/11/2009, -0/+5This is probably the only instance I'll ever read/hear of an economic situation being analogous to a blown-up condom...
- Midtowner, on 01/11/2009, -0/+5buutbutbubtut
Iraq is a sound investment!!! Theys gonna repay us with oil revenues! Bush said so, it must be true! - sheeplescareme, on 01/11/2009, -4/+9i wanted to digg you up twice but it wouldn't let me. i clicked the green thumb really hard though!
- hugolp, on 01/11/2009, -0/+5"This sort of spending in which money simply "evaporates" "
Ask Halliburton and the rest if the Irak money just evaporated. The corporation that grows arround a big goverment are a disgrace. - BESTenemy, on 01/11/2009, -0/+5 The reason banks had not been letting the easy money to trickle through to you - the borrower is because they've had their deflation-related problems to worry about first. Banks held houses as "assets" in order to fulfill the reserve requirement quotas to whatever regulatory commissions they were dealing with. Let's say, the requirement was 10:1, so they've had to have 1 dollar on hand for every 9 lent out. The money on hand were not just cash, but also "liquid assets" - or something that was treated as an equivalent of cash, for its ability to be sold off quickly.
All of the sudden, the housing prices had started to decline and the level of housing liquidity came under fire. It is no longer easy to sell a house and it's not worth anywhere near the peak 2007 level. So, now the bank, without having lifted a finger, finds itself in violation of the regulatory requirement. It tries to hide the depreciated assets, and at the same time borrows desperately to fix the situation.
It doesn't want to pass the rates onto you, because it's in survival mode. It doesn't want any more liabilities. All it cares about is restoration of its real balance. - SamSks, on 01/11/2009, -0/+5We're in two wars, 4 including the War on Drugs and War on Terror. Weren't we told by some folks in 2002 (during the last recession), right before the Iraq invasion, that wars were good for the economy? I remember folks telling me that.
I hope a bunch of you folks rub it in their faces. Maybe even say, "What we need now is another war!" in the most satirical way you can. - jasonalangraves, on 01/11/2009, -0/+5mrASSMAN, I dugg your comment, but we, and when I say we, I mean Americans, are in an extremely precarious situation. This financial crisis isn't a consequence of the mortgage bubble, it's a consequence of reckless borrowing. It's wasn't a mortgage bubble, but rather a debt bubble.
We can keep blowing air into that condom balloon stuffed over our heads like some cheap party trick, but you can inflate it only so much, because either the force required to blow more air into that balloon becomes too great, or, that condom balloon pops.
That condom is our countries economy, and the guys blowing into it are the federal reserve, the treasury, and most importantly, I would like to point out that that condom was made in China.
We face two problems. The amount of air we can keep huffing and puffing into that condom balloon isn't strong enough to keep inflating it, that is, the rest of the world is not dumb enough to keep lending us money they know we will never repay. Secondly, that last heave of air into that condom balloon will just end up breaching the integrity of its latex wall, which means the rest of the world, all of those entities who have been piling up massive reserves of US Debt and US currency, will see that condom is about to break, and they will pull out en mass, lest they be impregnated by this catastrophic monetary policy we have been engaged on for the last several decades.
And nobody wants to be the last guy without a chair when the music stops. The bond market is already crumbling. The US currency, now artificially elevated in value, will fall through the floor. Gold, silver and platinum prices are going through the roof. - jasonalangraves, on 01/11/2009, -0/+5DiggMeUpPlz, I dugg your comment, and, this isn't a recession, it's a depression.
Buying gold, silver, platinum is saving money in the sense that it's protecting you against inflation. What 1 Dollar will buy you today, by the time the government winds down it's printing presses, you will need 10 Dollars to buy the same thing.
Buying gold isn't spending money, and when I say gold, I mean bullion, it's transferring the buying power of your money now, from one vehicle which will lose value, purchasing power, etc., into a vehicle that will maintain that value. It is not that gold increases in price, but rather, currency decreases in value. A ounce of gold now, will buy you a nice suit, shoes, belt. A ounce of gold a thousand years ago would have bought you the equivalent thing. 30 years ago, 800 Dollars would have bought you a wardrobe of clothes. Now, it can barely buy you a nice suit. The Dollar has decreased in purchasing power quite dramatically in a very short period of time. It is my belief that in the near future, the Dollar will fall straight through the floor. We'll see a loss of the purchasing power of the Dollar equivalent to it's loss in value over the last several decades, except we'll see that continued loss of value in an instant.
I'm not calling for folks to go out and slaughter their neighbors, to take their guns and go on a looting spree, just the opposite. The guns and ammo remark was mainly for effect, to emphasize the fact that we are in paradise now compared to the world of ***** we will be in soon. To point out that this ***** will get so ugly, we really and truly, more than ever before, must rely on each other to pull through. - pgoetz, on 01/11/2009, -0/+4"The main problem of the US economy is that the goverment doesnt stop growing and keeps squeezing the producing part of the economy and is going to kill it."
That's a terribly naive view of what is going on here. The biggest problem, the one that no one wants to talk about, is that the American standard of living is much, much higher than 60%+ of the world's population. This means that goods and services can be produced more cheaply elsewhere, so production/services have steadily been moving to these places, both taking cash out of the economy indirectly through lost jobs and directly through increased imports. The reason no one wants to talk about this is that there are no real solutions: it's impossible currently to raise the world's standard of living up to ours, and no one wants to talk about belt tightening or making sacrifices. The current fiscal crisis is the direct result of trying to manufacture a robust economy by artificial means; in this case borrowing unrealistic sums of money to purchase homes the buyers couldn't afford. Without this artificial stimulus, the economy would never have recovered from 2000! - edstate, on 01/11/2009, -2/+6Righto. What's getting confused here is most economists belief that the Government should only run a budget DEFICIT during a severe economic downturn.... That's very different than the twisted logic of "Government spending will get us out of this!" That is a fallacy from the New Deal, and has been debunked several times over. But unfortunately, not enough.
- akhomestead, on 01/12/2009, -0/+4They never know what it is until they look back at the numbers. We'd been in a recssion for the last year but the numbers didn't show it until about a month ago. We're in a depression now, but the numbers for that won't show up until next year. You also have to realize they've changed the way the numbers are made. 6% unemployment now would have been about 15% 30 years ago.
Oh and onestrawplz, go to the beach, dig a hole and stick your head in it. Your there mentally now so you might as well have your body in the same place - mrASSMAN, on 01/11/2009, -0/+4I enjoy your colorful metaphors really breaks down the situation so that I can understand the complexities of the problem.
fap fap fap - jasonalangraves, on 01/11/2009, -0/+4Because the central bank has cut rates to, for all intense purposes, to zero. The idea behind this is to push money into the economy, out of savings, out of holding vehicles, and into circulation. To get financial institutions to exchange money with each other.
You have to remember that a number of the largest banks, all of the largest banks are being capitalized by the government from these bailouts via preferred securities, via guaranteed bonds, via common stock inflation, via government purchase of these mortgage backed securities, etc. The government has to buy this ***** because nobody is dumb enough to buy it, especially foreigners.
CD rates were not horrible back in January, February, even May and June. What we saw was a slight increase in CD rates. Banks, at that time, were under a great deal of strain. They were scrambling to pile up money, and the rates on CDs were ok. But now, there is an ever better source of money for banks, and it's Uncle Sam. It's cheaper to get money from Uncle Sam than from consumers. Consumers have expectations, the government doesn't.
As far as poor interest rates for savings. I am absolutely disgusted with the pitiful interest rates found in every bank savings account. It's disgusting. And I think it is a prime reason people are not saving money. It simply does not earn anything sitting in the bank. In fact, it loses value sitting in the bank at such low interest rates. Back in 1999, you could find CD rates at 6, 7, and 8%.
I think it ought to be a crime for a bank to offer such low interest rates on savings accounts. Interest rates ought to be set by law to equal 2x inflation, minimum.
CD's, bonds, etc. are very bad investments now, in my humble opinion of course. Actually, you would be wise to, at least take some due diligence and consider changing any excess money, that is money you don't require in the near future, into some other currency, like Swiss Francs, or Euros etc. I do believe that the Swiss government has at least a tad more sound monetary policy that we have in the US.
I expect that the US Dollar will drop by at least 50% in value vs. the Euro or even the Swiss Franc. By putting money into another currency, at least you would be able to bring it back once the Dollar hits bottom. If the US Dollar declines by 50% in value, you would have effectively doubled whatever amount it was.
Or, you could invest in stock. It's not too terribly difficult to get 2.5 to 5% monthly return trading stocks, that is, day trading. 2.5% return on investment per month would be equivalent to a 30% savings account interest rate. I think that Scottrade is an exceptionally good broker. But of course, it's incredibly risky! Now, I'm trying to guage the best time to move all of my Dollars into Euros or Swiss Francs, soon to be sure, within the next 2 months. - akhomestead, on 01/11/2009, -0/+4pay off secured debt, car, house, etc. but credit card or unsecure debt, *****'m walk away. It's not like credit will be avialable anyway, why have your family suffer, it's about CYA, and personally ***** the banks, they created that money out of nothing, and they created this problem we're in. .
- jasonalangraves, on 01/11/2009, -0/+4dshPls, that is a sentiment I can agree with. Though I do suspect there will be another 25% discount soon.
Not all stocks are good though, even at 75% off. There will certainly be a number of components of the S&P, the DOW, Russell, which will not survive to the end of this year. - jbella, on 01/11/2009, -0/+4@hugolp
"Spending doesn't solve a crisis. Producing saves a economy"
Producing to what end? Who is going to produce anything if no one is spending? Production is the result of spending and vice versa.
And lets not forget that economics is not a hard science but involves psychology as much as anything else. Maybe the hard numbers wont translate into instant economic recovery, but the perception that the problem is being attacked decisively will surely help allay fears and loosen up capital. - jasonalangraves, on 01/11/2009, -0/+4In an economic meltdown of this magnitude, you could use guns for a variety of things, all depending upon your situation.
Protecting your family, friends, neighborhood from looters.
Hunting for food, because if this get's out of control, grocery store bought food could be in short supply, and if it's not, it will be so ***** expensive, because of inflation, that hunting your own food would be cheaper. But of course, government price controls will most likely kick in, making this less likely, but of course making the situation even worse.
I don't want to suggest it, but, another use for the gun would be.....well, you have seem what some of these guys who lost everything because of Bernie Madoff ended up doing. But this is the worst possible thing to do, and not why I suggest guns and ammo. The guns and ammo remark was more for effect than anything else.
Regarding home defense, I tend to think shotguns are highly effective. But for DEFENSE! - hugolp, on 01/11/2009, -3/+7You want your example? The Great Depression.
" getting people back to work and putting money in their pockets does work to soften and shorten a recession "
No it does not. If it did then the goverment could get half the unemployed and put them to digg wholes in the sand, and the other half to cover those wholes. People working and money in their pockets = out of the depression! Where can I get my Nobel? The fact is that only producing gets a country out of a depression, not spending by the sake of it. This is basic economics.
"The government is just about the only entity that has any money to invest right now."
No it does not. The goverment is broke and in debt. What you are proposing will only get it more in debt and will revive the consumer driven economy that has produced the depression. USA needs to stop consuming and start producing, and trying to revive the consumer economy and its bubles by printing money will only make the problems bigger. -
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