Posted on 11/27/2008 6:48:26 PM PST by 2ndDivisionVet
Barack Obama and George W. Bush seem to have come away from their study of the Great Depression with similar conclusions:
To wit: After the Crash of 1929, the Federal Reserve did not move fast enough to save the banks and inject cash into the economy. Second, the New Deal, far from being wastrel deficit spending, was not bold enough. So it was that America wallowed in depression for a decade until the unbridled spending and mammoth deficits of World War II pulled us out.
Bush and Obama seem determined not to make the same mistake.
We are all Keynesians now.
Thus, we have the $700 billion Bush bank bailout, the $700 billion "stimulus package" Obama wants by inauguration to "jolt this economy back into shape" and the $800 billion fund Hank Paulson created to get consumers borrowing and buying again.
These come on top of Bush $455 billion deficit, the $29 billion bailout of Bear Stearns, the $105 billion in pork to grease the $700 billion bailout, the $100 billion to $200 billion to keep Fannie and Freddie afloat, the $140-billion-and-counting for AIG, the $25 billion for the greening of GM, Ford and Chrysler, the $25 billion more to save the Big Three and the $20 billion for CitiGroup.
Now much of this overlaps, and some will be retrieved. But we are still staring at a deficit that could approach $2 trillion.
How would this stack up historically?
A deficit of $1.4 trillion would be 10 percent of gross domestic product, dwarfing the postwar record 6 percent run by Ronald Reagan in the Jimmy Carter recession.
Bewailing the "Reagan deficits" has been a staple of Democratic oratory. This will stop. But the politics of this is not the point, the policy is.
Consider what we are about to do. Bush in 2008 spent 21 percent of GDP. States, counties and cities spent another 12 percent. Thus, one third of GDP is spent by government at all levels. Obama and Co. propose to raise that by another 10 percent of GDP. We may soon be north of 40 percent of gross domestic product controlled and spent by government.
That is Eurosocialism.
And where, exactly, are we going to get the money?
Americans save nothing. We spend more than we earn. Thus the levels of consumer debt, credit card debt, auto debt and mortgage debt. U.S. foreign-exchange reserves amount to a piddling $73 billion.
The only nation with the kind of cash on hand we need now -- if we don't print the money and invite another gigantic bubble -- is China, with its $2 trillion in foreign-exchange reserves.
Will Beijing lend back the dollars it has piled up by selling to us?
China certainly has an incentive to keep Americans spending. For our purchases of Chinese-made goods have often been responsible for 100 percent of China's growth. China does not want to kill the American goose that lays those golden eggs -- until the goose can't lay any more eggs. Then they won't need the goose.
But should China decide to lend us the money, what will Beijing demand in interest rates and assurances that we will not default. After all, the U.S. debt is 70 percent of GDP, our savings rate is near zero, and our merchandise trade deficit is still running at 5 percent to 6 percent of GDP.
Unlike the 1950s, we are today dependent on foreigners for two-thirds of our oil and for much of our manufactured goods -- toys, TVs, radios, cameras, cars, shoes, clothes, bikes, motorcycles -- and for the $700 billion to $800 billion we borrow each year to pay for these imports.
With U.S. homeowners, consumers, companies and banks now going bust, why must the nation borrow trillions more to bail them out? So we can maintain our status and standard of living as the last superpower.
Bush and Obama are competing to shovel out trillions of dollars, so we can return to the good times of yesterday.
But wasn't yesterday the root cause of today? Didn't saving nothing and spending more than we earn, purchasing what we cannot afford in cars, consumer goods and houses, buying far more from abroad than we sell abroad -- didn't that cause this crisis and crash?
A family man in America's condition, awash in debt, spending more than he makes, would cut back consumption, find a second job and get out of debt. Or declare bankruptcy, accept the shame and humiliation, change his wastrel ways and start anew.
Is it different for a nation?
Yet we seem to believe we can borrow and spend our way out of a swamp of unpayable debt into which borrowing and spending have plunged us.
We are headed either for default on our debts and bankruptcy as a nation, or something less honorable: a quiet cheapening of the debts we have incurred by inflating and destroying the dollar, robbing our creditors of what we owe them and robbing our own people of the value of what they have earned. And so it has come to this.
What would the Founding Fathers think of us now?
2. Again, no award for "FReeper Nit-Picker of the Year". I will cut to the chase, a house is an investment. Under normal circumstances, an individual puts a down payment and most of the time reaps a reward as the value of the house increases. In essence, it is a savings plan.
Buchanan like Rush, Ann, Laura, Sean, Mark, etc., etc., etc., has a product to sell, that would be himself (or herself). Unfortunately for him, Pat has become an MSM caricature of what a conservative looks like and sounds like. I'm surprised MSNBC doesn't force him to wear big, floppy shoes and a red nose in exchange for his face time.
The days of a 40 year employment with Widget Industries and a second-hand Buick (Excelsior!) are no more. I believe these times are making poor, ol' Pat's head hurt.
Good reply!
Really?! Would you say for most Americans it has? Because, get this, it takes far fewer hours of work to earn enough money to buy the things we need and also take far fewer hours of work performed to purchase those things that we want to have than it ever did in times passed. And, get this, there are things that are availible today that were not even dreamed of being produced than in times passed. Today, food preperation and housework take far less time than they do now -- and we're eating more, have bigger houses, and living longer, to boot. I'm highly skeptical that our standards of living have declined. Perhaps you can will shed some light on what you see to be decreases?
All this is is COMMON SENSE! Which is sorely lacking in this country. Our parents and grandparents knew you don’t spend what you don’t have and you don’t burden your kids with crushing debt. I don’t know why that is so hard to understand
In this particular case B (Godwin's law) does not apply when it comes to Buchannan unless he categorically rejects his past ramblings or moderates them in such matter that makes it improbable for people to accuse him of being a nazi sympathizer. As it stands it is currently a very difficult thing to do with regards to him. That very fact, makes giving validity to his positions even when he is right a difficult proposition.
Not here to defend Pat, but even he doesn't espouse that, unless you think "free" trade is the only type of trade.
FREE TRADE IS NOT FREE
Patrick J. Buchanan
Address to the Chicago Council on Foreign Relations
November 18, 1998
. . . I am called by many names. “Protectionist” is one of the nicer ones; but it is inexact. I am an economic nationalist. To me, the country comes before the economy; and the economy exists for the people. I believe in free markets, but I do not worship them. In the proper hierarchy of things, it is the market that must be harnessed to work for man - and not the other way around.
As for the Global Economy, like the unicorn, it is a mythical beast that exists only in the imagination. In the real world, there are only national economies — Japan’s that has lost its animal spirits, South Korea’s that is deep in recession, China’s which is headed for trouble, Brazil’s which is falling, Indonesia and Russia’s which are
in collapse.
In these unique national economies, critical decisions are based on what is best for the nation. Only in America do leaders sacrifice the interests of their own country on the altar of that golden calf, the Global Economy.
You must be young if you can’t remember. Even American culture has been dumbed down.
No one worships them. Some just have a higher amount of respect for free people to particpate in them [the freedom to transact with one another] than do others. Besides, the market is already harnessed to work for man. The fact that Buchanan does not see this fact reveals his bias for wanting there to be some kind of planner that steers us into decisions. See, Buchanan just cannot leave his own moral pronouncements out of it. By doing this, he shows a complete lack of faith and tolerance that people acting in their own self-interests just is not good enough; that many times people need a good nanny to watch over them.
As for the Global Economy, like the unicorn, it is a mythical beast that exists only in the imagination. In the real world, there are only national economies...
Really?! If this is true, than it surely is a myth that people transact with each other across political bounderies. if true, the so-called trade defict that he laments about nearly all of the time isn't real either; and neither is the amount of capital that flows back to the United States.
In these unique national economies, critical decisions are based on what is best for the nation.
As if having economic freedom is not what's best for the people who live within a nation. Perhaps Pat can tell us how -- using his logic -- what's best for the state is to lay claim over what would otherwise be your own property. I can just hear him now, "We're taking that! It's in the best interests of the state. It's in your best interests, too, if you could only see that the state has good intentions."
Only in America do leaders sacrifice the interests of their own country on the altar of that golden calf, the Global Economy.
Look who's worshipping now! I'd rather be accused of market 'worship' rather than worshipping the political leaders who make such sacrifices to us.
How can you take this guy seriously, Donna? Seriously, now!
free trade should be free but buchanan will make it worse.
I’m 39. I cannot see the decrease in standard of living. Perhaps you will privide some data. Maybe some anecdotes if you’d like to share those instead. I see some moral decay but that has more to do with reliance on the state and an erosion of freedoms.
It goes deeper than the national debt or the crass materialism and consumerism that the upper half may think they are enjoying now. (pm)
April 12, 2004 Issue
The American Conservative
Suicide by Free Trade
By Patrick J. Buchanan
...If the GOP persists in this free-trade fanaticism, it is courting suicide. For the policy is not working in the eyes of the people. And if Republicans insist the returns from global free trade—a disintegrating dollar and a merchandise trade deficit of $550 billion a year and rising—are good for America, folks are going to conclude that Republicans are too out of it to govern.
Given that the GOP today controls both Houses of Congress and the White House, this may sound alarmist. Yet GOP dominance today does not approach what it was in the 1920s under Harding, Coolidge, and Hoover, before the wipeout.
If the GOP does not offer ideas to halt the de-industrialization of America and the hemorrhaging of blue- and white-collar jobs, it is going to wind up on a landfill.
The problem with the columnists and think-tank scribblers who make up the intelligentsia of the GOP is not that they believe in free markets but that they worship them. They believe that if NAFTA, GATT, the WTO, and MFN for China mean production goes overseas, the market is telling us where production ought to be. And the voice of the market is to be obeyed, because that is the voice of their god.
When Reagan, a devout free trader, saw the U.S. auto industry sinking, he did not let ideology interfere with a rescue. He imposed quotas on imported Japanese cars and saved Detroit, though he was denounced for apostasy and heresy.
Free-trade Republicans are like militant Christian Scientists who prefer to let patients die rather than call in a doctor—which is fine, as long as you’re not the patient. (snip)
http://www.amconmag.com/article/2004/apr/12/00007/
Standard of living or quality of life? We have electronic gadgets now but those are at risk in this new world order.
Around the time you were born, half of the population did not need to work: Women stayed home and raised non-fat non-drugged kids. Gangs didn’t exist. Women ran the local public schools, local charities, and kept the neighborhoods safe so kids could play outside after dark. People didn’t even lock their doors as night. Hospitals were not for profit and doctors made housecalls. Teenagers did not get pregnant and go on welfare and the federal government never touched the lives of the citizens of each state - except for the dreaded IRS. America didn’t have the guilty stain of 60 million aborted babies. Banks didn’t know anyone’s social security number. Everyone knew that life wasn’t about materialism. You won’t believe it, but “Leave It To Beaver” was pretty much a reflection of the times.
That's why.
On MSNBC Patrick J. Buchanan said US must raise tariffs on foreign parts to Japanese plants in USA that employ Americans productively. So he wants to punish American workers at those plants, but worse he is so STUPID he doesn’t realize GM uses foreign parts too, so kill their remaining jobs too. I dont want to go back to days of Ford Pinto where workers would go on strike for 6 months, no parts for 6 months.
So, who does Pat think is buying the foreign goods. And who the hell is Pat to think that some policy is leading us to demand goods made in foreign contries. This shows Pat's utter stupidity on the subject, in my opinion. Pat has always thought like a central-planning asshat; not much difference between him and the other central-planners.
Really? It proves his point. We're now too scared to be sovereign America because we have disregarded national security for "free trade" and become dependent on the whims of foreign nations. We're in a bind now - one that Buchanan predicted.
You don’t remember the “Buy American” attempts during the 1970’s and 1980’s. This started when Made in China meant Made in Taiwan.
The multinationals bought off the politicians and the American people lost all their blue collar jobs.
We don’t want toys and pet food from China but the government doesn’t want the items labeled so we can avoid them.
When the government decides what is “free trade” and makes treaties and agreements with the force of law, how is that freedom for the American people?
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