Stimulus will lead to 'disaster,' Republican warns (Rats and 3 RINOs, you've been warned)

cnn ^ | 2/8/2009 | cnn

[tobyhill]

Leading Republicans warned Sunday that the Obama administration's $800 billion-plus economic stimulus effort will lead to what one called a "financial disaster."

"Everybody on the street in America understands that," said Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee. "This is not the right road to go. We'll pay dearly."

Shelby, of Alabama, told CNN's "State of the Union" that the package and efforts to shore up the struggling banking system will put the United States on "a road to financial disaster."

But Lawrence Summers, the head of the administration's National Economic Council, said Republicans have lost their credibility on the issue.

[BobL]

Agree with Summers...the Republicans have lost their credibility on the issue.

I guess the Democrats now want to join them (and wreck the country at the same time)...

[tobyhill]

Yep. They're doing the same bailouts and same stimulus that has been tried many times through our history to stave off a recession, and in at least one case a depression, yet none has ever worked. The only cure to a free market system is a free market.

[ex-snook]

Monday morning quarterbacking. If the GOP had come up with a better way, the economy would be great and McCain would have been elected.

[tobyhill]

I think they have now, even though too late, NO Porkulus.

[kittykat77]

It's impossible to be "on a road to financial disaster" when you're already in one. I keep waffling about what and how much the federal government should do. I also worry that European and Asian countries, whose citizens don't object to government financial tinkering, will stabilize first and there will be massive capital flows to those countries. Then I think that, if the US is still wobbly, those countries' recoveries will be tenatative.

Basically, I just don't know.

[tobyhill]

I'm not waffling, the Government put us in this mess and now they should get the hell out of it so the free market can cure it.

[paulycy]

Basically, I just don't know.

At least you're more honest than most of the politicians out there.

A big part of my thinking on this is that THIS generation should feel whatever pain is associated with our financial sins, and not that of my kids or grandkids.

The market will adjust. Killing this stimulus bill is better than passing it.

[dr_who]

Summers probably deserves most of the credit for this garbage. Another story suggested that there's a turf war between him and Volcker.

[zek157]

kittykat, what they shouldn't do is waste the nation and worlds remaining limited supply of capital. The rest of the world is not going to stabilize without us. They are in worse shape than we are and will continue so without exports. The bad thing is once this farce is done we will still have to go through a depression. There's no getting off that road. The government cannot spend us off on a detour. It's like a family spending itself into debt on furniture instead of education. While the furniture is nice it isn't going to do anything to increase future income (GDP). Fact is this course of action actually ensures decreased future income (GDP) because of the interest payments.

[Fee]

Our economy (GDP) is 13 trillion. Wall Street using leveraging and other debt shenanigans in the last 20 years produced a financial weapon of mass desstruction. The banks and insurance companies lost over 7 trillion. It forced the feds and GWB to abandon free market and intervene otherwise all our top banks and insurance companies would close causing social and economic chaos that can lead to riots, food shortages and etc. The infusion of money is used to buy time so a way can be found to write down these bank losses slowly without triggering chaos. Unfortunately no matter who won the election in 2008, that POTUS is basicly screwed (pardon my French) because the losses created by Wall Street is too great for even the feds to cover. Residential mortgages caused 7 trillion in damage, commercial real estate is next as malls, office buildings and hotels are losing tenants and business. Most of the developers and owners have 5 year balloon mortgages coming due in mid 2009. Without rent, it would be hard for these developers/owners to get refinance thus they will be the next shoe to fall in 2009 socking the banks with commercial real estate mortgage defaults. Finally the rising unemployment is causing many people to default on credit cards, college loans and etc. Following the commercial real estate collapse will be personal debt/credit card defaults. Our banks will essentially be swamped with additional losses on top of the ones covered by the feds. Where is the feds going to get the money. Keep an eye on the Treasury auctions, because if foreign countries do not buy our notes for future expenditures and interest payments on our debt, our government will become insolvent and our country and the world will financially collapse. Let us say if by chance we survive and able to cover all these losses, the amount of US dollars circulating in the system will devalue our buying power. In other words inflation or hyper inflation will destroy our buying power form our paychecks and worst for older people, the buying power of their fixed income pensions. Either way, the American people will suffer a degrradation in their standard of living and hopefully our society can survive the stresses that will come in the future. The numbers and stats are available for all to see.

[ProtectOurFreedom]

"There aren't going to be any boondoggles. This money will be spent correctly, by the book, with no shortcuts"

-- Transportation Secretary Ray LaHood

Stop It, LaHood. My sides are killing me and I'm gasping for air. When are the magical unicorns and tooth fairies coming?

[PAR]

You are apparently unfamiliar with Fannie Mae and Freddie Mac.

[drypowder]

Stimulus will lead to 'disaster

That's their plan, even a moron can see that. 75% of the people of this country now appose this so called Stimulus. We make our voices heard to those in DC but to no avail. What's next?

[Go Gordon]

If the GOP had come up with a better way, the economy would be great and McCain would have been elected.

What an assinine comment. All capitalist economies go through recessions - its the nature of the beast ussually occuring once every decade. Managing the recession can soften the blow, like the one earlier this decade when Bush got most of his tax cuts implemented.

This recession is being negatively affected by the forced credit/lending practices foisted upon banks by the Democrats and the Community Reinvestment Act + the Fannie and Freddie debacle. These issues were brought to the forefront by reblicans, including McCain, but the democrats, especially Frank and Dodd, stonewalled.

Now the democrats are over-hyping the problem in order to get their hands on a trillion doolars of pork to enrich themselves. It really is that simple.

[Phillipian]

This shows how far we’ve come. Lahood was a republican. Shelby was a democrat. Up is down and down is up.

[KeyLargo]

Your government at work:

[Windcatcher]

The most useless, know-nothing, moronic people that I have to deal with are the government employees (thankfully, it’s only once in a blue moon). It’s painfully obvious to all of us at work that they are merely welfare recipients with better PR.

[Fred]

credibility?

A worthless comment. Is this what Summers considers a defense for why Americans should sign on to this massive pork barrel spending bill???

There is no virtue on 'spending' for either party. In fact all the excess spending by congress for the last 4 years is one of the main reasons why our economy is in the tank.

So the solution now according to the likes of Summers is, hey, we have done tons of spending over the last 4 years and it did not work, ok, so lets do MORE!!!! How credible is that??