Congress has lost its mind...

Originally Posted by toranokaze

The reliance upon a pure fiat currency is one of the signs of the fall of a nation.

Back to the gold standard?

[Griff]

More good thinking about our current climate from David Brooks. As long as we punish hard work in this country our culture will continue its decline.


In a few years’ time, Ben is going to be disappointed again. He’s going to find that the outsiders he sent to Washington just screamed at each other at ever higher decibels. He’s going to find that he and voters like him unwittingly created a political culture in which compromise is impermissible, in which institutions are decimated by lone-wolf narcissists who have no interest in or talent for crafting legislation. Nothing will get done.

[Spexxvet]

Originally Posted by Griff

... Nothing will get done. [/i]

That's exactly what some people want..... until they need something to get done.

Originally Posted by Griff

More good thinking about our current climate from David Brooks. As long as we punish hard work in this country our culture will continue its decline.


In a few years’ time, Ben is going to be disappointed again. He’s going to find that the outsiders he sent to Washington just screamed at each other at ever higher decibels. He’s going to find that he and voters like him unwittingly created a political culture in which compromise is impermissible, in which institutions are decimated by lone-wolf narcissists who have no interest in or talent for crafting legislation. Nothing will get done.

I disagree with Brook's basic premise and its not clear at all how the current monetary policy has punished hard work. Ron Paul's "free trade" solution is certainly not the answer and would likely result in even more jobs going overseaS.

A recent study found more entrepreneurs starting new businesses in 2009 than at any other time in the past 14 years....in part, because, even with tight lending, money is cheap right now as a result of the current Fed policy.

http://thehill.com/homenews/senate/9...ew-businesses-

Add to that the recent (and largest) middle class and small business tax cuts and tax credits.... but these dont come without a cost to the deficit as well.

I do agree with Brooks on one point. Its easy to be on the outside criticizing and waving their signs, like the Tea Party crowd.

Its much harder to offer constructive and realistic solutions.

The US debt has to be addressed, but there are no simple solutions. Certainly not the notion of cutting spending AND cutting taxes, given that the largest and fastest growing component of the debt is entitlement programs (Social Security, Medicare....)

The solution will require compromise and tough decisions including cutting spending AND raising taxes.

added:
I am still perplexed at how silent the Tea Party crowd have been on the need for financial regulatory reform....another indication that they, at least the token leaders (Palin and now Rand Paul and to a lesser extent, Gingrich), are not interested in consensus building as much as they are in imposing their own narrow ideology.

To some degree, IMO, the Cellar is a microcosm of the country. Alot of complaining by those who dont like the current policy direction, but very little in the way of alternative constructive solutions.

[Griff]

Originally Posted by Redux

I disagree with Brook's basic premise and its not clear at all how the current monetary policy has punished hard work.

I don't think Brooks would ever endorse a "hard" currency as it can be too inflexible, suppressing economic expansion. That said, as long as our currency is losing value saving is punished. To go along with what you said we will have to raise taxes and cut services to rebuild the integrity of the dollar. We will have to cut more services than Democrats want and raise more taxes than Republicans want. Both parties live in a fantasy world created by ideology, we only have to read Krugman today to witness the self-delusion. I believe it may be possible to ease the pain in an economic contraction through government spending, but you'll never hear the left calling for cuts during an economic boom, much as we never hear Republicans complain about debt created by war-making.

Getting centrists elected is the tough part since they can't speak to blind ideology. They have no core group to hold in place while they reach out to other voters.

Rand Paul is going to get creamed defending BP the way he is. Sometimes corporations really are the bad guys.

Growing small business should be the focus of centrists. Let's not create a regulatory morass that suppresses start-ups, but we damn well better regulate and hold big business accountable for environmental and economic destruction.

[spudcon]

Originally Posted by Griff

we never hear Republicans complain about debt created by war-making.

I think you need to look back at the last century to see who was in charge when all the major deficit making wars were started. It wasn't Republicans. Republicans did get us out of most of them.

[Griff]

True enough, but you are thinking of the old GOP which is quite dead. It is time to open our eyes to what is.

[lookout123]

Originally Posted by Redux

A recent study found more entrepreneurs starting new businesses in 2009 than at any other time in the past 14 years....in part, because, even with tight lending, money is cheap right now as a result of the current Fed policy.

I think you'll find new businesses tend to launch more as unemployment climbs.

Originally Posted by Griff

I don't think Brooks would ever endorse a "hard" currency as it can be too inflexible, suppressing economic expansion. That said, as long as our currency is losing value saving is punished. To go along with what you said we will have to raise taxes and cut services to rebuild the integrity of the dollar. We will have to cut more services than Democrats want and raise more taxes than Republicans want. Both parties live in a fantasy world created by ideology, we only have to read Krugman today to witness the self-delusion. I believe it may be possible to ease the pain in an economic contraction through government spending, but you'll never hear the left calling for cuts during an economic boom, much as we never hear Republicans complain about debt created by war-making.

Getting centrists elected is the tough part since they can't speak to blind ideology. They have no core group to hold in place while they reach out to other voters.

Rand Paul is going to get creamed defending BP the way he is. Sometimes corporations really are the bad guys.

Growing small business should be the focus of centrists. Let's not create a regulatory morass that suppresses start-ups, but we damn well better regulate and hold big business accountable for environmental and economic destruction.

I agree with you with the need for, and the difficulty in electing, centrists or those willing to compromise and build consensus.

I still dont see anyway out of the necessity to have spent significantly in the last year to keep the economy from tanking completely. No one wanted the bank bailouts, but many understood the necessity....and no one, but the free traders thought that the economy would recovery on its own w/o some type of stimulus....spending or tax cuts.

When the economy is stabilized and growing again, I am all for responsible cuts in discretionary spending....including defense.

But the biggest bugaboo is Medicare. There is a relatively easy fix for Social Security...raise the base of income subject to the payroll tax and the system is financially sound for another 50 years...through the baby boomers.

The Medicare fix is not so easy, but tax increases will certainly need to be part of the solution.

Originally Posted by spudcon

I think you need to look back at the last century to see who was in charge when all the major deficit making wars were started. It wasn't Republicans. Republicans did get us out of most of them.

I recall Rumsfeld telling Congress that the Iraq war would cost no more than $50 billion and Iraq would pay for its reconstruction with oil revenue.

The cost of the war to-date? About $1 trillion and counting....all of it off-budget and not offset by spending cuts. The long-term costs are likely to exceed $2 trillion.

To depose a tyrant who posed no direct threat to the US and had no relationship with those who attacked us on 9/11.

Originally Posted by lookout123

I think you'll find new businesses tend to launch more as unemployment climbs.

I agree..but the point is, it can be further stimulated by monetary policy, which has been the focus of the Fed short=term policy.

And fiscal policy as well. I would suggest the small business tax incentives in the stimulus bill helped to some degree and so did the bank bailouts.

Without all of the above, credit certainly would have been much tighter than it is at present.

[Griff]

Are you saying that loose monetary policy, which was a major driver in our near collapse, is going to save us now?

I would disagree with you that the monetary policy of the last decade (or two) was a "major driver" in the near collapse.

I would attribute more to the lack of regulation, specifically, the virtual repeal of Glass-Steagall (and the resulting housing bubble) and to a lesser extent, the grossly over-priced dot.com bubble.

added:
I am not a fan of Milton Friedman, the Hoover/Cato crowd and free market, trickle down economics, but I agree with them on this:

We are not arguing that Greenspan's policies were perfect. Nor should anything that follows be construed as a defense of central banking or of the Federal Reserve. Particularly alarming is the way the lender-of-last-resort function has been expanding the moral-hazard safety net and mispricing risk, a trend to which Greenspan no doubt contributed. Our preferred ideal would combine abolition of the Fed and unregulated free banking.
(note: I dont agree with abolishing the Fed and unregulated free banking)

Nonetheless, Alan Greenspan stands out as the most competent--and arguably the only competent--helmsman of United States monetary policy since the creation of the Federal Reserve System. As Milton Friedman observed upon Greenspan's retirement, "For the first 70 years after it opened in 1914, the Fed did far more harm than good, presiding over inflation in two World Wars, converting a moderate recession into the great depression, and then in 1970s, producing the most serious peacetime inflation in our nation's history." By contrast, Greenspan's "performance has indeed been remarkable."
(I dont agree here either..that the Fed policy was largely responsible for the great depression.)

(here is where I agree)
Greenspan not only oversaw relatively low and stable inflation, but also ushered in a striking decline in the volatility of real gross domestic product. Although defenders of macroeconomic intervention often suggest that government policies after World War II dampened business cycles, the truly significant change should be dated at 1987, the year Greenspan assumed office.

http://econlog.econlib.org/archives/...reenspans.html

And, post-Greenspan, I think Bernanke's short-term policy was necessary and correct, given the state of the economy....but should now begin to be tightened as the economy recovers, as he suggested earlier this year.

[TheMercenary]

NEW YORK (CNNMoney.com) -- On Sept. 15, 2008, America woke up to its worst financial meltdown in generations.

Nearly two years and thousands of pages of legislation later, it is still unclear whether the government has found a way to prevent a similar collapse from happening again.

The Senate passed a financial reform bill Thursday with the aim of stopping future crises before they start. The bill addresses several leading causes: crazy lending practices, risky bets by banks, inflated credit ratings on junky assets and an inability to wind down collapsing financial institutions.

Will it prevent the next crisis? Even proponents of the legislation concede it might not.

http://money.cnn.com/2010/05/24/news...ex.htm?cnn=yes

[spudcon]

Will it prevent the next crisis? Even proponents of the legislation concede it WILL not.

Fixed it for ya.

[TheMercenary]

I agree, it will not. More smoke and mirrors by the Demoncratically controlled Congressional Whores, as it was with the Healthcare Reform and Stimulus Millions of Shovel Ready Jobs Package. A big fat FAIL as we are still at a near 10% unemployment rate. Elections are just around the corner folks. Vote the scumbags out.