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Someone posted this on another forum. Great article.

http://www.nytimes.com/2011/08...ng-worries.html?_r=1

The Wrong Worries
By Paul Krugman

 

In case you had any doubts, Thursday’s more than 500-point plunge in the Dow Jones industrial average and the drop in interest rates to near-record lows confirmed it: The economy isn’t recovering, and Washington has been worrying about the wrong things.

 

It’s not just that the threat of a double-dip recession has become very real. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.

 

For two years, officials at the Federal Reserve, international organizations and, sad to say, within the Obama administration have insisted that the economy was on the mend. Every setback was attributed to temporary factors — It’s the Greeks! It’s the tsunami! — that would soon fade away. And the focus of policy turned from jobs and growth to the supposedly urgent issue of deficit reduction.

 

But the economy wasn’t on the mend.

 

Yes, officially the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin. But at no point has growth looked remotely adequate given the depth of the initial plunge. In particular, when employment falls as much as it did from 2007 to 2009, you need a lot of job growth to make up the lost ground. And that just hasn’t happened.

 

Consider one crucial measure, the ratio of employment to population. In June 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number was down to 59.4. As of June 2011, two years into the alleged recovery, the number was: 58.2.

These may sound like dry statistics, but they reflect a truly terrible reality. Not only are vast numbers of Americans unemployed or underemployed, for the first time since the Great Depression many American workers are facing the prospect of very-long-term — maybe permanent — unemployment. Among other things, the rise in long-term unemployment will reduce future government revenues, so we’re not even acting sensibly in purely fiscal terms. But, more important, it’s a human catastrophe.

 

And why should we be surprised at this catastrophe? Where was growth supposed to come from? Consumers, still burdened by the debt that they ran up during the housing bubble, aren’t ready to spend. Businesses see no reason to expand given the lack of consumer demand. And thanks to that deficit obsession, government, which could and should be supporting the economy in its time of need, has been pulling back.

 

Now it looks as if it’s all about to get even worse. So what’s the response?

 

To turn this disaster around, a lot of people are going to have to admit, to themselves at least, that they’ve been wrong and need to change their priorities, right away.

 

Of course, some players won’t change. Republicans won’t stop screaming about the deficit because they weren’t sincere in the first place: Their deficit hawkery was a club with which to beat their political opponents, nothing more — as became obvious whenever any rise in taxes on the rich was suggested. And they’re not going to give up that club.

 

But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority. Nor should we let Ben Bernanke and his colleagues off the hook: The Fed has by no means done all it could, partly because it was more concerned with hypothetical inflation than with real unemployment, partly because it let itself be intimidated by the Ron Paul types.

 

Well, it’s time for all that to stop. Those plunging interest rates and stock prices say that the markets aren’t worried about either U.S. solvency or inflation. They’re worried about U.S. lack of growth. And they’re right, even if on Wednesday the White House press secretary chose, inexplicably, to declare that there’s no threat of a double-dip recession....

 

The point is that it’s now time — long past time — to get serious about the real crisis the economy faces. The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P.

 

 

 

Last edited by Buttercup
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The debt limit increase should have never been tied to deficit reduction in the first place. If it had not been, the debt ceiling could have been raised quickly and Congress could have got on with the business of concentrating on creating jobs, quickly, instead of wasting time over a deficit reduction agreement. 

After you put people back to work, then you worry about deficit reduction. Now shouldn't have been the time, when so many people can't find jobs. 

The Teatards and Republicans hijacked the political process and caused Congress to lose valuable legislative time. I hope voters see that for what it is and remember it come election time. And if Obama wants to get re-elected, he better grow a set rather quickly and start standing up to these asses.

The 500 point drop was mostly caused by panic outside the US.  Japan tried to defend the yen -- hard to do when your national debt is 240 percent of GDP.  That set it off.  The Italian economic is spiraling almost of out control.  Announcement of an austerity program was expect.  However, the government said, Let the good times roll. 

 

That set off massive retreat to cash.  Selling started in Japan, then the EU and finally, the US.  Ironically, US treasuries were bought in record amounts -- any port in a storm.  Our leaky, rusty barnacle encrusted old freighter looks better than the ornate European Titanic.

 

S&P tied the debt limit to reducing the debt.  Passing a clean bill would have caused an even lower rating.  Moody and Fitch would have joined in, as well.

Originally Posted by Buttercup:

        The debt limit increase should have never been tied to deficit reduction in the first place. If it had not been, the debt ceiling could have been raised quickly and Congress could have got on with the business of concentrating on creating jobs, quickly, instead of wasting time over a deficit reduction agreement.


And all three agencies, instead of just one, would have clobbered our rating.  I'm afraid to ask how Congress creates jobs in your view because I'm sure it involves spending more money...  Please tell me you are not one of Obama's new economic advisors...

I'm so sick of ALL of them! What we need is COMMON SENSE. If we reformed the tax code so that everyone paid their fair share, and at the same time REFORMED entitlements instead of just cutting them blindly, we would have enough money to balance the budget and pay our bills.

 

Common sense and justice. So that big companies and the super rich actually PAID taxes instead of hiring good accountants who knew every loophole. And so that only those who actually need and deserve entitlements got them. Then there would be no more GE making record profits and paying NO taxes. There would be no more free ride for those who are able, but too lazy to work. That would be fair and just for all of us who DO pay our fair share of taxes, and DO work for a living.

 

Instead of common sense, all these bozos have been doing is playing politics while the rest of us sink.

Originally Posted by Chuck Norris:
Originally Posted by Buttercup:

        The debt limit increase should have never been tied to deficit reduction in the first place. If it had not been, the debt ceiling could have been raised quickly and Congress could have got on with the business of concentrating on creating jobs, quickly, instead of wasting time over a deficit reduction agreement.


And all three agencies, instead of just one, would have clobbered our rating.  I'm afraid to ask how Congress creates jobs in your view because I'm sure it involves spending more money...  Please tell me you are not one of Obama's new economic advisors...

I never knew that Chuck Norris was an economist. I thought he was just a Tea Party stooge.

Originally Posted by JimiHendrix:

I never knew that Chuck Norris was an economist. I thought he was just a Tea Party stooge.



I've never said anything about the Tea Party.  Didn't your mama tell you all that LSD would cause hallucinations?


Chuck Norris is fabulously wealthy because he can kick any stock price so hard it never comes back down.


Do you remember the recession of 1993? Nobody does. Chuck Norris made sure it never happened, since it might have interfered with the first season of Walker, Texas Ranger.


Chuck Norris has a fractional reserve policy for roundhouse kicks. For every kick Chuck Norris has, he can kick you in the face nine times. If he feels like letting you give him a kick to show how tough he is, that's nine more kicks for you.

Buttercup, you say,"The debt limit increase should have never been tied to deficit reduction in the first place. If it had not been, the debt ceiling could have been raised quickly and Congress could have got on with the business of concentrating on creating jobs, quickly, instead of wasting time over a deficit reduction agreement."

Seeing how the Republicans are the only ones interested in turning around the out of controll spending. Mind you both parties put our Country in this dangerous territory. But now the Republicans

are trying to mend thier ways. This was the only time to do it. The democrats have had the first full two years of Obama's Presidency to do just this. So why isn't it done? Why? When Buttercup do you think it would be the right time? S&P now downgraded our debt the others may follow. Wasting time on the Deficit reduction agreement, Are you kidding me? Wasting time is exactly what the democrats have been doing. Wasting time on Cap and Spend. Wasting time on the massive out of controll Obama Care. Why didn't they take that time to even pass a yearly budget? Creating Quick Jobs? You are insane. How about shovel ready jobs?

 

Buttercup you said," After you put people back to work, then you worry about deficit reduction. Now shouldn't have been the time, when so many people can't find jobs.
The Teatards and Republicans hijacked the political process and caused Congress to lose valuable legislative time. I hope voters see that for what it is and remember it come election time. And if Obama wants to get re-elected, he better grow a set rather quickly and start standing up to these asses."

Teatards, seriously? Highjacked? What the H*ll do you think you Socialists did at the beginning of Obama term? Wasting all that time, when you could have focused on the Deficit and, what do ya think mabey even JOBS??? ASSES are you KIDDING??? You must of got into Jimbo's stash. IDIOT!!!

 

Skippy

Originally Posted by skippy delepepper:

Buttercup, you say,"The debt limit increase should have never been tied to deficit reduction in the first place. If it had not been, the debt ceiling could have been raised quickly and Congress could have got on with the business of concentrating on creating jobs, quickly, instead of wasting time over a deficit reduction agreement."

Seeing how the Republicans are the only ones interested in turning around the out of controll spending. Mind you both parties put our Country in this dangerous territory. But now the Republicans

are trying to mend thier ways. This was the only time to do it. The democrats have had the first full two years of Obama's Presidency to do just this. So why isn't it done? Why? When Buttercup do you think it would be the right time? S&P now downgraded our debt the others may follow. Wasting time on the Deficit reduction agreement, Are you kidding me? Wasting time is exactly what the democrats have been doing. Wasting time on Cap and Spend. Wasting time on the massive out of controll Obama Care. Why didn't they take that time to even pass a yearly budget? Creating Quick Jobs? You are insane. How about shovel ready jobs?

 

Buttercup you said," After you put people back to work, then you worry about deficit reduction. Now shouldn't have been the time, when so many people can't find jobs.
The Teatards and Republicans hijacked the political process and caused Congress to lose valuable legislative time. I hope voters see that for what it is and remember it come election time. And if Obama wants to get re-elected, he better grow a set rather quickly and start standing up to these asses."

Teatards, seriously? Highjacked? What the H*ll do you think you Socialists did at the beginning of Obama term? Wasting all that time, when you could have focused on the Deficit and, what do ya think mabey even JOBS??? ASSES are you KIDDING??? You must of got into Jimbo's stash. IDIOT!!!

 

Skippy

Skippy just sounds sillier and sillier, doesn't he? Socialists? Really? He keeps using words that he doesn't understand, and hopes that we won't notice.

Once again, what we need is common sense. We all agree that our debt is too big. Now, if YOU had run up your credit card bills to the point where you could no longer pay for the basic necessities and make your credit card payments too, what would you do?

 

If you stop using those credit cards, that's a good start. But you're still paying out more than you can afford to. So what would YOU do? I know I would get a second job so I could pay down those debts and still be able to afford food and other necessities. That would be the ONLY way to get out of the mess I had put myself in - stop making frivilous purchases on credit, and  increase my income at the same time.

 

We need to stop the FRIVILOUS entitlements AND raise taxes, and maybe then we can save the American economy. And the way to do that would be to clamp down on all of the "cheaters", both the ones who seek and use every tax loophole there is, and the ones who are taking welfare, foodstamps, and medicare, who don't qualify.

 

Fairness, justice, and common sense.

Originally Posted by O No!:

Once again, what we need is common sense. We all agree that our debt is too big. Now, if YOU had run up your credit card bills to the point where you could no longer pay for the basic necessities and make your credit card payments too, what would you do?

 

If you stop using those credit cards, that's a good start. But you're still paying out more than you can afford to. So what would YOU do? I know I would get a second job so I could pay down those debts and still be able to afford food and other necessities. That would be the ONLY way to get out of the mess I had put myself in - stop making frivilous purchases on credit, and  increase my income at the same time.

 

We need to stop the FRIVILOUS entitlements AND raise taxes, and maybe then we can save the American economy. And the way to do that would be to clamp down on all of the "cheaters", both the ones who seek and use every tax loophole there is, and the ones who are taking welfare, foodstamps, and medicare, who don't qualify.

 

Fairness, justice, and common sense.

That sounds good and all, but you seemed to miss the point that it is like YOU spending with MY credit card for YOUR purposes and then expecting ME to come up with a solution so YOU can spend  more of MY money. No thanks hon, we're tired of that nonsense. It is time for compromise to go in the OTHER direction.

Originally Posted by marksw59:
Originally Posted by O No!:

Once again, what we need is common sense. We all agree that our debt is too big. Now, if YOU had run up your credit card bills to the point where you could no longer pay for the basic necessities and make your credit card payments too, what would you do?

 

If you stop using those credit cards, that's a good start. But you're still paying out more than you can afford to. So what would YOU do? I know I would get a second job so I could pay down those debts and still be able to afford food and other necessities. That would be the ONLY way to get out of the mess I had put myself in - stop making frivilous purchases on credit, and  increase my income at the same time.

 

We need to stop the FRIVILOUS entitlements AND raise taxes, and maybe then we can save the American economy. And the way to do that would be to clamp down on all of the "cheaters", both the ones who seek and use every tax loophole there is, and the ones who are taking welfare, foodstamps, and medicare, who don't qualify.

 

Fairness, justice, and common sense.

That sounds good and all, but you seemed to miss the point that it is like YOU spending with MY credit card for YOUR purposes and then expecting ME to come up with a solution so YOU can spend  more of MY money. No thanks hon, we're tired of that nonsense. It is time for compromise to go in the OTHER direction.


 

So you're saying that even the old, sick, and disabled can just go die because you don't want to help them with YOUR money? Even though if we stopped giving the ultra rich and big businesses like GE, the loopholes to get out of paying ANY TAXES, their TAX money would probably pay for the truly deserving?

Originally Posted by Chuck Norris:
Originally Posted by Buttercup:

        The debt limit increase should have never been tied to deficit reduction in the first place. If it had not been, the debt ceiling could have been raised quickly and Congress could have got on with the business of concentrating on creating jobs, quickly, instead of wasting time over a deficit reduction agreement.


And all three agencies, instead of just one, would have clobbered our rating.  I'm afraid to ask how Congress creates jobs in your view because I'm sure it involves spending more money...  Please tell me you are not one of Obama's new economic advisors...

============================================================================

 

S&P has no credibility.  They gave AAA ratings to toxic mortgage securities that helped cause the Great Recession.  If they're so rep-u-t-able (apparently TD won't let me spell that word ), why didn't S&P sound the alarm to benefit Joe and Jane Homeowner during the mortgage meltdown - saving many of them from the hell they're going through now to save their homes?  I guess when you're paid off by Wall Street types you don't care about Joe and Jane Homeowner.

 

http://www.huffingtonpost.com/...dgment_n_920648.html

 

Geithner: Standard & Poor's Showed 'Terrible Judgment'

 

WASHINGTON (Associated Press) — The credit rating agency Standard & Poor's showed "terrible judgment" in lowering the U.S. government's credit rating, Treasury Secretary Timothy Geithner said Sunday.

 

"They've handled themselves very poorly. And they've shown a stunning lack of knowledge about the basic U.S. fiscal budget math," Geithner said in his first public comments about the credit rating decision.

 

Interviewed on CNBC, Geither said that U.S. Treasury securities were just as safe now as they were before S&P announced its downgrade....

 

Late Friday, S&P announced it was lowering its rating for U.S. debt one notch from AAA to AA+.

 

The other two major credit rating agencies, Moody's Investor service and Fitch Ratings, have not lowered their AAA ratings, although they have warned of a possible downgrade if more is not done to deal with soaring federal deficits.


The rating agencies were sharply criticized after the 2008 financial crisis for continuing to give top ratings securities backed by subprime mortgages. When the mortgages went bad, investors lost billions of dollars and the resulting financial crisis sent the country into a deeper recession.


Geithner alluded to those problems in his interview Sunday, saying about the credit agencies: "Look at the quality of judgments they've made in the past."

 

The administration has also accused S&P of a $2 trillion error in its estimate of the size of the deficits over the next decade because the agency made a fundamental error in interpreting budget projections of the Congressional Budget Office....


 

Originally Posted by O No!:
Originally Posted by marksw59:
Originally Posted by O No!:

Once again, what we need is common sense. We all agree that our debt is too big. Now, if YOU had run up your credit card bills to the point where you could no longer pay for the basic necessities and make your credit card payments too, what would you do?

 

If you stop using those credit cards, that's a good start. But you're still paying out more than you can afford to. So what would YOU do? I know I would get a second job so I could pay down those debts and still be able to afford food and other necessities. That would be the ONLY way to get out of the mess I had put myself in - stop making frivilous purchases on credit, and  increase my income at the same time.

 

We need to stop the FRIVILOUS entitlements AND raise taxes, and maybe then we can save the American economy. And the way to do that would be to clamp down on all of the "cheaters", both the ones who seek and use every tax loophole there is, and the ones who are taking welfare, foodstamps, and medicare, who don't qualify.

 

Fairness, justice, and common sense.

That sounds good and all, but you seemed to miss the point that it is like YOU spending with MY credit card for YOUR purposes and then expecting ME to come up with a solution so YOU can spend  more of MY money. No thanks hon, we're tired of that nonsense. It is time for compromise to go in the OTHER direction.


 

So you're saying that even the old, sick, and disabled can just go die because you don't want to help them with YOUR money? Even though if we stopped giving the ultra rich and big businesses like GE, the loopholes to get out of paying ANY TAXES, their TAX money would probably pay for the truly deserving?

No. I don't want YOU to help them with MY money, I'll do that. Moreover, what I'm saying is that I don't want YOUR grubby hands in MY pocket for YOUR purposes. Spend YOUR OWN money and credit. Who is truly "deserving"? Do you get to choose? Do I? I despise the word "deserve", try using the word "earn" instead, and get over your class envy.

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