Let's see....
10.2% unemployment. Check.
Millions more unable to afford health care and afraid they will either lose their homes or their jobs. Check.
Many worried Americans trying to pay off their credit cards, stop buying unnecessary shit, and actually save some money. Oh. No. Sound the alarm:
This is why it is now necessary for the government to begin spending money it doesn't have--because you won't.
Somebody will, of course, show up here and explain the stimulus and multipliers to me (ignoring the fact that I discussed them in exhaustive detail back at the time), but the most important fact in this story is actually the final short sentence that I quoted: Consumer spending accounts for 70 percent of total economic activity.
This only happens when the State interferes--as it has for decades--with the flow of credit to incentivize more and more people to purchase more and more shit that they don't need and really don't even want in order to (supposedly) provide more other people jobs producing and marketing shit that people don't need or really even want.
Only in this sort of managed (by idiots and Alan Greenspan) economy could we reach the point wherein deciding to live within your means becomes an economic crime punishable by generation-beggaring tax increases, because if people won't spend money they don't have on shit they don't need or want, the government must do it for them.
And I'm not talking about those little dipshit criticisms like we saved 900 jobs with stimulus spending at a company that only employs fourteen peopel, either.
I'm talking about roads and bridges and all that critical damn infrastructure that we all gotta go get shovels and repair.
See, this is the government's plan: over-reliance on foreign oil and the internal combustion engine is ... bad. We need a new economy based on mass transit (especially that yummy light rail nobody actually ever rides) and eating all our food from little organic neighborhood gardens so that we can make all those smelly, carbon-producing highways and bridges that are blighting our country and shrinking the icebergs obsolete.
In ten years we shouldn't need all that infrastructure because we'll be in the new Aquarian age of alternative energy.
So we'll just spend several hundred billion now to rebuild it all so that it will be in good shape when we stop using it, years before we are finished paying for it.
Stoopid Americuns. Stop living within your means. It is unpatriotic, treasonous, actually. Paul Krugman would round you up and lecture you to death except that we need you to have babies to pay the taxes to cover the spending we must do on your behalf.
My theory is that you ought to just say the hell with it and go back to maxing out whatever credit you can find.
That way the government will declare you a hero and you can at least enjoy the useless trinkets until the nice men come and take it all away to send you to debtor's prison.
Now I understand why Bernie Madoff made sense to so many people.
10.2% unemployment. Check.
Millions more unable to afford health care and afraid they will either lose their homes or their jobs. Check.
Many worried Americans trying to pay off their credit cards, stop buying unnecessary shit, and actually save some money. Oh. No. Sound the alarm:
WASHINGTON -Consumers borrowed less for a record eighth straight month in September amid rising unemployment and tight credit conditions. Economists worry the declines in borrowing will drag on the fledgling recovery.
The Federal Reserve said Friday that borrowing fell at an annual rate of $14.8 billion in September. That's the biggest decline since July and was larger than the $10 billion drop economists expected.
Americans are borrowing less as they try to repair cracked nest eggs and replenish rainy day funds in a dismal jobs market. Many are finding it hard to get credit as banks, hit by the worst financial crisis in decades, have tightened lending standards.
Borrowing by consumers for revolving credit, including credit cards, fell at an annual rate of 13.3 percent in September, the same as August. This category has declined for a record 12 straight months.
Borrowing for non-revolving loans, including auto loans, dropped at an annual rate of 3.7 percent in September after edging up 0.1 percent in August. The August gain reflected the surge in car sales as consumers rushed to take advantage of the government's Cash for Clunkers program.
The $14.8 billion overall decline in borrowing left total consumer credit at $2.46 trillion in September. The 7.2 percent annual rate of decline followed a 4.8 percent drop in August. The Fed's report doesn't include mortgages or other loans secured by real estate.
While economists have worried for years about the low rate of U.S. savings, the concern is that consumers could derail the recovery if they begin socking away too much of their incomes. Consumer spending accounts for 70 percent of total economic activity.
This is why it is now necessary for the government to begin spending money it doesn't have--because you won't.
Somebody will, of course, show up here and explain the stimulus and multipliers to me (ignoring the fact that I discussed them in exhaustive detail back at the time), but the most important fact in this story is actually the final short sentence that I quoted: Consumer spending accounts for 70 percent of total economic activity.
This only happens when the State interferes--as it has for decades--with the flow of credit to incentivize more and more people to purchase more and more shit that they don't need and really don't even want in order to (supposedly) provide more other people jobs producing and marketing shit that people don't need or really even want.
Only in this sort of managed (by idiots and Alan Greenspan) economy could we reach the point wherein deciding to live within your means becomes an economic crime punishable by generation-beggaring tax increases, because if people won't spend money they don't have on shit they don't need or want, the government must do it for them.
And I'm not talking about those little dipshit criticisms like we saved 900 jobs with stimulus spending at a company that only employs fourteen peopel, either.
I'm talking about roads and bridges and all that critical damn infrastructure that we all gotta go get shovels and repair.
See, this is the government's plan: over-reliance on foreign oil and the internal combustion engine is ... bad. We need a new economy based on mass transit (especially that yummy light rail nobody actually ever rides) and eating all our food from little organic neighborhood gardens so that we can make all those smelly, carbon-producing highways and bridges that are blighting our country and shrinking the icebergs obsolete.
In ten years we shouldn't need all that infrastructure because we'll be in the new Aquarian age of alternative energy.
So we'll just spend several hundred billion now to rebuild it all so that it will be in good shape when we stop using it, years before we are finished paying for it.
Stoopid Americuns. Stop living within your means. It is unpatriotic, treasonous, actually. Paul Krugman would round you up and lecture you to death except that we need you to have babies to pay the taxes to cover the spending we must do on your behalf.
My theory is that you ought to just say the hell with it and go back to maxing out whatever credit you can find.
That way the government will declare you a hero and you can at least enjoy the useless trinkets until the nice men come and take it all away to send you to debtor's prison.
Now I understand why Bernie Madoff made sense to so many people.
Comments
The horror to me is that when we got Obama we weren't told we were going to get the Clinton team too.
His entire failed financial group is not only continuing big finance favoritism behind Greenspan-Rubin-Summers-Geithner's counsel but from what I gather, when it came down to determining where to put stimulus dollars, this team pushed successfully for tax reduction rather than major infrastructure development.
Tax reduction won. IIRC half of te stimulus was given away in tax relief with no strings attached. Not many jobs were created.
The state's largely used the money to keep current employees on the payroll (leaving little incentive to trim positions) and pave roads whether they needed it or not.
So don't blame Krugman because Obama is listening to the very people who allowed the financial services market to self-destruct because their insistant faith in the soft, sticky Randian mantra of the invisible hand.
It is not history but the opinions of a variety of economists that appear to support Krugman.
In reality, as Krugman is unable to acknowledge, there are vast and significant differences between this current recession (structural differences in the economy, comparative differences in global money flow, regulative differences in the world economy) that render the incredibly simplistic analysis that government must "prime the pump" dangerous as well as misleading.
There are hundreds of leading economists--including other Nobel Laureates if you must go with honrs--who profoundly disagree with this course of action, because they realize that Krugman's chief asset to Barack Obama is now his political orientation and not his grounding in economic theory.
This is not a Randist fantasy.
People need to actually start reading some serious economists, looking at the models, and examining the disagreements. Our consumer-spending-driven-ever-enlarging economy was unsustainable in the long run of its own weight, much less so with added competition from China and India for energy sources.
Obama and Krugman are not radicals, I will give you that. They are actually conservatives in the worst sense of the word: it worked before, so we are going to do it again even though the conditions have changed.
So if you are going to come around with the "history bears him out" argument, you'd better be prepared to do a hell of a lot better than just make an assertion.
unless you believe silly "studies" like this one, in which case we'll be underwater literally as well as economically.