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  1. #1 Government Spending May Lead US into a Double dip Recession 
    Destroyer of Worlds Apocalypse's Avatar
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    Government Spending May Lead US into a Double dip Recession
    Published: 7/23/2009 12:17:45 PM
    By:
    Anna Fedec, contact@tradingeconomics.com

    Government spending is rising day-by-day. The list includes: $787bn spent for the fiscal stimulus, at least $600bn for the TARP funding, unlimited resources for bank takeovers, loans to the financial institutions, and so on. But on the wake of declining tax revenues, how are those programs being financed? And more importantly, who is paying for it?


    Indeed, its common sense among many politicians that during difficult times, economies need to be boosted either by fiscal or by monetary policy. For instance, the US government is using fiscal stimulus to revive consumer demand, stimulate investments and stop employment decline. And the Federal Reserve is lowering interest rates, purchasing treasuries and mortgage-backed securities to ensure credit availability. The problem is that in many cases countries donít have enough resources to provide fiscal stimulus. So many of them uses so called debt monetarization. In fact, one of the best ways to finance spending is to issue bonds and sell them to investors. However, treasuries may go back to country balance sheet as the Fed prints extra money and buys bonds back in the open market operations. Yet, the increase in money supply typically leads to higher inflation because there is more money available in the system for the same quantity of goods. And with rising consumer prices everyone loses purchasing power because our savings are worth less as we need to pay more for the same products. To make things even worst, the next step in this vicious-circle is generally higher interest rates as lenders demand an higher compensation for the lost value of their money.


    In sum, conducting fiscal and monetary stimulus has short-term benefits but also long-term costs because the credit availability boosted by open market operations is likely to end at the same level where the operation was initiated. So, after an initial boost where investors become more confident, living conditions get suddenly worst. Consumers spend less, production is further cut and unemployment rate start rising even further.


    http://www.tradingeconomics.com/Arti...ip%20Recession


    Good thing Obama saved the economy!


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  2. #2  
    PORCUS MAXIMUS Rockntractor's Avatar
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    Prosperity for us could be a long way off. As long as we have liberal democrats making all of our decisions we will not have a true recovery. Even if the Republicans regain control they are becoming increasingly liberal and may not desire to turn back all of the deadly programs Obama is installing.
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  3. #3  
    Senior Member Troll's Avatar
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    Quote Originally Posted by Rockntractor View Post
    Even if the Republicans regain control they are becoming increasingly liberal and may not desire to turn back all of the deadly programs Obama is installing.
    Bingo. Even with the financial trouble we're in, I can count on one hand the number of Republicans who are talking about cutting spending. Oh, they may be 'opposed' to cap and trade and socialized healthcare, but that's not cutting spending - that's opposing new spending.

    I'll be amazed if the Republican party is still politically solvent by 2020. By that point, it will probably be like choosing between Chavez and Mao. If socialized medicine and cap and trade become realities, I think the Republicans are forever sunk. Can you imagine? The Democrats will just have to say "don't vote for Palin, she wants to make you pay for your healthcare!"

    Nothing helps a bad mood like spreading it around.
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  4. #4  
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    Quote Originally Posted by Troll View Post
    . If socialized medicine and cap and trade become realities, I think the Republicans are forever sunk
    This is true.

    We have seen this in other G-7 nations. Whehn one party opposes the government health care plan and it passes anyway ...The party gets destroyed for decased.

    The people end up seeing for themselves how it works and they remember who opposed it.

    This is why the GOP is fighting it as much as they can, it could finish off the GOP.

    I agree, it will sink the GOP for decades.
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  5. #5  
    PORCUS MAXIMUS Rockntractor's Avatar
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    Quote Originally Posted by satanica View Post
    This is true.

    We have seen this in other G-7 nations. Whehn one party opposes the government health care plan and it passes anyway ...The party gets destroyed for decased.

    The people end up seeing for themselves how it works and they remember who opposed it.

    This is why the GOP is fighting it as much as they can, it could finish off the GOP.

    I agree, it will sink the GOP for decades.
    If a troll lies on a forum and there is nobody there to hear him does he make a sound?
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  6. #6  
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    Quote Originally Posted by Rockntractor View Post
    If a troll lies on a forum and there is nobody there to hear him does he make a sound?
    I would post links and sources, but you guys hate facts. and are afraid to answer a question.
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  7. #7  
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    Quote Originally Posted by satanica View Post
    This is true.

    We have seen this in other G-7 nations. Whehn one party opposes the government health care plan and it passes anyway ...The party gets destroyed for decased.

    The people end up seeing for themselves how it works and they remember who opposed it.

    This is why the GOP is fighting it as much as they can, it could finish off the GOP.

    I agree, it will sink the GOP for decades.
    Get off your unemployed lazy ass and go find a fucking job you bum.
    One does not greet death when he knocks at your door.

    Nay you repeatedly punch him in the throat as he slowly drags you away.
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  8. #8  
    The big Cheese
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    Quote Originally Posted by satanica View Post
    I would post links and sources, but you guys hate facts. and are afraid to answer a question.
    doesnt it bother you that you are a sponge and your poor wife has to bring home the bacon?
    One does not greet death when he knocks at your door.

    Nay you repeatedly punch him in the throat as he slowly drags you away.
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  9. #9  
    PORCUS MAXIMUS Rockntractor's Avatar
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    Quote Originally Posted by Zafod View Post
    doesnt it bother you that you are a sponge and your poor wife has to bring home the bacon?
    I think she has to furnish her own sausage too!
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  10. #10  
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    You guys want a good laugh ?

    Look at the posts 'recent posts' from Zafod.

    It is 100% FACT that he ONLY posts on the CU to insult me...he is obsessed with me, you will notice page after page of insults ...

    No debate

    No friendly talk with other conservatives

    Nothing but insults at me. I am flattered that he would obsess on me and spend so much of his time on little old me.

    The link that tells the story, page after page of a guy who needs therapy.

    http://www.conservativeunderground.c...earchid=235073
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