Stimulus Bill Will Lead to "Unmitigated Disaster"

[JPIIGopher]

Let's hope Peter Schiff gets this one wrong!

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[Schnoodler]

he's scary. Even I know he's wacked. there will be no inflation. there's no frikken demand. idiot. there's an over supply of cash to the current economy. The value of the dollar would have to shrink much faster than the impact of the lack of demand before inflation sets in. deflation is a much greater concern. the only way we see inflation is if demand returns too quickly for the bond markets to adjust. It could happen, not very likely as we're in for a long slow recovery.

Hoover's attempts were supply side akin to the bailouts, which is wrong and bubble creating not demand creating. His intervention was opposite of keyensian, he didn't embrace demand side til the very end of his tenure, but lacked the muster to move it. that's why they didn't work and made things worse. Infrastructure investment and spending is what worked. But they waited so long to get that rolling and created so much additional damage before it got rolling, that's why the depression took so long to shake out. Propping up demand softens the bottom of this. People point to WWII, but what was that if not a major government sponsored spending spree. The war was another form of goveernment spending that pulled us out. God these Austrian guys are goofy. it's like they got one concept and think none of the others matter. The economy is way to complex, and the needs of people way too diverse for such a simplistic viewpoint.

[Schnoodler]

Here's a link to a Reuters article that states deflation is the likely outcome of the tax cut portion of the stimulus bill, a larger component in the republican bill I might add.

I disagree with the logic as the supply and demand curve of work verses leisure which this article alludes to without naming is an oddly shaped curve that really has little impact in the middle and so although there may be some deflationary effect from the reasons stated i think quite little.

http://www.reuters.com/article/newIssuesNews/idUSN1845479520090218

[bga1]

he's scary. Even I know he's wacked. there will be no inflation. there's no frikken demand. idiot. there's an over supply of cash to the current economy. The value of the dollar would have to shrink much faster than the impact of the lack of demand before inflation sets in. deflation is a much greater concern. the only way we see inflation is if demand returns too quickly for the bond markets to adjust. It could happen, not very likely as we're in for a long slow recovery.

Hoover's attempts were supply side akin to the bailouts, which is wrong and bubble creating not demand creating. His intervention was opposite of keyensian, he didn't embrace demand side til the very end of his tenure, but lacked the muster to move it. that's why they didn't work and made things worse. Infrastructure investment and spending is what worked. But they waited so long to get that rolling and created so much additional damage before it got rolling, that's why the depression took so long to shake out. Propping up demand softens the bottom of this. People point to WWII, but what was that if not a major government sponsored spending spree. The war was another form of goveernment spending that pulled us out. God these Austrian guys are goofy. it's like they got one concept and think none of the others matter. The economy is way to complex, and the needs of people way too diverse for such a simplistic viewpoint.


No demand? There's a ton of demand- the only thing blocking the demand is fear and money supply. There are a lot of folks discussing the possiblity of back end inflation based on this plan.
Cars, computers, homes and most other types of products will in fact wear out and there will be a spurt of buying when confidence returns.
At about the time the economy would be recovering in more natural ways, in will come a zillion projects from the porkapalooza which could indeed kick off inflation.

[Schnoodler]

You think theres a lot of deamnd. what are you smoking. give me some dude. G4L wants some too.

[rrjackIII]

Public TV CH 17 will air FRONTLINE tonight 9pm CST about the financial meltdown. Frontline IMO always does a pretty good job of covering a subject.

[bga1]

You think theres a lot of deamnd. what are you smoking. give me some dude. G4L wants some too.

Again there is not present purchasing demand- but pent up demand is building and will continue to build. The danger of inflation is not now, it's later when the stimulus and natural demand meet head on.

[Jike Spingleton]

Cars, computers, homes and most other types of products will in fact wear out and there will be a spurt of buying when confidence returns.


Again there is not present purchasing demand- but pent up demand is building and will continue to build. The danger of inflation is not now, it's later when the stimulus and natural demand meet head on.

Howard Davidowitz disagrees (http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans'-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,%5EGSPC,%5EDJI,RTH).

[Costa Rican Gopher]

Do you guys think it would have been reasonable to expect the Congress to actually read the $800bb stimulus package before voting on it? I do.

[bga1]

Howard Davidowitz disagrees (http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans'-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,%5EGSPC,%5EDJI,RTH).

Good for him. Let's hope his scenario doesn't play out. Anyone could be right about what happens next. Anyone. No one knows for sure. I don't necessarily believe that inflation is an inevitable scenario. Nor do I believe that it is impossible for a decent long term recovery to occur. We are traveling on unpaved road here. A recession of this depth in a global economy has never been dealt with before.

[Gopher4Life]

Costa,

>>...expect the Congress to actually read the $800bb stimulus package before voting on it?<<

They couldn't have been given the time needed to read the entire bill prior to the vote. Then they couldn't tell their constituents, "What?!! I didn't know that was in there." I'll guarantee that Obama hasn't read it either and for the same reason. It's a toxic bill that mispsends billions while avoiding the real problems.

Furthermore, I'm not sure how many of them can actually read.

[bga1]

Good site: www.readthestimulus.org

According to the CBO only 20% of this money is in action in 2009. The balance is over the next 10 years. Stimulus? Or a spending wish list?

[Gopher4Life]

1/4 political payback to liberal factions
1/4 move toward more dependency on big govrnment
1/4 transferring cash from productive tax payers to those who don't even work
1/4 economic stimulus

Honesty was just too much to ask. Transparency, my rear.