The Stimulus

[quote]hedo wrote:

The IMF says it could be a lot worse and we are probably at the end of the recession.

http://www.powerlineblog.com/archives/2009/01/022672.php
[/quote]

Where the hell did you get this from? Oh, a blog…

Bother checking the IMF website? (biggest link at the very top)

[i]World Growth Grinds to Virtual Halt, IMF Urges Decisive Global Policy Response

January 28, 2009

*  IMF revises world growth down to lowest rate since World War II
* Stresses need for stronger international policy response to the crisis
* Banking sector must be unclogged to get economies moving again

[/i]

http://www.imf.org/external/index.htm

Say no to the Newerest Deal.

From the IMF website:

New policy initiatives needed

“For this purpose, new policy initiatives are needed to produce credible loan loss recognition; sort financial companies according to their medium-run viability; and provide public support to viable institutions by injecting capital, and carving out bad assets, including possibly through a “bad bank” approach,” the Update stressed.

“We think that more decisive action is needed now by both policymakers and market participants, and with greater emphasis on balance sheet cleansing,” said Jaime Caruana, Financial Counsellor of the IMF.

Setbacks all round

? Advanced economies will experience their sharpest contraction in the post-war period, the Update said. The IMF expects real activity to contract by around 1½ percent in the United States, 2 percent in the euro area, and 2½ percent in Japan.

? Though more resilient than in previous global downturns, emerging and developing economies will also suffer serious setbacks. For example, growth is expected to slow to 6¾ percent in China and 5 percent in India.

? Global growth is projected to rebound in 2010 to 3.0 percent after falling sharply to just 0.5 percent in 2009, when measured in terms of purchasing power parity. The 2009 world growth forecast has been revised downward by 1.7 percent compared with the last IMF projection last November.

Creating a turnaround

Blanchard emphasized that two types of measures are needed to turn things around:

  1. Stronger policy actions to restore financial sector health. Reviving the functioning of the financial sector and unclogging credit markets is a necessary condition for economic recovery. The building blocks of what needs to be done have been assembled to varying degrees in many countries, but a comprehensive framework for restoring financial health and dealing with bad assets remains to be built, and the financial crisis has lingered. More aggressive and concerted actions are now needed?through a unified approach involving liquidity provision, capital injections, and disposal of problem assets.

  2. Macroeconomic stimulus?both monetary and fiscal?to support demand.

On monetary policy, many central banks have taken strong actions to cut interest rates and improve credit provision. The IMF still sees some room to lower interest rates, as inflation pressures are subsiding, but the room is diminishing rapidly, and has disappeared altogether in some countries. Moreover, deflation is now a risk. In present circumstances, the effectiveness of low interest rates to support activity is likely to be constrained as long as financial conditions remain disrupted. Therefore, central banks will need to rely increasingly on unconventional measures to unlock key (high-spread, low-liquidity) credit markets.

On fiscal policy, many countries have announced and are already implementing sizeable stimulus. The key here is to design packages that provide maximum boost to demand, which argues for measures to increase spending. However, fiscal deficits are widening sharply because of the cyclical downturn and the impact of asset price declines on revenues, as well as stimulus measures and the cost of financial sector rescues. To prevent an adverse market reaction, the IMF says policymakers need to strengthen fiscal frameworks and commit to credible longer-term policies that reverse the deficit buildup as economies recover.

Space for easing

Blanchard also stressed that there is no “one-size-fits-all” policy mix. Some countries have more fiscal and monetary space than others. “In this respect, it is welcome that some emerging economies now have more space for policy easing than in previous downturns and are making use of it,” he said.

[quote]Gambit_Lost wrote:
hedo wrote:

The IMF says it could be a lot worse and we are probably at the end of the recession.

http://www.powerlineblog.com/archives/2009/01/022672.php

Where the hell did you get this from? Oh, a blog…

Bother checking the IMF website? (biggest link at the very top)

[i]World Growth Grinds to Virtual Halt, IMF Urges Decisive Global Policy Response

January 28, 2009

*  IMF revises world growth down to lowest rate since World War II
* Stresses need for stronger international policy response to the crisis
* Banking sector must be unclogged to get economies moving again

[/i]

http://www.imf.org/external/index.htm

[/quote]

Funny stuff. Sadly though you expect to be taken seriously.

The IMF quotes you selectively edit don’t say anything about the stimulus.

Selective editing might have worked for you when the media was in your pocket but it falls short now.

If you can’t add to the conversation why don’t you and the rest of the sheep get back to your circle jerk.

The question remains is this a stimulus or a spending bill that answers liberal desires while weakening the economy and prolonging the downturn like the New Deal did.

Providing for increased spending for medicare and unemployment benefits, while noble, isn’t going to create jobs. Spending money on highway projects that may begin in 2 years likewise doesn’t do anything right now.

Tax cuts have an immediate effect. Spending is what got us here. Psuedo-economic theory that doesn’t work in practice will only make things work.

Regardless the Democrats own this now 100%. The media will have nobody to blame but the Dems in two years. They’ll try but only the most foolish moonbats will buy it.

[quote]LIFTICVSMAXIMVS wrote:
hedo wrote:
I would add it doesn’t seem to do much for job creation and consumer confidence…

Correct, but these are the effects of intervention. Job creation doesn’t happen by mandate and neither will consumer confidence return by mandate.

In fact, any attempt to manipulate them will only have the effect of worsening them.

The best solution is the cheapest solution, and that is for Uncle Sam to do nothing.[/quote]

Agreed.

[quote]tom63 wrote:
It’s not deficit spending once you get the credit card.
[/quote]

Huh? Spending money one doesn’t actually have – worse than that, spending money that doesn’t even really exist – is always deficit spending whether it is done by individuals or by the government.

[quote]forlife wrote:
Then again, the market is ultimately a psychological game. Value is in the eye of the beholder, and the more confidence people have, the more the market will prosper. Unfortunately, neither stimulus package seems to have increased confidence to any great degree.[/quote]

You want restored confidence? How about a change of perspective?

Do we still have:

Food in our kitchen?
Gas in our gas tank?
Working electricity?
A warm place to sleep?
Untattered clothing hanging in our wardrobe?
A source of income?

They can’t fix the economy. Nothing can fix it.

The only remedy now is to simply repudiate all public debt, tell everyone ‘Sorry, we fucked up.’ and return to a gold standard. Fire all government workers except those in defense, police, or judiciary. Sell all public parks, roads, anything owned by gov’t NOT connected with the 3 above. Eliminate all taxes and institute user fees instead.

Make proposing the use of fiat money or the creation of debt by public officials a death-penalty offense.

I realize they’ll never do that and no one here will agree, but I had to say the truth.

The catch is, how do you get others to change their perspective?

Obviously, neither stimulus package has done that.

[quote]hedo wrote:
Gambit_Lost wrote:
hedo wrote:

The IMF says it could be a lot worse and we are probably at the end of the recession.

Where the hell did you get this from? Oh, a blog…

Bother checking the IMF website? (biggest link at the very top)

[i]World Growth Grinds to Virtual Halt, IMF Urges Decisive Global Policy Response

January 28, 2009

*  IMF revises world growth down to lowest rate since World War II
* Stresses need for stronger international policy response to the crisis
* Banking sector must be unclogged to get economies moving again

[/i]

Funny stuff. Sadly though you expect to be taken seriously.

The IMF quotes you selectively edit don’t say anything about the stimulus.

Selective editing might have worked for you when the media was in your pocket but it falls short now.

If you can’t add to the conversation why don’t you and the rest of the sheep get back to your circle jerk.

The question remains is this a stimulus or a spending bill that answers liberal desires while weakening the economy and prolonging the downturn like the New Deal did.

Providing for increased spending for medicare and unemployment benefits, while noble, isn’t going to create jobs. Spending money on highway projects that may begin in 2 years likewise doesn’t do anything right now.

Tax cuts have an immediate effect. Spending is what got us here. Psuedo-economic theory that doesn’t work in practice will only make things work.

Regardless the Democrats own this now 100%. The media will have nobody to blame but the Dems in two years. They’ll try but only the most foolish moonbats will buy it.

[/quote]

Did you even try to read the link?
It’s one thing to say, “I don’t agree with this point.” It’s quite another to have some ideological blinders on that you just skipped that part. (psst. in the part you quoted above it was in the “policy response” part :wink:

[i]2. Macroeconomic stimulus?both monetary and fiscal?to support demand.

On monetary policy, many central banks have taken strong actions to cut interest rates and improve credit provision. The IMF still sees some room to lower interest rates, as inflation pressures are subsiding, but the room is diminishing rapidly, and has disappeared altogether in some countries. Moreover, deflation is now a risk. In present circumstances, the effectiveness of low interest rates to support activity is likely to be constrained as long as financial conditions remain disrupted. Therefore, central banks will need to rely increasingly on unconventional measures to unlock key (high-spread, low-liquidity) credit markets.

On fiscal policy, many countries have announced and are already implementing sizeable stimulus. The key here is to design packages that provide maximum boost to demand, which argues for measures to increase spending. However, fiscal deficits are widening sharply because of the cyclical downturn and the impact of asset price declines on revenues, as well as stimulus measures and the cost of financial sector rescues. To prevent an adverse market reaction, the IMF says policymakers need to strengthen fiscal frameworks and commit to credible longer-term policies that reverse the deficit buildup as economies recover.

Space for easing

Blanchard also stressed that there is no “one-size-fits-all” policy mix. Some countries have more fiscal and monetary space than others. “In this respect, it is welcome that some emerging economies now have more space for policy easing than in previous downturns and are making use of it,” he said.

http://www.imf.org/external/pubs/ft/survey/so/2009/RES012809A.htm[/i]

Here’s another article from the IMF… don’t argue with me, argue with them:

[i]FINANCIAL CRISIS RESPONSE
IMF Spells Out Need for Global Fiscal Stimulus

By Camilla Andersen
IMF Survey online

December 29, 2008

* Large drop in demand requires substantial fiscal stimulus
* Stimulus should focus on spending, targeted tax cuts
* International dimension calls for collective approach 

As for the balance between spending increases and tax cuts, we think that there are two arguments why spending increases should be part of the package, probably more so than in the past.

"Consumers who are credit constrained are likely to spend any extra money derived from a lower tax bill."

First, the decline in private sector demand is likely to be prolonged. This implies that fiscal policy can rely more than in the past on spending measures, including investment in infrastructure, because we don’t need to worry so much about implementation lags.

Second, we believe that, in the current circumstances, the marginal propensity of consumers to spend tax cuts or transfers may be low, leading to low multipliers. That said, selectivity is needed in raising spending: direct purchases of goods by the government?investment spending in particular?has a direct effect on demand and will also have positive supply-side effects. In contrast, increasing public sector wages is unlikely to help and may be difficult to reverse. [/i]

Stimulus plan gives cash to illegals.
http://www.iht.com/articles/ap/2009/01/29/america/Stimulus-Illegal-Immigrants.php

From The Economist (nice interactive map in link):

[i]FEW now doubt that the world economy is in its most parlous state since the 1930s. Demand is slumping across the globe as firms and consumers are battered by a pernicious, self-reinforcing bombardment of dysfunctional financial markets, falling wealth, higher unemployment and rampant fear.

The IMF?s latest forecasts, published on Wednesday January 28th, suggest 2009 will bring the deepest global recession in the post-war era.

Most economists agree that the red ink is both unavoidable and appropriate. To prevent a steep recession becoming a depression, governments must step in to forestall financial collapse and counter the slump in private demand. Financial markets seem to agree. Yields on government bonds in most rich countries are extremely low as shell-shocked investors clamour for the safety of public debt.


Unfortunately, the political cost of bailing out bankers and the huge sums involved mean that many politicians in rich countries are loth to spend heavily. History suggests that is a mistake. Failure to mend a broken financial system quickly means a longer recession; it also renders fiscal stimulus much less potent. Contrast Japan, which had numerous fiscal-stimulus packages in the 1990s, but failed to emerge from its slump until its debt problem was finally dealt with, with South Korea in 1997, which spent 13% of GDP on a large, speedy bank-rescue package.

Less sensible, however, is the distribution of stimulus between countries. America?s fiscal package, at $800 billion or more, will be by far the biggest in absolute terms and one of the biggest relative to the size of its economy. Lamentably, rich creditor countries, such as Germany, are doing much less.

In the emerging world China?s boldness is laudable, and fat reserve cushions have also given other emerging economies more room. But many will find their ability to borrow constrained by investors? flight from risk?and the surge in public debt in the rich world. In its latest estimates, the Institute of International Finance, a bankers? group, expects private-capital flows to emerging economies of only $165 billion this year, down more than 80% from 2007.

If politicians dither over bank rescues, if countries that can stimulate safely do not do enough, and if fearful investors shy away from emerging markets, the odds of a lasting recovery of the global economy seem slim. And that, in turn, will mean far bigger rises in public debt. A multi-year downturn could easily send government-debt ratios up by 30% of GDP or more. [/i]

[quote]forlife wrote:
We are already deeply in debt thanks to Bush, [/quote]

Please get another angle here. That one is over.

[quote]forlife wrote:
how do you get others to change their perspective?
[/quote]

A few days with no food, warmth, or a place to sleep will change people’s perspective. That’s also when people really start to question the notion of “prosperity without work”.

[quote]forlife wrote:
I think the first stimulus was a joke, and this doesn’t seem much better. We are already deeply in debt thanks to Bush, and it isn’t doing us any favors to add another $1+ Trillion to the docket.

Then again, the market is ultimately a psychological game. Value is in the eye of the beholder, and the more confidence people have, the more the market will prosper. Unfortunately, neither stimulus package seems to have increased confidence to any great degree.[/quote]

No it’s not. Perspective has not shit to do with it. Actual flow of money does. When money flows economy is good, when it stops, it’s bad.

Actually the worst thing people can do is save. But you have to unless you want to be fucked in the end.

Hey wait, this isn’t a gay thread…What are you doing here?

[quote]pat wrote:
When money flows economy is good, when it stops, it’s bad.
[/quote]

Money “not flowing” is the symptom of a greater problem. If money is not flowing it is because there is nothing to spend it on.

Are you genuinely unaware – it seems so – that the problem in recessions and depressions is in fact the reverse of what you state?

Are you unaware of, for example, the large inventories of new automobiles, houses, etc?

Not aware that retailers had plenty of merchandise on the shelves for Christmas, that the problem was not less product than consumers wished to buy, but less demand than product?

Why your posts seems to specialize in economic issues when you’re so grievously ignorant in them, I can’t begin to imagine. The closest I can come to figuring it out is that some people are attracted to subjects they can’t comprehend, precisely for that reason.

[quote]Bill Roberts wrote:
Are you unaware of, for example, the large inventories of new automobiles, houses, etc?
[/quote]

Go back and reread my posts, I never said there was nothing to spend money on. I said that is the only way money will “not flow”. Money “not flowing” is not even the problem.

Eventually though, there will be nothing to spend your money on.

[quote]pushharder wrote:

I think you could post a bounty, a reward, on that one. If anyone can document where a governmental agency EVER advocated less government…

[/quote]

Ronald Reagan quotes:

“I don’t believe in a government that protects us from ourselves.”

“The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

“The nine most terrifying words in the English language are, 'I’m from the government and I’m here to help.”

Ron Paul quotes:

“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.”

“How did we win the election in the year 2000? We talked about a humble foreign policy: No nation-building; don’t police the world. That’s conservative, it’s Republican, it’s pro-American - it follows the founding fathers. And, besides, it follows the Constitution.”

“I am just absolutely convinced that the best formula for giving us peace and preserving the American way of life is freedom, limited government, and minding our own business overseas.”

“The obligations of our representatives in Washington are to protect our liberty, not coddle the world, precipitating no-win wars, while bringing bankruptcy and economic turmoil to our people.”

“When the federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans.”

“You wanna get rid of drug crime in this country? Fine, let’s just get rid of all the drug laws.”