A question for Fiscal Conseravtives

[lisadr]

So here goes.

I am asking those who describe themselves as fiscal conservatives to give me their opinion on how they feel the current economic situation should be addressed.

I know, I know-"is that all?"

But in hearing about all the opposition from both sides to Obamas' economic plan, I am curious to hear the reasons behind it.

I myself take a practical view on things and I am sure there are those who have a much more informed opinion and will tell me about it. And that's fine. But let's see if we can be respectful of each other in the process.


As for myself:

*I see any investment in our infrastructure as beneficial to the country as a whole. I feel that if we are going to have a deficit, we should have something to show for it.

*I don't see how the "starve the beasts" theory will do anything but more harm in the current condition of this country.

*I have never bought into trickled down economics. I know some argue that if corporate taxes are lower, companies will turn that into jobs-I disagree. I feel that the cost (wages, benefits, cost of materials, lower standards) of doing business in other countries is the motivating factor. Doing your banking in another country is just the cherry on the sundae.

* I really don't see the benefits to America in NAFTA and other trade agreements, with exception of cheap consumer products.

These are just some of my opinions. I am interested in yours. What I am not interested in (in this thread at least ) is which party is better, opinions on any of the presidents past, present, or soon to be future. Religious debate (I really don't see how it relates to fiscal issues). And any other unrelated issues.

Of course it's a free world and thread, but it would be great to have a real discussion on economic issues and not have this degrade into something else.

So let's see what happens.

 

[Golf4food]

There are a lot of things that the government shells out money for that it has no business doing - local projects that benefit only local areas should not be the job of the Federal government. All of those thousands of pork projects that get funded add up to millions and millions of wasted Federal dollars. If Podunk, California wants to build a small commuter rail system for their town the people in Miami, Florida shouldn't have their tax dollars go to pay for it. If Joe Blow, Ohio wants to build a museum dedicated to Wendy's then tax payers in Seattle, Washington should have to see their tax dollars go to pay for it. Things like that.

The Federal government should fund only those items which serve a national interest: defense, major infrastructure (highway system, ports, etc.), limited healthcare and welfare programs, catastrophe relief, etc. I do not think that Federal tax dollars should be used in such large quantities to fund so many local pet projects of our senators and representatives - let the local tax payers pay for their own museums, courthouses, and local mass transit, etc.

And while it has been shown that tax revenues increase when taxes are lowered I have seen no evidence to support trickle-UP economics... When companies pay more they spend less and that includes payroll - companies right now are shedding employees to save money because sales are down and the cost of business has gone up. Raising corporate taxes would only make that worse. Doesn't matter if taxes go up to fund welfare if the companies that provide work keep shedding employees, thus increasing the number needing welfare, thus creating the need for more taxes, creating more unemployment, creating more welfare... where does it end?

 

[Cool-Beans]

This will sound radical in this day and age, but...

1. No stealing in any form.

2. Don't spend money you don't have.

3. Pay your debts.

4. Make use of the Free Enterprise system. It works much better than communism.

 

[edwardsfire]

I personally want....
1. Low (er) taxes on ALL Americans
2. Get Govt. out of the markets, free enterprise and Capitalism always work if Govt. get out of the way.
3. End the bailouts
4. End capital gains taxes...thats a biggie.
Bottom line, There really isnt ANYTHING (other than lower taxes) that Govt. should do.
I would see NOTHING as better than some (bad things), I think that time will end this recession and the less the Govt. does the faster it will end.
The one thing i am suprised and happy about is Obamas willingness to cut taxes. (we will see if congess goes along).

 

[edwardsfire]

This will sound radical in this day and age, but...

1. No stealing in any form.

2. Don't spend money you don't have.

3. Pay your debts.

4. Make use of the Free Enterprise system. It works much better than communism.

Agreed.
Communism DOESNT work at all.

 

[edwardsfire]

There are a lot of things that the government shells out money for that it has no business doing - local projects that benefit only local areas should not be the job of the Federal government. All of those thousands of pork projects that get funded add up to millions and millions of wasted Federal dollars. If Podunk, California wants to build a small commuter rail system for their town the people in Miami, Florida shouldn't have their tax dollars go to pay for it. If Joe Blow, Ohio wants to build a museum dedicated to Wendy's then tax payers in Seattle, Washington should have to see their tax dollars go to pay for it. Things like that.

The Federal government should fund only those items which serve a national interest: defense, major infrastructure (highway system, ports, etc.), limited healthcare and welfare programs, catastrophe relief, etc. I do not think that Federal tax dollars should be used in such large quantities to fund so many local pet projects of our senators and representatives - let the local tax payers pay for their own museums, courthouses, and local mass transit, etc.

And while it has been shown that tax revenues increase when taxes are lowered I have seen no evidence to support trickle-UP economics... When companies pay more they spend less and that includes payroll - companies right now are shedding employees to save money because sales are down and the cost of business has gone up. Raising corporate taxes would only make that worse. Doesn't matter if taxes go up to fund welfare if the companies that provide work keep shedding employees, thus increasing the number needing welfare, thus creating the need for more taxes, creating more unemployment, creating more welfare... where does it end?

One word......TRUTH.

Alot of folks dont realize that: Lower taxes DOES increase federal revenue.
Even JFK knew that.
The key is: Cutting federal spending on non-essential things.

 

[LuvOrlando]

While I am 100% for a lassez faire economy we have been so negligent in preventing it from following its own due course that we simply can't revoke support now without dire consequences. If we had always practiced a hands off approach the sick companies would have collapsed with little damage and been replaced by more viable entities ages ago and all the employees would have moved on to better training long ago too. Now we have generations dependent on unsustainable industries who have no motivation to change.

The hard reality is that this country can no longer sustain itself in any sort of manufacturing industry. We shifted to a services based economy long ago, when our labor costs for unskilled labor outpaced the workers value. At this point the most viable jobs are in industries which covet our unparalleled creative culture (for example the video game markets) or well trained services providers (health industry) yet many Americans are unwilling or unable to shift over because we've been propped up too long.

I think we need to bite the bullet and get ourselves up and running (financial assistance to American's is unavoidable) and then commit ourselves to withdrawing support. The only involvement our government should have in private industry should be the passing of laws to protect 'we the people'. After all in Poly Sci 100 I remember learning the only relevant purpose of any government is to pool influence for the benefit of the masses (collect taxes for the creation of things such as a militia or bridges etc which can not be sustained otherwise).

 

[loco4dis]

Government doesn't "create" anything relative to the economy; it doesn't earn or generate income, and it doesn't create jobs that add to the economy, only those that take away in terms of higher federal spending. For a free market conservative, government either gets out of the way and lets the market work, or it interferes resulting in untold unintended consequences, all of them bad for the economy. (The current economic crisis, for example, is largely due to government requirements that lenders make risky loans, which the lenders then took and ran with, until the ponzi scheme fell in on itself.)

The government is 100% funded by the private sector in the form of various taxes paid. It would makes sense, then, to have a thriving private sector drive any economic recovery. We know from past practice that lower business taxes mean higher profits and thus higher tax revenues to the federal government, and conversely, higher business taxes mean lower tax revenues. We also know from past practice that lower income taxes increase revenues to the federal coffers, while higher income taxes decrease revenues. Anything the government does that takes money out of people's or business's pockets is punitive in nature (it punishes productivity, achievement, and wealth creation), so it always results in less personal and business productivity, spending, investment, and income.

I would have preferred that the Bush administration let the failing businesses last fall fail. In a free market, poorly managed businesses are supposed to fail, so better ones can come along and take their place. When poorly managed businesses are propped up, everyone loses in terms of higher prices and lower quality goods and services — and because government funds are being used, the propping up is temporary. Think of what the top 100 companies were 50 or 100 years ago, and ask yourself how we survived the "failure" of those no longer in the marketplace? We survived — and thrived — because better companies came along and filled the void. Failure does hurt the people closest to the company in the immediate term, but a sensible government that wasn't wasting its money on corporate socialism and other wasteful spending could help those few individuals, while allowing the market economy to continue to grow.

I know a lot of people argued that some of these companies were just "too big" to allow them to fail, but quite frankly, the bigger the failing company, the more of a drain it is on the economy, and the better off we'd be with it gone rather than temporarily propped up by a government that hasn't the funds or the know-how to make it a success. Government bailouts simply encourage inefficiency and more risky business practices. Businesses, in a market economy, must be able to rise and fall on their own merits to the consumer.

It's fine to want to "help people." This is always the big divide between conservatives and liberals, isn't it, that liberals want to help the poor and conservatives just don't care? But I do believe that free market fiscal conservatives understand that needy people can't be helped without a thriving, profit-driven private sector because that is where government gets its money to "help" people. If business wins, everyone wins. The alternative is egalitarian poverty — there are no more "rich" people, to be sure (except, of course, those few politicians who foisted the poverty on us), we're simply all poor, all suffering, and all deprived, but equal, I suppose.

So, NO more government bailouts; immediate transparency as to how the previous bailout funds were spent, and if they were squandered, an immediate order that they be repaid; significantly lowered taxes across the board, for individuals and businesses; suspension of the capital gains tax for at least 5 years. That would be a start.

 

[minnie61650]

<SNIP>(The current economic crisis, for example, is largely due to government requirements that lenders make risky loans, which the lenders then took and ran with, until the ponzi scheme fell in on itself.)<SNIP>

I respectfully disagree.
Although the financial institutions would like us to believe and have led us to believe that mandated morgage lending is the reason they are in trouble , I believe the Credit Default Swaps are the real reason that our financial institutions are in dire straights.


I am 58 years old and have lived through many recessions.
This recession is unlike the others I have known.
In the past we had manufacturing crisis, fuel crisis, inflation crisis, dot. com crisis etc.

In the last 40 years every other recession our country was in those who had very good or excellent credit were able to get loans. Those loans may have come with double diget interest but they were still available.

This recession is different because the lending institutions do not have the money to loan.

I think the problem started way before the mandated morgage lending.
I think it stated over 10 years ago in 1997 when the JP Moragn came up with a wonderfully evil ( my words) idea to free up their monies called Credit Default Swaps.

The Credit Default Swaps were invented in 1997 by a team working for JP Morgan. They were designed to shift the risk of default to a third-party, as this shifted risk did not count against their regulatory capital requirements. In essence the swaps were created as a regulatory loophole


Basically banks used to need to keep monies on hand to back up loans. The financial institutions decided they could free up more money for loans if they had a 3rd party be responsible if a loan was defaulted.
Kind of like an insurance policy but unlike a real insurance company which is regulated these 3rd party companies are not regulated and did NOT have money to pay the defaults and that is why our financial institutions are in such a mess.

The banks kept lending money they did not have and now lots of defaults are coming in with no one to pay the defaults. My guess is that te banks are bankrupt and no longer can even pretend to lend the money they do not have.

This article explains a little about Credit Default Swaps:

http://www.time.com/time/business/article/0,8599,1723152,00.html

 

[lisadr]

Sorry I disappeared, I was watching the concert and then baking cookies with the rugrat.

There are a lot of things that the government shells out money for that it has no business doing - local projects that benefit only local areas should not be the job of the Federal government. All of those thousands of pork projects that get funded add up to millions and millions of wasted Federal dollars. If Podunk, California wants to build a small commuter rail system for their town the people in Miami, Florida shouldn't have their tax dollars go to pay for it. If Joe Blow, Ohio wants to build a museum dedicated to Wendy's then tax payers in Seattle, Washington should have to see their tax dollars go to pay for it. Things like that.

I can see your point, but would you say it is almost a state form of protectionism? How far would you take this? For example FEMA. I totally get pet projects and agree that there are some really silly ones out there, but how tight would you be on spending? I ask because you use the example of a rail system.


The Federal government should fund only those items which serve a national interest: defense, major infrastructure (highway system, ports, etc.), limited healthcare and welfare programs, catastrophe relief, etc. I do not think that Federal tax dollars should be used in such large quantities to fund so many local pet projects of our senators and representatives - let the local tax payers pay for their own museums, courthouses, and local mass transit, etc.

[COLOR=This is kinda off topic, but how do you feel about projects of a national historic nature?
Also you mentioned limited welfare and healthcare, would you please elaborate.[/COLOR]

And while it has been shown that tax revenues increase when taxes are lowered I have seen no evidence to support trickle-UP economics... When companies pay more they spend less and that includes payroll - companies right now are shedding employees to save money because sales are down and the cost of business has gone up. Raising corporate taxes would only make that worse. Doesn't matter if taxes go up to fund welfare if the companies that provide work keep shedding employees, thus increasing the number needing welfare, thus creating the need for more taxes, creating more unemployment, creating more welfare... where does it end?

Do you feel that lower taxes are enough of an incentive to keep jobs in American? If not, why?
Do you believe in a temporary increase in welfare and unemployment benefits?
Are you for heavier taxes on doing business in the US for companies who have outsourced jobs to other countries?
What is your opinion on NAFTA? Do you feel the US is getting the short end of the stick?

 

[lisadr]

This will sound radical in this day and age, but...

1. No stealing in any form.

2. Don't spend money you don't have.

3. Pay your debts.

4. Make use of the Free Enterprise system. It works much better than communism.

Would you like to elaborate on this? As it pertains to the government. They are all great things, but I was curious how you would specifically apply them in a beneficial way to the economy.

 

[eliza61]

1) End bailouts. Not working and they are only help big corporations
2) End corporate taxes with some strings. You start shipping jobs overseas you have your taxes raised out the wazoo.
3) Get a handle on all the fraud in our social programs. Yes, the government should help it's most vunerable citizens but some of our citizens do need a well place kick in the backside. Don't throw out the baby though just to change the bath water.
4) End all the hand outs to foreign countries. While I would love to help our allies buy weapons, I do have a problem giving foreign aid when an estimated 10 million children here are without the basic health care.
5) If we truly want to end our dependance on foreign oil, we better start acting like it. End the bipartisan bickering, with todays technology we should have all sorts of viable alternative energy. I don't believe it can't be done, we put a man on the moon.

 

[lisadr]

Hello Edward,

I personally want....
1. Low (er) taxes on ALL AmericansDo you believe in sliding scale taxation? Or do you support a fixed rate across the board?
2. Get Govt. out of the markets, free enterprise and Capitalism always work if Govt. get out of the way.How do you feel that the deregulation of certain sectors has worked? Do you feel that the housing crisis is or is not a direct problem stemming from the deregulation of Wall St.?
3. End the bailouts This one realy intrigues me. I am on the fence. How far can we take that statement? Do you feel that the banking bailout was unnecessary?
4. End capital gains taxes...thats a biggie.On a corporate level or for small business and investors? Do you feel it's fair that many big companies wind up only paying a CGT instead of an income tax? I feel it's a form of tax evasion.
Bottom line, There really isnt ANYTHING (other than lower taxes) that Govt. should do.
I would see NOTHING as better than some (bad things), I think that time will end this recession and the less the Govt. does the faster it will end. So you support a "starve the beast" form of dealing with the recession?
The one thing i am suprised and happy about is Obamas willingness to cut taxes. (we will see if congess goes along).

 

[Mr Man]

So here goes.

I am asking those who describe themselves as fiscal conservatives to give me their opinion on how they feel the current economic situation should be addressed.

I know, I know-"is that all?"

But in hearing about all the opposition from both sides to Obamas' economic plan, I am curious to hear the reasons behind it.

I myself take a practical view on things and I am sure there are those who have a much more informed opinion and will tell me about it. And that's fine. But let's see if we can be respectful of each other in the process.


As for myself:

*I see any investment in our infrastructure as beneficial to the country as a whole. I feel that if we are going to have a deficit, we should have something to show for it.

*I don't see how the "starve the beasts" theory will do anything but more harm in the current condition of this country.

*I have never bought into trickled down economics. I know some argue that if corporate taxes are lower, companies will turn that into jobs-I disagree. I feel that the cost (wages, benefits, cost of materials, lower standards) of doing business in other countries is the motivating factor. Doing your banking in another country is just the cherry on the sundae.

* I really don't see the benefits to America in NAFTA and other trade agreements, with exception of cheap consumer products.

These are just some of my opinions. I am interested in yours. What I am not interested in (in this thread at least ) is which party is better, opinions on any of the presidents past, present, or soon to be future. Religious debate (I really don't see how it relates to fiscal issues). And any other unrelated issues.

Of course it's a free world and thread, but it would be great to have a real discussion on economic issues and not have this degrade into something else.

So let's see what happens.

Good post. I have been thinking about the economic mess quite a bit lately. Sadly, I see no easy solution.

I believe there is a root cause to this mess. IMO, it is entirely because of moral and ethical decay in virtually all of our countries great institutions. I go right down the line and spare noone. I see the evidence of this decay all around us: government, school, business, church, media, courts, public sports. Examples of this decay are too numerous to list in a message board. I believe this economic crisis is a cumulative effect of our failure to live and work as a moral and ethical people.

I say this in all seriousness.

When I say moral and ethical, I do not mean to say this is all about religion or any specific religion. It is not. But it is about greed, avarice, envy, sloth (and all those age old vices).

There is an acronym fiscal convservatives use from time to time: TANSTAAFL. It means "There Aint No Such Thing As A Free Lunch". What I have seen of the 2009 Stimulus Plan (and frankly the previous stimulus plans) contain a lot of free lunches. They are not going to work.

I do not know what will work exactly, but do know that we need to hold ourselves, our companies, our representatives in government and those we interact with on a daily basis to a higher standard than we do currently. If we do not, we will leave our children nothing for them to build on.

JMO

A short response to your points above:

Investment in our infrastructure is fine, but it is a temporary ameliorant. FDR did a lot of this sort of thing. It did get people working.....but this only for a while. Also, our Federal Govt. has a spotty record with this kind of thing. As evidence, I submit "The Big Dig".

"Starve the Beast" is a draconic measure to be used as a last resort. However, feeding failure simply prolongs the Beast's suffering......at greater cost to all......

Trickle down theory is an incomplete explanation of economics that does not adequately describe how a company/corporation interacts with the people and government (luckily, it is just a theory and not the law). However, it is manifestly obvious to me that any tax increase on a company or corporation is passed along directly to those who buy anything from them.

Trade agreements are critical components of the Free Market.......I was skeptical of NAFTA from the beginning.....and do miss a lot of those jobs the US lost. On balance, NAFTA has been good for the US, Canada and Mexico......I think we should let Columbia into the agreement.

 

[lisadr]

While I am 100% for a lassez faire economy we have been so negligent in preventing it from following its own due course that we simply can't revoke support now without dire consequences. If we had always practiced a hands off approach the sick companies would have collapsed with little damage and been replaced by more viable entities ages ago and all the employees would have moved on to better training long ago too. Now we have generations dependent on unsustainable industries who have no motivation to change.

What are your thoughts on agriculture in relation to this statement?
Also do you feel that the government negotiating treaties should or should not be a part of a new real lassez fare style of doing things?
How do you feel the government has represented the US employee in treaties in general?

The hard reality is that this country can no longer sustain itself in any sort of manufacturing industry. We shifted to a services based economy long ago, when our labor costs for unskilled labor outpaced the workers value. At this point the most viable jobs are in industries which covet our unparalleled creative culture (for example the video game markets) or well trained services providers (health industry) yet many Americans are unwilling or unable to shift over because we've been propped up too long.

Do you thing that a new green economy could put us back in the world market as a manufacturing country?

I think we need to bite the bullet and get ourselves up and running (financial assistance to American's is unavoidable) and then commit ourselves to withdrawing support. The only involvement our government should have in private industry should be the passing of laws to protect 'we the people'. After all in Poly Sci 100 I remember learning the only relevant purpose of any government is to pool influence for the benefit of the masses (collect taxes for the creation of things such as a militia or bridges etc which can not be sustained otherwise).

Do you feel that laws protecting the "we the people" have helped or hurt business?

 

[ntsammy5]

I used to think I had an answer - not so much anymore. Things are so borken now, I'm not sure what to suggest. Like others Turth )transparency) is a good thing. Bernie Madoff should be hung and anyone else who did the same thing.

 

[lisadr]

Government doesn't "create" anything relative to the economy; it doesn't earn or generate income, and it doesn't create jobs that add to the economy, only those that take away in terms of higher federal spending. For a free market conservative, government either gets out of the way and lets the market work, or it interferes resulting in untold unintended consequences, all of them bad for the economy. (The current economic crisis, for example, is largely due to government requirements that lenders make risky loans, which the lenders then took and ran with, until the ponzi scheme fell in on itself.)

Would you please explain this more. I find this idea interesting. Which loans, banks, gov. was involved.

The government is 100% funded by the private sector in the form of various taxes paid. It would makes sense, then, to have a thriving private sector drive any economic recovery. We know from past practice that lower business taxes mean higher profits and thus higher tax revenues to the federal government, and conversely, higher business taxes mean lower tax revenues. We also know from past practice that lower income taxes increase revenues to the federal coffers, while higher income taxes decrease revenues. Anything the government does that takes money out of people's or business's pockets is punitive in nature (it punishes productivity, achievement, and wealth creation), so it always results in less personal and business productivity, spending, investment, and income.

If we lower the income tax, would the revenue be from sales and sin taxes? Do you believe they will be viable enough to fund the government? How does this relate to the Deficit?

I would have preferred that the Bush administration let the failing businesses last fall fail. In a free market, poorly managed businesses are supposed to fail, so better ones can come along and take their place. When poorly managed businesses are propped up, everyone loses in terms of higher prices and lower quality goods and services — and because government funds are being used, the propping up is temporary. Think of what the top 100 companies were 50 or 100 years ago, and ask yourself how we survived the "failure" of those no longer in the marketplace? We survived — and thrived — because better companies came along and filled the void. Failure does hurt the people closest to the company in the immediate term, but a sensible government that wasn't wasting its money on corporate socialism and other wasteful spending could help those few individuals, while allowing the market economy to continue to grow.

What do we in in the case of companies entangled with our national economy?

I know a lot of people argued that some of these companies were just "too big" to allow them to fail, but quite frankly, the bigger the failing company, the more of a drain it is on the economy, and the better off we'd be with it gone rather than temporarily propped up by a government that hasn't the funds or the know-how to make it a success. Government bailouts simply encourage inefficiency and more risky business practices. Businesses, in a market economy, must be able to rise and fall on their own merits to the consumer.

Should the government step in and fill the void of large banks? I don't understand a way to let large banks fail.

It's fine to want to "help people." This is always the big divide between conservatives and liberals, isn't it, that liberals want to help the poor and conservatives just don't care? But I do believe that free market fiscal conservatives understand that needy people can't be helped without a thriving, profit-driven private sector because that is where government gets its money to "help" people. If business wins, everyone wins. The alternative is egalitarian poverty — there are no more "rich" people, to be sure (except, of course, those few politicians who foisted the poverty on us), we're simply all poor, all suffering, and all deprived, but equal, I suppose.

I understand that a healthy business sector funds a healthy government, which in turn can offer help to it's citizens. But where does the cycle start? And when the system is in danger, where does the government step in? If at all. And what about protecting the worker in all this?

So, NO more government bailouts; immediate transparency as to how the previous bailout funds were spent, and if they were squandered, an immediate order that they be repaid; significantly lowered taxes across the board, for individuals and businesses; suspension of the capital gains tax for at least 5 years. That would be a start.

I totally agree with this. I still cannot wrap my mind around the recent bailouts. How could the gov. hand out billions of dollars with no accountability? And just stand there and accept being told it is not our business where the funds went.
A lot of folks have touched on the CGT. Would you have it an across the board, or do you support PE Obamas' plan to direct it more toward small business?

 

[lisadr]

I respectfully disagree.
Although the financial institutions would like us to believe and have led us to believe that mandated morgage lending is the reason they are in trouble , I believe the Credit Default Swaps are the real reason that our financial institutions are in dire straights.


I am 58 years old and have lived through many recessions.
This recession is unlike the others I have known.
In the past we had manufacturing crisis, fuel crisis, inflation crisis, dot. com crisis etc.

In the last 40 years every other recession our country was in those who had very good or excellent credit were able to get loans. Those loans may have come with double diget interest but they were still available.

This recession is different because the lending institutions do not have the money to loan.

I think the problem started way before the mandated morgage lending.
I think it stated over 10 years ago in 1997 when the JP Moragn came up with a wonderfully evil ( my words) idea to free up their monies called Credit Default Swaps.

The Credit Default Swaps were invented in 1997 by a team working for JP Morgan. They were designed to shift the risk of default to a third-party, as this shifted risk did not count against their regulatory capital requirements. In essence the swaps were created as a regulatory loophole


Basically banks used to need to keep monies on hand to back up loans. The financial institutions decided they could free up more money for loans if they had a 3rd party be responsible if a loan was defaulted.
Kind of like an insurance policy but unlike a real insurance company which is regulated these 3rd party companies are not regulated and did NOT have money to pay the defaults and that is why our financial institutions are in such a mess.

The banks kept lending money they did not have and now lots of defaults are coming in with no one to pay the defaults. My guess is that te banks are bankrupt and no longer can even pretend to lend the money they do not have.

This article explains a little about Credit Default Swaps:

http://www.time.com/time/business/article/0,8599,1723152,00.html

From my understanding of the market collapse, I totally agree with this. I have heard so many people say that President Clinton was the cause of the housing market collapse, I disagree.

I benefited from his Home ownership program. But I can honestly say, I was "given" nothing. The home I bought was within my financial means. I had to show proof of income, length of employment, savings, any gifts or unexplained funds were questioned(we sold a car we bought from a friend whose cousin was a dealer at a great price and were able to make a profit on it.), debt-to-income ratios, they checked my property taxes as well. The only break we got was in the down payment we put down. Instead of a higher percentage, the government program allowed us to put down 3%. This simply put us in our house faster. But the bank was not going to give me any loan that I could not repay-gov. backing or not. I also received no money toward my home purchase. I only mention this because I have heard it said.

 

[wall*e2008]

*I see any investment in our infrastructure as beneficial to the country as a whole. I feel that if we are going to have a deficit, we should have something to show for it.

I am for this as long as it makes people who would be collecting unemployment or welfare go to work.


*I don't see how the "starve the beasts" theory will do anything but more harm in the current condition of this country.

Not sure if I know what "starve the beasts" theory is so I will not comment.


*I have never bought into trickled down economics. I know some argue that if corporate taxes are lower, companies will turn that into jobs-I disagree. I feel that the cost (wages, benefits, cost of materials, lower standards) of doing business in other countries is the motivating factor. Doing your banking in another country is just the cherry on the sundae.

Making it cheaper to do business here results in US jobs. We need to manufacture again here. To do that we need to reduce corporate taxes.


* I really don't see the benefits to America in NAFTA and other trade agreements, with exception of cheap consumer products.

I am not a NAFTA fan.


The best administration is one that does no harm to the economy. This is where Bill Clinton did well. We need an administration that cuts all spending and removes pork. I want a line item veto for the President.

This country wastes so much money. I want real welfare reform, real pork reform, real debt reduction etc.

 

[lisadr]

Good post. I have been thinking about the economic mess quite a bit lately. Sadly, I see no easy solution.

I believe there is a root cause to this mess. IMO, it is entirely because of moral and ethical decay in virtually all of our countries great institutions. I go right down the line and spare noone. I see the evidence of this decay all around us: government, school, business, church, media, courts, public sports. Examples of this decay are too numerous to list in a message board. I believe this economic crisis is a cumulative effect of our failure to live and work as a moral and ethical people.

I say this in all seriousness.

When I say moral and ethical, I do not mean to say this is all about religion or any specific religion. It is not. But it is about greed, avarice, envy, sloth (and all those age old vices).

There is an acronym fiscal convservatives use from time to time: TANSTAAFL. It means "There Aint No Such Thing As A Free Lunch". What I have seen of the 2009 Stimulus Plan (and frankly the previous stimulus plans) contain a lot of free lunches. They are not going to work.

I do not know what will work exactly, but do know that we need to hold ourselves, our companies, our representatives in government and those we interact with on a daily basis to a higher standard than we do currently. If we do not, we will leave our children nothing for them to build on.

JMO

A short response to your points above:

Investment in our infrastructure is fine, but it is a temporary ameliorant. FDR did a lot of this sort of thing. It did get people working.....but this only for a while. Also, our Federal Govt. has a spotty record with this kind of thing. As evidence, I submit "The Big Dig".

"Starve the Beast" is a draconic measure to be used as a last resort. However, feeding failure simply prolongs the Beast's suffering......at greater cost to all......

Trickle down theory is an incomplete explanation of economics that does not adequately describe how a company/corporation interacts with the people and government (luckily, it is just a theory and not the law). However, it is manifestly obvious to me that any tax increase on a company or corporation is passed along directly to those who buy anything from them.

Trade agreements are critical components of the Free Market.......I was skeptical of NAFTA from the beginning.....and do miss a lot of those jobs the US lost. On balance, NAFTA has been good for the US, Canada and Mexico......I think we should let Columbia into the agreement.

You raise an interesting point about morality. Stepping outside of religion of any kind, I do feel that we are losing something in ourselves as a country. What is more upsetting is the fact that we have become so preoccupied in being right as a group(conservative, liberal, democrat, republican) we have forgotten how to be a country.

I myself am as guilty as any. There are certain ideas I believe in and groups I identify with. While it great fun to debate a subject, I fear it is paralyzing us from coming together to make real changes this country needs. It is one of the reasons I started this thread. I want to be less the "dog with a bone" and take more steps to understand beyond what I know now.

I know there are some very strong feelings about our new president, but one of the strongest reasons I voted for him was I feel he is more interested in what is right for the country than his party. Only time will tell if that is the case, but for now it does me good to hope. But I will not let it blind me.

It seems that the only time this country can come together, is during crisis. I just wonder if an economic crisis is enough to be the catalyst. I wonder does the average American really understand or care to understand our government and the current financial crisis? Because without that understanding we simply rely on preconceived ideas-personal ones.