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Author Topic: Educating the Public-Seeds of the Depression, your job/401K/IRA future shock  (Read 2512 times)
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WhiskeyGirl
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« on: December 12, 2008, 07:59:01 AM »

I'm waiting for the media and government to start educating the public on the seeds of the Depression or "deep recession" as some would like to call it. 

Some on Wall Street, some insurance companies, and TARP recipients party on.  Slashing jobs, they seem to be unaware of the misery on Main Street. 

Where did all those paper fortunes go?   

What is the real value of a company?  The stock price?  What if no one wants to buy your stock?  What if the only thing left of a company is their stock?  They don't produce things?  What if a company focused on leveraging things that only exist in the minds of management/boards?  Goodwill?  What happens when the "Goodwill" is gone? 

What happens when there are no more poor/fraud people to sign onto mortgages they cannot afford?   No more fees?  Why didn't someone help those people understand that they cannot afford the mortgages they were signing for?  Where was the reality check?  The buyer education? 

Why didn't someone help those people wake up and smell the coffee?
   

I remember a time when there were seminars and educational programs for home buyers.  They helped you determine what you could afford.  It was based on a realistic look at your finances.  Most of all, they asked, can you afford this house?   Maybe you should save a little longer.  They educated the public about potential fluctuations in the housing market and why banks asked for a 10-20 percent down payment.  They tried their best to explain how the real world works.  When did common sense go out the window? 

When there was trouble with an increasing number of these mortgages - home owners over extended, liars loans, fraud mortgages, why didn't the government do something to address the problem?  Taxpayers were backing all these things.  Where were the people responsible for looking out for taxpayers?  Why weren't there enough of these people to fix things before they crashed?


What happens when a company exists only to raise the stock price for the benefit of management/board compensation and bonus?

What happens when your government only looks out for a few?  When does the party stop?

Are those stock prices going to be re-inflated/overinflated, resuscitated any time soon?   Crying or Very sad

Who's going to wave the magic wand this time?   

Who's going to tell the public that their 401k/IRA and real estate values are not coming back tomorrow?  It might take 8-10 years?  Maybe 20?   

Who wants to tell the public here is no magic wand?  Only an ugly stick?


Just my humble opinions.
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WhiskeyGirl
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« Reply #1 on: December 12, 2008, 08:48:59 AM »

When will corporate America acknowledge that profits will be down?  That America is in a holding pattern?

I remember reading stories about people who survived the Great Depression.  Sometimes, they didn't know why their employers kept them on.  There really wasn't work, no business to speak of.  However, they did what they could and took home a small paycheck.

Times were tough.  There was no welfare.  There was no food stamps.  There was no earned income credit.   Cash was hard to find.

There were a lot of stories about individual acts of kindness and generosity.

Often there was no hand up, but a hand to steady and keep a family afloat.  Sometimes families had many members and everyone helped.  Sometimes families had just a few members.

I think what we need in this country are the hands that keep us steady and afloat.  Some will sink deeper, and they need helping hands to. 

Where is the message about saving jobs?  Everyone giving up a little and helping everyone stay afloat?  Rightsizing compensation and benefits for everyone, to sustainable levels for the long term?

Where is the message about making do with a little less?

I don't think the government is in a position to save or create jobs.  The country is broke. 

just my humble opinions
 
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WhiskeyGirl
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« Reply #2 on: December 14, 2008, 09:50:33 AM »

I have to wonder today why some politicians keep invoking the race, class, poor, disadvantaged, and rich cards.  Why?

In my mind, all people need the same basic things - shelter from the elements, food, clothing, and community.  I sure there are other things that could be added to the list.

Perhaps all these cards are used to avoid discussion about what needs to be accomplished?  Society may feel the need to shelter those that are incapable of finding or maintaining shelter.  Sometimes, people fall on hard times and lose their homes.  They need shelter to.

Should taxpayers keep giving away all these houses?  Condos?  Townhouses?  Watching as the people just walk away?  What happened to responsibility?  Maybe there should be no qualification?  Don't need a job, don't need any income, don't need to worry about ever making a payment...taxpayers have you covered, will continue eating all the losses for banks, mortgage companies, and anyone on Wall Street that may be feeling a little down and out too.

Taxpayers will just bend over and do it again too.


Why isn't the new administration looking at building long term solutions for the homeless?  Homelessness has been an issue for many years.  I am sure there will be record numbers of people/families needing a place to sleep also known as "shelter".  Where will they turn?  Maybe the "you don't want poor people to have the American dream of "home ownership".  What happened to simply providing shelter to those in need?

I believe there is a hugh difference between providing shelter and providing people with the OPPORTUNITY to own a home.  In my mind, everyone needs shelter, some cannot find or maintain this for themselves, and some need help in a crisis.  

Why invoke the race, class, poor, disadvantaged, and rich cards?  Over, and over, and over again. 

Why isn't the focus on everyone?  Everyone isn't going to college?  What opportunities are there for these people?  Why not provide opportunities for everyone without playing games?

When will public works include building cities for the homeless?  The hungry?  Irregardless of any race, ethnic, class, or other categories?

Who has the best interests of the nation's future generations in mind?  Who worries about sustainability?  The party continues with the taxpayer dollars, and some have no concern with the nation's debt.  How many hundreds of years will this debt be with us?  When will the party come to a crash?

For some taxpayers, the US is the beginning and end of their journey.  There is no place to go when the US collapses-no dual citizenship, no mother country to return to, this is it.  Not everyone, including politicians have that same concern.  They and their families will just get on the next boat or plane and leave the troubled US behind.  No problem if things get better, they just return.

Every time I hear card playing, it's a sure sign of taxpayers being assaulted with yet another monetary and cultural swindle.   

just my humble opinons
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WhiskeyGirl
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« Reply #3 on: December 17, 2008, 10:24:04 AM »

Quote
Four of the scenarios keep him up at night:

The Bait Effect

Terrorists, and al Qaeda in particular, are fascinated with the idea of destroying the U.S. economy. Rickards worries that the economic meltdown in the United States could serve as bait of sorts for a terrorist attack, as plotters calculate that a strike now could have a "force multiplier" effect because of the already skittish U.S. stock market.


Yes, what an idea.  Let America rebuild brick by brick, spend all that pork barrel money.  Then, terrorists come in and bomb everything.  Some, with moral and ethical values, ensure that the buildings are empty. 

Quote
The China Syndrome

The Chinese own more than $500 billion worth of U.S. Treasury bonds, and billons more in the debt of other U.S. entities such as those held by Freddie Mac and Fannie Mae. And a general sense of mutually assured financial destruction keeps them from wielding that debt like a weapon: if the Chinese dumped U.S. debt on the global market, their own holdings of U.S. debt would decline in value, the U.S. economy would be damaged, ultimately harming the Chinese economy by reducing American ability to buy more Chinese goods.

(snip)

"It gives the Chinese de facto veto power over certain U.S. interest rate and exchange rate decisions," Rickards explained. "For example, there's a limit to how much dollar depreciation the Chinese would tolerate."

That potentially closes off one American economic strategy: allowing the dollar to decline in value in order to help boost U.S. exporters. And China's leverage is only growing as each federal bailout adds to the U.S. deficit.

Why isn't the US living within the national means?  Living DEBT FREE as advocated by so many for our personal lives and families?  I wonder how many will go before creditors and bankruptcy judges with something like "I was just trying to SPEND by way out of the depression." or "I was just trying to spend my way out of foreclosure."?

Quote
The Existential Crash

A pessimist by nature, Rickards believes that many economic forecasters are wrong, and the recession will get far worse than predicted.

He sees an epic disaster scenario in which the U.S. gross domestic product declines by a staggering 35 percent over the next six to seven years. Crippling deflation could take hold. Unemployment, he says, could approach 15 percent.

That's a calamitous rate, but it would not be an all time high: unemployment hit 25 percent during the Great Depression.

"The national security community needs to be conversant with this," Rickards said. "In defense, intelligence, and national security, you earn your money by preparing for things that may be remote, but pose an existential threat if they come to pass."

In this scenario, the possibilities for global unrest increase dramatically as a staggering United States retreats from foreign aid and global diplomacy and the list of dangerous failed states grows sharply.


I don't see the new administrations pork fest doing anything like "sparking the economy".  I read today they're planning to add over $1 trillion to the national debt with their spending.  I would imagine that this does not include the $350 billion leftover from TARP for Obama.  The $350 TARP will likely be a 'slush' fund arrangement, little if any transparency, or common sense, lots of bonuses to political favorites and nothing for the working people who have to pay all this money back in the future.

During the first Great Depression, people worked or they went hungry.  They lined up at soup kitchens.  I remember many stores from my relatives.  There was no housing assistance, no food stamps, no clothing allotment, nothing but hard work.  If mom and dad didn't go and earn money for food, the family went hungry.  There was no safety net.  People saved during the good times, and spent less and conserved during the low times.  My aunt used to have a saying "I have to lay low for a while."  That meant she didn't spend any money.  She let her savings build a bit.

During this Depression, the nation is already burdened with entitlement programs from the last Depression.  In my mind, the government hasn't been able to keep up with the growth in expenditures, and fewer and fewer people work.  The media suggests that there are jobs, but no one has wanted them for years.  People probably make more money and resources from entitlement programs than they do from work.  Seems like the government needs to lay low and find ways to conserve money.  Probably never happen.

The pork fest continues.  National collapse in the future.  No future is dim.


Quote
The Alternate-Dollar Nightmare

"The Number One vulnerability is the dollar itself," Rickards concluded. "We're printing them and shoving them out the door, and the Fed is basically out of bullets. So why hasn't the dollar collapsed? The short answer is, global investors don't have any other choice." That is, there simply aren't enough Euro- or Yen-backed securities for investors to shift their money out of dollars and into some other currency.

But what if some kind of global coalition - say a trillion-dollar sovereign wealth fund allied with several countries around the world - banded together to create a gold-backed alternative to the dollar?

Rickards says investors - many of whom already resent that they have no alternative to the dollar - would sell American currency in huge numbers to take advantage of the new opportunity. "If that happens, that's the end of the dollar," Rickards said. "You'd have high unemployment, deflation, and interest rates would go up. It would take what already looks like a strong recession and make it a Great Depression or worse."


My billion dollar check has not arrived.  Where is my piece of pork?

I remember reading that India has abandoned the dollar.  I wonder how many are in that group?


Quote
Still, even Rickards sees a silver lining to all this. He looks around the world to the problems facing other countries such as Russia, China, Iran, and those in the Middle East.

"There are vulnerabilities for the United States, but also opportunities," he said. "I'd rather be the United States than any of these other countries."

What are the opportunities?

http://www.kivitv.com/Global/story.asp?S=9536867
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WhiskeyGirl
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« Reply #4 on: December 17, 2008, 11:25:02 AM »

Quote
...Infrastructure Spending Won't Boost the Economy

by Ronald D. Utt, Ph.D.
Backgrounder #2222

...many in Congress, the media, and the business com­munity are pushing for a bold federally funded stimu­lus package that they claim will create jobs, raise incomes, and put the economy back on its path of positive economic growth. Not surprisingly, much of this advocacy stems from a nostalgic embrace of Pres­ident Franklin Delano Roosevelt's New Deal...

Related to this sentimental longing for New Deal authenticity is the revival of the teachings of John Maynard Keynes, who postulated in his 1935 The General Theory of Employment, Interest and Money that "There is room...to promote investment and, at the same time, to promote consumption, not merely to the level which with the existing propensity to con­sume would correspond to the increased investment, but to a higher level still."[1] Subsequent generations of elected officials throughout the world took this obser­vation as a license to raid their treasuries, and no country could be sorrier for endorsing a primitive ver­sion of Keynes's teachings than the Japanese--who squandered vast sums of national wealth in a vain attempt at stimulus that cost them the chance to lead the world in economic growth and prosperity.[2]

During the first Great Depression, were there entitlement programs to be funded as there are today?  From my family accounts, there was no welfare, no safety net.  Also, no one paid for the safety net.  People went to work each day and what they made was what they had to spend.  There was little if any credit and no credit cards.  No mortgage. 

Why continue to spend, spend, spend?  I hasn't worked for millions of Americans, and it hasn't worked for government.


Quote
Little Impact on Jobs or Growth

As The Heritage Foundation has noted in earlier reports, past infrastructure spending--especially related to transportation--has little to show in terms of countercyclical stimulus or job creation.[4] Much of this lackluster impact stems from the long lag time involved in getting such spending pro­grams up and running, as well as the propensity of the state and local governments to substitute federal money for already-committed state and local money in order to shift such funds to other purposes.[5]

Why shouldn't the local community pay for infrastructure?  Some communities are more responsible than others.  That's just the way it has been for generations. 

Quote
In this regard, trade associations like the Ameri­can Association of State Highway and Transporta­tion Officials, which contend that there are more than 3,000 transportation projects ready to get started within 30 to 180 days, are most likely refer­ring to projects that are already funded. In this time of need, no sensible state government would waste the considerable costs associated with planning, permitting, engineering, and management in get­ting projects "ready to go" unless there were funds already available to start--and complete--them.

Why not look to states to drive the future job growth?  Create an inviting atmosphere for business?  I remember reading this year that China has a 10 year tax holiday for businesses that relocate. 

Who is leveling the playing field between nations?  Wage and benefit packages?  Can any worker/business compete with no tax/slavelike wages?


Quote
Although the benefits of a costly, infrastructure-focused stimulus package based on massive gov­ernment spending may be intuitively attractive, past evidence suggests that the impact of govern­ment spending programs that are intended to encourage economic growth is very modest and unlikely to enhance recovery or deter recession. As noted above, the Japanese government imple­mented such a program during the 1990s, and the consequence was two decades of economic stagna­tion. Less ambitious infrastructure stimulus pro­grams have been implemented in the United States over the past few decades, and numerous indepen­dent and government studies have concluded that these programs had little impact on economic activity or jobs.

I wonder how fast the new administration will blow through the $350 billion from TARP and the 1 trillion plus from new acts of Congress?  The nation was bankrupt some time ago.  Instead of building the economy based on sound principles, Capitol Hill just want's to keep spending the money the nation does not have.  When the spending cycle continues, they will go after or find ways to redistribute the hard work of others to maintain their squandering wastrel ways.  Watch out for any money you have...Capitol Hill wants to give that away in pork to their special interests.  It's not the citizen that clings to their guns or bibles, it the new administration of Capitol Hill you have to fear.

Will change finally come when the nation collapses?  Bombs fall?  The landscape is devastated?  Where will the money come to rebuild?

Where is the new prosperity?  When will the lesson be learned that goes like this "Those that dance to the music have to pay the piper when the evening is over." 


Quote
...Given current congressional practices, any stimulus package approved by Congress is certain to contain a host of projects that have nothing to do with prosperity and everything to do with political influence and current fashion.

Ronald D. Utt, Ph.D., is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Lots of spending, nothing to promote prosperity and who knows how much longer this depression with last than the great one of the last century.  Maybe 20-30 years?  When will the money run out for Social Security, Medicare, and Medicaid?  Food Stamps?  Housing Assistance?  How is the government going to continue paying for all that?

Yes, I'm sure there will be people walking over all the new infrastructure, sleeping in schools when they are homeless.   Capitol Hill and Wall Street have already squeezed prosperity from this great nation.  The nation is bankrupt.  Capitol Hill is now spending money that just doesn't exist.  Capitol Hill is stealing from future generations of Americans, and failing to live within the means of the present, and look out for taxpayers.  The nation is financially, morally, and ethically bankrupt.


http://www.heritage.org/Research/Economy/bg2222.cfm

jmho
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WhiskeyGirl
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« Reply #5 on: January 06, 2009, 08:28:40 PM »

Quote
A stimulus to last for ages
 
By Tracy Warner
Editorial Page editor 
Posted January 06, 2009
 
"The fact is that recent economic numbers have been terrifying, not just in the United States but around the world. Manufacturing, in particular, is plunging everywhere. Banks aren’t lending; businesses and consumers aren’t spending. Let’s not mince worlds: This looks an awful lot like the beginning of a second Great Depression."

This rosy assessment is from Nobel Prize economist Paul Krugman, in his New York Times column Monday.

Quote
..."While the mechanics of a payroll tax cut are simple, spending hundreds of billions wisely on infrastructure is hard," wrote Harvard economist Edward L. Glaeser in The Boston Globe. The federal government could double its infrastructure spending and it still wouldn’t amount to 10 percent of Obama’s proposed stimulus, he said.

Is the 90 percent that is left pork or special interest spending?

Quote
That money must be borrowed, mostly from foreigners who buy Treasury bills...That could soon change, wrote economist Willem Buiter in The Financial Times. Debt requires future tax increases, which will be difficult, which means either the federal government must default on its debt or print money to pay it. Inflation follows, meaning those financing our deficits will be fleeced. "If I can figure this out, so can anyone in the U.S. or abroad who follows recent economic developments. The dawning of the realization will lead to the dumping of assets," he wrote.

We need an economic stimulus package desperately. But, it may not work, and it might bankrupt us. We should be worried, and our leaders in Washington should be simultaneously swift, wise and cautious. I am not optimistic.

Sounds like 'hyperinflation' - destroys debt and SAVINGS.  Unless you have good investments like gold.

401k, CD, IRAs and other savers will be 'fleeced' to.  No gain, no job, but enjoying all the pain that comes with that spending.


http://wenatcheeworld.com/article/20090106/OP03/701069900/-1/OP

Where is my $1 billion dollar bailout?  Check in the mail yet?  Since I'll be paying for this in the years to come, I deserve a bonus and gold futures too. 

I've watched Suzi O. a few times.  She has told people to live within their means, pay off their debt, and save money.  Why isn't the government giving that a try?  Why continue on with programs and policies that haven't worked and have built up a tremendous debt?  Who's going to pay for all these bailouts?  Will the government/taxpayers make money on these last rite banks and bailouts?  "Privatize profits and bonuses, socialize losses..."

imho

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WhiskeyGirl
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« Reply #6 on: January 06, 2009, 09:37:01 PM »

Quote
...Yale professor Jeffrey Garten, wrote that the root of the global problem lies in "the fact that banks lent way too much money to too many people and companies that were not worthy." Since that fateful Sept. 15, the flow of capital has run dry, and financial institutions have fallen into something resembling a stupor.

For years, the financial sector became more and more disconnected from the real economy, developing a life of its own in its quest for higher and higher returns. This led to the development of an economy of borrowers based on a foundation of debt. Nevertheless, it all seemed safe enough, because even risks created opportunities to make money. The system made it possible for people to buy houses and companies, for giant corporate empires to be developed and entire economies paid for.

America...lived beyond its means for decades. Asia granted the United States almost unlimited credit, and the Americans bought foreign goods in return. It was the deal that fueled the world economy - Asia produces, America consumes - and the banks provided the necessary capital; but it was clear that this kind of imbalance could not last forever.

Now U.S. consumers are being forced to re-learn an old virtue: frugality. For now at least, Americans are no longer providing the necessary demand for goods - and the entire world suffers as a result.

Someone else has to step up to the global plate and start spending money and going into debt for chachkes.  Someone else has to be the global squandering wastrel example. 

http://freeinternetpress.com/story.php?sid=19720
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« Reply #7 on: January 07, 2009, 03:19:37 PM »

Did my Grandfathers "New Deal" prolong the Depression?

Quote
What's the price for ending the recession? How about trillion-dollar-plus deficits -- and a longer recession? ...

Quote
President-Elect Barack Obama cautions that his economic plans will probably have the United States running "trillion-dollar deficits for years to come." Before the ink has dried on news reports of his mind-boggling concession, the Congressional Budget Office raises a red flag (PDF) and warns that the next resident of the White House is being unreasonably optimistic -- the tidal wave of red ink about to engulf the federal budget is bigger than anticipated even before taking into account Obama's plans for a "new New Deal."

Quote
...That vast new spending is necessary and will pull us out of recession just the way the FDR-era programs on which it's modeled saved us from the Great Depression.

...Plenty of experts think emulating the New Deal is a recipe for economic disaster.

Quote
...Salon's David Sirota declared doubt about the wisdom of the New Deal to be "abject insanity." If it's insane to criticize 1930s-era economic policies, then it's a madness shared by a good many scholars. As Jonathan Bean, a historian at Southern Illinois University, points out at The Independent Institute's blog, The Beacon, a 1995 survey of economists and historians published in the Journal of Economic History found "[h]alf of the economists and a third of historians agreed, in whole or in part, that the New Deal prolonged the Great Depression."

I'm thinking the current Depression will be a "Dark Ages" for America, far worse than anyone can imagine (except me).  All the pork and special interest spending, necessary so that the new incoming administration doesn't waste a good crisis, will add years.  Years to pay off entitlement programs that are in the red, have no funding, and little basis in reality (jmho), maybe a hundred years of misery.

Quote
...Two UCLA economists, Harold L. Cole and Lee E. Ohanian, studied FDR's economic policies for a 2004 paper (PDF) published by the Federal Reserve Bank of Minneapolis. They concluded that "New Deal policies are an important contributing factor to the persistence of the Great Depression." Labor and industrial policy, in particular, "accounts for about half of the continuation of the Great Depression between 1934 and 1939."

Quote
...John Maynard Keynes "repeatedly criticized FDR for discouraging private business investment with his taxes, regulations and overheated rhetoric (the White House charged that opponents were 'Big Business Fascists')."

Quote
...money has to come from somewhere, and the only source is the private sector, since that's where wealth is created. The money can be taxed, it can be borrowed or it can come from inflating the money supply and devaluing existing dollars -- in all cases, wealth is taken from the hands of private citizens so it can be spent by politicians and bureaucrats. The end result is a public flurry of checks cut by government officials, but nobody sees the checks that aren't being cut by millions of businesses and consumers who now have less to spend.

Quote
The hangover from this spending spree won't just mean huge bills, it will mean huge changes in the balance of power between the people and the state. Bankrupt though the goverrnment will be, it will own things we never thought it would own, and it will have inserted itself into areas that we never thought appropriate.

That's what happened during the first New Deal, and it will happen again if those policies are repeated in any significant way.

If history is any guide, Barack Obama's proposed economic policies may actually prolong our economic woes. And they'll leave us with an unacceptably high tab in terms of  both money and liberty.

The start of dictatorship...campaign financing my mystery people and email addresses from all over the globe.  Sham elections, email addresses with two or three votes each, votes by mystery people armed with a human to vouch for them and a 'utility' bill courtesy of photoshop...

The best is yet to come.


http://www.examiner.com/x-536-Civil-Liberties-Examiner~y2009m1d7-Trilliondollar-deficits-of-a-new-New-Deal-would-expand-government-power-for-ill

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« Reply #8 on: January 13, 2009, 07:14:39 PM »

Libertarian Party: If Obama’s plan doesn’t seem to make sense, it’s because it doesn’t
January 13th, 2009 · 2 Comments
Press release from the Libertarian Party

Libertarian Party Says Obama Plan Based on Failed Economics


Quote
“Just look at the last eight years,” says Redpath. “President George Bush did more to increase government spending during his administration than any president in American history....Is there any reason then to believe that more government spending will pull us out of this decline?”

“Keynesians believe that government can jump-start the economy by creating artificial demand through massive spending projects,” says Redpath. “This debt is later repaid with magic money borrowed from foreign countries, printed out of thin air or from tax increases. But, unfortunately, government can’t spend billions of dollars without incredible amounts of waste, through fraud or worthless projects. So, much of the money taken out of the economy, in order to jump-start the economy, is lost...

[color=red]“Politicians like Keynesian-based spending plans because it makes it easy to bring pork projects back to their districts, and they’ll be out of office before they ever have to worry about paying down the debt,” explains Redpath. “It’s all about power. It’s not about helping the American people.”[/color]

“Obama’s plans will put the United States another trillion dollars in debt while doing nothing to pull us out of the recession,” says Redpath. “Taxpayers have good reason to be skeptical of the stimulus plan because it is their money backing Obama’s multibillion-dollar boondoggle.”

http://www.independentpoliticalreport.com/2009/01/libertarian-party-if-obamas-plan-doesnt-seem-to-make-sense-its-because-it-doesnt/

I think any government spending should be directed at building large cities to address the increasing number homeless (next ten years) people and buying up food and basic medical supplies to ensure that no one goes hungry or suffers.  Where are provisions for the homeless?  Those that will go hungry?

IIRC, the government at one time had a program to buy and store excess production and maintain an oil reserve.  Where are the stores for bad times?

Does anyone really expect the economy to get better in the next 30 days?  The jobless will just disappear before 2012?  2013?  2020?

jmho
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It doesn't do any good to hate anyone,
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