Will the Republicans in Congress Send the Economy into a Death Spiral?

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  1. Ralph Deeds profile image66
    Ralph Deedsposted 15 years ago

    Paul Krugman's column in the NYTimes today 1-5-08 is entitled "Fighting Off Depression." In it he called the recent economic numbers "terrifying," not just in the U.S. but around the world. Manufacturing in particular is plunging everywhere; banks aren't lending; businesses and consumers aren't spending. "Let's not mince words: This looks an awful lot like the beginning of a second Great Depression."

    Krugman expressed the fear that the Republicans in Congress will delay and shrink Obama's stimulus package to the point that it will be inadequate to do its intended job. According to Krugman "... the political posturing has already started, with Republican leaders settin up roadblocks to stimulus legislation while posing as the champions of careful Congressional deliberation--which is pretty rich considering their party's [profligate spending] behavior over the past eight years."

    Here's Krugman's nightmare scenario: "It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it's only enough to slow the descent, not stop it. Meanwhile, deflation is settling in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy--well, you can see where this is going."


    1. Specificity profile image60
      Specificityposted 15 years agoin reply to this

      The Republicans in the House are powerless.  They are 177 strong and new rules passed this year severely restrict their ability to ammend and delay legislation.  I don't think Krugman is afraid of the House GOP.

      The Republicans in the Senate are notoriously "moderate" and several, like John McCain and Lindsey Graham, love the media to report about how they "reach across the aisle" to Democrats.  Add Arlen Specter from PA, Snowe and Collins from Maine, or Voinovich from OH, and the Dems will have no problem rolling a GOP senator or two for a fillibuster-proof majority on nearly anything.  Not much to fear here, either.

      I would think the GOP's lack of participation in the process would make Krugman happy because it would ensure their minority status in 2010.  The fact is, Obama/Reid/Pelosi don't need a single GOP vote to accomplish anything, so what is Krugman all concerned about?

      Methinks he is concerned that the Democrats will fail in their attempts to revive the economy and won't have the cover of bipartisanship to scurry under for the midterm elections.  Pelosi and Obama keep reminding the GOP that "we won, and we write the bills."  Then let the Democrats take ownership of their actions and quit whining about GOP non-involvement.


  2. Misha profile image64
    Mishaposted 15 years ago

    Happy New Year Ralph! smile

  3. Ralph Deeds profile image66
    Ralph Deedsposted 15 years ago

    Same to you, Misha!

  4. mdvaldosta profile image60
    mdvaldostaposted 15 years ago

    The answer to our (the US') economic problem isn't throwing more money at it, or giving money away to people - especially those that already don't pay taxes as it is. Throwing money around that people (including the government) didn't have is the problem. People borrowing money and spending beyond their means, while relying on credit cards and over-inflated housing prices to bail them out.

    This isn't a democrat, republican, independant or in-between caused problem. The majority of Americans contributed to the problem - not government. Seems the blame game is still popular. Whatever happened to personal responsibility?

    I'm not happy with the Republican party over the past eight years, and I wasn't happy with John McCain either. I have more confidence in Obama, but I don't like his shady past and personal associations. Nevertheless, he's the man now. I do like his plan to improve the US' infastruction to temporarily bolster jobs, it's a good one even if it's mostly temporary. It will help.

    The solution to the problem is living at your means, not beyond. Only then will we avoid crazy recessions, depression, inflation, etc. You want to encourage people to spend money? Well, they have to have JOBS first. But, since the Democrats wants to raise taxes on the very businesses responsible for keeping people employed... so they can give a handout to people who many of them will simply piss away like the did the rest of their money (read: teaching people to fish rather than giving them fish).

    The answer is to stimulate jobs, not wallets. Unfortunately, the wallets are the ones casting the votes.

    PS - Happy new year smile

  5. profile image54
    NewRepublicanposted 15 years ago

    what we are doing now is exactly what japan did in the 90s to try to fix their economy.  we all know how that turned out.  we should learn from other's mistakes

    1. Nickny79 profile image68
      Nickny79posted 15 years agoin reply to this

      Well said.  I hope we hear more from you.  We need more troops to hold the fort in this forum.

  6. profile image54
    NewRepublicanposted 15 years ago

    Not Bipartisan...

    NEW YORK (CNNMoney.com) -- The House on Wednesday evening passed an $819 billion economic stimulus package Wednesday on a party-line vote, despite President Obama's efforts to achieve bipartisan support for the bill.

    The final vote was 244 to 188. No Republicans voted for the bill, while 11 Democrats voted against it.

    1. SparklingJewel profile image65
      SparklingJewelposted 15 years agoin reply to this

      from what I heard on the news, there still wasn't enough biparitsan play going on. Dems aren't totally right on everything, nor are repubs...so who pushed it through without better analysis and CHANGE??? who didn't try harder to make it a bill that all could vote for with confidence???

      1. kerryg profile image83
        kerrygposted 15 years agoin reply to this

        Speaking for myself alone, the Republicans showed laughable hypocrisy (complaining about driving up the deficit(!) after spending 8 years turning a Democratic budget surplus into the largest deficit ever) and were promoting, for the most part, exactly the same financial strategies that got us into our current financial catastrophe in the first place, so frak them, and thank God the House Democrats have finally grown enough spine to ignore them on economic issues.

        Obama would be wise to do the same, but I get why he's attempting to be bipartisan.

        1. livelonger profile image86
          livelongerposted 15 years agoin reply to this

          +1 I couldn't agree more, except I suspect the Republicans know the hole they've dug is so deep that $1 trillion won't have pulled us out of it by 2010, so they're closing ranks and hoping to make this an effective gambit for the next election. Most Republican-leaners will have forgotten by then who got us into this mess.

          +1 for using the word "frak" (so sad we only have 8 episodes left in the series!)

          1. Ralph Deeds profile image66
            Ralph Deedsposted 15 years agoin reply to this

            Here's a critique of stimulus bill by a first rate economics writer, David Leonhardt

            http://www.nytimes.com/2009/01/28/busin … amp;st=cse

            1. livelonger profile image86
              livelongerposted 15 years agoin reply to this

              Terrific article. I'd imagine the urgency makes ironing out all the details difficult, but he makes some good points. The stimulus package could be an important turning point in a number of infrastructural problems that have been in decline for decades.

              1. Ralph Deeds profile image66
                Ralph Deedsposted 15 years agoin reply to this

                Many people are legitimately concerned about the effect of Obama's economic recovery program on the national debt. They should recognize that the loss from a deep, extended recession or depression would greatly exceed the $trillion slated for Obama's program. Moreover, the talk about saddling our grandchildren with a big debt is exaggerated. The national debt, while high in total dollar terms, is manageable and within the post World War II range. The chart linked below shows what happened to the debt under each president, Truman through W. Bush. Note the tendency of the debt to go up under GOP presidents and down under Democrats.


  7. Misha profile image64
    Mishaposted 15 years ago

    For those who are really interested in bipartisanship, this might be an interesting reading: http://hubpages.com/hub/The-Lost-Philosopher

    1. SparklingJewel profile image65
      SparklingJewelposted 15 years agoin reply to this

      Yes, great hub! and as I said in the comments there, the answer to humanity's ills in every respect is to seek and attain the Mind of God/Higher Self, one's"natural state" of being.
      But until that time, if ego's need for power is not adjudicated with some form of  government, it would be more chaos than it is now.

      As a nation and as a planetary population, it is easy to see that that is where we need to be looking for our answers...purposefully looking to God, our Highest Self for direction. For there is Order to the Universe, but it is up to us in our free will to seek to understand it, loving each other in all the ways needed, to help each other find it.

      And to stand up and say "hell no" bankers and manipulators will not take my freedom from me!

    2. Ralph Deeds profile image66
      Ralph Deedsposted 15 years agoin reply to this

      Mullen is living out of touch with reality in an 18th century dream world.

      1. Misha profile image64
        Mishaposted 15 years agoin reply to this

        That's a big question Ralph smile

        IMHO Tom has a much better grip on reality then yourself smile

        1. Ralph Deeds profile image66
          Ralph Deedsposted 15 years agoin reply to this

          Here's what the NY Times had to say today:
          The Stimulus Advances

          Published: January 28, 2009
          The signature achievement of the $819 billion stimulus and recovery bill, passed on Wednesday by the House, is that it directs most of its resources where they would do the most good to stimulate the economy.

          The bill is large because this deep recession is getting deeper, and the recovery, when it comes, is expected to be slow. President Obama and the lawmakers who wrote the bill are to be commended for not letting size distort the substance. Contrary to the claims of Republican opponents that the bill indiscriminately rains money down, the amounts and categories of spending have, for the most part, been calculated carefully and chosen well.

          Nearly 30 percent is devoted to unemployment benefits, food stamps and fiscal aid to states so that they don’t have to cut services, raise taxes and lay off employees and contractors. Evidence is overwhelming that such spending yields the biggest return for every dollar spent. The bill, however, takes into account that these areas cannot absorb unlimited money. In calculating the expanded food stamps, for instance, it provides a significant increase immediately that would otherwise have occurred over time in line with inflation. That way, ample funds are available when needed, but there is no sudden cut off down the road.

          Aid to states also is well thought out. The single biggest chunk of spending — $87 billion for states to shore up Medicaid programs — would allow them to provide care to the neediest, whose ranks have been swelled by the deepening recession. Equally important, by taking on more of the states’ Medicaid burden, the federal government frees up states to continue providing other services that would have had to have been cut.

          One of those vulnerable areas, states’ education budgets, is the main target of another $79 billion. The money would help to prevent lapses in early childhood education, which often cannot be made up later. It would also prevent cuts in the curriculum and in extracurricular activities in grade schools through college — while averting big layoffs in a sector that is among the largest employers in many states.

          After jobless benefits, food stamps and aid to states, the most effective stimulus is to get money directly to low- and middle-income Americans, who are likely to spend it quickly, boosting demand. The package expands the Earned Income Tax Credit temporarily to raise the pay of the working poor. There also is money to allow low-income workers to qualify for a tax credit of up to $1,000 per child, a break currently denied them. These are good tax policy and good stimulus.

          The measure devotes $145 billion to Mr. Obama’s “Making Work Pay” tax credit for the next two years. The credit, up to $500 per worker, would be more effective as stimulus if the cutoff for eligibility were lower. The richer the recipient, the more likely it is that the money would be saved, not spent.

          Having maxed out on the most powerful forms of stimulus and facing an economic downturn that requires still more government intervention to prevent a more disastrous downward spiral, lawmakers sensibly expanded the package into other areas. It contains $62 billion on infrastructure spending for highways, mass transit and school buildings, and tens of billions more for other projects. It also includes $40 billion to subsidize the cost of health coverage for the unemployed.

          Republicans’ objections are mostly ideological. They worry, in particular, that subsidizing health insurance may be a step toward universal coverage. They may be right. But that is an argument for another day. The government must act urgently to protect the vulnerable from what is shaping up to be the worst recession in modern history and to boost the economy at a time when consumer and business spending is slack. Besides, a lamentably large amount of money goes to business tax cuts dear to Republicans. That is folly as stimulus but more than enough for political compromise.

          A more thoughtful criticism is that the package is not more transformative in scope. There is more money for fixing roads, but not for high-speed railroads; for Head Start, but not for curriculum reform. That, too, is a discussion for another day.

          Indeed, even with an $819 billion package, the challenge for the Obama administration is to lower expectations, not raise them. The hole the economy is in is so deep that even the stimulus package will only dig us halfway out. According to recent testimony by Douglas Elmendorf, the director of the Congressional Budget Office, without the stimulus, the economy in 2010 could underperform its potential by an amount equal to 6.3 percent of gross domestic product. With the plan, the gap could be, at best, about half that.

          It will be a long and unpleasant climb from the ruins of the economy. But the House stimulus package is a good first step. The Senate, which takes up its version next week, should follow suit.

  8. Specificity profile image60
    Specificityposted 15 years ago

    I've criticized the GOP Congress and Bush for their overspending.  They gave the people a choice between Democrat and Democrat Lite, and the people chose the real deal.  That said, I'm still critical of overspending by government.  We cannot spend our way out of a deficit.

    It's bad that Bush ran up a huge tab during the good times, but it's even worse that Pelosi/Reid/Obama think they can spend even more during bad times.  There is no stimulus in this bill; it is a regular omnibus spending bill like any other.  Much of the money isn't spent until the end of 2010.  The House GOP knows this cannot help the economy, so they're going to let the Dems own it. 

    For those of you who think this bill is such a good idea, you should be happy that the GOP voted against it.  Then they won't be able to claim any credit for it in 2010.  Right?


  9. profile image0
    pgrundyposted 15 years ago

    While Congress bickers and stews about this and that part of this stimulus bill, the global economy is tanking very rapidly. I don't think a stimulus package can stop the downward spiral that has already started, and definitely THIS stimulus package can't stop it.

    I was hoping for lots more infrastructure money. Then at least when the stimulus package failed we'd have some roads and an up-to-date electrical grid. But it looks like all we'll have after the shoutin' stops is another trillion tacked on to the national debt. It's not that Republicans have a clue though--they got us into this, and now all they have to say is same old same old. I mean, same old is what caused this.

    We started the slide down this slippery slope when we let our manufacturing base go, and Democrats and Republicans share the blame for that. Where will the long term recovery come from? What exactly are we 'stimulating' at this point? Our wonderful historic auto industry? Our steel industry? Textiles? Electronics? What? You say we don't make any of those things here anymore? We're a 'consumer economy' now? Rilly? What does that look like, exactly?

    Oh yeah, it looks like this. Yikes.

    It feels good to some to say things like, "people live beyond their means," but when credit and finance and creatively shuffling investment documents around to create the illusion of wealth became our single major product, people soon lost means to live. So of course a family without adequate means will spend beyond it--especially when debt is our greatest national resource. Making it personal obscures Wall Street and the government's part in it.

  10. profile image0
    pgrundyposted 15 years ago

    "Indeed, even with an $819 billion package, the challenge for the Obama administration is to lower expectations, not raise them. The hole the economy is in is so deep that even the stimulus package will only dig us halfway out."

    Exactly. It's NOT a 'stimulus package'. It's a 'save-us-from-bowels-of-hell while we figure out WTF to do next' package.

    Which is fine. Something has to be done. But it's not going to stimulate the economy--it's designed to buy time and plug a dozen or so of the fifty dozen leaks in the dike. The economy is really, really bad and no one knows how to fix it. Maybe if there was more honesty about it--like, this won't fix the economy, it's disaster relief--Maybe that would help. It feels like Washington is still pretending and playing games. At least, it feels like Congress is doing that.

  11. knolyourself profile image60
    knolyourselfposted 15 years ago

    "Exactly. It's NOT a 'stimulus package'. It's a 'save-us-from-bowels-of-hell while we figure out WTF to do next' package."
    I agree with pgurndy.
    What is never mentioned is the wars and the military industrial complex, that are bleeding the US dry. The empire is broke. All smoke and mirrors until they reign it in.

  12. TheMoneyGuy profile image70
    TheMoneyGuyposted 15 years ago

    Editorials are written by spin doctors, with an agenda to push, they are only a person's opinion the same as Mine, Misha's, Tom's, or Ralph's.

    This is not a stimulus package it is clearly a budget bill that is loaded with pork that will drag my children, their children, and their children into the muck that is this country's economic policy and whether you like it or not it will drag your offspring into the same dump.  Anyone that is happy with this or thinks it will do anything other than pad a lot of undeserving people's pocket books are a sad hopeless lot that will live to be very disappointed.

    Nothing in this bill brings new production to this country the only thing that creates wealth.  It is just transfering what little we have left through a few hands creating the illusion of money flow until it ends up in the same hands.  That is not stimulus that is just giving the kids a candy bar so they will shut up, and for that article, well it is the same as having their mother tell them what a great dad you are for getting them that candy even though you and her both know it is going to rot there teeth out.


  13. profile image0
    pgrundyposted 15 years ago

    Well, it will send the states some much needed money to temporarily extend the piss poor social safety net we used to have, such as it was. Unemployment ran out here in MI a long time ago--the state is running a half a billion dollar deficit on that, but its ok because you can't get through to the 800 number to sign up anyway. So I think that is all to the good--to help people who are suffering-- but as you say, there's no explanation of where the 'recovery' will come from or what exactly is being stimulated.

    The country came back from the Great Depression when we decided to build arms for Britain. We had the factories, we had the people to do the work, and that generated the prosperity of the 50s. The New Deal kept people from jumping off buildings (well, some of them...) and it created lots of really good social programs and public works projects, but the economy did not turn around until the war jump started production and people began to make things and make money.

    Now we have no industrial base, and as knolyourself points out, our foreign wars just deplete the Treasury coffers and enrich Halliburton. Where will the recovery come from? At best Wall Street will create another bubble, probably in the energy sector. So we may get to go through this all over again. But probably not. I think this will sink us for a good long while. I don't think we even can look forward to another bubble.

  14. lindagoffigan profile image57
    lindagoffiganposted 15 years ago

    They can't.  The Democrats controls the House.

    1. Specificity profile image60
      Specificityposted 15 years agoin reply to this

      ...and the Senate, and the Presidency, and the majority (28) of the governors.

      Question for everyone: how long before Democrats can be expected to take ownership of the economy?  Obviously, the GOP was on watch for what's happening now and we don't blame dems for that, but at what point do we hold them responsible if they fail to fix it?


      1. profile image0
        pgrundyposted 15 years agoin reply to this

        Well, I personally would like to see that nation move past that, and moving the prospect of moving past that kind of division was what one of the main things that won Obama the election. Clinton and Bush both bear lots of responsibility for the current mess, and Carter and Reagan also initiated policies that contributed to the train wreck we now have on our hands. So this partisan "who gets the blame" and when is just unproductive and annoying.

        It isn't Republicans or Democrats screwing up the economy. It's the incredibly rich top 1/10th of 1% and their powerful lobbies. The culture wars keep us at each others throats so they can keep robbing us all blind while we bicker about abortion and religion and Rush Limbaugh and all kind of other meaningless crap.

        1. Specificity profile image60
          Specificityposted 15 years agoin reply to this

          Then how do you propose to hold the elected officials accountable? Unless we have standards and look objectively at what each side has proposed and done, how will you decide whom to vote for in 2010?

          I don't blame Clinton for what we're going through now because Bush and Congress could have fixed it in the last 8 years, but they failed to even warn the people about the house of cards that had been made of our financial markets. 

          The people who are in charge right now have overwhelming power.  The "stimulus" bill passed the House with no input or votes from the GOP.  That's a lot of power!  Reid can slam this through the Senate no problem.  There are no real obstacles standing in their way.

          My question is a fair one: how long do we give them to turn things around before we hold them accountable?


          1. profile image0
            pgrundyposted 15 years agoin reply to this

            It's a fair question. All I'm saying is that breaking it down along party lines is not productive. Instead of saying to yourself, should I vote Democratic or Republican in 2010, look at who is running and look at their respective voting records. Educate yourself on the issue so that you know who sided with the very rich and who sided with ordinary people when policies were made. For example, John McCain and Phil Gramm were instrumental in repealing the regulations on interstate banking that were set in place to prevent another Great Depression.

            McCain continues to support deregulation even in the face of this mess. On the other hand Clinton gave us NAFTA which gutted our industrial base and many Congressional Democrats looked the other way as Fannie and Freddie got bloated and out of control. So it doesn't always break down neatly along party lines.

            Forget about the elephants and donkeys and follow the money and you'll get a better idea of who we ought to hang and who might be good for another term. smile

  15. Uninvited Writer profile image79
    Uninvited Writerposted 15 years ago

    Didn't NAFTA come during the Reagan years? I seem to remember being against it when Brian Mulroney agreed to it. A lot of American's didn't seem to be against it until it started doing the same to them as it did to Canadians.

    But I agree, you should try to decide on policy not party.

    1. Make  Money profile image66
      Make Moneyposted 15 years agoin reply to this

      I was thinking the same but the Free Trade Agreement, the precursor to NAFTA came first during the Reagan years.  Mulroney signed both.  Remember the goof singing 'Oh Danny Boy' with Reagan.  All of Canada was against both agreements but Mulroney had a majority government.  He is still the most hated Prime Minister in Canadian history.  We called him Back Door Brian here because he entered the town hall from the back door to avoid the protesting crowd out front.  We still may be able to get him on the Air Bus scandal.  Every Prime Minister of Canada before Mulroney back to John A. MacDonald said that reciprocity (free trade) can not work between Canada and the US because the US has ten times the economy of scale.  And that's been proven here in Canada.

      If Obama follows through with the "Buy American" protectionist plan written into the stimulus package it just might give reason to repeal NAFTA.  I hope it does.

      That moron Stockwell Day just said the most intelligent thing I ever heard him say.

      Obama's 'Buy American' plan blasted

      Some of the 13 pages of comments on the above link are worth reading.

  16. WeddingConsultant profile image66
    WeddingConsultantposted 15 years ago

    Hang on a second here people. We've been calling it the wrong thing all along. It's not a "stimulus package", it's a BAILOUT package.

    :::runs away:::

    1. Mark Knowles profile image59
      Mark Knowlesposted 15 years agoin reply to this

      Agreed. Just like the last one by Mr. Bush. Mr Obama is doing the same as the last admin. sad

      Not surprised really. Although, perhaps, this one will not be paid out as bonuses to bankers?

  17. knolyourself profile image60
    knolyourselfposted 15 years ago

    "Didn't NAFTA come during the Reagan years?"
    No it came from Clinton, the other side of the same coin.

  18. Ralph Deeds profile image66
    Ralph Deedsposted 15 years ago

    NAFTA was negotiated by BUSH I and ratified under Clinton.

  19. Mark Knowles profile image59
    Mark Knowlesposted 15 years ago

    Having a little trouble telling the difference between any of them.

    Except for the abortion and the torture that is......

  20. knolyourself profile image60
    knolyourselfposted 15 years ago

    Seems like the Repubs pile up mountains of dept, and then the party of the people comes to the rescue, to make the people pay for the depts of the theives. Same with the the S&Ls of Reganism.

    1. WeddingConsultant profile image66
      WeddingConsultantposted 15 years agoin reply to this

      I'm not sure where you come off with that statement considering a democratic president is proposing over a trillion dollars in bailout packages. That's a pretty penny if you ask me, a lot of pretty pennies, actually.

      1. Mark Knowles profile image59
        Mark Knowlesposted 15 years agoin reply to this

        Presumably you have faith that the current need to prevent the banking system from collapsing completely did not happen during a republican administration and only came about in January.

        Obama's response is typical of all gov responses because none of them know what is going on, how big the problem is -  and this is what he has been told to do.

        1. WeddingConsultant profile image66
          WeddingConsultantposted 15 years agoin reply to this

          I'm certainly not in denial about that, but let's be realistic here, Clinton left things for Bush as he left. USS Cole response? None.

          And is selling nuclear secrets to communist China- are you out of your mind?

        2. profile image0
          pgrundyposted 15 years agoin reply to this

          Amen to that. I'm still waiting to see how we get out of this. I haven't heard one credible scenario yet. I mean it looks freakin' bad, real bad.

          I watched Press the Meet Sunday and they had all these financial talking heads on (including Steve Forbes god help us) and they were all about the "unfortunate populist tone" that has taken "crept into the rhetoric," and how common people don't understand that you can't get the best and the brightest in banking and finance if you don't pay big bonuses--that these people EARN those billions, even when they break the whole world with their shenanigans.

          And I thought, you mean there are bright people in finance in America? Rilly? Where are these people? lol

          I was waiting for someone to say, "Let them eat cake," but it didn't happen.

          Almost, though.


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