Of Obama and referring only to the auto industry situation, President Bush said, “I believe that good policy is not to dump him a major catastrophe in his first day of office”. Does anyone find it ironic? It's the only one he didn't cause.

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I think that MOST of President Obamas problems are of his own making. In the past two and a half years he has increased the deficit tremendously. We are now borrowing more money in one month than President Bush borrowed in a full year. 40 cents of every dollar spent by the federal government is borrowed. This is drying up the pool of dollars available for borrowing to the point where private persons and industries are unable to get loans.

Economically President Obama has made every wrong choice imaginable. Using the excuse of trying to stimulate the economy he has spent close to 4 billion dollars on what he lied to us and told us were "shovel ready" jobs. Instead this money went to some temporary construction jobs and to bail out state union pension funds.

President Obama should have surrounded himself with some real economic advisors that actually understood how macro economics work. Let me try to explain some relatively simple concepts.

1 - Cutting taxes increases the amount of money available for investment in businesses. Investment in businesses leads to companies buying equipment and services. This causes other companies to start to make more money. The new equipment and services need additional people to run/manage them. More people get hired. More economic activity generates more income. More income makes for more money collected. Take a smaller slice and the pie grows bigger, and you get more pie.

2 - If you borrow money, you have to pay back more. This is called interest. If you borrow more than you can pay back, then you either have to cut back on your expenses or you will have to depreciate the money. If you depreciate the money, no one will want to hold on to it, or fixed return securities. In short, you can't get people to buy your debt any more.

3 - Social security had been taking in a lot of money, that it is obligated to spend later on. If you take that money now, you will not have it to spend tomorrow. IOU's to yourself are not spendable. You have been stealing from the future to pay for your profligate spending today.
This works just like buying a PS3 game console with next months rent money. It isn't smart.

4 - Illegal aliens. We have about 20 million people out of work. We have about 20 million illegal aliens in the US. Is it that big of a stretch to say that if we got rid of the illegal aliens, we could have almost full employment? You say that they are doing jobs americans wont do. Please finish the sentance. ... for the money you want to pay them. If picking lettuce, an admittedly hard physical job, paid 100,000 a year, many many americans would be applying to pick lettuce. At five dollars an hour, not so much. So it is not that americans won't do the job as much as they want a decent wage. I don't believe the cost of labor is that big a part of the cost of goods. Maybe at best a third of the cost. Would you care if lettuce went from 1.79 a head to 2.10 if it meant that you or your neighbor got a better job, and could then afford to either come off the unemployment rolls or started to buy the goods and services you provide? A rising tide raises all boats.

I could go on for another 20 or so points, but why bother? You won't listen anyhow.

Comments

1 - That goes against standard Econ 101 on how to stimulate a recessed economy. Most non-government economists supported the stimulus (which Bush actually started) and felt that Obama stopped short on - due to conservative backlash. Also - every other wealthy nation did exactly the same thing.

3 - All recent Presidents have borrowed from the SS Trust Fund. It's common practice now. I also think it's law that requires those funds be "borrowed" before borrowing from outside sources.

4
A. Are you really claiming 20 million illegals entered the US in the last 2.5 years? Or even a significant subset?

B. Do Americans enjoy cheap food? Production is the first expense onto which all the middle men add their percent. It gets magnified with every middleman.

But let's look at your figures. Most Americans live in one place. Most farm labor is migrant. So - for your Real Americans to take those jobs they would need to travel AND work hard. It's my guess most wouldn't do it for anywhere near what illegals do. $10-20/hr maybe? And the to live in the conditions illegals do on the way?

Now - go ask if most Americans would be happy to pay 1/3 more for all food - not just that head of lettuce?

See? I listened. I heard you restate conservative theology which has helped bring the US to it's financial knees. I heard you lecture on what interest is - and act as if all recent Republicans haven't broken all prior debt records. I heard you blame Obama for something all recent presidents do. And I heard you blame Obama for a much larger problem and add a bit of fantasy.

And I heard you say that lovely rising tide thing. Have you read anything about the America you now live in? The recession officially ended a couple years ago. Since then US companies have been hugely profitable and have the unusual problem of having to much cash on hand. Yet most of the jobs - good jobs - haven't come back and never will. They got automated or shifted offshore. A machinist who worked at Harley Davidson, for instance, isn't likely to be too happy about his new career as a migrant laborer. Now I have no problem with business optimizing production and profits - but so many good jobs vanished in the Bush Recession that the economy won't recover by itself for a generation. The only way fix it faster is to use Government. I don't know exactly how - but perhaps there could be Govt/Business Startup partnerships for new companies that would replace certain categories of jobs (not more cashiers - but similar level ones). Or maybe government should continuously fund research into things that can produce new business (like the way the space program of the 60's enabled the computer / internet revolution). Or maybe, make companies pay for education so that the investment into educated employees encourages them to keep the jobs at home. Currently, American workers are very cheap to get rid of - hence they and the education they themselves paid for are disposable to the corps.

I also heard the gaps in what you said. Obama's spending is primarily in an attempt to fix the economic problems he inherited from Bush (who reduced taxes for the rich, lies to launch a war and then hid the costs of that war off budget) including the costs of two horribly mismanaged wars. If you take away these two cost centers what are you left with?
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by 23Skidoo on June 20th, 2011
However - you are aware that none of what you wrote has anything at all to do with the question, right?
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by 23Skidoo on June 20th, 2011

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Thanks - but the questions wasn't about the financial trouble - but the auto industry trouble which is quite different. US car makers caused their problems all on their own.
+6
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by 23Skidoo on December 20th, 2008
I'm not sure the auto industry isn't in the same trouble every industry is in right now. Pls explain how it is a separate issue? Thanks.
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by shrinkess on December 20th, 2008
The main financial crisis was spurred by the bad loans banks have been making and the real estate bubble. That caused banks to go under, stocks to drop, lenders to foreclose on homes that lost value to a level below their mortgage and all that. This rippled out and effected many countries and the global economy all over. And it definitely worsened the pickle the US auto business had gotten itself into.
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Worsened but didn't create the problem. The US auto industry has been digging its grave independently for several decades and that includes bad decisions like not investing enough in low to zero carbon tech, to have a pay-as-you-go pension system as opposed to funding a pension fund and pay out of it income, and paying its top guys way, way too much.
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Even if the economy didn't have its current woes, the auto industry would have gone down soon.
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by 23Skidoo on December 20th, 2008

Question

Of Obama and referring only to the auto industry situation, President Bush said, “I believe that good policy is not to dump him a major catastrophe in his first day of office”. Does anyone find it ironic? It's the only one he didn't cause.

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Of Obama and referring only to the auto industry situation, President Bush said, “I believe that good policy is not to dump him a major catastrophe in his first day of office”. Does anyone find it ironic? It's the only one he didn't cause.

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