Why, Pray Tell Would You Freeze Government Spending In The Midst Of A Deep Recession*?

[DemocratSinceBirth]

I know the economy is technically growing but it's not growing fast enough to bring down the unemployment rate.

Government spending has to take up some of the slack caused by decreased consumer demand. At least that's what I learned in Economics 101 some thirty years ago.

[yurbud]

1. Wall Street is growing by turning the rest of us into Soylent Green

[DemocratSinceBirth]

2. Maybe The Genius Who Unrecommended It Wants To Say Why It's A Good Thing.

~

[TexasObserver]

3. You'd only do that if you knew absolutely nothing about economics.

You'd only do that if your top economic advisers were all GOP advisers.

You'd only do that if you had no understanding of the US deficits in the Depression and WWII.

[DemocratSinceBirth]

4. That's What Roosevelt Did In 36 Which Prolonged The Great Depression

Oh well. At least I will have a lot of company in my "brokeness".

[TexasObserver]

11. Krugman has warned that the recovery will flame out this year without more.

And I think he's right.

You don't stop putting wood in the fireplace just as the kindling begins to burn.

[DemocratSinceBirth]

25. What If Textbooks Fifty Years From Now Show We Repeated Hoover's Mistakes

~

[Loge23]

5. Possible answers:

Because:
1) He hasn't a clue as to what else to do.
2) He is doggedly determined to win the approval of at least one Republican.
3) He is somehow still grossly mis-reading the situation at hand.
4) He is begging us to send him home.
5) He was seen in the WH drunkedly rambling to Herbert Hoover's portrait.

Either way, I feel sorry for the guy. Still waiting on a miracle.

[Myrina]

14. +100

Or all of the above.


:applause:

[Mojorabbit]

18. or maybe China is making noises about

calling in it's chips if we don't do something or maybe the big money guys are threatening to lower our credit rating if we don't do something.

edited because I left out two words in a sentence. Need more coffee.

[napi21]

6. We should wait to see what he intends to freeze. I must admit

I get ticked off when I hear some Sen. put in an earmark for a statue somewhere! I think it's possible that Obama intends to freeze things like that. And before you scream at me because building a statue would employ someone or even a few people the cost is way to high to squander on just one or a small handfull of people.

I'm going to wait until I hear the speech. If all the complainers are right, I'll be right there with you

[DemocratSinceBirth]

7. I'd Love To Help Build A Statue In My Town If It Meant Getting Paid

~

[napi21]

12. I'd ;ove tp pay you to do a job too, but I think there are a lot of

other jobs that would help improve the econony & the infracture at the same time much better than a statue!

[enlightenment]

9. Here's the list of potentials -

http://www.whitehouse.gov/omb/budget/fy2010/assets/trs.pdf

Some is probably pork, some not.

[napi21]

16. EVeryone should take a look. The BIGGEST $$'s are out of Defense!

That's one of the gripes I keep hearing, one of the biggest expenditures we have is Defense, and they're exempt!" They're NOT! It sounds like what is exempt is paying for the wars, paying the soldiers we have there etc. but I saw $4.1 billion cut from Defense & I only looked at 1/2 the first page!

[jtrockville]

19. Then why announce it as a "freeze to everything BUT"?

Very curious.

[napi21]

20. I have no idea, but that's exactly why I said WAIT until you find out exactly

what is being terminated or frozen. There are at least 2 catagories ya know.

[enlightenment]

21. Remember, these are potential cuts and reductions.

Line item stuff - what will actually get cut is an unknown (and did you notice that they sneaked in a $255 million increase for the Navy under the reductions column?)

[old mark]

8. Because the Republicans are complaining about the spending

that the Democrats have been doing, totally ignoring of course the incredible debt created by the irresponsible spending of the Republicans after they took power with a surplus created by the Democrats.

Of course our President trys to gain favor with the Republicans who didn't vote for him while trashing those of the Democratic left who did.

Anybody understand the logic of this, please feel free to step in....


Rec.

mark

[RedCloud]

10. because the government can afford to borrow?

rates are dropping... It's the only one to fuck up more borrowing at reasonable rates. Banks might get pissed at him.

[Winterblues]

13. I remember well when every single Republican stood up and said raising taxes

in a recession would bankrupt America when Clinton presented his first Budget. Everyone of them and they all voted in lock-step said America would be completely destroyed..Just as they are saying now and yet America went on to experience the "Greatest Economic Expansion in History" I suspect all of the rhetoric from the left might be just as accurate as that from the right. I believe even the appearance of trying to control our spending can and will restore even more consumer confidence and thus improve the economy...

[salguine]

15. Because your corporate masters told you to. Money going anywhere else is money not going to them.

[REACTIVATED IN CT]

17. Because you are feeling a need to pander n/t

[Alias Dictus Tyrant]

22. There is a caveat

"Government spending has to take up some of the slack caused by decreased consumer demand. At least that's what I learned in Economics 101 some thirty years ago."


This economic theory is based on the idea of manipulating the perceptions of the population in ways that are contrary to reality to shift the equilibrium. Unfortunately, if the public refuses to drink the Kool-Aid then it is worse than doing nothing at all. This is the giant caveat of Keynesian economics; it is predicated on the public being ignorant and easily manipulated toward a certain course of action. If you have a highly skeptical public and/or a lack of de facto media message monopoly on the part of the government, government spending just makes the problem worse.

I think it is very difficult to argue that the public is so out-of-touch with reality and unskeptical in these days of pervasive mass media that the public will not see the sleight-of-hand for what it is.

[daa]

23. Here is something

No one mentions that states cannot borrow:

"These new shortfalls are in addition to the gaps states closed when adopting their fiscal year 2010 budgets earlier this year. Counting both initial and mid-year shortfalls, 48 states have addressed or still face such shortfalls in their budgets for fiscal year 2010, totaling $193 billion or 28 percent of state budgets — the largest gaps on record."
So cut teachers and other state workers and the spirals continues down.

So that is why the feds cannot freeze spending in the middle of a depression.

[greenbird]

24. I hoping for farm subsidies.

But I'm kind of a dreamer.

[daa]

26. Sam Donaldson needs more money? nt

[greenbird]

27. I meant cutting them.

Sorry!

[rucky]

29. Michelle Bachman won't stand for that.

she loves her some welfare

[rucky]

28. Because the MBA's are running the show.

and want to prove that government can and should run like a business. It can't, but they don't really care if they destroy government in the process.

[groundloop]

30. The freeze / cuts won't happen until NEXT Year

Rachael Maddow touched on this, it's a tough dance transitioning from propping up a failing economy to keeping a groing economy from inducing rampant inflation. In the first case it's desireable to pump money into the economy and not worry about the defecit (of which Obama inherited a horrible one), but once the economy picks up the deficit becomes a huge problem.

Maybe President Obama didn't explain this part well enough, but none of the freezes / cuts will kick in until 2011. All of the stimulus money that's being put to work this year will still be out there providing jobs that will last 2, 3, or more years. At some point in the future the economy will start growing, at which time the government will need to go into deficit reduction mode, it seems that's what President Obama is planning for. After Rachael explained this it makes sense. The one thing that we have to remember (and keep pounding into the heads of our RW friends) is that President Obama inherited a horrible defecit that it will take some time to dig ourselves out of.