Obama: U.S. Must Spend Itself Out of Recession

[SubGod22]

Will they EVER get it?... I don't think so either.

"At least the president's proposal will result in one new job — he'll need to hire a magician to make this new deficit spending appear fiscally responsible," said Sen. Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee.

[1979Shocker]

Something has to be spent to produce jobs. Preferably the best way would be to have consumers spent the money and in turn more products get produced which in turn produce more jobs.

The situatioin we have right now is that consumers aren't spending any money. At least not enough to pull us out of recession and produce more jobs.

I'm not saying that government spending money is a bad thing if it will kick start consumers in to spending more.

[WuDrWu]

Consumer spending isn't going to drive this economic recovery and anyone that thinks that just doesn't understand this climate.

Consumer OVER spending the past 15 years or so has been fueled by CREDIT, not increased disposable income.

We (consumers) have to reduce our outstanding debt before we (consumers) are going to start spending again. Couple that with the high unemployment and it just isn't going to happen for awhile. If for some reason it does, it's going to be fueled again by the credit market and that's just going to make the next bubble even worse......

Nobody wants to deal with the truth, and the truth is we got ourselves into this mess.....it's going to take some time to get out of it, right. Nobody wants to feel the pain.....and that's a BIG part of the problem.

[WuDrWu]

Just like nobody wants to feel the pain of FAILED Social Security.

Nobody wants to feel the pain of war started by other people.

Nobody wants to feel the pain of killing the unborn.



Everybody justs wants the pain to go away.

[ShockCity]

Consumer spending isn't going to drive this economic recovery and anyone that thinks that just doesn't understand this climate.

Consumer OVER spending the past 15 years or so has been fueled by CREDIT, not increased disposable income.

We (consumers) have to reduce our outstanding debt before we (consumers) are going to start spending again. Couple that with the high unemployment and it just isn't going to happen for awhile. If for some reason it does, it's going to be fueled again by the credit market and that's just going to make the next bubble even worse......

Nobody wants to deal with the truth, and the truth is we got ourselves into this mess.....it's going to take some time to get out of it, right. Nobody wants to feel the pain.....and that's a BIG part of the problem.

Stop the presses...I totally agree with you on this.

[WuDrWu]

Stop the presses...I totally agree with you on this.

Even a blind squirrel finds a nut once in a while.






(You're the squirrel btw.)

j/k

[Maggie]

Something has to be spent to produce jobs. Preferably the best way would be to have consumers spent the money and in turn more products get produced which in turn produce more jobs.

The situatioin we have right now is that consumers aren't spending any money. At least not enough to pull us out of recession and produce more jobs.

I'm not saying that government spending money is a bad thing if it will kick start consumers in to spending more.

I would be interested to know how you arrived at your conclusion.

In my opinion, the focus should be on creating an environment in which economic growth is primary. The government has been spending money at an unprecedented rate for over a year with little result – and the answer is it is not spending enough? The President’s economic team predicted in January that without his stimulus plan, unemployment would rise to 9 percent. It rose to 10.2 percent before leveling off last month. Yet, in his speech, Obama said that thanks to the stimulus, we've avoided the terrible scenarios his economic team predicted in a series of "unforgettable" presentations shown to Obama when he took office. Which struck me as kind of an odd statement. If that's what he thinks, those presentations must have been quite forgettable. The jobs picture is currently worse than his team predicted it would be.

Look the economic literature supporting the link between tax cuts and growth is fairly solid. The link between government spending and growth is not nearly as well-established, relying more on Keynesian theories than actual evidence. In fact, there is quite a bit of evidence that the opposite is true: Reducing the size of the government's footprint in the economy would be conducive to growth.

The President and Congress are singing the same tune they were a year ago. And it will be a tough sell.

[ISASO]

I think His Majesty decreed that unemployment wouldn't even hit 8 percent if the stimulus was passed.

The government is so inefficient at creating simulus by spending money, that's why this Stalinist approach isn't working and that's why we're having a "jobs summit" 11 months after he said he solved the jobs problem.

I hope not, but I suspect unemployment will rise again after January. The Christmas season allowed Obama and his disciples to say that their plan worked. The reality is that Christmas saved Obama, just like WWII saved FDR.

Now I hear that the Feds are revising the unemployment numbers. Of course, the revision is UP. Will there be mention of the real numbers in the next Obama speech from the mountaintop?

[Downtown Shocker Brown]

Just to enlighten on how much crap is actually going on in this credit environment...

My good friend runs his own company that he has expanded over the last 10 years a little at a time, only spending money he had to expand, NO CREDIT.

3 years ago, he was set up, at his bankers advice, to have a $20,000 line of credit with the bank in case of emergency. It was a way to start building the companies credit also. In September, this line of credit was mysteriously taken away. He had never used it, but had paid the minimal fee to maintain it as it was a business account, and only noticed it was no longer available as it dropped off his statement. The bank had never even contacted him about it. When he called to ask they said that his company no longer met the "Credit Requirements" for the account, and that he would need to reapply with collateral for the line of credit. He was already listed to guarantee the loan, so he reapplied. It was denied and he was told he would need collateral in addition to his guarantee. So he put his house (appraised at $245,000 and PAID-OFF) and was denied. He asked why, and was told this:

It's too risky.

[ISASO]

Is he a registered Republican? :lol:

[Downtown Shocker Brown]

His is actually a registered independent.

[kcshocker11]

Everybody justs wants the pain to go away.

Oh Doc how can you leave yourself open like this? I'm not even going there! :D 8)

By the way the Shoxs looked great in KC! tonight! :goshocks: 8)

[Maggie]

Just to enlighten on how much crap is actually going on in this credit environment...

My good friend runs his own company that he has expanded over the last 10 years a little at a time, only spending money he had to expand, NO CREDIT.

3 years ago, he was set up, at his bankers advice, to have a $20,000 line of credit with the bank in case of emergency. It was a way to start building the companies credit also. In September, this line of credit was mysteriously taken away. He had never used it, but had paid the minimal fee to maintain it as it was a business account, and only noticed it was no longer available as it dropped off his statement. The bank had never even contacted him about it. When he called to ask they said that his company no longer met the "Credit Requirements" for the account, and that he would need to reapply with collateral for the line of credit. He was already listed to guarantee the loan, so he reapplied. It was denied and he was told he would need collateral in addition to his guarantee. So he put his house (appraised at $245,000 and PAID-OFF) and was denied. He asked why, and was told this:

It's too risky.

You are correct to point out that financing for the small-business sector is hard to come by in the current environment. Part of the reason is directly related to the fact that many banks over invested in asset-backed securities and derivatives related to the real-estate market. Now the TARP program was supposed to help with this; however, the manner in which it was implemented (i.e. the incentives it created) did little to free up capital banks could use to invest in entrepreneurial enterprises.

Capital was injected directly into banks, through some regulatory changes the pressure was reduced on banks to devalue their bad assets, interest rates were cut to zero by the Fed, and some investment banks were allowed access to cheap loans. Now this probably did prevent the collapse of several large banks; however, it didn’t free up capital. It created an environment in which banks decided to pursue low risk/almost no risk investments while hording money to pay back the TARP funds. That’s a major reason why the small-business sector has found it so difficult to get financing, even as other economic indicators show signs of improvement.

[ISASO]

Bank of America just announced that they are paying back the TARP funds so that they are no longer White House employees.

[shocklight]

Just to enlighten on how much crap is actually going on in this credit environment...

My good friend runs his own company that he has expanded over the last 10 years a little at a time, only spending money he had to expand, NO CREDIT.

3 years ago, he was set up, at his bankers advice, to have a $20,000 line of credit with the bank in case of emergency. It was a way to start building the companies credit also. In September, this line of credit was mysteriously taken away. He had never used it, but had paid the minimal fee to maintain it as it was a business account, and only noticed it was no longer available as it dropped off his statement. The bank had never even contacted him about it. When he called to ask they said that his company no longer met the "Credit Requirements" for the account, and that he would need to reapply with collateral for the line of credit. He was already listed to guarantee the loan, so he reapplied. It was denied and he was told he would need collateral in addition to his guarantee. So he put his house (appraised at $245,000 and PAID-OFF) and was denied. He asked why, and was told this:

It's too risky.

First off, I am not a banker. Although I have owned my own business for nearly 31 years. In that 31 years I have seen many angles of the economy, good times, bad times and so-so times.

In reading your thoughts about your friends business, the first thing that came to my mind was, not that the bank couldn't give him a line of credit, but they wouldn't give him a line of credit. To be fair, we don't know the current financial well being of his business. However, lets assume everything is stable. As I was saying, the bank wouldn't give him the line of credit, the real question is why then? Why was it to big of a risk?

The answer could simply be, the bank he is dealing with could be in financial trouble itself. A few local banks aren't healthy right now. If bank examiners are there (at his bank) he would never know this. Again this is assuming your friends business is in good shape. My suggestion for your friend is to start shopping for another bank, he may be surprised what he finds out. I wonder who the risk is to great for? The bank or the customer?

He needs to remember, he is the customer here. Just like anyother business, if you can't/won't take care of your customer, you probably will lose them as a customer.

Our local banks for the most part have money to lend, even though it's a bad economy. Your friend may find that if he shops around to other banks he will find out what the risks are. Besides, it would be a good business move on his part.

This is my humble opinion, but then again I could be full of ****!