The Problem With keynesian economics

[EdwardBaiamonte]

[Jesus, ed. At it again with your itsy bitsy brain. Can't come up with a time when tax decreases helped, can you genius.

Ireland cut taxes and most of the worlds major corporations moved operations there!

Delaware cut taxes and most US corporations incorporate there!!!

 

[Rshermr]

Why would I have to read minds? You realize there are books written on this topic, right? It's not like we're just sitting out in a field trying to call upon the cosmos for answers.

Jesus, guys. The first and only stimulus was not that long ago in terms of understanding what happened. What happened was that every repub was voting against, and a couple of blue dog dems were voting with them. There was never a filibuster proof majority in real terms.
Obama took what he could get. Had to go along with a good deal of the stimulus as tax breaks to get enough votes.
Not a great stimulus, but some stimulus and it did do some good. According to the CBO, somewhere between 1.3 and 3.4 m jobs, as I recall, though i could easily be off a few.

Since then, repubs have filibustered EVERY attempt at stimulus spending of any kind. Question is, are they that stupid, or do they care about nothing except crashing the economy.

You really should get your head out of your ass. The ARRA passed with 3 Republican votes in the Senate, that is a matter of public record.

Jesus, Windbag. Obviously you can not read.

I said, that the dems did not have a filibuster proof majority. And the fact that 3 of 40 repubs voted has absolutely nothing to do with the truth of what I stated.

Jesus, Windbag thinks 3 of 40 makes some difference. What is says is that even though Repubs vote in a block, even they could not completely control the herd in this case. They tried, but could not quite do the job.
And Windbag, relative to the ass thing, screw off. Stupid childish insults simply show your mental age.

 

[Polk]

Damn, now you can read minds. What next, the ability to predict the future?

Why would I have to read minds? You realize there are books written on this topic, right? It's not like we're just sitting out in a field trying to call upon the cosmos for answers.

Books were written about how incompetent Obama is? When? Who wrote them? Where can I get copies?

Moving from issue that you don't know what the word "incompetent" means, the book on the issues surrounding stimulus was already mentioned earlier in the thread (The Escape Artists: How Obama's Team Fumbled the Recovery).

 

[Polk]

Why would I have to read minds? You realize there are books written on this topic, right? It's not like we're just sitting out in a field trying to call upon the cosmos for answers.

Jesus, guys. The first and only stimulus was not that long ago in terms of understanding what happened. What happened was that every repub was voting against, and a couple of blue dog dems were voting with them. There was never a filibuster proof majority in real terms.
Obama took what he could get. Had to go along with a good deal of the stimulus as tax breaks to get enough votes.
Not a great stimulus, but some stimulus and it did do some good. According to the CBO, somewhere between 1.3 and 3.4 m jobs, as I recall, though i could easily be off a few.

Since then, repubs have filibustered EVERY attempt at stimulus spending of any kind. Question is, are they that stupid, or do they care about nothing except crashing the economy.

You really should get your head out of your ass. The ARRA passed with 3 Republican votes in the Senate, that is a matter of public record.

That goes to show why a larger stimulus wasn't feasible. The initial bill was constructed in a way intended to gain widespread bipartisan support, and even after putting additional potsweeters in the bill, it still only garnered three Republican votes.

 

[Quantum Windbag]

Jesus, guys. The first and only stimulus was not that long ago in terms of understanding what happened. What happened was that every repub was voting against, and a couple of blue dog dems were voting with them. There was never a filibuster proof majority in real terms.
Obama took what he could get. Had to go along with a good deal of the stimulus as tax breaks to get enough votes.
Not a great stimulus, but some stimulus and it did do some good. According to the CBO, somewhere between 1.3 and 3.4 m jobs, as I recall, though i could easily be off a few.

Since then, repubs have filibustered EVERY attempt at stimulus spending of any kind. Question is, are they that stupid, or do they care about nothing except crashing the economy.

You really should get your head out of your ass. The ARRA passed with 3 Republican votes in the Senate, that is a matter of public record.

Jesus, Windbag. Obviously you can not read.

I said, that the dems did not have a filibuster proof majority. And the fact that 3 of 40 repubs voted has absolutely nothing to do with the truth of what I stated.

Jesus, Windbag thinks 3 of 40 makes some difference. What is says is that even though Repubs vote in a block, even they could not completely control the herd in this case. They tried, but could not quite do the job.
And Windbag, relative to the ass thing, screw off. Stupid childish insults simply show your mental age.

They did not need one, the fracking thing passed with Republicans voting for it. The only reason Republicans ended up rejecting it was because Pelosi decided to railroad it through without considering any Republican amendment. Since there is no filibuster in the House she was able to get away with it, even though she pissed off quite a few Democrats when she did.

Please, continue to blame the Republicans for that, I love laughing at idiots.

 

[Quantum Windbag]

Jesus, guys. The first and only stimulus was not that long ago in terms of understanding what happened. What happened was that every repub was voting against, and a couple of blue dog dems were voting with them. There was never a filibuster proof majority in real terms.
Obama took what he could get. Had to go along with a good deal of the stimulus as tax breaks to get enough votes.
Not a great stimulus, but some stimulus and it did do some good. According to the CBO, somewhere between 1.3 and 3.4 m jobs, as I recall, though i could easily be off a few.

Since then, repubs have filibustered EVERY attempt at stimulus spending of any kind. Question is, are they that stupid, or do they care about nothing except crashing the economy.

You really should get your head out of your ass. The ARRA passed with 3 Republican votes in the Senate, that is a matter of public record.

Jesus, Windbag. Obviously you can not read.

I said, that the dems did not have a filibuster proof majority. And the fact that 3 of 40 repubs voted has absolutely nothing to do with the truth of what I stated.

Jesus, Windbag thinks 3 of 40 makes some difference. What is says is that even though Repubs vote in a block, even they could not completely control the herd in this case. They tried, but could not quite do the job.
And Windbag, relative to the ass thing, screw off. Stupid childish insults simply show your mental age.

They did not need one, the fracking thing passed with Republicans voting for it. The only reason Republicans ended up rejecting it was because Pelosi decided to railroad it through without considering any Republican amendment. Since there is no filibuster in the House she was able to get away with it, even though she pissed off quite a few Democrats when she did.

Please, continue to blame the Republicans for that, I love laughing at idiots.

 

[Quantum Windbag]

Why would I have to read minds? You realize there are books written on this topic, right? It's not like we're just sitting out in a field trying to call upon the cosmos for answers.

Books were written about how incompetent Obama is? When? Who wrote them? Where can I get copies?

Moving from issue that you don't know what the word "incompetent" means, the book on the issues surrounding stimulus was already mentioned earlier in the thread (The Escape Artists: How Obama's Team Fumbled the Recovery).

What? Didn't he have Harvard economics professors advising him? How is it there fault he didn't listen?

 

[Quantum Windbag]

Jesus, guys. The first and only stimulus was not that long ago in terms of understanding what happened. What happened was that every repub was voting against, and a couple of blue dog dems were voting with them. There was never a filibuster proof majority in real terms.
Obama took what he could get. Had to go along with a good deal of the stimulus as tax breaks to get enough votes.
Not a great stimulus, but some stimulus and it did do some good. According to the CBO, somewhere between 1.3 and 3.4 m jobs, as I recall, though i could easily be off a few.

Since then, repubs have filibustered EVERY attempt at stimulus spending of any kind. Question is, are they that stupid, or do they care about nothing except crashing the economy.

You really should get your head out of your ass. The ARRA passed with 3 Republican votes in the Senate, that is a matter of public record.

That goes to show why a larger stimulus wasn't feasible. The initial bill was constructed in a way intended to gain widespread bipartisan support, and even after putting additional potsweeters in the bill, it still only garnered three Republican votes.

Actually, it just shows how far you are willing to go to defend you idol. Reid and Pelosi stopped accepting amendments, upsetting people on both sides of the aisle. They decided to shut out everyone who disagreed with them, and you have been blaming the Republicans ever since.

 

[Rshermr]

You really should get your head out of your ass. The ARRA passed with 3 Republican votes in the Senate, that is a matter of public record.

Jesus, Windbag. Obviously you can not read.

I said, that the dems did not have a filibuster proof majority. And the fact that 3 of 40 repubs voted has absolutely nothing to do with the truth of what I stated.

Jesus, Windbag thinks 3 of 40 makes some difference. What is says is that even though Repubs vote in a block, even they could not completely control the herd in this case. They tried, but could not quite do the job.
And Windbag, relative to the ass thing, screw off. Stupid childish insults simply show your mental age.

They did not need one, the fracking thing passed with Republicans voting for it. The only reason Republicans ended up rejecting it was because Pelosi decided to railroad it through without considering any Republican amendment. Since there is no filibuster in the House she was able to get away with it, even though she pissed off quite a few Democrats when she did.

Please, continue to blame the Republicans for that, I love laughing at idiots.

You must get a real kick out of yourself.

Congress can pass nothing. Except on to the Senate. It was passed in the Senate, barely, over an attempted filibuster, thanks to 3 republican votes.

Lots of compromises, primarily in the area of exchanging tax decreases for spending, got it past the repubs and blue dog dems.

 

[EdwardBaiamonte]

They pressured Fed to keep inflation low

inflation will end this depression?? How?

and they demanded cuts in government spending at the time when it needed more stimulus.

too stupid!!! government spending to stimulate the housing market caused this depression.

And by threatening to force a default, they made clear that they will not allow any steps that could possibly help the economy to recover.

putting a stop to rising debt does prevent a default. No debt no default. Is that really over your head?? The more debt the more likely default!!

 

[ilia25]

They pressured Fed to keep inflation low

inflation will end this depression?? How?

By lowering real interest rates and encouraging investment. Normally Fed lowers the interest rates in order to stimulate the economy, but they hit zero lower bound back in 2008. But rising inflation will make the real rates negative.

and they demanded cuts in government spending at the time when it needed more stimulus.

too stupid!!! government spending to stimulate the housing market caused this depression.

Those are fairy tales Republicans use regularly to trick their dumb supporters. The crisis of 2008 did not cause the depression. The lack of response to the crisis did.

And by threatening to force a default, they made clear that they will not allow any steps that could possibly help the economy to recover.

putting a stop to rising debt does prevent a default. No debt no default.

Putting a stop to rising debt does not eliminate the existing debt. But it makes impossible to pay it off, hence the default.

Of course Republicans were never intended to make good on their threats. They are many things, but suicidal are not among them. They just wanted to bully Obama and blame the deficits on him -- and to that end they were very successful.

 

[Quantum Windbag]

Jesus, Windbag. Obviously you can not read.

I said, that the dems did not have a filibuster proof majority. And the fact that 3 of 40 repubs voted has absolutely nothing to do with the truth of what I stated.

Jesus, Windbag thinks 3 of 40 makes some difference. What is says is that even though Repubs vote in a block, even they could not completely control the herd in this case. They tried, but could not quite do the job.
And Windbag, relative to the ass thing, screw off. Stupid childish insults simply show your mental age.

They did not need one, the fracking thing passed with Republicans voting for it. The only reason Republicans ended up rejecting it was because Pelosi decided to railroad it through without considering any Republican amendment. Since there is no filibuster in the House she was able to get away with it, even though she pissed off quite a few Democrats when she did.

Please, continue to blame the Republicans for that, I love laughing at idiots.

You must get a real kick out of yourself.

Congress can pass nothing. Except on to the Senate. It was passed in the Senate, barely, over an attempted filibuster, thanks to 3 republican votes.

Lots of compromises, primarily in the area of exchanging tax decreases for spending, got it past the repubs and blue dog dems.

What?

Congress is the House of Representatives and the Senate. How can Congress pass something and then send it back to part of itself?

 

[Truthseeker420]

Everyone?

Obama says stimulus package is right size, scope | Reuters

There's a difference between knowing something and saying what you know.

I don't think Obama knew that the stimulus was too small. He is a lousy leader because he was never able to choose right advisers. He is not very bright.

What? Obama stimulus plan was scaled down by congress.

 

[ilia25]

There's a difference between knowing something and saying what you know.

I don't think Obama knew that the stimulus was too small. He is a lousy leader because he was never able to choose right advisers. He is not very bright.

What? Obama stimulus plan was scaled down by congress.

That did not make a lot of difference. Even if Congress would approve the original proposal, it would be grossly inadequate.

 

[itfitzme]

too stupid!!! government spending to stimulate the housing market caused this depression.

Too stupid!!! There is not one shred of evidence to support the idea the rising defense spending caused the housing market boom.

On the other hand, there is every manner of evidence to support the housing market boom and bust was driven by unconstrained speculative invesment.

 

[EdwardBaiamonte]

too stupid!!! government spending to stimulate the housing market caused this depression.

Too stupid!!! There is not one shred of evidence to support the idea the rising defense spending caused the housing market boom.

On the other hand, there is every manner of evidence to support the housing market boom and bust was driven by unconstrained speculative invesment.

dear, how can one speculate with money unless liberals print to money with which to speculate????????

our great newspapers and economists on left and right agree it was liberal government that caused the current depression.

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NYTimes and the Wall Street Journal agree on its validity!"...John B. Taylor


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"





You may not have heard of the Federal Reserve system but it exists to inflate and deflate the currency supply through the housing market. They inflated too much for too long. This caused what they call a housing bubble. While the bubble was inflating all the big banks and many insurance companies bought bubble mortgages thinking they were sound rather than merely purchased or made possible by newly printed funny money. When the bubble deflated they all lost money on the mortgages. It would be analogous to the government making cars and giving them to GM so everyone could have a car. If GM got them by the ton and for very little money of course they would find a way to move them . This is essentially what the Banks did with the free money. In addition to the Federal Reserve System you had Fanny and Freddie which bought and guaranteed many of the mortgages so no one had to worry about them failing. Then you had CRA, FHA, Federal Home Loan Bank Board( 3% down payment loans) and several others that were designed to get everybody in their own home.

When the states tried to move against predatory lending by national banks they were blocked by the bank's federal regulator, the office of the comptroller of the currency, That empowered money lenders say Lynn Turner.

Just as significantly you had very badly conceived accounting rules that hid the problems from everyone until it was too late. Accounting rules are supposed to do the opposite, not move billions in potential liabilities off the balance sheet onto tiny footnote on the bottom of a page as happened at Citibank, or onto on sentence at the end of a 10-Q report as happened at AIG, or as generally happened with SIVs (structured investment vehicles). Then you had gov't rules from the last crisis, the Enron Crisis, the created mark-to- market accounting rules for this crisis that many believe greatly exacerbated this crisis.

Then you had the problem with the government backed ratings agencies that simply failed to rate the mortgage backed and related securities, properly. Sorry, it had little to do with Bush, but had everything to do with inane attempts by the liberal to regulate the free market!


Warren Buffett: "There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places".

Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!

“Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”-Alan Greenspan

Courtesy A. Smith:FDR created Fannie.
LBJ Privatized Fannie - creating an "enron" like environment:
Greg Mankiw's Blog: Thanks, LBJ

Carter's Community Reinvestment Act - accelerated by Clinton - pushed risky loans:
Community Reinvestment Act - Wikipedia, the free encyclopedia

Clinton pushed Fannie into Subprime - the most critical mistake:
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village Voice

Even the NY Times figured this out: Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com

Bush and McCain attempted to reform Fannie on 17 occasions
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone Only To Have Dems Ignored His Warnings :: Political News and commentaries :: Hyscience

The risky subprime loans fueled another layer of risk - derivatives
https://www.istockanalyst.com/article/viewarticle/articleid/2947518

The LA Times reported on Clinton's "subprime" success in 1999:
Minorities' Home Ownership Booms Under Clinton but Still Lags Whites' - Los Angeles Times


"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NY Times and the Wall Street Journal agree on its validity!"...John B. Taylor( arch conservative, author of the Taylor Rule)

" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"


If you still can't grasp what happened why not read "Reckless Endangerment" by NY Times person and see if you can say with a straight face that the crisis was not caused by liberal interference wit the free market.


Fannie and Freddie had purchased $4.9 trillion of the mortgages outstanding as of the end of 2007, 70% of which the GSEs had packaged and sold to investors with a guarantee of payment, and the remainder of which Fannie and Freddie kept for their own portfolios. The fraction of outstanding home mortgage debt that was either held or guaranteed by the GSEs (known as their "total book of business") rose from 6% in 1971 to 51% in 2003. Book of business relative to annual GDP went from 1.6% to 33%.



Sum of retained mortgage portfolio and mortgage backed securities outstanding for Fannie and Freddie (from OFHEO 2008 Report to Congress) divided by (1) total 1- to 4-family home mortgage debt outstanding (from Census for 1971-2003 and FRB for 2004-2007) and (2) annual nominal GDP.


The problem is summed up succinctly by Stan Liebowitz of the University of Texas at Dallas:

From the current handwringing, you’d think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards--at the behest of community groups and "progressive" political forces.… For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage done by relaxed loan standards.



Washington Post:

Fannie Mae aimed to benefit from subprime loans and expand the market for them -- and hoped to pass much of the risk on to others, documents show. Along with subprime loans, which were typically issued to borrowers with blemished credit, the company targeted so-called Alt-A loans, which were often made with no verification of the borrower's income.

"By entering new markets -- especially Alt-A and subprime -- and guaranteeing more of our customers' products at market prices, we met our goal of increasing market share from 22 to 25 percent," Mudd wrote in a 2006 year-end report to the Fannie Mae board dated Jan. 3, 2007.

In other internal documents, there was a common refrain: One of Fannie Mae's objectives for 2006 was to "increase our penetration into subprime."

In an interview, Fannie Mae Executive Vice President Thomas A. Lund said the company pursued the purchase of subprime loans in 2006 and 2007 at the request of lenders, who wanted Fannie Mae to take the loans off their books. He said Fannie Mae hoped to bring higher standards to the market, and he added that the loans helped the company in its struggle to meet goals the government had set for Fannie Mae's advancement of affordable housing.



they reflected the company's appetite for subprime and Alt-A mortgages. The company had a long and deep involvement in this market through a different form of investment.

Instead of buying the loans and securitizing them itself, Fannie Mae had invested in securities packaged by others from pools of these loans. Going back at least as far as 2002, Fannie Mae had taken on tens of billions of dollars of such securities, according to regulatory data.

Fannie Mae's investment in Alt-A and subprime securities issued by others would later prove costly. But in Mudd's January 2007 report, as he reviewed the company's business, they didn't even draw a mention.



From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending. Subprime loans are targeted toward borrowers with poor credit, and they generally carry higher interest rates than conventional loans.

WP:Today, 3 million to 4 million families are expected to lose their homes to foreclosure because they cannot afford their high-interest subprime loans. Lower-income and minority home buyers -- those who were supposed to benefit from HUD's actions -- are falling into default at a rate at least three times that of other borrowers.



WP: Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt. Owned by private shareholders but chartered by Congress, they are exempt from state and local taxes and receive an estimated $6.5 billion-a-year federal subsidy because they can borrow money more cheaply than other investors. In return, they are expected to serve "public purposes," including helping to make home buying more affordable



Since HUD became their regulator in 1992, Fannie and Freddie each year are supposed to buy a portion of "affordable" mortgages made to underserved borrowers. Every four years, HUD reviews the goals to adapt to market changes.

In 1995, President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans. HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders



But by 2004, when HUD next revised the goals, Freddie and Fannie's purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.



In 2003, the two (fanny/Freddie)bought $81 billion in subprime securities. In 2004, they purchased $175 billion -- 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.

 

[ilia25]

too stupid!!! government spending to stimulate the housing market caused this depression.

Too stupid!!! There is not one shred of evidence to support the idea the rising defense spending caused the housing market boom.

On the other hand, there is every manner of evidence to support the housing market boom and bust was driven by unconstrained speculative invesment.

dear, how can one speculate with money unless liberals print to money with which to speculate????????

Right, so now you are against printing money? That is the most ridiculous suggestion one can come up with. Any economist, left or right, will tell you that.

Oh, and by posting 1000s words of nonsense you end up with a lot of nonsense still.

Even if the financial crisis was caused by Freddie & Fannie -- which it was not, it was caused by the private sector speculating on subprime -- the crisis itself did not cause the years of depression we were living since then. For that we should thank Republicans, who've been doing everything to prevent the economy form recovering. And to much lesser extent we should fault Obama, for trying to play bipartisan with all those madmen.

 

[EdwardBaiamonte]

Right, so now you are against printing money?

dear, a little econ 101 for you, calls one day one. Conservatives are against printing enough to inflate the currency.

 

[ilia25]

Right, so now you are against printing money?

dear, a little econ 101 for you, calls one day one. Conservatives are against printing enough to inflate the currency.

And when was the last time our currency was "inflated"? Do you think it was inflated during "the housing bubble"?

 

[EdwardBaiamonte]

They pressured Fed to keep inflation low

inflation will end this depression?? How?[/quote]

By lowering real interest rates and encouraging investment.

dear, interest rates are already as low as the can go. THis is caled a liquidity trap. Sorry

Those are fairy tales Republicans use regularly to trick their dumb supporters. The crisis of 2008 did not cause the depression. The lack of response to the crisis did.

dear, BO had a super majority; he responded with a bailout and Tarp and cash for clunkers for good measure. sorry

And by threatening to force a default, they made clear that they will not allow any steps that could possibly help the economy to recover.

putting a stop to rising debt does prevent a default. No debt no default.

Putting a stop to rising debt does not eliminate the existing debt. But it makes impossible to pay it off, hence the default.

dear, the less debt rises the less chance of default. Get it?? THe more debt you have the harder it is to pay off?? Still over your head??

Of course Republicans were never intended to make good on their threats. They are many things, but suicidal are not among them. They just wanted to bully Obama and blame the deficits on him -- and to that end they were very successful.

of course deficits belong to liberals since Republicans have proposed many times that they be made illegal and Democrats have objected. Is that over your head too??

See why we are positive a liberal will be slow, very very slow??