[Giselle]

The Greater Than Great Depression Depression?

The President's 2007 Budget is good to be sure, but not good enough.

The President now knows discretionary spending is out of control; time to reign in the purse strings.

But if the lawmakers don't actually stick to the changes proposed, it will all be for naught.

Moreover, cutting Medicare is only one entitlement reform required to avert the pending long-term budgetary crisis.

If people don't think the mighty USA can never become bankrupt, I'd remind them of the 10 year Great Depression of 1929-1939.

Only the next full-fledge depression, which I believe is only a matter of time, will make the Great Depression look like a Sunday picnic!

And what will historians call the next fullfledged depression, The Greater Than Great Depression Depression?

Great Depression
http://en.wikipedia.org/wiki/Great_Depression

The Great Depression
http://www.english.uiuc.edu/maps/dep...depression.htm

America's Great Depression
http://www.amatecon.com/gd/gdtimeline.html

Slouching Towards Utopia?: The Economic History of the Twentieth Century -XIV. The Great Crash and the Great Slump-
J. Bradford DeLong
University of California at Berkeley and NBER
February 1997
http://www.j-bradford-delong.net/TCE...h_Crash14.html

New Deal Network
http://newdeal.feri.org/

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With federal spending, it's long-term reform that matters. Spending is too high today, but it's set to explode in just a few years. Reforming entitlements must be the priority. Despite many worthwhile ideas, entitlement reform is not the priority in the President's just-released FY 2007 budget proposal, concludes budget expert Brian Riedl.

Bush's budget holds the line on discretionary spending while eliminating or reducing funding for 141 failed, wasteful, or outdated programs. That's a good step. Slowing the growth of Medicare is also a good fiscal idea.

Bush's budget lays out a good framework for 2007. But will the President hold Congress to it?

Read: The President's Budget: Strong on Short-Term Spending, But Long-Term Challenges Remain by Brian M. Riedl
http://www.heritage.org/Research/Budget/wm990.cfm

Extra! Federal Spending by the Numbers by Brian M. Riedl
http://www.heritage.org/Research/Budget/wm989.cfm

[kjsdiuwe]

Do you see how this is for the most part ignored ?

Just another factor that assures it will be coming.

Lets not bother with fixing anything until it's so fucked up it's beyond repair.

This is what happens to a society that gets so rich and secure that common sense gets forgotten.

The laws of nature and common sense WILL pay us a VERY unpleasant visit someday.

And we can RELEARN things that we KNOW, but choose to ignore.

[Q0KmoR8K]

Combine energy problems with fiscal problems and you have such a big mess that it's hard to imagine how bad it can get. Also, there's a new chairman on federal reserve who is of unknown quality so to speak. My guess is on that Barnake will inflate like no tomorrow like his predecessor big Al.

[arrasleds]

Zorlag
My guess is on that Barnake will inflate like no tomorrow like his predecessor big Al. What delusional world are you living in? You can say alot of things about Greenspan, but that he "inflated" is the furthest from any. His record on containing inflation is unasailalbe. Where I fault him is for being overly cautious on inflation to the extent that he tended to consistently understimate the inflation retardant effects of consistent productivity gains over the last 25 years (largely unleashed by the Reagan taxcuts) which resulted in his raising interest rates too much in the early and late 1990s

[eEwbYjOH]

So long as he has the credentials for the position and not just another buddy of GW is good enough I would think.

It seems he is knowledgeable about "The Great Depression", having authored a book on the subject, which may address some of the issues LDS Patriot pointed out.

http://en.wikipedia.org/wiki/Ben_Bernanke

[RuttyUttepe]

So, what's the consensus here then ?

I think that if the citizenry keeps handling their own $$ like the govt. has been handling $$, then it's pretty much a given ?

I don't know ?

[Stoniaanapy]

It's a given anyway. If we-- either the government or private citizens-- stopped borrowing money like there's no tomorrow, we wouldn't be able to buy enough goods to support the people who produce them.

The only thing we can do is adopt policies that will slow the crash down so that we can buy some time to prepare for it. Of course... noone in the government is even remotely interested in making preparations, because that would be admitting that there's a problem. (And it would start a consumer panic which would probably accelerate things.)

[iNYZgxNC]

It's a given anyway. If we-- either the government or private citizens-- stopped borrowing money like there's no tomorrow, we wouldn't be able to buy enough goods to support the people who produce them.

The only thing we can do is adopt policies that will slow the crash down so that we can buy some time to prepare for it. Of course... noone in the government is even remotely interested in making preparations, because that would be admitting that there's a problem. (And it would start a consumer panic which would probably accelerate things.)

The debt is rationalized as being relatively small as a percentage of GDP, but as GDP growth is completely driven by debt--assuming that there is any growth, which may not be the case--and we have no way of changing this dynamic without the house of cards crashing down, much less paying off this mountain of debt, it's a totally fraudulent perspective.

The global economy appears to me to be little more than an immense check-kiting scheme. Everything appears OK--if you don't look closely--as long as the money keeps moving around, but when the merry-go-round stops, all hell is going to break loose. A few more storms and/or energy market disruptions is all it'll take, I'd say.

[Bbjhjxfy]

What delusional world are you living in? You can say alot of things about Greenspan, but that he "inflated" is the furthest from any. His record on containing inflation is unasailalbe. Where I fault him is for being overly cautious on inflation to the extent that he tended to consistently understimate the inflation retardant effects of consistent productivity gains over the last 25 years (largely unleashed by the Reagan taxcuts) which resulted in his raising interest rates too much in the early and late 1990s

Only if you reach such a determination strictly on the basis of rate adjustments. Factor in growth in the money supply and you get a much different picture, one that shows the Fed under Greenspan to indeed be an engine of inflation.

[viepedorlella]

Combine energy problems with fiscal problems and you have such a big mess that it's hard to imagine how bad it can get. Also, there's a new chairman on federal reserve who is of unknown quality so to speak. My guess is on that Barnake will inflate like no tomorrow like his predecessor big Al.

He's on record as saying he'll throw money from helicopters if need be.

[Frierlovene]

Or we could raise taxes, and pay for spending that way.
There is no correlation between top tax rates and growth.
Deficit spending does provide an immediate stimulus but it's short lived, and no where near as effective as a balanced budget.
We could also cut things like the military, Grover Norquist believes that military spending can be cut by 70% without effecting our security, so there's a possible savings there.
Paying off the Debt, would reduce interest payments which will become the largest single item in the budget soon.
Higher taxes do work wonders.

[exhibeKed]

Or we could raise taxes, and pay for spending that way. ... Higher taxes do work wonders. Yes, like increasing turnover in Congress. That's why it won't happen, unless it's either done very gradually or a rape-the-rich proposal. I personally wouldn't have a problem with higher taxes if the funds were truly needed for necessary expenditures. Given that last I checked, less than half of the current federal budget fit that description, I think you'll get some appreciable resistance to that plan.

There is no correlation between top tax rates and growth. I find that hard to believe, but I'm too lazy to look it up. I'm sure there Is a correlation between overall tax burden and growth tho, and it sounds like you favor increasing that.

military spending can be cut by 70% without effecting our security, so there's a possible savings there. I'm not sure about 70%, but I'm sure there are some savings to be had there. On the other hand, our numerous, unconstitutional entitlement programs could be cut by 100%, for even greater savings. Tho they would have to be phased out over at least 5 years to reduce disruption to society and/or the economy.

Paying off the Debt, would reduce interest payments which will become the largest single item in the budget soon. Yes, but there's also a high correlation between tax surpluses (which are a prerequisite to paying off debt) and recession. So as much as I personally would love a balanced budget and debt-free status asap, from a societal standpoint, this needs to be something we ease into. It took over 50 yrs to dig the hole we're in; it'll take at least 20 years to fill it back in properly.

[ephennaCypota]

Pogo
Only if you reach such a determination strictly on the basis of rate adjustments. Factor in growth in the money supply and you get a much different picture, one that shows the Fed under Greenspan to indeed be an engine of inflation. All of which is factored into the final measure of inflation.(although I am not sure what you mean by "rate adjustments") The overall inflation rate has been incredibly low in the last 25 years, and in all likelyhood even the official rate is somewhat overestimated as it tends to not represent improvements in product quality (i.e. even if the average computer today costs the same as one a year ago, the likelyhood is that there are substantial improvements in the capacity or quality of the product for that same price).

[Alina20100]

Posts 7 - 13 tell me I'm not hurting myself by stashing some of my $$ in silver and gold. When paper $$ balances out to it's actual, physical value (about .0001 $) it might be nice to still be holding something of value maybe.

Maybe.

I don't know. Just trying to cover my butt and be prepped for the worst.

[NaMbessemab]

The Greater Than Great Depression Depression?

The President's 2007 Budget is good to be sure, but not good enough.

The President now knows discretionary spending is out of control; time to reign in the purse strings.

Might the 'right time' for reigning in the purse strings on discretionary spending have been BEFORE President Bush oversaw the largest increase in discretionary spending in history? Lets just say President Bush's credibility on the issue is somewhat suspect.

Moreover, cutting Medicare is only one entitlement reform required to avert the pending long-term budgetary crisis.

Really? You do realise that President Bush's Medicare Bill massively increased entitlements in this respect? That Medicare Bill also almost doubled the total amount of subsidies going out to private corporations (from around $100 billion previously to over $200 billion per year now).

Only the next full-fledge depression, which I believe is only a matter of time, will make the Great Depression look like a Sunday picnic!

Really? On what basis do you make this prediction? All previous analysis of the topic have suggested the opposite conclusion - that is to say, that many of the elements that 'caused' the Great Depression (or made it worse) have been addressed. Indeed, the single greatest political mistake of the period was (Republican President) Hoover's tight money policy and high tariff policy adopted in the early stages of the 'downturn'.

In other words, as long as you don't have an idiot ordering the wrong medicine at a time of crisis, the effects of the Great Depression are very unlikely to recreate.

With federal spending, it's long-term reform that matters. Spending is too high today, but it's set to explode in just a few years. Reforming entitlements must be the priority. Despite many worthwhile ideas, entitlement reform is not the priority in the President's just-released FY 2007 budget proposal, concludes budget expert Brian Riedl.

Yes, spending is too high and is set to rise exponentially over the next 20-30 years. One wonders why taxes have been falling steadily for 15 years? Indeed, the problem is a serious fiscal imbalance, not necessarily a problem with spending.

Bush's budget holds the line on discretionary spending while eliminating or reducing funding for 141 failed, wasteful, or outdated programs. That's a good step. Slowing the growth of Medicare is also a good fiscal idea.

This is priceless 'double-speak'. Discretionary spending is rising as fast as ever before - this present fiscal year only reduces the rate at which discretionary spending has been rising lately. It is still rising.

And as noted above, Bush's Medicare Bill massively increases the entitlement spending on Medicare (open-ended of course, with significant benefits now going to corporate benefactors of the Republican party rather than actual sick people).

Read: The President's Budget: Strong on Short-Term Spending, But Long-Term Challenges Remain by Brian M. Riedl

Translation out of Republican Beltway-speak: Same crap - rising spending, never ending deficits, more pork for the faithful and more debt for the grandchildren.