"1 year recession vs. 10 year depression"

[KramerDSP]

I need some help here. I had a discussion with a friend of mine who is an Obama supporter. I was trying to explain the bailout situation with him and he agreed with me and said he was dissapointed that Obama voted for the bailouts. I also told him about the bankers being the number one contributors and threw stats at him on fundraising for both Obama and McCain.

A few days goes by, and he said he chatted with his mother and had a change of heart. His rationale ? The bailout might be bad on principle, but if there's no bailout, people WILL lose their jobs and houses and so forth. He said it is easy to say "let's suffer a little now to prevent a long term disaster", and wants to know why Ron Paul is convinced that we're entering a 10 year depression. He said "and if we didn't pass the bailouts, we would only going to be in a recession for 365 days or so?". He ended by saying that not to try to save these jobs and prevent a recession just to prevent a future possible depression is not fair to the people who will lose their jobs because of no bailouts.

Obviously, I completely support the idea of no bailouts, and made many calls to my representatives and senators leading up to the votes, but I would like more concrete explanations of why Ron Paul is certain that the depression would be 10 years, not say 5 or 15... and why he s certain that a recession would only be 1 year. If I could understand this better, I could continue to work on my friend.

[TER]

bump. I also need help in explaining this to people!

[torchbearer]

Congress chooses 10 years depression.

People in my congressional districts are fucking stupid.
Alexander, who voted for the bailout beat his primary challenger by 90%.
This is the same numbers I would have gotten in this race, and the main reason i didn't continue with this futile run.

Look at district 5: http://staticresults400.sos.louisiana.gov/100408state.htm

23,723 89.87% Rodney Alexander (Incumbent)
2,674 10.13% Andrew Clack


I must add, that 2 of those 2674 votes came from my household.
People are fucking stupid.

[Alawn]

How do they expect to solve the problem by doing more of exactly what caused the problem?

[torchbearer]

How do they expect to solve the problem by doing more of exactly what caused the problem?

They don't know, don't care.. and won't until they lose there retirement, home, cable, cars, and other articles of leisure.
They are fucking stupid. Don't have a clue.

When I talk to people at our family diner, they don't have a clue what is happening.
To them, I probably sounds crazy.

[KramerDSP]

How do they expect to solve the problem by doing more of exactly what caused the problem?

That's too vague. I need specifics. Why are we guaranteed a ten year, specifically ten year depression, and why would a recession only last one year if we didn't pass the bailout bill ?

[torchbearer]

That's too vague. I need specifics. Why are we guaranteed a ten year, specifically ten year depression, and why would a recession only last one year if we didn't pass the bailout bill ?

It is assumed, that if the malinvestment is liquidated, the chains of debt would be removed and people can get back to work and rebuilding....
assuming we have a free market and stable currency.

[Flirple]

It is a false premise. Ron isn't garunteeing a ten year depression. Nobody could possible no such an exact thing. Especially because nobody knows what future interventions the government will make. This bailout ensures that there will be anotherone and so on. The more such intervenions they do the longer the crises will drag on and the deeper it will become.

But the real question is will one such intervention push us into a hyperinflationary spiral? Or will the dollar hang on long enough to survive a 2,6,9,or 13 year crises if that is the path the Fed and congress choose with their inflationary monetary policy?

[KramerDSP]

It is a false premise. Ron isn't garunteeing a ten year depression. Nobody could possible no such an exact thing. Especially because nobody knows what future interventions the government will make. This bailout ensures that there will be anotherone and so on. The more such intervenions they do the longer the crises will drag on and the deeper it will become.

But the real question is will one such intervention push us into a hyperinflationary spiral? Or will the dollar hang on long enough to survive a 2,6,9,or 13 year crises if that is the path the Fed and congress choose with their inflationary monetary policy?

That's what I was looking for. Thanks.

[RSLudlum]

ahh the pity of the people that don't see the things 'not seen' per Bastiat.

[Anti Federalist]

I need some help here. I had a discussion with a friend of mine who is an Obama supporter. I was trying to explain the bailout situation with him and he agreed with me and said he was dissapointed that Obama voted for the bailouts. I also told him about the bankers being the number one contributors and threw stats at him on fundraising for both Obama and McCain.

A few days goes by, and he said he chatted with his mother and had a change of heart. His rationale ? The bailout might be bad on principle, but if there's no bailout, people WILL lose their jobs and houses and so forth. He said it is easy to say "let's suffer a little now to prevent a long term disaster", and wants to know why Ron Paul is convinced that we're entering a 10 year depression. He said "and if we didn't pass the bailouts, we would only going to be in a recession for 365 days or so?". He ended by saying that not to try to save these jobs and prevent a recession just to prevent a future possible depression is not fair to the people who will lose their jobs because of no bailouts.

Obviously, I completely support the idea of no bailouts, and made many calls to my representatives and senators leading up to the votes, but I would like more concrete explanations of why Ron Paul is certain that the depression would be 10 years, not say 5 or 15... and why he s certain that a recession would only be 1 year. If I could understand this better, I could continue to work on my friend.

Even if the "bailout" was the best thing since sliced bread, could cure cancer and make people walk on water, there is one fatal problem with it.

We're broke. We don't have 850 billion, period. The budget deficit for this year alone is close to 500 billion, and that's not including the "bailout" or the 85 billion for AIG. We currently owe close to ten TRILLION dollars and have another bill coming in the mail for 40-50 TRILLION more.

We're (meaning Uncle Slaughter) bankrupt, and the talk of a "bailout" is nothing more than getting another credit card to pay for the bills you already can't pay or afford. Oh yes, and to go on a shopping spree to ease your pain.

[SWATH]

I think Ron Paul is worried that more bailouts (especially ones of this size) will cause more weakening of the dollar to the point of a run on the dollar where foreigners start shedding dollars like water and begin refusing to lend money to us, forcing us to print more money further devaluing the dollar until it collapses and people stop accepting it, like a run away effect similar to run away global warming except real.

[danberkeley]

I need some help here. I had a discussion with a friend of mine who is an Obama supporter. I was trying to explain the bailout situation with him and he agreed with me and said he was dissapointed that Obama voted for the bailouts. I also told him about the bankers being the number one contributors and threw stats at him on fundraising for both Obama and McCain.

A few days goes by, and he said he chatted with his mother and had a change of heart. His rationale ? The bailout might be bad on principle, but if there's no bailout, people WILL lose their jobs and houses and so forth. He said it is easy to say "let's suffer a little now to prevent a long term disaster", and wants to know why Ron Paul is convinced that we're entering a 10 year depression. He said "and if we didn't pass the bailouts, we would only going to be in a recession for 365 days or so?". He ended by saying that not to try to save these jobs and prevent a recession just to prevent a future possible depression is not fair to the people who will lose their jobs because of no bailouts.

Obviously, I completely support the idea of no bailouts, and made many calls to my representatives and senators leading up to the votes, but I would like more concrete explanations of why Ron Paul is certain that the depression would be 10 years, not say 5 or 15... and why he s certain that a recession would only be 1 year. If I could understand this better, I could continue to work on my friend.


Start by reading Hazlitt's Economics in One Lesson. Then, read Rothbard's America's Great Depression. Then, apply what you have learned. Lastly, don't get into a debate with someone when all you are doing is simply repeating what someone else said. Do your own homework.

[raiha]

I like your bonnie blue flag torch bearer. I suspect it has some significance.
My friend and i (she's not a Paulite...yet) were just saying to each other...even we (of little economic nouse) understand that it is not rocket science. If you are over your gills in debt and you then make the exact same mistake and borrow more to get out of it....to the extent that your brand spanking new bailout bill has just done...hyperinflation is assured;... a depression guaranteed.
dear friends i feel green around my very own gills about this. I wake up at 3 a.m with the horrors. Never surrender! Never give up!

[kojirodensetsu]

I like your bonnie blue flag torch bearer. I suspect it has some significance.
My friend and i (she's not a Paulite...yet) were just saying to each other...even we (of little economic nouse) understand that it is not rocket science. If you are over your gills in debt and you then make the exact same mistake and borrow more to get out of it....to the extent that your brand spanking new bailout bill has just done...hyperinflation is assured;... a depression guaranteed.
dear friends i feel green around my very own gills about this. I wake up at 3 a.m with the horrors. Never surrender! Never give up!
So could it be said that this is like paying a credit card bill with another credit card?

[freelance]

That's too vague. I need specifics. Why are we guaranteed a ten year, specifically ten year depression, and why would a recession only last one year if we didn't pass the bailout bill ?

I think that the poster isn't really focusing on the numbers but rather the severity of the downturn. Congress put one more albatross around our necks, this one big enough to sink us for a long period of time and of greater severity.

[torchbearer]

I like your bonnie blue flag torch bearer. I suspect it has some significance.
My friend and i (she's not a Paulite...yet) were just saying to each other...even we (of little economic nouse) understand that it is not rocket science. If you are over your gills in debt and you then make the exact same mistake and borrow more to get out of it....to the extent that your brand spanking new bailout bill has just done...hyperinflation is assured;... a depression guaranteed.
dear friends i feel green around my very own gills about this. I wake up at 3 a.m with the horrors. Never surrender! Never give up!

As the secession crisis intensified, the Bonnie Blue Flag gradually became the unofficial banner of independence and self-government for the Southern states. It waved prominently at political rallies and parades and flew in Montgomery, Ala., while the first Confederate Congress was in session.

[KramerDSP]

Start by reading Hazlitt's Economics in One Lesson. Then, read Rothbard's America's Great Depression. Then, apply what you have learned. Lastly, don't get into a debate with someone when all you are doing is simply repeating what someone else said. Do your own homework.

Duly noted. Thanks for the tips on the books.

[raiha]

Hurrah, hurrah, for liberty, hurrah!
Hurrah for the Bonnie Blue Flag
That bears a single star!!!

:D: :D

[Isaac Bickerstaff]

I am going to very reluctantly disagree with Ron Paul on this one. Without the bailout, the economy would crumble to the point that the free market would have to come up with new mediums of exchange--competition in currency. As credit tightens, more money will be sucked back into the debt monster then will be loaned into existence, and FED dollars will be so scarce that individual states, municipalities, or even private entities will come up with sound money solutions.

With the bailout, the true destructive nature of debt-backed fiat currency will be hidden for another business cycle, and when it comes around again, it will be total economic destruction. Keep in mind, with the wonder of compound interest, and the fact that virtually all countries in the world economy use debt-backed fiat currency, the next business cycle will be abbreviated and the next collapse will be global.