I need some replies to "If the gov. didn't spend, we would be in a depression now."

[dr. hfn]

"If the gov. didn't spend, we would be in a depression now."

[ForLiberty-RonPaul]

You're right. Except it would be over in six months as apposed to the next 15 years. But if we didn't have the Fed in the first place we would not be in a depression anyway.

[MRoCkEd]

We would be in a severe recession, but it would end relatively quickly as the markets recalibrate. However, by continually distorting the markets with artificially low interest rates and deficit financing we are repeating the problems that got us into this mess and only prolonging the agony.

"If the government didn't spend, we would be in a depression now."
"If a drug addict didn't keep taking hits, he would be in withdrawal now."

[Bruno]

Because of the government spending, we will instead have hyper-inflation.

[Lisle16]

You're right. Except it would be over in six months as apposed to the next 15 years. But if we didn't have the Fed in the first place we would not be in a depression anyway.

This.

[ForLiberty-RonPaul]

We would be in a severe recession, but it would end relatively quickly as the markets recalibrate. However, by continually distorting the markets with artificially low interest rates and deficit financing we are repeating the problems that got us into this mess and only prolonging the agony.

"If the government didn't spend, we would be in a depression now."
"If a drug addict didn't keep taking hits, he would be in withdrawal now."

better

[brandon]

http://18.media.tumblr.com/tumblr_koxxn6h61t1qztssoo1_500.jpg

Just post this picture and then if they question you tell them that you are both using the same logic to arrive at your conclusions.

[ForLiberty-RonPaul]

http://18.media.tumblr.com/tumblr_koxxn6h61t1qztssoo1_500.jpg

Just post this picture and then if they question you tell them that you are both using the same logic to arrive at your conclusions.

shouldn't you be warming up for nakedness?

[SL89]

..

[jsu718]

We ARE in a depression right now... adjust for inflation (not govt spun CPI) and show them their stupidity.

[SL89]

We would be in a severe recession, but it would end relatively quickly as the markets recalibrate. However, by continually distorting the markets with artificially low interest rates and deficit financing we are repeating the problems that got us into this mess and only prolonging the agony.

"If the government didn't spend, we would be in a depression now."
"If a drug addict didn't keep taking hits, he would be in withdrawal now."


this^^^^

[Fr3shjive]

Im still on the fence on how I feel about the bank bail outs. I think the "stimulus" was a waste of tax payer money but if we had allowed the entire banking system to collapse I dont think we would've been out of it in 6 months.

On one hand, allowing the entire US banking system to collapse would have been terrible and I doubt we would have been out of it in 6 months.

On the other hand, none of these problem are going to be addressed and we're just headed for either hyper inflation or an even bigger financial crisis down the line.

So I basically feel they would have been the right thing to do if we had competent politicians to clean up the mess but because we dont this mess will just grow and crash some where else down the line.

[max]

economics for idiots...go to www.TomatoBubble.com

[StilesBC]

We would be in a severe recession, but it would end relatively quickly as the markets recalibrate. However, by continually distorting the markets with artificially low interest rates and deficit financing we are repeating the problems that got us into this mess and only prolonging the agony.

"If the government didn't spend, we would be in a depression now."
"If a drug addict didn't keep taking hits, he would be in withdrawal now."

This is the better angle. Non-Austrians refuse to believe the Fed causes the business cycle. If you start with this, you will immediately be ignored as an "ideologue." The hyperinflation/collapse of the dollar argument is easily refuted by considering credit aggregates. You might be right eventually, but if you're arguing with someone who knows their stuff, they'll make you look foolish.

Talk about excessively low leverage ratios at banks (without decrying "fractional reserve lending"). Talk about the further perpetuation of moral hazard. Most importantly, talk about how telegraphed positive inflation targeting encourages risk taking (to beat inflation), malinvestment and reckless speculation. Talk about how the money from "gov't spending" goes toward lobbying the gov't for more money, creating massive bureaucracies to carry out the simplest of tasks. Talk about how spending now does have its immediate costs: the implied rate of future taxation rises with it, reducing the profitability of organic investment. Talk about how lower wages, lower asset prices, higher savings, and a destruction of bad debt (conditions that would be magnified w/o "stimulus") will be healthy for the re-creation of lost American jobs. Mention that like any complex adaptive system, both periods of expansion and contraction are necessary requirements for continued health.


And give your counterpart a copy of "Economics in One Lesson" from Henry Hazlitt.

[Dr.3D]

From what I witnessed, the government said some banks were too big to fail, so they gave them money. Then those too big to fail banks grew bigger by buying up others that didn't get any of the money.

Just how did the government address the too big to fail problem by enabling those that were too big to fail to grow bigger? Now they are really too big to fail.

[Andrew-Austin]

Look up the corresponding lesson in Henry Hazlitt's Economics in One Lesson. Its easy to read, and available on the interweb.

[Nate]

"If the government didn't spend, we would be in a depression now."
"If a drug addict didn't keep taking hits, he would be in withdrawal now."

^This one.

[emazur]

If you're talking about not doing any bank bailouts, John Williams from ShadowStats.com says we would have fallen into a deflationary depression (a storm we could have weathered like the 1920-21 depression). But he also says the bailouts will ultimately make us worse off and we will see hyperinflation within I think 5 to 10 years, with 2010 being a very risky year.

If you're talking about the stimulus, it was just Obama subsidizing big business:
YouTube - Best buddy of big business: Barack Obama (http://www.youtube.com/watch?v=fkmlclFv_uQ)

[angelatc]

"If the gov. didn't spend, we would be in a depression now."

http://johnrlott.blogspot.com/2009/07/obama-claims-credit-for-saving-economy.html#5236558269558043320

Check out economist John Lott's response to my inquiry here. He provides links to the economists who indicate that the stimulus slowed the recovery down.

[Harris4LarouchePAC]

Spending money isn't the issue, the fact of the matter is you can't be spending trillions on a bankrupt federal reserve system. If your going to spend money, then how about take care of the rapidly disentigrating infrastructure of the country...instead of bailing out banks that are foriegn.

We are killing ourselves trying to keep this derivitives bubble up.

[tangowhiskeykilo]

We would be in a severe recession, but it would end relatively quickly as the markets recalibrate. However, by continually distorting the markets with artificially low interest rates and deficit financing we are repeating the problems that got us into this mess and only prolonging the agony.

"If the government didn't spend, we would be in a depression now."
"If a drug addict didn't keep taking hits, he would be in withdrawal now."

This is amazing!