Skip to comments.With federal stimulus funds running out, economic worries grow
Posted on 06/29/2010 9:41:09 PM PDT by thecodont
With home sales sliding, employers reluctant to hire and world stock markets gyrating wildly, the U.S. economy is in danger of stalling. Now one of its only reliable sources of fuel is running out: federal stimulus spending.
Funds flowing from the $787-billion legislation passed last year have helped create hundreds of thousands of jobs and propped up social programs such as unemployment benefits. But with much of that money spent and lawmakers reluctant to approve another big round of spending, concerns are rising about what will replace it in the short term to keep the economy moving.
Jitters about a global slowdown pounded world markets Tuesday after an index forecasting Chinese economic activity was revised downward and Greek workers walked off the job to protest government budget cuts. In the U.S., the Dow Jones industrial average plunged 268 points on news from the Conference Board that consumer confidence fell in June after three straight months of gains.
Economists worry that the weak labor market will spook U.S. consumers, whose spending fuels the economy. Dwindling federal stimulus funds are only heightening those fears.
(Excerpt) Read more at latimes.com ...
The stimulus only delayed the inevitable, and will make the inevitable collapse all that much worse.
Jim Morrison--When The Music's Over.
The stimulus kept the market from experiencing reality. Here comes reality with a big stick in its hand.
Step one, humble yourself in the sight of the Lord.
One need only read to sentence two to find the false premise upon which this argument is based. Federal spending actually decreases GDP by twenty cents on the dollar. The so-called 'stimulus' bill has resulted in a $160 billion reduction in GDP.
If this government really wants to stimulate economic growth, they should do three things:
Were in a recovery, Obambi told me so...
It wasn't inevitable. It still isn't. If we had a President who would immediately implement the Reagan model we would recover. Instead we have Mr. HopeNChange who appears to have exhausted his socialist approach and is flat out of ideas. For the socialist, it is all about spending money and there just is nothing left to spend. They've spent and borrowed pretty much all the creditors will allow.
So at this point, sadly, yeah, I do think we are dangerously close to a complete economic collapse. We may muddle along, but we are much closer to total disaster than even I could have imagined just a few months ago.
Obama is a fool.
I don’t disagree, but if we had implemented the “shock therapy”, it may have made things worse in the short-term, but it would have been over quickly, and the recovery would have already started by now.
But nobody in Washington is willing to “think outside the box.”
Agreed. Yes, a shock therapy will always have negative short term consequences. Things like NOT extending unemployment benefits forever hurt, but they are necessary. Eventually people just have to take what they can get, even if it means mowing lawns for a year. NOT sending money to the states to bail out the public sector cost jobs in the short term, but the result is states that bring their spending back in line with reality immediately instead of later when the Feds run out of money to provide additional lifelines. Cutting taxes now may cause a temporary loss in revenue in the short run requiring more cuts in services, but will foster confidence within the business community so they are not scared to death to hire and plan for the future.
So yeah, your right, but think where Obama would be sitting had he done a "shock therapy" at the beginning of his term. Done correctly, he could be sitting on the verge of massive economic growth. Instead, he has effectively shot his proverbial wad and has nothing left in the chamber since the money is all spent. There is just nothing more HopeNChange can do but watch the economy crumble further and further.
Pushing those taxes and social engineering experiments as far up the line as they can go is inevitably doomed.
The politicos did, however, try even to push the costs overseas, even to the ChiComs.
But also, as a lame duck, why couldn’t President Bush have seen that, what did he have to lose?
Think it’s bad now? ... wait till they raise taxes next year.
Recession ... meet depression.
We’re on the precipice. Barry’s only previous experience prior to his present position was working on the Board of a Foundation, working closely with Domestic Terrorist Bill Ayers, where they distrubuted wads of cash to dubious organizations. Barry only knows how to throw money at a problem, but has never had to produce results. So, we’ve spent a trillion dollars to fund an army of clipboard carriers in low paying government temp jobs. No grand public works projects have been constructed, no training for long term self-sufficiency, just some temporary paychecks for the few lucky enough to land the gigs. Barry has no Plan B other than to throw another trillion at the problem.
They can’t be serious. What a stupid writer.
Bush had lost all real power and influence by that time. Remember, the GOP lost Congress in 2006. While Bush was no Reagan conservative, he did pass 2 tax cuts when he had the votes to get them done. The economy was shaky, but not terrible through most of his tenure. Considering we had 9-11, fought 2 wars, had Katrina, etc, that isn't so terrible.
Obama had the votes to get almost anything he wanted. He could have chose the Reagan model, but instead pursued the old socialist-welfare state approach - spend, regulate and spend some more. Only this time, there is no more money left in the till. We are tapped out. There is no cash and very little credit left to keep things artificially afloat with government spending.
First, it was wasted on non-stimulating expenditures. Only 6% were spent on our "eroding infrastructure."
Second, whatever effect the stimulus was supposed to produce was counteracted by the promise of government action that will crush the economy. Healtcare, Cap and Trade, Banking Reform.
In the end all we got was an extra trillion dollars to pay off some day in the future.
That $19B of unfunded unemployment extensions bill that was defeated? Barney Frank has introduced legislation to take it out of big bank bonuses.
He says he and other socialist spenders have thrown Goldman Sachs, etc. trillions of dollars of federal bond commissions their way. He wants it for more deficit spending.
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