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US bailouts prevented 1930s-style Great Depression
Guardian UK ^ | July 28, 2010 | Andrew Clark

Posted on 07/28/2010 11:38:42 AM PDT by Oldeconomybuyer

An in-depth modelling exercise by Moody's chief economist, Mark Zandi, and a Princeton University expert, Alan Blinder, paints a bleak scenario of a 1930s-style Great Depression if the US government had enacted none of its $1.7 trillion programmes to avert a financial meltdown.

Using historical statistical relationships and a focus on the government's impact on narrowing credit spreads, the pair found that the downturn would have continued into 2011, with unemployment peaking at 16.5% rather than last year's actual high of 10.1%.

They believe US gross domestic product would have slumped by 7.4% in 2009 and by 3.7% in 2010, producing a "peak to trough" decline of 12%, rather than the anticipated 4%. Starved of demand, shops and employers would be cutting prices and wages.

"With outright deflation in prices and wages in 2009 to 2011, this dark scenario constitutes a 1930s-like depression," says the study, entitled How the great recession was brought to an end".

Zandi and Blinder say that although economic activity and job creation remain extremely sluggish, the US economy has made "enormous progress" since its nadir last year: "Maybe the country and the world were just lucky. But we take another view: the great recession gave way to recovery as quickly as it did largely because of the unprecedented responses by monetary and fiscal policymakers."

(Excerpt) Read more at guardian.co.uk ...


TOPICS: Business/Economy; Government; News/Current Events; Politics/Elections
KEYWORDS: failure; obamanomics; porkulus; socialism
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To: All
CNBC's outspoken Rick Santelli: Obama's so-called stimulus spending went to govt payrolls---and not infrastructure improvement---as it was sold to taxpayers.

The $786B TARP Bailout is now being called, "A MASTERFUL DECEIT." Paulson, et al, may not have pulled a fast one when he testified in favor of the TARP before Congress----but Congress' phony outrage is a puzzlement. If HR 1424 was a 'MASTERFUL DECEIT' then CONGRESS didn't do its job.

TITLE I—TROUBLED ASSETS RELIEF PROGRAM (required 'Congressional Oversight' sections listed)
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 111. Executive compensation and corporate governance.
Sec. 116. Oversight and audits.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 121. Special Inspector General for the Troubled Asset Relief Program.
Sec. 125. Congressional Oversight Panel.
Sec. 127. Cooperation with the FBI.
Sec. 129. Disclosures on exercise of loan authority.

ANALYSIS In HR 1424, there are enough rules, regs and CONGRESSIONAL OVERSIGHT REQUIRED that not one Thin Dime should have been 'misspent.' So if anything crooked did go on Congress should look in a mirror. They dropped the ball -- again. And the same Gangster Government will run our healthcare.

================================

DID YOU KNOW? TARP was not designed to be a pool of money available for bailout of just anything that didn't move, like a couple of bankrupt unionized companies in the automobile industry? TARP was very specific in its purpose to provide liquidity to frozen banking and financial system and stave off the run on the banks (attack on the financial system, by proxy) and allow the 'netting' of the [frozen] assets on the books of financial institutions, in the aftermath of the fall of Lehman Bros and the run on trillions of dollars in money market funds in the consequent "breaking the buck" by private Reserve Primary Fund managed by Bruce Bent.

21 posted on 07/28/2010 12:18:33 PM PDT by Liz
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To: All
Americans are awakening to the fact that govt insiders are mishandling trillions in "stimulus" that federal monies are being illegally directed to Democrat campaign coffers, and/or wire-transferred offshore into personal accounts......and being laundered in the states.

Keep in mind, some 85% of Obama's stimulus is still in Washington. Ohaha's hoarding it among his several slush funds, doling it out to imperiled Dems' 2010-12 campaigns.

========================================

ABC NEWS, Nov 18, 2009----Stimulus grants: Why Was The White House Website Riddled With Errors?

Officials tell ABC News so far, they found 700 mistaken Congressional districts out of more than 130,000 stimulus grants. On Monday night, ABC reported on errors found on the website set up by the White House to track the number of jobs created or saved by the economic stimulus program. The website was riddled with reports of jobs in places that didn't even exist. That report prompted anger on Capitol Hill, and defensiveness at the White House. On Tuesday night's broadcast, ABC's Chief Congressional Correspondent Jon Karl took another look at the stimulus confusion (link) http://blogs.abcnews.com/theworldnewser/2009/11/why-was-white-house-website-riddled-with-errors.html

LINK---Jon Karl: White House Vows to Correct Stimulus Reports Officials Tell ABC News So Far, They Found 700 Mistaken Congressional Districts Out of More Than 130,000 Stimulus Grants

ABC NEWS' JONATHAN KARL, Chief Congressional Correspondent, REPORTS, Nov. 17, 2009

When it comes to stimulus spending, could the wheels of government bureaucracy be grinding too quickly for once? Responding to more inaccuracies discovered in the reporting of spending and job creation from the administration's economic stimulus plan, the top White House official charged with overseeing the program vowed today to go through the reports with a fine-toothed comb and to correct the mistakes.

The promise came after ABC News found that Recovery.gov, the government Web site created to track the expenditures, had many job creation and stimulus spending figures that were attributed to congressional districts that do not exist, or that were incorrectly identified.

"The first time out, we knew there were going to be problems," said Edward DeSeve, special advisor to the president on the stimulus bill. "We don't think there are a lot of them. There are less than 1 percent in terms of the recent concern about congressional districts of the overall reports. And we've got a good commitment from the recovery board to work with us to fix them."

Officials tell ABC News, so far, they have found 700 mistakenly credited congressional districts out of more than 130,000 stimulus grants. The White House's Web site claims that more than 640,000 jobs have already been saved and created by the " $787 billion stimulus program. The reports used to come up with that number are riddled with errors.

In addition to the jobs in non-existent congressional districts reported Monday by ABC News, in real congressional districts, there are also problems, lots of them.

Moore's Shoes in Campbellsville, Ky., claims nine jobs were created from an $890 grant for nine pairs of work boots for the Army Corps of Engineers. Head Start of Augusta, Ga., claimed 317 jobs with a $790,000 grant, but it was really just a one-time raise to its 317 employees.

Chris Whitley is a fiscal officer for Central Savannah River Area Economic Opportunity Authority, which administers the Head Start program in Augusta. He says it was the administration's stimulus help line that advised them to claim 317 jobs. "It wasn't illegal, immoral or unethical. And they told me to do it, so I did it," said Whitley.

The mistakes have prompted anger on Capitol Hill. Rep. David Obey, D-Wis., the powerful chairman of the House Appropriations Committee, was outraged that one sewer project in his district was listed as creating 100 jobs. The real number is five. When asked what he thought when he saw the mistakes in his district, Obey said, "I wanted to strangle somebody."

Obey is demanding the administration fix the mistakes. "Fix the problem, the blessed problem, so that we're getting accurate information. I don't care what people's bureaucratic niceties are, or how hard it is to do it. I mean, they've got to fix the problem, so the American people can understand what the realities are.

SOURCE http://abcnews.go.com/WN/white-house-stimulus-website-riddled-errors/story?id=9110298

22 posted on 07/28/2010 12:20:22 PM PDT by Liz
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To: Oldeconomybuyer

The lack of a Dust Bowl prevented a 30’s style Depression.


23 posted on 07/28/2010 12:23:55 PM PDT by NVDave
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To: Tarpon

This BS is ALL based on some computer model with, I am sure, hundreds of built in assumptions. This is as believable as the models that are the foundation of the Man-made Globull Warming HOAX.


24 posted on 07/28/2010 12:30:32 PM PDT by Laserman
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To: Oldeconomybuyer
US Bailouts Prevented 1930s-Style Depression

George Bush's invasion of Iraq prevented a nuclear bombing of Manhattan.

I've got as much proof as Mark Zandi and Alan Blinder.

25 posted on 07/28/2010 12:38:53 PM PDT by Steely Tom (Obama goes on long after the thrill of Obama is gone)
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To: Oldeconomybuyer

There is no way to measure “Number of Jobs saved”.


26 posted on 07/28/2010 12:56:51 PM PDT by Tzimisce (No thanks. We have enough government already. - The Tick)
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To: Oldeconomybuyer
They believe US gross domestic product would have slumped by 7.4% in 2009 and by 3.7% in 2010

Considering the deficit was $1.4 Trillion out of $15 Trillion GDP, there was a slump of around 9%

27 posted on 07/28/2010 1:05:32 PM PDT by Sgt_Schultze (A half-truth is a complete lie)
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To: LibLieSlayer

Yep!


28 posted on 07/28/2010 1:06:55 PM PDT by WKUHilltopper (Fix bayonets!)
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To: Blood of Tyrants

yes, right after he counts the angels on the head of his pinhead.

goodness gracious, pretty stupid #$%^ from two very high iq guys.


29 posted on 07/28/2010 1:07:19 PM PDT by genghis
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To: Oldeconomybuyer

Isn’t Blinder a “JournOlist” member?


30 posted on 07/28/2010 1:09:36 PM PDT by demsux (Obama: THE job destroyer)
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To: demsux

Oooops, he’s not on the list...yet


31 posted on 07/28/2010 1:10:35 PM PDT by demsux (Obama: THE job destroyer)
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To: Siena Dreaming

TARP averted a Great Depression style PANIC, I’ll admit to that.
(even though Chuck Schumer tried his best to cause a bank run. Remember Indy Mac? Anyone? Buehler? Buehler?...)
The current situation is definitely the fault of government intervention. Producers have no confidence.
We’ve had many instances in this country of severe debt crisis. IMHO, this is a crisis that the “Progressives” won’t let got to waste.
Beware!


32 posted on 07/28/2010 1:43:44 PM PDT by griswold3 ('Regulation and law without enforcement is no law at all)
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To: Oldeconomybuyer
US bailouts prevented temporarily delayed 1930s-style Great Depression

Fixed it.

33 posted on 07/28/2010 1:49:11 PM PDT by OB1kNOb (When all else fails one must, "Release the Kraken!")
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To: griswold3
TARP averted a Great Depression style PANIC

Panic is what caused the Great Depression. Bank runs caused banks to collapse which, in turn, collapsed thoussands and thousands of small businesses. And Gov't did NOTHING to shore up the banks. This time the Fed & Treasury did (which is what stopped the panice IMO).

Yes, Schumer actually is the one who lit the match to the kindling. His comments started the downward slide which ended up collapsing Bear Stearns, Wamu, etc. The TARP halted the slide.

The current situation is definitely the fault of government intervention

This is true of the Gov't intervention feeding the demand-side (Porkulus, Obamacare, etc.). There's not much hope of getting a return for those expenses. TARP, though, is almost paid back already.

34 posted on 07/28/2010 3:30:02 PM PDT by Siena Dreaming
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To: Oldeconomybuyer

Horsefeathers!


35 posted on 07/28/2010 3:34:57 PM PDT by dfwgator
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To: Siena Dreaming

“TARP, though, is almost paid back already.”

With a tidy profit. AIG was loaned over $130B at 18% interest!?!? When the government enters into profit making deals, it is not good, my friend.


36 posted on 07/28/2010 5:05:17 PM PDT by griswold3 ('Regulation and law without enforcement is no law at all)
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To: Oldeconomybuyer

There is STILL a crap storm coming, all they did was defer it.............................


37 posted on 07/28/2010 5:20:38 PM PDT by PeterPrinciple ( Seeking the truth here folks.)
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To: WKUHilltopper

Thanks Hill!

LLS


38 posted on 07/29/2010 4:21:58 AM PDT by LibLieSlayer ( WOLVERINES!)
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To: griswold3
The interest mandate would give the recipient of the loan incentive to to pay the loan back faster.

To the benefit of the taxpayer.

39 posted on 08/03/2010 4:29:04 AM PDT by Siena Dreaming
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To: Siena Dreaming

True.
However, the billions of dollars in interest have not gone to the deficit as written in the legislation. Now, it has become a slush fund for Treasury. Once they get used to having this revenue stream, the picking of ‘winners and losers’ commences.


40 posted on 08/03/2010 5:09:57 AM PDT by griswold3 ('Regulation and law without enforcement is no law at all)
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