Posted on 08/05/2011 7:52:34 AM PDT by Notary Sojac
Well, it's deja vu all over again.
But there are also several very important differences between this market crash and the ones a few years ago:
The Fed has fired most of its bullets (interest rates are already at zero) Our budget deficit is already out of control, and Congress has had it with "stimulus" The public has had it with bailouts
That means the government's ability to do anything about this market crash is severely limited.
Yes, we'll almost certainly have a "QE3." And maybe that will prop things up a bit. But it won't fix the fundamental problems clogging the economy, just as QE1 and QE2 didn't permanently fix anything. (The only thing that will fix our economy is debt-reduction, discipline, and time.)
In 2007, when the market began to crack, the Fed Funds rate was 5.25%. The Fed immediately began cutting rates and eventually took them all the way down to 0.25%. Where they have been as long as anyone can remember. And where they still are today, just as the market is beginning to crash again.
In short, it IS different this time. And not in a good way.
(Excerpt) Read more at businessinsider.com ...
Attention Freepers: The only thing that will fix our economy is debt-reduction, discipline, and time.
Attention Herman Cain, Michelle Bachmann, Sarah Palin, Tim Pawlenty, Rick Perry: The only thing that will fix our economy is debt-reduction, discipline, and time.
Promising anything else is a delusion and a lie to the American people.
But I would also add "massive de-regulation". It wouldn't cost a penny and it would grow the economy, get people back to work, and boost tax revenue. Just stop prosecuting people for breaking useless rules. Take existing court cases and toss them away.
Currently, you can't open a lemonade stand or sell raw milk. The government just needs to shut down its regulatory arm and watch people beef up the economic activity.
yes.
Herman Cain, Michelle Bachmann, Sarah Palin, Tim Pawlenty, Rick Perry, let me add one more....Allen West. If we want a Super Committee, these are the people that need to be on it.
Two things are needed above and beyond all else to fix the economy: the breakup of the failed European Union, and Obama out of office.
A half-assed QE-3 should be just enough to delay the big collapse until Nov. 7 2012.
C’mon, promising to replace marxo-muslim Obama is a delusion?
Replacing him and his ilk with traditional American outlook will solve the problem FAST!
Here’s what the Democrats believe:
If you’re drunk, to get sober, drink more...
If the boat’s leaking, drill more holes in the bottom to let the water out quicker...
If your credit card maxes out, get the credit card company to increase your credit limit...
There are plenty of bullets available to the government to make this situation MUCH better. Problem is, nobody’s got a spine(except for Tea Party members of Congress).
If you cut both personal and corporate income taxes and make them permanent for at least five years, this economy will start to recover. Businesses hate uncertainty and trying to guess what a political leader will do when he has no clue about economics is what is forcing business to hoard cash. They are minimizing their risk by avoiding hiring more people. However, cut corporate and personal income taxes, and people will start spending some of that additonal takehome pay on goods and services. As demand goes up, more inputs to the production process are needed...including labor. As new hires come on line, more demand and more taxes collected, thus nibbling into the deficit.
This is not rocket science. If you truly want to fix this economy, the proper steps are easily done. However, if you have a Socialist agenda poffered by a leader who is clueless about the proper steps, the current economic mess comes as no surprise.
>>That means the government’s ability to do anything about this market crash is severely limited.<<
The fact that “what the govt. can do” issue comes first means we’ve lost the war.
A half-assed QE-3 should be just enough to delay the big collapse until Nov. 7 2012.
BINGO!
It should not come as a shock to anyone that when Moodys and Standard & Poors says they want 4 trillion in cuts or 400 billion per year and they get next to nothing in year one that the market crashes.
Not everyone is brain dead.
The sad yet predictable thing is that the DBM won't say anything bout how we need much more in budget cuts than we got.
No, he missed one. You can do the above 3 and still get a stagnant economy unless the high price of energy is addressed.
Replacing them is only the first step on a long hard road of public/private deleveraging and weaning Americans (many of whom think of themselves as conservatives) off the entitlements teat.
We need political leaders who can talk blood, toil, tears and sweat here.
Sounds like you are talking about chaos,high on the marxist list.
WRONG! Debt reduction, discipline, and time will NOT, by themselves, fix the economy. We need to remove the impediments to growth: dismantle EPA; cut capital gains and corporate income taxes; encourage energy production, including nuclear power; expand foreign trade; eliminate the minimum wage; tame the litigation monster; end don’t-build-anything-anywhere zoning policies; eliminate requirements to hire expensive union labor; repeal needless (keep-out-the-competition) occupational licensing policies; deregulate the provision of insurance (especially health insurance); and I’m sure readers can think of many more. Cutting the budget alone, without economic growth, is a formula for losing elections and will lead only to a balanced budget at a poverty level of income.
Yes, we need growth. But we cannot grow our way out of the entitlements hole. They must be cut by 25% or more.
I’ll add one more - failures have to be allowed to fail. The deadwood needs cleared periodically.
You also need to address the high price of energy. That has a fundamental drag on the economy that cannot be overcome simply by changing fiscal policy.
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