[Sixstrings]

Senior Democrats hinted today that Congress could get behind a massive stimulus plan worth hundreds of billions of dollars.

In an interview with ABC's This Week, Schumer said, "I believe we need a pretty big package here," Schumer said, adding that Congress is working on getting the economic package to president elect Barack Obama by inauguration day. "I think it has to be deep. In my view, it has to be between $500 and $700 billion dollars and that's because our economy is in serious, serious trouble."

"It's a little like having a new New Deal, but you have to do it before the Depression. Not after," Schumer added.

http://www.huffingtonpost.com/2008/11/2 ... 45830.html

This would be ON TOP of the last $700 billion TARP plan. That's 1.4 trillion right there. And, this new 700 bil package is on top of the normal omnibus budget funding that will have to be passed in February.

[Byron100]

Cool stuff!

I'm seriously hoping that the Obama Administration will be able to push gov't spending up to 40% of GDP, what we reached at the height of WWII, as well as accumulating total debt of 200% or more of GDP.

Of course, all this is going to end someday, and probably in a very sudden manner, but hey, might as well spend while the "card is still good", huh? The best part of bankruptcy is the period just before, in which you're able to go on a free spending spree, knowing very well that you'll never, ever have to pay that money back...LOL.

And I'll be glad when we finally go bankrupt, as that means we get to start at Ground Zero, with no interest owed to anyone. Fresh slate. That's the miracle of bankruptcy - you get to start all over again without the burden of unpayable debt weighing upon your shoulders. The sooner this happens, the better, IMO. As for trade with other nations, we need to learn to be self-reliant anyhow, so the ensuing trade embargo should do us good in the long run, at least. Just be sure to have lots of fresh underwear stocked away...

[Revi]

I like your cheery assessment of the situation, Byron.

What are they going to give more money away for? Why not spend $700 billion on infrastructure we need to make it through the next decade?

Like railroads, bus stations, insulating public buildings, etc.

I hope Obama doesn't just dole out the treasury like this.

[Heineken]

Byron, don't you think national bankruptcy would bring lasting consequences for most of us? It might be a pretty awful "miracle."

[Denny]

I recall hearing Jim Puplava discuss the ultimate answer to a credit crunch and a resulting recession, back two years ago, a time when the Fed said it wold be putting the brakes on to ensure inflation kept under control.

Jim said, very simply of government actions "They will spend inflate and then spend more, because that is all they know how to do."

[Byron100]

Byron, don't you think national bankruptcy would bring lasting consequences for most of us? It might be a pretty awful "miracle."

That's the problem - if we don't spend like drunken sailors now, we'll be going off the cliff into GDII, which would surely be far worse than GD I, due to the lack of farms for people to go back to, etc. We HAVE to spend trillions now, just to keep the ship afloat. Granted, this will probably just push Doomsday back a few years, but it's a few years I'll gladly take, as would most anybody.

And bankruptcy only hurts for a short time, it really doesn't take long to recover, if you're smart about it. Even Argentina got back on its feet after a year or 2 after their bankruptcy. Peak Oil may very well deny us from ever coming back, but it's sure going to make things a whole lot easier if we don't have to pay interest on 20 trillion dollars of debt, that's for sure. And furthermore, taking on debt and never paying it back is like making free money. Forget about the "moral" consequences of such actions - we as a human species have long gone past that point. Only thing that matters is national as well as personal survival - you gotta do what's gotta be done. Morality and ethics are no longer part of the equation when it comes to survival. If there's someone reading this in Dubai, you have very good reason to be afraid - very afraid, for *someone* is going to come and take your loot...LOL.

[Byron100]

I like your cheery assessment of the situation, Byron.

What are they going to give more money away for? Why not spend $700 billion on infrastructure we need to make it through the next decade?

Like railroads, bus stations, insulating public buildings, etc.

I hope Obama doesn't just dole out the treasury like this.

Oh, I agree with that 100%.

I just want spending to be very, very high to counter the downfall of our collapsing economy. If we're able to rebuild our infrastructure, develop alternative energy sources, etc, that would be a triumph of good government, and I sincerely hope Obama will have the foresight to do that with his unlimited checkbook.

But we also need to be spending those hundreds of billions to keep paying pensions that people depend on for survival, state and local gov'ts who need that money for stuff like police and fire, as well as long-term unemployment pay for those who have lost their jobs and are unable to find new employment.

What I DON'T want billions to be spent on is bailing out those fat pigs in Wall Street - that's government at its very worst.

[Plantagenet]

What I DON'T want billions to be spent on is bailing out those fat pigs in Wall Street - that's government at its very worst.

You must've missed it....thats already well underway. The Fed already was spending billions to bail out Wall Street banks and Fannie and Freddie etc., and the Congress (including both McCain and Obama) then voted another 700 billion for Treasury to spend on even more Wall Street bailouts.

[Byron100]

What I DON'T want billions to be spent on is bailing out those fat pigs in Wall Street - that's government at its very worst.

You must've missed it....thats already well underway. The Fed already was spending billions to bail out Wall Street banks and Fannie and Freddie etc., and the Congress (including both McCain and Obama) then voted another 700 billion for Treasury to spend on even more Wall Street bailouts.

Huh? Care to run that by me again? I thought only half the $700 billion was being spent on the Fat Cats, with the other half to come after Obama gets in. The new $700 billion is supposed to be the for the rest of us, call it the "people's bailout" if you will.

If this isn't correct, then I'm really out of it...and Doomsday is a whole lot closer than I'd like for it to be...

Sometimes, I don't even know which way is up, and perhaps that's for the best...LOL.

[ReverseEngineer]

I saw the 1.4 trillion thing on Fox News this morning, along with another tid-bit I had not heard before. nancy Pelosivich wants to give the automakers three times what they asked for. You heard that right, she wants to give them 74 billion dollars, rather than the 25 billion being bandied about lately. But what is another 49 billion amongst friends? Better get them thar printing presses tuned up!

There are approximately 140 million US Taxpayers. If we are going to write a $1.4 TRILLION check as bailout money, why don't we just write each taxpayer a $10,000 check? This should allow most normal folks to wipe out their credit card debt, which takes this toxic asset off the books of the banks. Also would get most folks current on their mortgages. Should leave some over to do some Christmas Shopping also, and help out the Chinese Factories.

[galacticsurfer]

I think LSD was relegalized and made a party drug in Washington DC. Now we have to hope for the best.

[pup55]

During the 60's and 70's, people figured out how to vote themselves benefits out of the federal treasury re: welfare, defense spending, pork.

Now, we have reached a new paradigm--people have figured out how to use the system of recycling campaign contributions to get themselves benefits out of the "future" treasury as well--all of this money is being printed up out of thin air, and is going to have to be paid back by somebody, either in the form of inflation or taxation or both.

Unrestrained by the voters that are going to be most affected by this (because they are at this moment crawling around the floor in diapers) we've reached a historic level of irresponsibility, in the guise of protecting us from the so-called "serious consequences". There has yet to be a plausible explanation of where the money we have already spent has gone, and no real explanation of what the new sum(s) are going to accomplish.

The sad part is, with a few heroic exceptions, no one is standing up to the groupthink on this mess.

I blame some of this on the baby boomers that are running the show, who have the mindset: "if I wreck the car, Dad will bail me out". The current president himself is the classic example of this. At some point, the Chinese and Japanese and Saudis that are lending us this money will get sick of it, and presumably, the people responsible for the mess will be the ones who will have to pay for it, which is the way it ought to be.

It just makes you sick.

[jupiters_release]

and presumably, the people responsible for the mess will be the ones who will have to pay for it, which is the way it ought to be.

incorrect

[Heineken]

Byron, don't you think national bankruptcy would bring lasting consequences for most of us? It might be a pretty awful "miracle."

That's the problem - if we don't spend like drunken sailors now, we'll be going off the cliff into GDII, which would surely be far worse than GD I, due to the lack of farms for people to go back to, etc. We HAVE to spend trillions now, just to keep the ship afloat. Granted, this will probably just push Doomsday back a few years, but it's a few years I'll gladly take, as would most anybody.

And bankruptcy only hurts for a short time, it really doesn't take long to recover, if you're smart about it. Even Argentina got back on its feet after a year or 2 after their bankruptcy. Peak Oil may very well deny us from ever coming back, but it's sure going to make things a whole lot easier if we don't have to pay interest on 20 trillion dollars of debt, that's for sure. And furthermore, taking on debt and never paying it back is like making free money. Forget about the "moral" consequences of such actions - we as a human species have long gone past that point. Only thing that matters is national as well as personal survival - you gotta do what's gotta be done. Morality and ethics are no longer part of the equation when it comes to survival. If there's someone reading this in Dubai, you have very good reason to be afraid - very afraid, for *someone* is going to come and take your loot...LOL.

I suspect that national bankruptcy for a country as large as the US would have very different implications from bankruptcy of a Citigroup or even a country like Argentina; the latter two can rely on recovery aid from the US. But if the US itself is bankrupt?

I'm not an economist, but intuitively I don't think we get off so easy from that. What happens to the dollar? What happens to your savings? What happens to millions of elderly people dependent on Medicaid Social Security and Medicare? What happens to our already struggling infrastructure? Etc.

Germany went bankrupt after WWI. This ushered in one of the worst depressions and economic inflations ever seen and created the conditions that led to the rise of Hitler.

[mos6507]

It just makes you sick.

We know what you don't want the government to do. So what DO you want them to do? Sit back and watch financial armageddon?

[jupiters_release]

It just makes you sick.

We know what you don't want the government to do. So what DO you want them to do? Sit back and watch financial armageddon?

You haven't seen any of the offered solutions?

http://www.denninger.net/letters/genesis.pdf

[pup55]

Sit back and watch financial armageddon?

The government could have bitten the bullet in 2001, had the minor recession we were due for, and by now, things would have been better. But, they took the cowards way out, by this system of ever increasing asset bubbles, until now, instead of having a 25 mph fender bender, we are going to have the full blown 150 mph head on collision with reality.

By delaying it longer, by shoveling money into an enormous black hole, they are only setting us up for something even worse later on, however shocking that seems.

But that's not solving the problem.

The first step is rounding up all of the CEO's and VP's and auditors of these fine institutions, and putting them in jail, with fines equal to the amount of money they made during that era, for fradulently misrepresenting the value of their companies' stock based on these BS assets.

This includes the ratings services Moody's and S and P which rated some of this mess AAA to get someone to pony up top dollar.

I am well aware that Hank Paulson himself, along with Bob Rubin and a lot of other high profile people are on this list.

The guys at the bottom, the mortgage brokers that fraudulently sold these NINJA loans to the unsuspecting halfwits in California that thought they could afford a half million dollar house on a lettuce picker's income, they also need to be rounded up, as does everybody up the line who aided and abetted this fraud.

I don't favor spending one more dime on this exercise without some accountability. But, once we get the perps out of the system, we might have a chance at some honest communication, and at least we will know what the real situation is. Someone is hiding something to save someone's posterior.

Fact is, I don't think they know what they are doing. $2T and we appear really to be no closer to the solution than they were in July.

[Heineken]

Great post, pup.

However, punishment and retribution on the scale you describe are possible only against a backdrop of revolution. The system is famous for protecting its own, and it will continue to do so. In fact, the current bailouts are a radical escalation of that protection.