How will the market react to downgrade?

[Tgo01]

Unfortunately it does not change the fact that a period of economic downturn is not the time to reduce the deficit.

Is it just me or does this argument seem to be a never ending cycle? You can't reduce the deficit during a recession because bad things happen, you can't reduce the deficit during a recovery because that will put us back in a recession, you can't reduce the deficit when times are good because Congress is a bunch of jackasses and has never done such a thing.

[crb]

Well... we tried increasing the deficit during an economic downturn and employment went over 8%. So lets try the opposite now. I mean, the keynesians have had their turn, it didn't work. Let someone else have a shot.

You certainly shouldn't be increasing spending while tax revenues are falling, right? Lets rewind to 2007 and see if we can do that. Remember the huge discretionary spending bumps in Obama's first budget?

Remember the Great Depression? In the end all the government meddling prolonged it.

http://newsroom.ucla.edu/portal/ucla...sion-5409.aspx

So if your plan is just to keep the spigot open until things improve, you might just end up drowning us all.

In reality though, it isn't government spending or a lack there of that will get things moving again. It is corporate spending, and you won't have that so long as Obama insists on beating them over the head with regulation after countless regulation, not to mention all the tax uncertainty that his profligate spending creates.

PS... DOW was down 300, Obama started talking, Obama stopped talking. Dow was down 500.

[Tgo01]

PS... DOW was down 300, Obama started talking, Obama stopped talking. Dow was down 500.

That's an old gag that goes back since...I don't know probably the first president to start communicating to the country via radio.

[Cephalopod]

Remember the Great Depression? In the end all the government meddling prolonged it.

http://newsroom.ucla.edu/portal/ucla...sion-5409.aspx

Are you fucking kidding me? Did you even look at the methodologies used for that paper? (Hint: look at how they count WPA and CCC workers, then look at the wage and employment numbers. Also, pay close attention to the years sampled.) That is the most retarded thing I've ever seen come out of California, and that is saying a lot. These two economists had an axe to grind with organized labor, and this was the best they could muster?

[Latrinsorm]

You might want to actually read the statement. Here, I'm feeling charitable today.. so I'll highlight the section and provide you a link.

I was going by what you quoted in the other thread. Weren't you?

[Cephalopod]

Well... we tried increasing the deficit during an economic downturn and employment went over 8%. So lets try the opposite now. I mean, the keynesians have had their turn, it didn't work. Let someone else have a shot.

Okay, having had my little fit over that retarded paper...

It's hard to claim increasing the deficit as a means of reversing the economic downturn has been "tried": the stimulus that was passed was so watered down and ineffectual, it's hard to say the Keynesians 'had their turn', since the amounts and distribution of spending that would have been required were not even close to reached. Since 1/3 of the original $900b stimulus bill was tax cuts, you've got $650b in actual stimulative monies. This is compared to the >$1T that economists indicated would be necessary. If we couldn't get to that level, the overall stimulus was a waste and not a valid test of Keynesian stimulus. For this reason, Obama and the Democratic leadership is fully to blame for the failure of the stimulus.

You certainly shouldn't be increasing spending while tax revenues are falling, right?

Why? Governments work at the macroeconomic level, not the micro.

[Parkbandit]

I was going by what you quoted in the other thread. Weren't you?

That wasn't from Moody's, that was a news article from msn.com that talked about the Moody's report.

If you want to make a post regarding the information in the actual statement.. it makes sense that you should actually read the statement.

[Kithus]

Is it just me or does this argument seem to be a never ending cycle? You can't reduce the deficit during a recession because bad things happen, you can't reduce the deficit during a recovery because that will put us back in a recession, you can't reduce the deficit when times are good because Congress is a bunch of jackasses and has never done such a thing.

So your argument is that we should reduce the deficit at the wrong time because you don't trust congress to reduce it at the right time? I can't disagree that they screwed up not dealing with the deficit while the economy was good. That's when you rein it in. It doesn't change the fact that reducing or eliminating deficit spending during times of economic hardship is simply going to make things worse.

In reality though, it isn't government spending or a lack there of that will get things moving again. It is corporate spending, and you won't have that so long as Obama insists on beating them over the head with regulation after countless regulation, not to mention all the tax uncertainty that his profligate spending creates.

Obviously its time to deregulate because that worked so well prior to this. Maybe you forgot that's how this whole mess got started?

[Parkbandit]

So your argument is that we should reduce the deficit at the wrong time because you don't trust congress to reduce it at the right time? I can't disagree that they screwed up not dealing with the deficit while the economy was good. That's when you rein it in. It doesn't change the fact that reducing or eliminating deficit spending during times of economic hardship is simply going to make things worse.

While that's good in theory.. it rarely ever happens in actual practice. Even in most households, when times are good.. spending increases, credit card bills go higher, etc... no one pays attention to it until the money starts disappearing.

Obviously its time to deregulate because that worked so well prior to this. Maybe you forgot that's how this whole mess got started?

Do you believe more or less regulations help create a positive environment for businesses? And what about the pressures placed on banks by the government to allow easier access to mortgages by people who couldn't afford them?

[prance1520]

My down 2% was looking good...until the afternoon sell off. Brutal. At least I have that cash stuffed under my matress.