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I agree that a recession is a correction to a boom. The best situation is to avoid the boom since it brings on inflation and inevitably a bust. Using fiscal and monetary policy to control the expansion softens the economic contraction leading to steady growth. This is how it should work, but often political policies work in the opposite direction of economic polices.About the only good thing about a recession is that it cures inflation. Recessions cause a lot of hardships for those that are least equipped to bear it. From a more global view, a boom and bust economy is inefficient. Both capital and resources are wasted. The best scenario is a steadily growing economy with low inflation and full employment, a major goal of economy policy.Is recession always a bad thing ?
But the aswer to my questions lies in you response with regard to boom and bust.
A recession is a correction to a boom.
Many people I know who could not afford houses before....now can. My buying power is up in many areas.
I agree that it causes hardships on those least likely to deal with them.
I agree that a recession is a correction to a boom. The best situation is to avoid the boom since it brings on inflation and inevitably a bust. Using fiscal and monetary policy to control the expansion softens the economic contraction leading to steady growth. This is how it should work, but often political policies work in the opposite direction of economic polices.About the only good thing about a recession is that it cures inflation. Recessions cause a lot of hardships for those that are least equipped to bear it. From a more global view, a boom and bust economy is inefficient. Both capital and resources are wasted. The best scenario is a steadily growing economy with low inflation and full employment, a major goal of economy policy.
But the aswer to my questions lies in you response with regard to boom and bust.
A recession is a correction to a boom.
Many people I know who could not afford houses before....now can. My buying power is up in many areas.
I agree that it causes hardships on those least likely to deal with them.
About the only good thing about a recession is that it cures inflation. Recessions cause a lot of hardships for those that are least equipped to bear it. From a more global view, a boom and bust economy is inefficient. Both capital and resources are wasted. The best scenario is a steadily growing economy with low inflation and full employment, a major goal of economy policy.Like Cameron's austerity program and the UK falling back into recession.
Is recession always a bad thing ?
Both congress and the administration pursue political policies which may or may not be the best thing for the economy. From the late 1990's till about 2006, both Congress and the administration followed a course of active encouragement of the activities in the sub-prime mortgage market that led to the 2007 recession. The Bush administration that had been hostile to the GSE's till 2006 when it was becoming increasing obvious that the housing market was the only thing holding up the economy, suddenly reversed it's position on Fannie May. Fannie Mae, who was playing second fiddle to Wall Street in the purchase of sub-primes in the 2000's, then became the primer purchaser. By 2008, Fannie May was purchasing 80% of all mortgage which did little to save the economy but resulted in the biggest government bailout ever.I agree that a recession is a correction to a boom. The best situation is to avoid the boom since it brings on inflation and inevitably a bust. Using fiscal and monetary policy to control the expansion softens the economic contraction leading to steady growth. This is how it should work, but often political policies work in the opposite direction of economic polices.But the aswer to my questions lies in you response with regard to boom and bust.
A recession is a correction to a boom.
Many people I know who could not afford houses before....now can. My buying power is up in many areas.
I agree that it causes hardships on those least likely to deal with them.
That is where it get's tricky.
If you watched "No, They Can't", you saw a claim (I'll just call it that) that all these education loans have driven up the cost of education. There is more money out there and universities are raising tuition to get more of it. At the same time, they are putting in more and more non-education related stuff so that some universities look like vacation get aways.
I realize that is cherry picking. I am just pointing out that it is very difficult to use policies in a way that are neutral. I think Obama has really blown it in this regard. I think he simply does not get it.
Both congress and the administration pursue political policies which may or may not be the best thing for the economy. From the late 1990's till about 2006, both Congress and the administration followed a course of active encouragement of the activities in the sub-prime mortgage market that led to the 2007 recession. The Bush administration that had been hostile to the GSE's till 2006 when it was becoming increasing obvious that the housing market was the only thing holding up the economy, suddenly reversed it's position on Fannie May. Fannie Mae, who was playing second fiddle to Wall Street in the purchase of sub-primes in the 2000's, then became the primer purchaser. By 2008, Fannie May was purchasing 80% of all mortgage which did little to save the economy but resulted in the biggest government bailout ever.I agree that a recession is a correction to a boom. The best situation is to avoid the boom since it brings on inflation and inevitably a bust. Using fiscal and monetary policy to control the expansion softens the economic contraction leading to steady growth. This is how it should work, but often political policies work in the opposite direction of economic polices.
That is where it get's tricky.
If you watched "No, They Can't", you saw a claim (I'll just call it that) that all these education loans have driven up the cost of education. There is more money out there and universities are raising tuition to get more of it. At the same time, they are putting in more and more non-education related stuff so that some universities look like vacation get aways.
I realize that is cherry picking. I am just pointing out that it is very difficult to use policies in a way that are neutral. I think Obama has really blown it in this regard. I think he simply does not get it.
My point is the government in the late 1990's and 2000's was serving political interest which was not in the best interest of the country. The sub-prime mortgage lenders such a Commercial Credit were writing billions of dollars in worthless mortgages and selling them to Wall Street as fast as they wrote them. Wall Street was constructing and peddling ever more elaborate synthetic and mortgage backed securities backed by this just junk. The balloon grew larger and larger and the government did nothing. The SEC said it wasn't their job to regulate these securities. The Fed was not about to step in. The administration thought Wall Street could regulate themselves. Paulson, although probably too late, got Bush to introduce legislation that would provide some regulation. The Democrats though Bush was pandering to Wall Street and the Republicans were against any regulation, so nothing happened. The result was millions of homes and jobs lost in the US and a recession that spanned the globe.Both congress and the administration pursue political policies which may or may not be the best thing for the economy. From the late 1990's till about 2006, both Congress and the administration followed a course of active encouragement of the activities in the sub-prime mortgage market that led to the 2007 recession. The Bush administration that had been hostile to the GSE's till 2006 when it was becoming increasing obvious that the housing market was the only thing holding up the economy, suddenly reversed it's position on Fannie May. Fannie Mae, who was playing second fiddle to Wall Street in the purchase of sub-primes in the 2000's, then became the primer purchaser. By 2008, Fannie May was purchasing 80% of all mortgage which did little to save the economy but resulted in the biggest government bailout ever.That is where it get's tricky.
If you watched "No, They Can't", you saw a claim (I'll just call it that) that all these education loans have driven up the cost of education. There is more money out there and universities are raising tuition to get more of it. At the same time, they are putting in more and more non-education related stuff so that some universities look like vacation get aways.
I realize that is cherry picking. I am just pointing out that it is very difficult to use policies in a way that are neutral. I think Obama has really blown it in this regard. I think he simply does not get it.
Can't argue that.
But what was your point ?
I view it as GWB's efforts to keep the economy white hot (keep the boom going).
But the bigger they get, the harder they fall.
And did we fall hard.
I am afraid Obama's meddling has kept the bust a bust longer than it has needed to be.
By Brian Beutler
A giant austerity bomb is timed to go off at the beginning of next year, and the threat of significantly higher taxes and lower spending has Republicans running around the Capitol sounding more like John Maynard Keynes than John Boehner.
Automatic, across-the-board reductions to domestic and defense spending, combined with the looming expiration of the Bush tax cuts, will dramatically consolidate the budget in the next calendar year, if Congress does nothing. And despite bemoaning deficits throughout the Obama years, the GOP’s suddenly come around to the view that cutting government spending is a job killer.
Just listen to Sen. John Cornyn (R-TX).
“Just when you thought the economic news could not get much worse with slow economic growth, with reduced wages because of higher costs, and with many people simply giving up looking for work with the lowest labor participation rate we’ve had in some time,” Cornyn warned reporters in the Capitol Tuesday, “we have an entirely predictable and preventable jobs crisis approaching in January, where because of the sequestration [automatic spending cuts], my state alone will lose 91,000 private sector jobs — and there are about a million private sector jobs at risk if the sequestration goes into effect on January 2.
By Brian Beutler
A giant austerity bomb is timed to go off at the beginning of next year, and the threat of significantly higher taxes and lower spending has Republicans running around the Capitol sounding more like John Maynard Keynes than John Boehner.
Automatic, across-the-board reductions to domestic and defense spending, combined with the looming expiration of the Bush tax cuts, will dramatically consolidate the budget in the next calendar year, if Congress does nothing. And despite bemoaning deficits throughout the Obama years, the GOP’s suddenly come around to the view that cutting government spending is a job killer.
Just listen to Sen. John Cornyn (R-TX).
“Just when you thought the economic news could not get much worse with slow economic growth, with reduced wages because of higher costs, and with many people simply giving up looking for work with the lowest labor participation rate we’ve had in some time,” Cornyn warned reporters in the Capitol Tuesday, “we have an entirely predictable and preventable jobs crisis approaching in January, where because of the sequestration [automatic spending cuts], my state alone will lose 91,000 private sector jobs — and there are about a million private sector jobs at risk if the sequestration goes into effect on January 2.
This marks the return of the Defense Keynesians — Republicans who admit that government spending supports job growth in a weak economy, if and only if that spending is directed toward the military.
As luck would have it, a new Congressional Budget Office concludes Republicans are right about the economic consequences of defense cuts — but that their other fiscal priorities are just as perilous for economic growth.
Ron Paul will never be elected because we like the being a nation, not a loose confederation of states whose purpose of self defense.After reading this, I have to imagine if Ron Paul were to be elected... We're ceased to be a Nation then because he proposed ideas that would essentially cut everything to nearly zero, and he praises the 0% income tax.
Not sure how "cutting everything to nearly zero" means we'd "cease to be a nation."After reading this, I have to imagine if Ron Paul were to be elected... We're ceased to be a Nation then because he proposed ideas that would essentially cut everything to nearly zero, and he praises the 0% income tax.
CBO said, cut the DEFICIT and the economy falls off the "fiscal cliff." Don't try to reduce the deficit and the economy grows by 4.4%.they steamroll doing nothing so the country will fail
