Quote:
Originally Posted by dogzilla
As to why I'm opposed to Obama's stimulus programs, he borrowed hundreds of billions of dollars to artificially inflate the economy. Just the two examples I've referenced, cash for clunkers and the new home buyer's credit borrowed against future sales to create a temporary bump in the economy, with subsequent slump in sales after the programs ended. So the taxpayers paid for a nice discount to people who took advantage of the programs for no benefit.
|
Okay, let's assume, then, that Obama's handling of the stimulus spending was, for the most part, bad. (However, the only true way to know this is to wait until all of the money has run through the system---and, as an aside, the Canadian government's handling of stimulus spending was more moderate and therefore more manageable and likely more effective...time will tell.) This brings us to: what do we do now? People are calling for the government to reign in spending. That's probably a good idea. I'm not sure what this deal is with stimulus spending made "permanent," but stimulus spending is supposed to be temporary. Maybe start by making sure it's temporary.
Of course, the government could also look at ways to trim the budget. I know that people are concerned about "pork," so money could be saved there, but it's my understanding that it isn't all that much, comparatively.
The other ways to trim the budget will need to be weighed seriously. With an aging population, cutting things like medicare or pensions would be disastrous. I think that much of any savings should come from the defense budget, which remains to be monstrous and at levels comparable to WWII. Save. money. there. Start by ending operations in Iraq and Afghanistan. Play it touch-and-go from there, there's a lot to be done.
Beyond that, cutting too much of any other spending would most likely hurt those in lower income levels. This is a terrible thing to do during a recession, and would serve to stall the recovery.
That said, I don't think there is much else to save. Most of the savings would come from ending the stimulus and cutting from the defense budget. A big picture reminder: government spending remains low as a percentage of GDP (below 25%). In real terms, the U.S. spending at the moment isn't "out of control" or "breakneck." That there was a spike in spending during the biggest economic contraction since the Great Depression isn't a surprise, and shouldn't be to anyone, no matter how much you want to criticize it.
So spending can be reigned in, but whether deficits can be eliminated depends on the topic of this thread: the expiry of the Bush tax cuts. They should expire. The tax revenues are needed to help cover the budget and eliminate the deficit. Furthermore, increasing taxes should be considered because....um....there's a pretty big debt to pay down. If you disagree with raising taxes for this purpose, then I can only assume you're not too interested in paying down the debt, at least not in the current environment----not for at least 10 years or so.
Quote:
|
My point was government subsidies. That means that the company is having part of the price of his products paid for by the taxpayer. The company should succeed or fail on its own merits.
|
If you're going to be a free-marketer, you shouldn't cherry-pick your government "meddling." It makes you look like you're open to it. If you want to rid of subsidies, then you should be ridding of tariffs, quotas, and embargoes as well. If you don't, you're economic philosophy is that of a conflicted nationalistic nature: You're not okay with the government preventing domestic prices spiking and industries collapsing (no subsidies), but you're totally okay with the government increasing the prices of foreign goods by adding to their value (tariffs) and limiting how many can be sold (quotas). Embargoes are often political, but a free market is a free market. American companies should be allowed to do business with Cuba. To have a government say no you can't do business because of political reasons hints as socialism, as it is a government-directed economic measure (just like subsidies, tariffs, and quotas).
So...why get rid of subsidies but not the others? Would you prefer the government only direct economic activity where you think it's a good fit? You know that's called a mixed economy, right? Capitalism and socialism?
Quote:
|
If GM and Chrysler couldn't manage their business to remain profitable, then they deserve to go out of business. If the UAW was collectively such a group of greedy people who were unwilling to recognize they had priced themselves out of the labor market, then they collectively deserve to lose their jobs.
|
It might still happen. I think Japan and China (and maybe India) are going to take over the U.S. auto market over the next 20 or 30 years. The government may be just delaying the inevitable, but at least the blow will be softer than if they just let the thing collapse to foreign competitors. It's more gradual this way.
Quote:
If people selling their homes has so inflated the market that they priced themselves out of the market, then they, not the taxpayers should eat that loss.
If people were dumb enough to sign a mortgage with terms they couldn't afford, they should suffer the consequences of that mistake, not the taxpayers. Next time maybe they will read before signing.
|
I think the industry needs tighter regulation. Reagan ruined much of America's economic stability with his radical policies. I sincerely hope Obama and those who come after him instill some sense and responsibility in the financial sector.