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Post by Ashton on Feb 3, 2009 16:43:04 GMT -5
www.lewrockwell.com/orig8/jacobs3.htmlI don't see how Robert Reich thought this: would do the economy any good. Where is that money going to come from? Taxes. What do taxes come out of? Paychecks. Who's getting a paycheck right now? No one.
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Post by Monster on Feb 3, 2009 21:41:44 GMT -5
wow i knew Kane was like crazy good with government stuff i just never knew he sounded like a professional. But he is right about everything he said. and by the way who is this Robert Reich? he sounds like the kind of person who puts people at ease with just his words that have no true meaning.
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Post by lindsay on Feb 4, 2009 15:53:18 GMT -5
OK I applaud Kane for taking the initiative here, but I think everyone, including Kane is reacting to PART of what Reich said and taking it out of context.
Reich was Bill Clinton's Labor Secretary. He's a former Harvard professor and I think he's currently at UC Berkeley. The Wall Street Journal called him one of the "top ten thinkers" in business last year. In other words, he's not stupid.
On CNN, when Reich talked about expanding the social safety net and causing money to go into circulation, he had been discussing WHY the economy got into bad shape in the first place. While many economists blame the housing market, Reich argues the problem actually began back in the 70's.
To try and sum it up, (um, which got Reich into trouble) wages stalled in the 70's and forced many women (who had been stay at home moms) into the workplace to make ends meet for the family. America's spending habits didn't change, so pretty soon, families began relying on credit as well as mom having a job to make ends meet. 25+ years later, mom's still working, the credit's maxed out, and America's still spending.
Then boom ... the housing market goes to hell, no one's got credit, prices are shooting high, AND the cost of health care is unreal. Now American's aren't spending because they're afraid too.
What Reich is arguing --at least I think -- is that Americans have to know they have help WHILE the government tries to correct course. If they feel like there's a plan in place to help them keep their home, they're more likely to go out and buy a car, buy a dishwasher, invest in small business, etc. and PUT money back into the economy. Hence, expand the security net and cause money to go directly into circulation....
In other words, our spending habits got us into this mess, and ironically the only thing that can reverse it is to spend more money, which everyone has stopped doing.
Now whether or not Reich is right is a whole different argument. I personally think he is, but I don't think this government fix is going to be as simple as most think. It took decades to get into this shape and it will take decades to get out.
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Post by huneychild on Feb 4, 2009 16:21:45 GMT -5
Wow Lindsay,
You broke that down better than anyone! I see exactly what you mean about us spending money in order to make money.
Take the housing market for example. You see all these houses that are empty and yet they will not approve people for home loans unless they have a minimum credit score of 720 and put at least 20% down. Who the hell has 20% of 300,000 sitting around? You can't even get refinanced unless you have that same 720 score.
Like Obama said, this mess will not be fixed overnight.
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Post by Monster on Feb 4, 2009 16:32:49 GMT -5
seriously Lindsay that was a good break down of it. i actually understood what you were saying. you should teach economics.  |
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Post by lindsay on Feb 4, 2009 17:37:13 GMT -5
Oh God help us all  You don't want me teaching anything dealing with math. I majored in English for a reason LOL ;D It is ironic that the one thing that will pull us out of the economic crisis is spending money  |
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Post by Monster on Feb 4, 2009 19:27:31 GMT -5
Oh God help us all You don't want me teaching anything dealing with math. I majored in English for a reason LOL ;D It is ironic that the one thing that will pull us out of the economic crisis is spending money yet like you said no one wants to spend money. the thing is that people here in the U.S. dont know how to save money. like in china i know they save like around 30% of their check for a rainy day. not a lot of people here do that and now its pouring and it doesnt look like the storm will pass. |
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Post by Ashton on Feb 4, 2009 19:31:48 GMT -5
Great breakdown Lindsay!
Another problem is real estate. It's outrageous! It's way overpriced, so nobody can afford to buy a home, and people who already do own a home are losing theirs. There are plenty of older people that live in our apartments. I sometimes wonder is the same thing happened to them.
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Post by Monster on Feb 4, 2009 20:05:48 GMT -5
Great breakdown Lindsay! Another problem is real estate. It's outrageous! It's way overpriced, so nobody can afford to buy a home, and people who already do own a home are losing theirs. There are plenty of older people that live in our apartments. I sometimes wonder is the same thing happened to them. dont doubt it. some of my neighbors have lost their houses because they cant afford it. and its true the payments re ridiculously high. and all of these empty house are a threat to other house on the block. ive heard of robbers going into houses they know are in lonely neighborhoods. its scary! |
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Post by lindsay on Feb 5, 2009 14:28:36 GMT -5
And part of the housing problem too is that banks handed out money to couples earning a combined income of $40K a year so they could buy $200K homes  If you make $40k a year, you cannot afford that. You may want it -- you may think you need it, but you can't. But as Ashton pointed out, real estate prices are so high, it's hard to find a house in a decent neighborhood for less. |
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Post by huneychild on Feb 5, 2009 17:27:21 GMT -5
And part of the housing problem too is that banks handed out money to couples earning a combined income of $40K a year so they could buy $200K homes If you make $40k a year, you cannot afford that. You may want it -- you may think you need it, but you can't. But as Ashton pointed out, real estate prices are so high, it's hard to find a house in a decent neighborhood for less. I knew a lady that worked at McDonalds and she was married with 5 kids. Her and her husband were qualified by their bank to purchase a $450,000 house, at the time when the banks were handing out these loans. Her husband mostly worked under the table. I thought that was ridiculous. |
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You don't want me teaching anything dealing with math. I majored in English for a reason LOL ;D
If you make $40k a year, you cannot afford that. You may want it -- you may think you need it, but you can't. But as Ashton pointed out, real estate prices are so high, it's hard to find a house in a decent neighborhood for less.