Michael

Unless the mentality of the Detroit automaker CEOs has changed, they'll be back to business like usual but maybe there is now a new breed in charge and they'll make better decisions.
I wasn't making any assumptions. In fact we don't know if tax cuts help the economy or tax increases hurt the economy since there is no proof either way. Republicans like to point to the Reagan tax cuts (but were really tax increases) that tax cuts stimulate the economy. Even if I believed that they were tax cuts, I have my doubts that is what stimulated the economy but instead believe it was major increases in government spending on the military that revived the economy (pure Keynesian economics of digging a hole and filling it back up) since all the spending did was create jobs with no benefit to the consumer.

MostlyYank

I know a few folks who think military spending is a net plus. On its' own I do not agree. I also don't believe one can spend ones' way out of debt. I'm willing to try, but I doubt my bank would like it

USdebtclock.org currently pegs the US total unfunded liability at 125 Trillion and climbing by the million as you watch.

Pete

Pulaski

Please excuse me for pointing out that the taxpayer funds (the government doesn't have any money of its own, only what it takes from people and businesses) that funded the "(partially government funded) rebound" went to GM and Chrysler Dodge, but NOT to Ford. Ford has reinvented itself, but did not declare bankruptcy nor take government bailout money.

RoadWarriorFromLP

The US federal government can and does create money.

Ford received $5.9 billion in Department of Energy loans under the ATVM program.

RoadWarriorFromLP

Military spending contributes to growth, but it costs more than the growth that it creates. So it produces growth, but it's costly.

Businesses do so routinely. And governments use spending to produce economic growth.

We could all save ourselves a lot of trouble if conservatives would figure out that the federal government is not a household. A household can't tax GDP and it can't print money.

On the other hand, city governments do more closely resemble a household, since their access to GDP growth is limited and they don't control the currency. The city of Detroit is in a very different situation from the US government.

Pulaski

..... which impacts the future value of privately owned assets, by devaluing the currency, thereby transferring value from private ownership to government coffers just as surely as taxation would.
The ATVM was not in any way connected to the TARP program that was used to rescue GM and Chrysler Dodge.

Tesla received ATVM loans, does that mean it was bailed out too?

MostlyYank

In fairness to Ford that wasn't bailout money. They gave those to foreign manufacturers too.

When a business attempts to spend for growth it's a gamble and they sometimes fail.

We can print money till the presses melt but sooner or later we will lose reserve currency status. The group or party that succeeds in that will be reviled for a long, long time, a historical marker. And the trust fund? It's an IOU from the government to itself basically, there's no cash, just more debt.

The thought that our leaders think debt doesn't matter at all gives me a chill.

Pete

RoadWarriorFromLP

You guys don't really get it. An economy needs growth (national income), otherwise it fails. Without growth, none of the other stuff matters, as the economy will fail. If stimulus is required for growth, then the government would be foolish not to stimulate it.

Yes, it was. Without the ATVM program, Tesla would have failed.

Michael

Spending one's way out of debt by governments have a much greater chance of succeeding than cutting taxes. Ever since WII, temporarily increasing spending has pulled the country out of recessions but cutting taxes has always increased the national debt. The only times prior to the current recession that the national debt has increased as a percentage of gdp was during republican administrations when they cut taxes. Believe it or not, the democrats have done a much better job of reducing the national debt as a percentage of gdp than the republicans.

Much of that is because of Medicare and an aging population. Currently the US spends about 2x as much of the gdp as most other developed countries for medical care with no statistical advantage. The problem can be solved by passing most of the costs to the seniors as is desired by the right or it can be solved by reducing costs to bring costs in line with other developed countries as favored by the left.

The only way the plan from the right will work is if enough seniors die since they can't afford the cost and the government won't treat them driving down demand and therefore costs. As along as the government will pay the bills for seniors that can't afford medical care or the seniors default on medical bills, costs will still remain at 2x that of other developed countries.

The proposals by the left have a much greater chance of succeeding without undue hardship for seniors by applying pressure on health care providers, negotiate drugs prices with pharmaceutical companies, require generic drugs to be tried prior to trying brand name drugs, eliminate unnecessary end of life procedures unless the patient pays the bill, and implement a single payer system for health care reform.

FlaviusAetius

[QUOTE=RoadWarriorFromLP;10810048

On the other hand, the judge may be doing a bit of grandstanding herself. She issued instructions that her decision be sent to Obama and that he should look into the pension issue, a move that was a bit out of left field. Circuit court judges in Michigan are elected, and this judge is up for reelection next year -- she probably expects that this decision will play well with the votes in her district, even if it is overturned.[/QUOTE]

Judge Aquilina, a Democrat, certainly hopes that Obama will look favourably upon her when it comes time to name a new federal judge in her District. Her ruling is absurd, but fully expected. Look for Democrats to pressure Obama to bail out Detroit - and for him to figure out how many votes he could buy for the 18 billion it would cost the rest of us.http://britishexpats.com/forum/image...ies/unsure.gif

scrubbedexpat099

What would be the point, I thought Detroit was solid Dem?

MostlyYank

Thank goodness the Chinese like Buicks.

Pete

Pulaski

That's easy to explain: it's that one child policy they've had since the 1980's, and they now have a rapidly aging population!

MostlyYank

LMAO!!

Pete

MostlyYank

Watching TV the other day this thread occurred to me, the slogan from Whose Line is it Anyway but thusly:

'the rules are made up and the debt doesn't matter'

Pete