Democrats sounding economic warnings after downplaying recession threat

July 7, 2010 by Golfboy

Ironic that they don’t understand they are proving their economic stimulus plan was a complete and utter failure, isn’t it?
And of course, their ONLY answer is MORE SPENDING!!! Typical liberal pablum, when liberal programs fail, it’s always because it just want aggressive enough - meaning they didn’t waste enough money.

Democrats are starting to warn of major risks to the economy after months of downplaying the threat of a double-dip recession.

In letters, interviews, and public statements, President Barack Obama, House Speaker Nancy Pelosi (D-Calif.) and other senior Democrats are now raising red flags that the economy could falter without additional stimulus efforts.

Obama urged congressional leaders in mid-June to pass an extension of tax breaks and unemployment benefits, and up to $50 billion in aid for states and local governments. Without Congress acting, Obama said the economy could “slide backwards.”

Two weeks later, in an interview with the Huffington Post, Pelosi said that absent new federal help, “we could slip back and have another recession, and if we do it’s harder to come back.”

Earlier this year, senior administration officials suggested the economy did not risk falling back into recession.

Read the original thread on Democracy Forums!

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Grizz Reality Czar	Yes, it could happen, just as it did after the market crash in 1929. With the economy struggling along, FDR was convinced to "balance the budget" and set out to to just that. And so we stayed in the depression until WWII came along. That's a history I don't want to see repeated. You might also want to peruse Paul Krugman's column from a few days ago just to get a heads up.
07-05-2010, 07:48 PM	#2

SteveGan1 Eventually Banned	Only 43% of the stimulas has been spent. The rest is not scheduled to be spent until 2011-12 to shore up the numbers for the presidential election. These people are all about deception, and dam the populace.
07-05-2010, 07:54 PM	#3

william the wierd Senior Member	The Dems are in deep trouble. I have December puts because of the changes in the tax laws and Roth conversions all deadlined for Jan. 1, 2011. The highest reasonable estimate for the Dow, that considers these changes, is below 8K. The double dip has been cooked in by the current congress.
07-05-2010, 08:03 PM	#4

NIOSA Senior Member	5 reasons why a double dip recession could happen. http://money.usnews.com/money/blogs/...ld-happen.html
07-05-2010, 09:30 PM	#5

Golfboy

VRWC Member #77

Quote:

Originally Posted by Grizz

Yes, it could happen, just as it did after the market crash in 1929. With the economy struggling along, FDR was convinced to "balance the budget" and set out to to just that. And so we stayed in the depression until WWII came along. That's a history I don't want to see repeated. You might also want to peruse Paul Krugman's column from a few days ago just to get a heads up.

Peruse Krugman? Honestly? I've posted before many of the contracictory statements by Krugman, who's view of economics changes depending on which party controls the White House.

07-05-2010, 09:41 PM Golfboy is offline

Bok_Tukalo Ect ...	It was a monstrous hole. It will take a decade, at least, to crawl out of it. I credit the leadership we have had since mid '08 for keeping us from collapse but the bill for Thatcherism/neoliberalism/globalism came due.
07-05-2010, 09:44 PM	#7

Grizz

Reality Czar

Quote:

Originally Posted by Golfboy

Peruse Krugman? Honestly? I've posted before many of the contracictory statements by Krugman, who's view of economics changes depending on which party controls the White House.

As I recall, Krugman wasn't much in favor of Republican policies and laws and looked more favorably on what the Dems did. Offhand, looking at the wreckage of our country's economy, he got it right.

07-05-2010, 09:57 PM Grizz is offline

Golfboy

VRWC Member #77

Quote:

Originally Posted by Grizz

As I recall, Krugman wasn't much in favor of Republican policies and laws and looked more favorably on what the Dems did. Offhand, looking at the wreckage of our country's economy, he got it right.

Actually he was a deficit hawk when Bush was spending money. Now deficits are a good thing, and will save the economy.
Reading Krugman is entertaining, as long as you don't give a rat's ass about consistancy.

Currently Krugman says:

These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

Yet they aren’t facts.

But back in 2003, his viewpoint was slightly different:

With war looming, it's time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.

But what's really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government's solvency.

That may sound alarmist: right now the deficit, while huge in absolute terms, is only 2 — make that 3, O.K., maybe 4 — percent of G.D.P. But that misses the point. "Think of the federal government as a gigantic insurance company (with a sideline business in national defense and homeland security), which does its accounting on a cash basis, only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting . . . is an accident waiting to happen." So says the Treasury under secretary Peter Fisher; his point is that because of the future liabilities of Social Security and Medicare, the true budget picture is much worse than the conventional deficit numbers suggest.

And as that temptation becomes obvious, interest rates will soar. It won't happen right away. With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.

As I said, Krugman's viewpoint is largely determined by what party controls the Presidency.