Send a Tweet
Most Popular Choices
Poll Analyses
Share on Facebook 17 Share on Twitter Printer Friendly Page More Sharing
Exclusive to OpEdNews:
OpEdNews Op Eds    H1'ed 8/28/10

Why is America suffering so much from a recession that Germany largely bypassed?

By       (Page 5 of 5 pages) Become a premium member to see this article and all articles as one long page. (View How Many People Read This)   27 comments
Author 8235
Follow Me on Twitter     Message Richard Clark
Become a Fan
  (108 fans)


There has been testimony given to Congress that some of the banks have lied by saying people did not get the necessary documents to them, even though people had certified copies of receipts of mailing those very documents. At other times, the banks created extra paperwork, after deadlines, just to keep the loans from going through. And while many banks have said they were offering loans, when it actually came down to it, they did not offer said loans, nor did they actually offer the rates they later said they did.

With all this in mind, as well as the way Obama and the Fed threw money at the banks (which the banks then proceeded to either gamble in the Wall Street Casino or use to buy ultra-safe Treasury certificates), and with the country falling apart emotionally, financially, militarily, medically and educationally, how could any fully informed person wonder why housing sales would fall? As one would-be home buyer put it, "How can you buy a house when you don't know if you'll even have a job next month?"

Not all deficit spending is good. John Maynard Keynes never advocated bailing out underwater financial institutions run by crooks, and yet, that has been the essential Fed policy from Day One. Keynes believed that markets were fundamentally unstable, that government had a role to play in smoothing out capitalism's excesses, reducing inequality and creating jobs. He also believed that slumps will last much longer than necessary if government does not intervene and stimulate demand.

The value of deficit spending depends on how the money is spent. The $700 billion TARP was largely wasted on financial institutions that should have been nationalized, broken up, and their toxic assets put up for auction.

The $787 billion stimulus, on the other hand, was largely a success, because it provided urgently needed relief for the states, benefits for unemployed workers, tax cuts and infrastructure programs. Experts believe the stimulus increased employment by roughly 2 million workers and raised GDP by 1.5% to 2.5%.

Stimulus is not a panacea, and no one ever said it was. It's an emergency blood-transfusion to get a sickly patient through a violent trauma. It did what it was designed to do, and it paid for itself via the uptick in economic activity and growth.

Here's how Paul Krugman sums it up:

"...increasing government spending in a slump more or less pays for itself: it leads to higher output not just in the short run but in the long run, and therefore leads to higher revenue that very likely more than offsets the original expense." (Source: Paul Krugman's blog, "The Conscience of a Liberal," New York Times).

Next Page  1  |  2  |  3  |  4  |  5

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

 

Must Read 4   Supported 4   Valuable 3  
Rate It | View Ratings

Richard Clark Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)
 

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Was Pat Tillman Murdered by an American Sharpshooter to Shut Him up?

New JFK assassination bombshells

Two U.S. presidents implicated by ex-CIA black-ops assassin

The cholesterol - heart disease scam: How the medical-industrial complex is raking in billions at our expense

Four Ticking Time Bombs That Will Soon Ignite a Revolution

The Ultimate Goal of the Bankster-led Political-economic Warfare Being Waged Against Us Is . . . ?

To View Comments or Join the Conversation: