Tag Archives: Financial crisis
If you truly want to confuse the Hell out of your friends and foes alike, start talking about the economy using actual “facts and figures.” Truthfully, most folks don’t understand economics very well at all, and a good portion have no understanding greater than the mantra of “cut taxes, cut spending, yada, yada!”
I would venture to say that 9 out of 10 Americans would not know what that meant, even though we have basically employed a Keynesian economic model since 1932. In very raw, basic terms, Keynesian theory prescribes that in an economic downturn, the government needs to pump money into the economy to keep it from further contraction which would lead to recession or even depression.
Economics is not a subject near and dear to my black little heart, but in recent years, I have forced myself to learn more, in an effort to be able to debate the subject with some level of knowledge.
Although many on the Right would be loathed to admit it, without TARP and the Stimulus act, America could have fallen into a second Great Depression, dragging the rest of the world with us.
Much has been made of deficits and the National Debt, with many calling for balancing the Federal budget NOW!
Well, that sounds nice on paper, but this is what would happen if miraculously the Federal government balanced the budget today:
Instantly, the GDP (Gross Domestic Product) would contract by $1.4 trillion, putting thousands of Federal workers on the unemployment rolls and laying off thousands of others dependent on indirect government spending, and bring the economy to a screeching halt, possibly launching a Depression.
Simple rule – in times of recession, don’t cut spending.
GDP = private consumption + gross investment + government spending + (exports – imports) or………………..
“GDP = C + Inv + G + (eX – i)”
Eliminating the current Federal deficit right now would be a $1.4 trillion hit to a $14 trillion economy – a ten percent bang to the bottom line.
Simple? Well, not really, but for a thread column, that is about as simple as can be made of a complex issue.
Tomorrow: The economy isn’t as bad as you might think.
William Stephenson Clark
This movement seems to be catching on. There is a link in the article to check the banks in your zip code. What are your thoughts about this movement’s chance of success? Will it make a difference or are they just Don Quixote chasing those windmills?
Like many of you, my personal health insurance is going up in November by a factor of over twenty-five percent. I’m caught in the aging baby boomer dilemma of needing to keep myself covered, because at my age, I’m just a walking pre-existing condition. But I have to wonder how long I can continue paying almost half of my income for health insurance. And all the while, a hell of a lot of the remaining half needs to be dedicated in reserve for taxes, including taxes that are health care related.
I’ve been thinking lately that while most people say they are “worth more dead than alive” as a joke, for me, it’s rapidly becoming a reality. I wonder if I’m not better off just dropping my health insurance now and facing the future without it. I mean, why pay another year of half my income when the health insurance companies tell us it’s going to get worse, not better, before I reach Medicare age? If I’m going to be forced, because of cost, to drop it next year, is it really worth it to continue it this year? I could maybe hold on and hold my nose and write the obscene checks for another year if I thought health care reform was going to help people like me. But it doesn’t sound like anything being considered on Capital Hill is going to help self-insured people like me, and even if it did, it won’t take effect for another four years. And now they’re talking about mandatory insurance? Does anyone up there realize that’s like a mandated tax of at least fifty percent of my income? Does anyone care? Continue reading
Yes, the economic news shows signs of improvement, but we’re not out of the woods. There are economists who are grading the stimulus and seeing signs it did boost the economy even tho a small portion of it has been spent. There’s a good explanation at NPR of why the unemployment rate fell for the first time in fifteen months. The news isn’t all bad anymore, and a depression was avoided, but we’re still in the deepest recession since WWII.