Michelle Can Get a New Pair of Earrings

"President-elect Barack Obama today kicked off his campaign to win approval of his economic stimulus plan, launching a series of face-to-face meetings on Capitol Hill to sell a plan that will now likely include $300 billion in tax cuts and another $500 billion, or more, in spending"

Let's see if I got this right, $300 Billion in tax-cuts and $500 Billion in spending.........hmmmmmmmm.....Why does this not sound right??? Is this where the 'Magic' comes in??

But, I guess when your a 'Magician', you can make it work.

Liar, liar, pants on fire. Michelle Obama was not in Michigan last week. They just got back from Hawaii late Friday, JANUARY 2, 2009!!!!

Janice,

The quote was from an article dated July 15 2008. During the campaign, as noted. There's a link to the article embedded in the text of Dave's post just prior to the quote.

>Let's see if I got this right, $300 Billion in tax-cuts and
>$500 Billion in spending.........hmmmmmmmm.....Why does this
>not sound right??? Is this where the 'Magic' comes in??

No, it's where the "liquidity trap" comes in. Unlike those run by Reagan, both Bushes, and yes, Carter, we *need* to have big deficits now. The "magic" was the supply-side nonsense that either lowering taxes will lower deficits rather than increasing them, or that "Deficits don't matter." (Actually I think the latter was "postmodern" supply-side, which bears about as much relation to reality, or even "real" supply side, as most things postmodern do. But that doesn't stop the WSJ editorial board from believing it, or at least trying to convince their readers of it.) Deficits *do* matter, but the way they matter is that you don't want to have them in "good" times, and you do want to have them in recessions.

If you believe in the "monetarist" models (which the WSJ does at least some of the time, because (a) Uncle Miltie said so and he was right exactly once in 70 years, and (b) it suits their corporatist ideological prejudices), then you don't think there should ever be deficits at all, because you think monetary policy can control everything. But that's demonstrably wrong when there's a liquidity trap, which Uncle Miltie says is impossible, but which there demonstrably was in the 1930s and there demonstrably is now. Namely, you've done as much as you possibly can with monetary policy -- interest rates are *zero* -- and there's still no money moving.

The hits just keep on rolling. Another hard hitting expose on the lawyer couple, the Obamas. Ear rings, yah...that is it, tought reporting on substantial issues. Especially when Betty Soetoro/AKA Barry Obama has an appointment with the US Supreme Court this Friday, Jan. 9 about his constitutional eligibility to assume the office of the president of the USA, not Indonesia.

Should this charlatan be ordered to prove his constitutional eligibility, that is, should the Supremes order this flim flam con man to produce his "Hawaiian birth certificate" which he claims documents his Hawaiian birth (of which he has repeatedly never shown anyone) AND explains away his Indonesian citizenship which inconveniently erased his NATURAL BORN claim (assuming he was born in Hawaii??), then and only then will THE CHOSEN ONE be eligible to solve the WORLD's problems, period!!!!

THANKS FOR THIS SOMEONE NEEDS TO TRY AND KEEP
'THE ONE' AND THE ONE'S WIFE SOMEWHAT ACCOUNTABLE.

Barack Hussein Obama made history recently. He was the first African-American to be elected President. He also has set the record for the most scandals between an election win and an inaugeration.

He still has two weeks to go. Impressive.

Maybe Michelle could use the money as a down payment for plastic surgery.

Namely, you've done as much as you possibly can with monetary policy -- interest rates are *zero* -- and there's still no money moving.
___________________________

The velocity of money is zero because that which money is based on has been greatly breached - trust. Our money, which use to be based on gold, is now based on trust. No trust, no velocity. That is why monetary policy is having no impact. You would think that nearly free money from the FED would do the trick, but even with the $700 billion infusion, banks don't even trust the fed.

If Michelle continues with her 'holier than tho' attitude, she will definitely impact the success and popularity of her husband. Since the day she said..she was not proud of America...I wrote her off my list, and will NOT give her any credit of any kind. We did NOT elect her. She should keep any and all political thoughts to herself. Go re-decorate the White House, like the woman you THINK you are like, which by the way, you are NOT anything like Jackie O.

>Our money, which use to be based on gold, is now based on
>trust. No trust, no velocity. That is why monetary policy is
>having no impact.

Splash, please read an economics textbook (or even an economics Wikipedia article (;-)) not written by the WSJ editorial board. Even Friedman and the Austrians didn't think liquidity traps (in the rare cases they admitted that they were even possible) had anything to do with whether the money was "based on gold" or not. They happen when banks fear they won't get paid back at a rate of return that exceeds inflation, but when inflation is *negative* as it is now, it's not the low rate of return that causes the fear. And of course, the classic liquidity trap of the 1930s, and those presumably involved in at least some financial "panics" before that, occurred when the money *was* "based on gold." That was in fact part of the problem, because it gave the banks (and lucky individuals who had any money) all the more reason to hoard it.

http://en.wikipedia.org/wiki/Liquidity_trap

>You would think that nearly free money from the FED would do
>the trick, but even with the $700 billion infusion, banks
>don't even trust the fed.

It has nothing to do with trusting the Fed, the Fed already gave them the money. And if they really thought inflation was a worry (i.e. that the Fed and/or economic conditions were going to devalue the money), then they'd want to put it into something productive *faster*. Instead, they're sitting on it because they don't think there *is* anything productive to do with it, other than acquiring each other (and each other's distressed assets) at bargain prices.

But what are you complaining about, anyway? The Keynesian fix for a liquidity trap, which Obama shows every sign of at least partly pushing, is your best hope of getting your f...ing tax cut.

dr jay10:23AMJan 6th 2009

They happen when banks fear they won't get paid back at a rate of return that exceeds inflation,

Instead, they're sitting on it because they don't think there *is* anything productive to do with it,
_________________________________

dr jay -

Your response to me reeks of the lack of trust. You disguise it with "nothing more productive to do with it" but I went to the link you provided and it only supports my claim of trust:

"For example, the fear of default on loans can inhibit lenders from lending except to extremely credit-worthy customers. These fears are most likely after a financial crisis such as that associated with the Stock Market Crash of 1929."

It appears that I was wrong. Trust, or the lack of it, was even a factor when gold was the standard. It is even listed as one of the top 5 causes of the Great Depression (look at #2; all about trust):

http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm

I, admittedly am not an economics major, but have read enough to stand by my statement: remove trust, eliminate velocity. Your Liquidity Trap, as Wiki says, is just a theory. Makes sense, but is still based on and caused by a lack of trust.

The problem with you economist is that you study your trade to a fault. This is why Greenspan is surprised that his policy didn't work and why not much is working now. It is just another area that government put it's hands in that became less efficient and more expensive. Creating an artificial environment comes with unintended, and in this case, inexplicable consequences. This one just might break us.

I threw the fed in there for the current situation; as the fed acquires more and more worthless paper, it is becoming less and less trustworthy, not to mention more and more frail. Once the money/wealth they print/create becomes void of trust just what does your economic mind think will happen???

Talk about too big to fail? What will we do then?? Ehat do your textbooks say about that one???

dr jay10:23AMJan 6th 2009

But what are you complaining about, anyway? The Keynesian fix for a liquidity trap, which Obama shows every sign of at least partly pushing, is your best hope of getting your f...ing tax cut.
__________________________

Whose complaining? I was conversing. I am not really that interested in the how or why of your paragraph above or which "fix" is the best means to my selfish end. I want my FUCKING tax cut, because it was promised to me, (not by Keynen, but by The Big O) and for no other reason. It is the same reason I wanted my FUCKING tax cut when I voted for Billy Boy the first time and it is the same reason I withheld my vote from him the 2nd time.

A promise is a promise.

Now my FUCKING tax cut is caught in the quicksand of huge spending well worthy of debate. Why should a PROMISE be dependent on The Big O getting his way? If his spending is necessary, why can it not stand on its own? I say "Bad form Obama!" Just like I said bad form on W and Big Mac with their insistence on Comprehensive Immigration Reform; as a result our borders are as open as ever: our illegal alien cup runnith over.

Politicians attach good ideas and campaign promises to bad or less popular ideas so they can get their foolishness passed to the detriment of the people's long term stability.

These politics, should I get my FUCKING tax cut, only serve to water down the promise The Big O keeps. My FUCKING tax cut would win approval on its own. The Big O's spending cuts would have less of a chance; for conservatives they are too big, for MRs it would depend upon how much Libs are willing to pay for their votes and for Queen Pelosi they are not nearly enough.

Either way, I want my FUCKING tax cut even though I would rather have it cleanly.

>The problem with you economist is that you study your trade >to a fault. This is why Greenspan is surprised that his
>policy didn't work and why not much is working now. It is
>just another area that government put it's hands in that
>became less efficient and more expensive. Creating an
>artificial environment comes with unintended, and in this
>case, inexplicable consequences. This one just might break
>us.

Got news for ya, I ain't an economist. (If I were, would I need to look things up on Wikipedia? (;-)) And I agree that their "studied to a fault" theories are often garbage. But this ain't "just a theory," it has happened over and over in the real world. And you're at least partly right about trust. But in a liquidity trap, the thing undermining the bankers' trust is not the possibility that the money is gonna become "worthless paper," it's that there won't be enough of it. The reason it's called a "trap" is that the usual, "responsible" ways of trying to fix things tend to drive you in further, and thus deplete trust even more. *Not* spending money sure ain't gonna restore anybody's trust. (Including yours, because you'll just be saying "See? They pulled back my f***ing tax cut again! I told you you can't trust them!")

>If his spending is necessary, why can it not stand on its
>own?

Economically, it could, or at least, it would help on its own, and the tax cuts would help on their own. But given the deflationary environment of a liquidity trap, one doesn't undermine the other, so why not do both? Linking them is indeed a political choice, but what's so wrong with getting a few Republicans vote for spending, or more than a few Democrats to vote for tax cuts? Sounds a helluva lot more like "reaching across the aisle" than anything W ever did, even as governor. How better to restore trust than to get everyone on the same page doing what's best to help us all out?

dr jay3:12PMJan 6th 2009

***Got news for ya, I ain't an economist. (If I were, would I need to look things up on Wikipedia? (;-)) And I agree that their "studied to a fault" theories are often garbage. But this ain't "just a theory," it has happened over and over in the real world. And you're at least partly right about trust. But in a liquidity trap, the thing undermining the bankers' trust is not the possibility that the money is gonna become "worthless paper," it's that there won't be enough of it. The reason it's called a "trap" is that the usual, "responsible" ways of trying to fix things tend to drive you in further, and thus deplete trust even more.
________________________

Got news for ya. Big whoop! You spoke with the authority of an economist. Would you have to look stuff up? I don't know. What do doctors do when they disappear for about 10 minutes?

Besides, your statements betray you. The wiki article you sent me to was defining liquidity traps and used defaults as an example and then said clearly that it caused the 1929 crash. Here is the full quote:

"John Maynard Keynes is usually seen as the inventor of the liquidity-trap theory. In his view, financial actors fear the possibility of suffering capital losses on non-money assets and thus hold money (liquid assets) instead. For example, the fear of default on loans can inhibit lenders from lending except to extremely credit-worthy customers. These fears are most likely after a financial crisis such as that associated with the Stock Market Crash of 1929."

Based on how wiki talks about it, IT IS just a theory. In this country you have only cited 2 instances: 1929 and now.





***Not* spending money sure ain't gonna restore anybody's trust. (Including yours, because you'll just be saying "See? They pulled back my f***ing tax cut again! I told you you can't trust them!")
_________________________

Sorry, but my FUCKING tax cut IS NOT "spending". It is MY FUCKING MONEY. How FUCKING liberal of you. So let me rephrase: If The Big O doesn't let me keep more of MY MONEY like he promised then I will not trust him. Don't be fooled by the "How are you going to pay for it" "liquidity trap" of a standard that Liberals demanded of W's tax cuts; they didn't really mean it.

The other $500 billion IS SPENDING and I haven't heard how The Big O or the Libs are going to pay for that either, other than deficit spending, which will only make the long term problem worse.





***Economically, it could, or at least, it would help on its own, and the tax cuts would help on their own. But given the deflationary environment of a liquidity trap, one doesn't undermine the other, so why not do both? Linking them is indeed a political choice, but what's so wrong with getting a few Republicans vote for spending, or more than a few Democrats to vote for tax cuts? Sounds a helluva lot more like "reaching across the aisle" than anything W ever did, even as governor. How better to restore trust than to get everyone on the same page doing what's best to help us all out?
______________________________

I have no problem doing both SEPARATELY. Putting them together gets dems to vote for one to get the other and vice versa. My FUCKING tax cut should be universally supported since both candidates supported it in the election. It is the REAL SPENDING, the extra $500 billion, that Pelosi knows will bring on spirited debate; it may make it through on its own, but with far less bipartisan support and you know it, dr jay. The only reason The Big O put them together (at the Queen's bequest, I am sure) is because the tax-cut would allow them to mislabel the spending as a bipartisan venture when it is anything but.