Wednesday, November 12, 2008

What have we got to lose?

First Read This

Sad part is, That little weasel Reich might be right. But no one is going to like the results. Bushie left Obama a huge s*%$ sandwich and I hope that the poor sap doesn't choke on it.

If the guv'mint starts this kinda spending, the end result will be high inflation if it works (I can live with that) or hyperinflation if it doesn't (which would really suck). Doing nothing would mean a deflationary cycle like the depression and that would really suck.

So, unless I am completely off-base (which happens more frequently than I care to admit), what we are looking at is cranking up the printing presses and hoping for the best. It gives us a chance of getting through this time of suckage without an incredible amount of damage. It might not work and things will really suck, but if it isn't tried, things will really suck anyway.

Kind of reminds of the scene in Butch Cassidy and the Sundance Kid when they were running from the law. The two of them were on a ledge above a raging river and Redford's character (Sundance) wanted to go back and fight rather than jump. When Newman asked why, Sundance said "Because I don't know how to swim". Newman's character (Butch Cassidy) just said "You crazy, the fall will probably kill ya."

5 comments:

cfloersch said...

I have one major argument against the linked article. It was stated that the government spent our way out of the depression.

That is inaccurate. The New Deal spent and spent and spent on infrastructure projects galore yet we remained in the depression.

What eventually pulled us out of the depression was shipping half or more of our unemployed workforce over seas to fight a war. With that done the remaining state side population was put to work building the weapons of war and unemployment was near zero.

Never mind that so many things were rationed during the actual war. This resulted in something that just doesn't happen much. SAVINGS!!!!

Degringolade said...

I tend to agree, but I do feel that the high rate of spending on public works in the Roosevelt Administration did allow jobs and a less severe impact for millions.

I agree that the only thing that pulled us out was the Second World War. But the public works projects in 1932-1936 did help a lot of folks and made the depression less severe.

riverwalker said...

I think we're probably in for some very "lean and mean" times. A lot of downsizing in people's lifestyles because they're going to be forced into the basics of a simpler lifestyle.

RW

Rose said...

There is a major problem with Mr. Reich's reasoning. The government would need to borrow the money for these hugely expensive projects. We already owe more money than we will ever be able to repay, how can he assume that other nations will be stupid enough to keep lending to us?

Degringolade said...

Rose:

That is why I said we are going to eventually have to have a high inflation rate (though hopefully short of hyperinflation). No one will loan us the money, we have to manufacture it from thin air.

Debts will be repaid by the inflated money, folks will make enough to keep fed, and it will give us time to figure out what to do next.

It is the sleazy way of tightening our belts several notches. As you are well aware, sleazy is the way that politicians usually do it.

We have to get by with less and rebuild. It ain't pretty, but it is a way to get the job started.