No Stimulus. No Bailouts

It is written. It's not codified. But, hey, it's not green either.

I am not sure about brevity being a particular virtue.
Brevity is a virtue. The US Constitution doesn't waste time with ruffles and flurishes, just dives straight into essentials and lays out the framework for a successful government. The simplicity is the strength.
 
Wasn't it a conservative Republican that set the first round of Bailouts into action?

yes but this isn't political its the national and economic security of your country for once this is something above politics.

i am not saying any of the programs were conducted efficiently or even correctly but the mere fact that the government stood behind the banks and facilitated the unwinding of the credit default swaps saved them from a death spiral that can't be comprehended.

AIG alone had 1.6 trillion in derivative securities that would have defaulted without uncle sam back stopping it. These securities were not just held by wallstreet fat cats they where held by the entire economy... (money market funds, bond funds, bank reserves, pension funds, and personal 401k's and ira's) These investments represent people's retirements and America's national wealth to have them fall apart is to lose confidence in the entire banking system and have an unstopable run on the entire financial system

if it was obama or bush or my ass in charge no reasonable leader can let banks as important to the economy as bear stearns, aig and citi bank just arbitrarily fail... no safety net in the world could stop the calamity that would follow
 
Yep. Even if it delayed that inevitable it's still better because at least we have time to absorb and repair between collapses.

No Stimulus or Bailouts, well it won't be road warrior or Zimbabwe, but it might be Argentina.
 
No you dont. You live in a country that came into existance 200 years ago, for one. And the 13th century constitutional order was one of complete feudalism. One cant even say the 13th century is the state of a gradual, institiutional development, as there were such interruption as the ECW inbetween.
If you're referring to the Union with Ireland, that's hardly the birth of a completely new country. You'd have better luck arguing for the merger of England and Scotland in 1707, but even then it wasn't a completely new country per-se.

The Union with Ireland was incorporating territory, it's closer to adding a state to the Union than creating a new country. Given that metric, if we were to apply it fairly to all sides, means the US only came into existence 50 years ago.
 
yes but this isn't political its the national and economic security of your country for once this is something above politics.

i am not saying any of the programs were conducted efficiently or even correctly but the mere fact that the government stood behind the banks and facilitated the unwinding of the credit default swaps saved them from a death spiral that can't be comprehended.

AIG alone had 1.6 trillion in derivative securities that would have defaulted without uncle sam back stopping it. These securities were not just held by wallstreet fat cats they where held by the entire economy... (money market funds, bond funds, bank reserves, pension funds, and personal 401k's and ira's) These investments represent people's retirements and America's national wealth to have them fall apart is to lose confidence in the entire banking system and have an unstopable run on the entire financial system

if it was obama or bush or my ass in charge no reasonable leader can let banks as important to the economy as bear stearns, aig and citi bank just arbitrarily fail... no safety net in the world could stop the calamity that would follow
I agree, I was responding to the thing about "being better if a conservative was in charge" (I know it was said in Jest). We're basically making the same general point ;).
 
A stimulus is inevitable, though the form could have changed. If the the neoliberals are still as strong (i.e. conservatives still have power), then a stimulus would have come in the form of reduced taxes and tax credits for businesses. Maybe a conservative Congress would have been able to repeal the estate/death tax. A liberal/Keynsian response would be more along the lines of what we have seen, though less emphasis on taxes and more on automatic stabilizers and infrastrure. Stimulus is inevitable in the face of economic crisis, only the form changes.

We could see less bailouts or even no bailouts. I believe the appointment of Ben Bernanke is the key point. As a leading scholar on the Great Depression, he knew that deflation has to be avoided at all costs. Failing banks depress asset prices and stifle lending. Bernanke, just as much Paulson, got TARP passed. It was his push for unconventional measures to fight the crisis that ultimately led to the bailouts.

The easiest way to stop many of the bailouts (and really start a depression...) is to make a strict inflation hawk who doesn't consider deflation a worry the Fed chairman. Marty Feldstein was a name thrown around back in 2006 for the seat and he's pretty conservative. He definitely would not have followed the same measures Bernanke did. It is quite possible that a Fed under Feldstein would have been too concerned about possible inflation to expand the monetary base enough or give out the necessary money to keep the big banks afloat. Hell, the Feldstein Fed might not have cut the funds rate all the way to 0-.25%!

I think a quick synopsis of "no bailouts" would look something like this:

- Banks' balance sheets stay deep in the red from the toxic assets they are forced to keep.
- Even more of the mortgage back securities are sold to keep the banks solvent.
- Banks and mutual funds start to buckle under their own debt, leading to far more collapses.
- FDIC is actually called in to reimburse clients of the FDIC insured banks and eventually goes bankrupt itself.
- Congress takes too long to give more money to the FDIC and more banks go under as people feel less secure in the financial sector.
- The stock market, already weakened throughout the entire financial crisis, crashes when the FDIC announced its bankruptcy.
- Historic low stock prices, combined with even lower housing prices, lead to real deflation, which the Fed under inflation hawks is unprepared to fight.
- The Fed finally cuts the fed funds rate to under 1%, but has no more room to manouver.
- Consistent deflation, faling asset prices, a major credit crunch, a depressed stock market, and rampant unemployment make the Great Recession look more like a second Great Depression.

A shackled Fed would have less of an impact on the market, necessitating a larger role for the legislature and fiscal policy. Public works programs, a la the New Deal, would have to be passed if monetary policy fails.
 

Susano

Banned
If you're referring to the Union with Ireland, that's hardly the birth of a completely new country. You'd have better luck arguing for the merger of England and Scotland in 1707, but even then it wasn't a completely new country per-se.
In both cases, officially (that is constitutionally, what we talk about!) a new counrty was founded.

The Union with Ireland was incorporating territory, it's closer to adding a state to the Union than creating a new country.
As said, officially and constitutionally its something very else (wheeras the USA does have constitutional provisions to simply add new state under the existing constitutional framework). But interesting point you raise - so the Irish were absolutely justified in their complaints of foreign rule?
 
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