But I watched the whole damn thing, and the 9 minutes on healthcare sealed the deal for Obama.  Real problem, real issue, and McCain's position doesn't make a damn bit of sense, while Obama seems to have it figured out.

Ehh... In the words of the great Captain Tenneile "[They're] both wrong." We don't need more government interference in the health care system ------ we need less.

VA liquor stores have been out for months.

So what is the great commonwealth of Virginia on the state liquor store system?

On the alcohol issue, since such a large portion of the country is probably bombed right now...... has the country likely come to terms with the imminent  economic decline or change in credit availability/lifestyle? Or are we just tired of the whole election thing? I think we need a writeup on the psychology of these events.

I think I'm like the only African-American, Dog, that can go to the projects by his fuckin' self and be good!

VA liquor stores have been out for months.

I read that as "Veterans Affairs" instead of "Virginia" and had a momentary panic.

- derumi (del-me)
"Bobby Fischer? Man, that guy is crazy!" - Mike Tyson

I'd like to see a schism in the Democratic Party, with one half forming a new conservative party, and the other forming a liberal/progressive party, while all the batshit crazies could stay with the Republicans where they belong.

It's my thought as well that when you look at the two major parties, the one more likely to split/collapse is the Democratic Party. However, the most organized, well funded alternative does seem to be coming from the Paulites and the Reform Party drew most strongly from Mid Western Republicans so it's a segment that has been there before.

It is easy to buy small plaster models of what you think life is like.

The Reform folks would probably be pretty comfortable in a conservative spin-off of the Democrats...as long as they didn't call themselves Democrats.  The Paulites can form their own splinter party, because they don't actually fit anywhere: anti-choice, anti-trade, isolationist libertarians?

Netflix sounds awesome. Do they have an entire Zombie category?

I think I'm like the only African-American, Dog, that can go to the projects by his fuckin' self and be good!

Of course they do...all kinds of movies.  It's invaluable.  If it wasn't for Netflix and Google, I wouldn't understand what you say half the time.

Minty fresh

Yeah, obscure quotes FTW........ It's all about society, isn't it?

I think I'm like the only African-American, Dog, that can go to the projects by his fuckin' self and be good!

How philisophical are you?

Now see...I didn't know if that was a line from a movie or not...so I googled it.  Turns out that it's like the biggest question on Cupid.com.

Minty fresh

Cupid.com? Never been.

"It's all about society, isn't it?" ~ A line from one of the more classic internet quizzes of the late 90s early 00s, "What type of a drunk are you?" It should be googleable.

I'm glad you enjoy my obscure referneces. Although I have only written two since, I've made it a rule that any letter to the editor I write must include at least one obscure Big Lebowski or Super Troopers reference.

Apparently they get very few letters that include the term "shenanigans."

I think I'm like the only African-American, Dog, that can go to the projects by his fuckin' self and be good!

If nothing else I love the analogies in this discussion.

I think I'm like the only African-American, Dog, that can go to the projects by his fuckin' self and be good!

...and then we all could have relived the Great Depression!

I know! It's a great thing Paul didn't get the nomination. If he had, we'd probably be facing market devaluations of 50% over a period of months and drops in the range of 5-10% a single day on multiple trading sessions in a row.

Oh wait, we're already there. But by all means, lets continue to spend without abandon or limit. Because that's not at all what got us in this mess.

I think I'm like the only African-American, Dog, that can go to the projects by his fuckin' self and be good!

lets continue to spend without abandon or limit. Because that's not at all what got us in this mess.

Funny thing about that, you're right.  The deficit is a completely different problem from the banking crisis.

Unfortunately we will have to run the deficit up even higher to get out of the current situation.  That's the problem with Republican borrow-and-spend policies, they run up the national debt without producing any real benefit, and that raises resistance to deficit spending when it's really needed.

Of course, it's more than deficit spending that is needed, the money has to be spent where it will do some good.

Back in the day, the dollar was pegged to gold.  As William Jennings Bryan pointed out, this made no sense whatsoever, because the dollar was originally a silver coin, but it was pegged to gold instead of to silver anyhow.  Although this was supposed to stop the dollar from devaluing over time, they kept letting the peg slip so that the dollar was worth less, but in any case it devalued a lot more slowly than it does today.

When there was no central bank, the economy had a very strong boom and bust cycle.  Banks would print their own money, resulting in strong economic growth and inflation, until at some point people would start to question whether the paper money was worth anything and start to withdraw money form the weak banks.  At this point, banks would fail, and there would be more bank runs, and with prices falling people had trouble paying back their loans, and more banks would fail, and eventually we would wind up back where we started, only with a lot of inefficient inflation and deflation and bankruptcies and high interest rates.

Eventually, after the particularly severe Panic of 1907, we resolved to stop this cycle by creating the Federal Reserve, which soon allowed unlimited circulation of bank notes without sending them back to the original banks to be settled for gold or the notes of other banks.  This allowed a huge expansion of the money supply which, when it became obvious that many of these notes from southern banks were worthless, created the Great Depression.

But since the bottom of the Great Depression in 1933, we have never seen a major recession of the type that was common before the creation of the Federal Reserve, and with the exception of the botched response to the oil price shocks of 1973 and 1979, the FED has done its job without huge blunders.

The thing that needs to be understood here is that when people or businesses or even local governments are given an extra dollar, they become more creditworthy and can borrow money, and tend to spend even more than that dollar, and the person they give that money to spends even more.  Without the involvement of the federal government, the economy is inherently unstable.  When times are good the Federal Reserve can actively adjust interest rates to keep growth stable, and having a fiat currency not based on gold makes this easier for the Federal Reserve, but you can't shove interest rates below zero, so as FDR showed us, when zero percent is not low enough, we need fiscal deficit spending to help prevent deflation and its associated growth of real debt burden and bankruptcies.

The flip side to this deficit spending is of course that when the economy recovers, you need to have a strong fiscal surplus, as otherwise you just keep getting further in debt, and we haven't  had these surpluses.  Instead we had "Reganomics" which postulated that if you lowered taxes and made no other changes, the deficit would go down.  This was of course proven dead wrong, but nevertheless became Republican gospel.  In the meantime, large deficits when they weren't needed created a large amount of debt, this debt created unnecessarily high interest rates which retarded growth, and these interest rates attracted foreign capital which pushed up the value of the dollar, and the high dollar created incentives for industry to move overseas, starting the boom in foreign outsourcing of US manufacturing jobs.

McCain's solution to our economic problems is to balance the federal budget in four years, thereby significantly deepening the recession.  Obama at least talked about the need to balance the budget after the crisis was over.

McCain wants to buy up bad mortgages and renegotiate them as was done in the Depression.  This is rather odd since it attempts to attack Obama from the left.  The problem with this is idea that with modern securitization, the owner of the mortgages no longer has the right to negotiate.  This right is handed over to a separate servicing company which may have little desire to work for the benefit of the mortgage owner.  Any effective mortgage intervention policy is going to have to start with a refinancing to get rid of these "toxic" contracts, and not the buying of current securities.

McCain's capital gains tax cut is likely to have very little impact, given that with the stock market collapse, there are little in the way of capital gains to tax.  Similarly, Obama's minor progressive tax redistribution is a standard Democratic proposal without significant effect on our current crisis.

If the economic debate was a boxing match, it was a Boonjumnong boxing match, all holding and shoving and running away and with very, very little in the way of actual punches connecting.  Perhaps that was understandable from Obama, who was up by 8 points going into the final round, and only needed to avoid getting hit by a knockout punch to win, but McCain at least should have pressed the action with more in the way of effective attacks.

I hadn't heard that theory that bogus bank notes were responsible for the Great Depression before, but while looking for some info on it, I ran across this entertaining read among other things (including a paean to Arthur Laffer's genius).

The key to getting out of a recession is not so much deficit spending, but rather where the money is spent.  It needs to be put into the demand side of the economy, that is to say, with people who will spend it.  It's my opinion that Clinton's success in balancing the budget came about because of that sort of budgetary policy.  You could run a huge deficit, but if it all goes to people who already have a lot of money, you aren't going to see any beneficial effects.

The uptick in the second quarter of this year has been attributed to the stimulus checks most of us got.  That's the sort of thing that could produce a quick effect on the economy.

" It's my opinion that Clinton's success in balancing the budget came about because of that sort of budgetary policy.  You could run a huge deficit, but if it all goes to people who already have a lot of money, you aren't going to see any beneficial effects."

Yes, because everybody knows that rich folks just cash out their bank accounts and stuff their mattresses with Benjamins.  With the rich these days, actually spending or investing their money has become so gauche.  I hear they are actually competing with one another to see who can live in the most run down, disease ridden trailer parks - 70s Ford pickups are the new Mercedes.

I'm sorry, I completely forgot how successful trickle-down economics has been.  How could I be so foolish, with this warm yellow stream dripping on my head?

I mean, those credit default swaps that the hedge funds were using all that money for did SO much good for the economy!  Where would we be now without them?

I'm glad you set me straight, I just wasn't thinking.

What do credit default swaps have to do with trickle down economics?

I don't have time to read it right now, but I also found this speech by Bernanke on the Great Depression.  It looks interesting on a quick browse.

"When times are good the Federal Reserve can actively adjust interest rates to keep growth stable, and having a fiat currency not based on gold makes this easier for the Federal Reserve, but you can't shove interest rates below zero, so as FDR showed us, when zero percent is not low enough, we need fiscal deficit spending to help prevent deflation and its associated growth of real debt burden and bankruptcies."

And here I thought it was WWII that brought us out of the Great Depression.  Perhaps you have some evidence of the efficacy of FDRs programs?

"McCain's solution to our economic problems is to balance the federal budget in four years, thereby significantly deepening the recession."

Please, show your math.

here I thought it was WWII that brought us out of the Great Depression.

Yes, it was the mighty juju of blood sacrifice that ended the depression.  The anger of the gods must be appeased!

How, exactly do you think WWII ended the Great Depression?  It was through massive government spending on the war effort, putting everyone back to work building guns and bombs, or going overseas to use those guns and bombs.  If the war had been fought on a balanced budget, it wouldn't have ended the depression.

The depression dragged on despite the many New Deal programs, because of the commitment to a balanced budget that hampered the infusion of needed money into the economy.  It took a war to get the budget hawks to give up their obsession with a balanced budget, an obsession that put the balanced budget ahead of the lives of human beings, an obsession that was relinquished only for the purpose of killing human beings.

Deficits need to be paid down when the economy is strong, and then allowed when the economy is weak, in order to moderate both bubbles and busts.  They are an economic tool, not a sin.  Governments don't operate like households, that can only spend what they take in, because governments have the privilege of actually creating money.

If they go overboard, the money becomes useless, but if the money supply is prudently managed and distributed, it enables the growth and innovation that actually drives an economy.

WWII doesn't prove that deficit spending ends economic depression.  It proves that world girdling wars can end depressions.

world girdling wars

Like...like the War on Terror!

Minty fresh

It proves that world girdling wars can end depressions.

How do they do that?  By the mighty juju of blood sacrifice?

Your premise seems to be that "they just do."  My premise is that there is a mechanism by which they end depression, that is to say, by employing the unemployed, to which you astutely answer "nuh uh!"

"How do they do that?  By the mighty juju of blood sacrifice?"

I would assume the mechanism relies on a massive mobilization of manpower and capital, as I've said in other posts.  This suggests that deficit spending on the scale of that undertaken in WWII can end depressions.  It does not prove that deficit spending on all scales can or will end or forestall a depression.

"Your premise seems to be that "they just do."  My premise is that there is a mechanism by which they end depression, that is to say, by employing the unemployed, to which you astutely answer "nuh uh!""

You seem to read a lot of words in my posts that just aren't there.

You seem to read a lot of words in my posts that just aren't there.

An event like WWII, which was extraordinary in it's ability to mobilize people and capital, proves absolutely nothing about the effects of ordinary deficit spending.

Short version: "nuh uh."

"Short version: "nuh uh.""

Well, at least you've impressed Lou with your "logic".

The economy was halfway out of the depression prior to WWII, and the recession of 1938 followed a cut in government spending in 1937, which reinforces the point that deficit spending is needed in a deflationary recession yet again.  WWII itself was the ultimate in deficit spending, so it reinforces rather than contradicts the point.

The statement about balancing the budget deepening a recession is qualitative and not quantitative.  In any case, with a deficit at 3.2% of GDP prior to the current recession starting, you're talking about his proposal adding about another 3% to the unemployment rate over what it otherwise would be, plus more for the economic stimulus currently underway which he would forgo.

An event like WWII, which was extraordinary in it's ability to mobilize people and capital, proves absolutely nothing about the effects of ordinary deficit spending.

"The statement about balancing the budget deepening a recession is qualitative and not quantitative... you're talking about his proposal adding about another 3% to the unemployment rate over what it otherwise would be"

Fascinating, 3% seems like a quantity to me, a pretty darned specific one at that.  Is there some empirical method I can use to test this claim?

Is there some empirical method I can use to test this claim?

Wait for your unemployment check.  Then wait for it to run out.

WWII itself was the ultimate in deficit spending

Better so say that WWII was the ultimate in well-directed deficit spending, insofar as there isn't a better way to grow an economy than destroying all other alternatives.

That said, I don't think bombing every other industrial economy into oblivion is going to be a practical alternative this time around.

or at least the gold standard

It is easy to buy small plaster models of what you think life is like.

There's this collection of McCain macros and 'shops floating around some of the blogs.

- derumi (del-me)
"Bobby Fischer? Man, that guy is crazy!" - Mike Tyson

This one at least is unphotoshopped, and doesn't show much in the way of improvement.

So long as we're using irrelevant measures to judge his performance, I expect that for most Americans he lost the debate because of his Nixonian blink rate.

McCain's handlers must have told him to get control of his tongue, since he wasn't doing the creepy lizard tongue thing nearly as much in this debate.  Watch almost any footage of him and you'll see him stick the tip of his tongue out, without actually licking his lips.

Maybe he's one of those reptiles who run all the governments.