36 1 min 13 yrs

I thought this cartoon rather aptly sums up Obama’s big idea. The debt mountain being hailed by the lickspittle media as visionary and refreshing will have impacts on generations to come. If it were a Republican President doing this, he would be damned. But when it is the Light Worker, why it’s just wonderful. It’s hard to decide which is worse; a radical left President or a sycophantic left wing media but  when they are combined…!

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36 thoughts on “OBAMA’S BIG IDEA!

  1. ‘ If it were a Republican President doing this, he would be damned.’

    hah! It is republican Presidents who mired America in debt to begin with.

  2. Guba,

    And the response is to treble it? Yes, it takes a Dem to come up with that level of logic.

  3. David,

    Obama has no realistic choice, he has inherited this disaster from Bush. The economy will collapse without a serious cash injection. He has two choices: do nothing (also called lowering taxes) and leave the country fall apart or save the country and saddle it with enormous debt. As long, as Reaganomics is not tried out again for the next 60 years, things should be alright.

  4. The economy will collapse without a serious cash injection.

    Rubbish. Utter rubbish. The economy collapsed. The recession is the recovery.

    Good grief. The economy collapsing is the debt bubble collapsing. No-one can re-inflate it, even if ‘more consumer debt’ is – somehow – recovery.

    We are where we are because of consumer and government debt.

    The only help that politicians can possibly give is to cut taxes and spending, to leave as much wealth in the private economy as possible because recovery con only come from the private economy.

    They cannot conceive of this because economic recovery inevitably must come with the state retreating from our lives.

  5. ‘Rubbish. Utter rubbish. The economy collapsed.’

    hah! You ain’t seen nothing yet. The recession is not the recovery, by definition; whether there will be a recovery is not automatic. The banks need to start lending again and people need to start spending again.

    If the banks collapse, in this present monetary system, how do you suggest that these two things will happen?

    ‘The only help that politicians can possibly give is to cut taxes and spending’

    How would that save the banks and increase the money supply?

    ‘o leave as much wealth in the private economy as possible because recovery con only come from the private economy. ‘

    How can this happen, if the banks aren’t lending?! Remember, we DO NOT have a gold-standard money supply (whether you like it or not), we have a ‘money as debt’ money supply.

  6. GUBA –

    Governments cannot create wealth. Wealth does not roll off the end of a printing press.

    Wealth is capital. Wealth is savings.

    Recovery – genuine, sustainable economic recovery can only come from savings and a reconstruction of the capital base.

    No, this does not include worthless fiat money created from thin air. It was creating money and spending it all up that has got us here. We blew a load of it on assets and inflated their values to insane levels. We know it’s madness, we did it for decades, and here we are.

    You know that. You do because we all had those "how far can house prices go?" conversations. Well, we blew it all, there’s none left and those assets are now deflating to realistic levels.

    This is recovery.

    Sustainable economies must be built on our savings, on a tangible capital base. How can we build that when government is taxing it all from us? Inflating away the value of the currency?

    How can we do that when government creates still the illusory wealth of fiat money, tips it all into the economy and diverts scarce resources to projects as useful as digging holes in the road?

    More than ever our finite capital must go to useful, productive ventures but DC and Westminster are diverting a load of worthless printed money and a load of taxes to nonsensical, bureaucratic schemes that won’t produce any wealth at all.

    And what do all these hole diggers and builders of bridges to nowhere do when all this fiat money dries up?

    How does pouring worthless fiat money into anyone’s pocket to keep on buying Chinese made tat equate to economic recovery?

    Recovery can only happen by building private capital in the private economy. Anything the government does to hinder that hinders recovery.

  7. Pete, i agree with you on the fiat money, by the way, but that is the system we have now. We could do nothing and leave the present system collapse and then build up a stable money supply from the bottom up. That would, however, lead to financial ruin for decades.

    It would be better for us to salvage the present economy and, then, ease ourselves into a change in the monetary system.

    In the economy we now have, money is created as debt. An economy cannot grow without an increase in personnel debt. It is not physically possible. Economic growth (increased production and spending) can only happen if the banks are creating more money. That is the reality of the situation; i wish it were not; but it is.

    Obama has to save the banks, make sure they lend again and inject cash into the economy. tax cuts will make no difference if the banks do not start lending again, how can it? The only way to save this mess is to get more in debt or shift the burden from the public to the Government. It is the only way to solve the financial crisis. It will, of course, be short-term. The better way would be to change the monetary system.

  8. So basically, gubanomics is best described as "if you’re up to your neck in debt, borrow more". Of course, gubanomics wouldn’t say ‘borrow’: it would say ‘invest’ meaning, to quantitively ease oneself into terminal economic collapse.

    The banks must fold in order to ensure that sound banking comes through. There is no other way.

  9. GUBA –

    We could do nothing and leave the present system collapse and then build up a stable money supply from the bottom up. That would, however, lead to financial ruin for decades.

    Not at all. We’d have short, sharp pain and come out of it very quickly.

    The UK entered the Depression pretty much with the USA. FDR did what he did and sustained the depression. The British government was far more hands off and we came out of it soon after.

    Obama is now prolonging the pain.

    It would be better for us to salvage the present economy and, then, ease ourselves into a change in the monetary system.

    Impossible with the current Enemy Class. A sustainable (let’s say gold) system restricts the ability of governments and banks to restrict the money supply and manipulate the currency. It would be such a revolution that a political revolution would be required first.

    Economic growth (increased production and spending) can only happen if the banks are creating more money.

    That’s not growth, that’s debt. Remember, the money that banks create is inherently worthless, just paper that is good for exchange until we realise it’s just worthless paper.

    Genuine and sustainable growth must be based on lending agianst savings. We must have the savings before the lending. If not, what are the banks creating and lending but fiat money?

    And that is how we got here.

    Obama has to save the banks, make sure they lend again and inject cash into the economy.

    How can he without unimaginable confiscation of wealth from the private economy, wealth that is needed in the private economy for growth?

    Look, only a few headline banks are bust. The great majority are still functioning ok. Did the world end when Lehman Bros went south, or did the sun still rise in the morning?

    Something to ponder – I read last night that the govt/fed/banking cartel is to bail out Citicorp yet again with tens of billions more of looted dollars.

    The piece mentioned that one of the primary shareholders in Citicorp is Prince Abdul Kaboom Whatever of Saudi Arabia.

    Now I’m no conspiracy theorist, but does the foreign prince standing to lose a whole chunk of investment capital make a bail out on the American taxpayers’ tab more or less likely?

    If you believe it would sway a decision where the Kerplunknick Bank of Hicksville would be allowed to go under, then the answer is ‘yes’.

    By ‘saving the banks’ Brown and Obama are merely transferring junk from the banks to us. It’s still junk. Let them go under and let the many other survivors pick up the assets.

    tax cuts will make no difference if the banks do not start lending again, how can it?

    Because we will have more of our own money to save (stimulating lending) and spend on those things that we want.

    How can central planners direct our resources better? Other countries have tried that, most of them are known as ‘the third world’.

  10. ‘Look, only a few headline banks are bust. The great majority are still functioning ok. Did the world end when Lehman Bros went south, or did the sun still rise in the morning?’

    The banking system would have completely collapsed were it not for the bailout.

    You are right, our money and, therefore our wealth which is measured by it, is worthless. If the economy collapses, all of your wealth becomes worthless, because our money supply is completely unstable.

    Economic growth cannot happen without increasing indebtedness. In order for the money supply to increase, banks need to make more loans. Because the banks only create the principle of the loan and not the interest, this becomes self-enforcing.

    Our economy is completely dependent on the banking system continuing to lend; if it stops, the economy will collapse. If we do nothing, it will not be a short recession, at all. The banks would collapse, of that there is no doubt, and economic growth would become impossible.

    How could it be short if the banking system collapses? How do you propose the public (with their lower taxes) could stimulate economic growth without the possibility of getting reasonable loans?

    I don’t like this system anymore than you do, but it is what we’ve got.

  11. How could it be short if the banking system collapses?

    The banking system will not collapse.

    Recovery will come quickly because we will continue to get up and go to work, to save, to spend and to invest.

    Free societies are dynamic. We will continue to interact productively as humans always do.

    It’s a tribute to the astonishingly malevolent power of government that not even mother nature can stall human advancement in the same way. Plague and pestilence is as nothing to socialist economics.

    Look, the problem is the debt, it must be eradicated. Your politicians stealing from you to buy the debt to lump onto you is not ‘economic recovery’.

    Let the debtors take the the hit, then we carry on.

  12. ‘The banking system will not collapse.’

    It has. The Government has had to buy it.

    ‘Recovery will come quickly because we will continue to get up and go to work, to save, to spend and to invest. ‘

    If there is no lending, their is no investment; there is no capital; there is no work; there is no spending. All of this has to be done with money and it cannot happen without a proper banking system.

    ‘Plague and pestilence is as nothing to socialist economics.’

    The fractional-reserve banking system has nothing to do with socialism.

    ‘Look, the problem is the debt, it must be eradicated.’

    Debt cannot be eradicated. Money is created as debt; economic growth can ONLY occur with increased bank lending. That is the basis of the business-cycle. Economic growth increases along with debt, then the economy collapses when the debt becomes too great and the banks seize up. Then the process begins again. It’s not a particularly good system and the Government should try and lessen the dips.

    ‘Let the debtors take the the hit, then we carry on.’

    If they can’t or don’t pay it, then we have to pay it, otherwise the banking system collapses and so does the economy.

  13. GUBA –

    Instability is not an inherent feature of the business cycle. It is government intervention in and manipulation of money supply that causes instability.

    If there is no lending, their is no investment

    How can there be lending without an adequate capital base? What you are advocating is yet more fiat money creation and yet more debt – precisely what got us where we are.

    Now, how can the debts be be met if capital is sucked from the economy?

    If debts cannot be met (many will never be) then they must be written off.

    We do seem to be going round in circles now.

    I have a solution – you need to read up on Austrian economics.

  14. ‘Instability is not an inherent feature of the business cycle.’

    ??? It’s called a cycle for a reason.

    ‘How can there be lending without an adequate capital base?’

    There can only be lending if the banks have money and the people money to pay it back.

    ‘If debts cannot be met (many will never be) then they must be written off.’

    ha, if only it were that easy. Every action has an equal and opposite reaction.

    ‘;I have a solution – you need to read up on Austrian economics’

    I have – it’s shite.

    You explain to me, how can we create economic growth without the banks lending money?

  15. GUBA –

    I’ll try one more time, then it’s time for some tantric boozing.

    There can only be lending if the banks have money and the people money to pay it back.

    Unless the lending is against actual savings, deposits, tangible capital, then you do not have lending, you have the creation of debt and inherently worthless fiat money.

    Lending capital can only be against capital. If the loan is not against real wealth, it is debt creation.

    This is the practice that lies at the heart of the debt bubble and, unless governments come to understand this, we are stuffed because they’ll go on and on doing again all those things which caused the bubble.

    You explain to me, how can we create economic growth without the banks lending money?

    By working, earning, saving and spending our own slowly and steadily building capital accumulation. Corporates wouldn’t like it, but stuff corporates.

    Finite – but real – resources must be directed by our own needs to where they’ll be most productive. Any other way is madness.

    Growth wouldn’t be spectactular because sensible, sound money economics doesn’t allow for illusory bubbles to inflate.

    We line up again very roughly along political divides, with professional republicans and conservatives of course standing by the big-government, big-tax, big-tax Left Wing.

    The irony is that that this block contains many of the same real and pretendy environmentalists who cannot let a day go by without lecturing the rest of us on the need for sustainable lifestyles, the prudent use of resources, on the need to recycle resources, on not using more resources than we need, ad-bloody-infinitum.

    Yet when it comes to economics, they morph instantly into the most wasteful spendthrifts around.

    Do they think ‘capital’ is not finite and limited?

    Do they think think the sustainability concept does not apply to finance?

    How do these principles magickly no longer apply to capital, savings and investment?

  16. Guba, have a search for ‘fractional reserve banking’. That is the system and that is why the system doesn’t work.

  17. ‘Unless the lending is against actual savings, deposits, tangible capital, then you do not have lending, you have the creation of debt and inherently worthless fiat money.’

    I know that, but that’s not how it works. You do know that, don’t you? The problem with your arguments is that they do not apply to this system. Money is created as debt by the banking system. In order for the economy to grow, we need to become more in debt. That is why we have this ‘boom and bust’ cycle. In the long-run it’s unsustainable.

    Obama, therefore, has no choice but to prop up the banks and loan more money, otherwise the economy will collapse.

    Your arguments seem to be in favor of changing the monetary system itself, but they do not apply to the present system. In a gold-standard backed money supply, the present banking crisis could not have materialized, but your arguments for non-intervention would be disastrous in the system that we actually have.

    I don’t know any environmentalist who supports the present monetary system.

    ‘How do these principles magickly no longer apply to capital, savings and investment?’

    Of course, they SHOULD apply, but they do not. We have to sort out this crisis first, then discuss changing the money system. Obama is doing the only thing that he can.

  18. ‘Guba, have a search for ‘fractional reserve banking’. That is the system and that is why the system doesn’t work.’

    I know, but the problem is that that is the system that is in place. Obama has to ensure that the economy does not collapse; then we can discuss changing it.

  19. What is qoing to be the incentive for people to work, if their earnings are looted by the goverment and what’s left is inflated currency? We’re stuffed for a long time to come.

  20. ‘What is qoing to be the incentive for people to work, if their earnings are looted by the government and what’s left is inflated currency?’

    The incentive will be to make more money as it always is. The bottom line is that the banks have to start lending and people have to start spending, quickly.

    Taxes are not just taken out of the economy, they are invested back in and increase economic growth. Most people are happy paying taxes as it can benefit society and provide jobs.

    Far better to have inflation then deflation and economic collapse!

    ‘We’re stuffed for a long time to come.’

    Well, if the stimulus works and the Government has the gall to nationalize the banks, then things will not be as bad as they could be. America’s national debt will be huge, but economic growth should recover. Higher income tax should be introduced to help pay off the debt. It’s far better to have a Government, particularly as big as the USA, saddled with debt then its citizens.

  21. Guba if you really believe taxes are an investment back into the community than you really are a misguided soul

  22. the economy can be fixed with a couple of simple things 1) get rid of way to means 2)cut corporate tax to 10% and 3)cut capitail gains to zero, 4)dril here drill now

    then the marxist could even keep his spending scheme and we would be in the black

  23. ‘The citizens are the ones who have to give the government the funds to pay the debts.’

    I know, but a Government will always be able to pay it back and cannot really go bankrupt. They could pay back the loans over a longer period of time at more favorable terms. If the worst came to the worst, they could always tell China to piss off.

    ‘Guba if you really believe taxes are an investment back into the community than you really are a misguided soul’

    Well, they are. I mean, that is the reality of the situation on planet earth. In order to keep jobs, spending has to increase and if the banks won’t loan to the people, the Government will have to loan the money and give it to the people or spend it themselves.

    The Government also has to ensure that the banks start lending again ASAP.

    ‘1) get rid of way to means 2)cut corporate tax to 10% and 3)cut capitail gains to zero, 4)dril here drill now’

    And leave the banks collapse and not inject cash into the economy? Troll, there is a reason why people – even people from Indiana – elect Democrats when the economy is screwed.

  24. the democrats screwed it up if we had reporters instead of journalists that would be better known and when their done scvrewing us this time it will swing back to the right where it belongs

  25. Troll,

    This economic crisis was always going to come. Economic growth is always followed by increased debt; the money supply can increase in no other way. As long as people can pay back their loans and the backs can keep on lending, there will not be a problem.

    The problem was that people could not pay back their loans and the banks could not lend. How else do you suggest economic growth be restarted?

    Republicans seem to decrease taxes and increase spending as well as loosening regulation. They read some Milton Friedman and think that they’re experts when they haven’t a clue about basic economics. They’ve screwed up so far, from Reagan to Bush, what makes you think they won’t screw it up again?

  26. Guba the banks failed because the government forced them to lend money to people who could never pay it back.

    Capitalism is a bakery there is just not one pie that needs to be divided amongst everyone.

    We can make more and more pies and everyone can have as much as they want.

    That is what capitailism is.

    Your communistic view looks at it as only one pie with to many people getting larger slices leaving none for some.

    thats not how it works

  27. ‘Guba the banks failed because the government forced them to lend money to people who could never pay it back.’

    You see Troll, that isn’t true and i cannot, for the life of me, figure out where you got that from.

    ‘Capitalism is a bakery there is just not one pie that needs to be divided amongst everyone.

    We can make more and more pies and everyone can have as much as they want.’

    If the banks ain’t lending and the customers not paying, how is the baker going to make more boys? What happens when he runs out of pies!!!

    ‘Your communistic view looks at it as only one pie with to many people getting larger slices leaving none for some.’

    Hey! I’m not being communist! I want to give the baker more money to make more pies, then he can pay me back later, i can get a loan and he can’t.

    I wanna give his customers a loan too, so that they will buy more pies. But the deal is, that the baker and villagers have to pay more in taxes to me so that i can pay off the debt.

    You want the baker to stop making pies altogether, how very, very dare you!!

  28. Guba, it’s the Communities Reinvestment Act, passed into law by Clinton which obliged banks to lend money without usual diligence to lenders who did not meet safe criteria (job, income, stability etc.). Bush II tried to reform it but was prevented by Dems (incl. Sen Obama).

  29. Allan,

    "it’s the Communities Reinvestment Act, passed into law by Clinton which obliged banks to lend money without usual diligence to lenders who did not meet safe criteria (job, income, stability etc.)."

    Obvious crap, since banks were doing that all over the world and couldn’t get enough of it. And since they made out like bandits doing it, nobody needed to twist their arms to do it.

    Not only did the CRA not require skipping due diligence, but the CRA certainly didn’t oblige lenders in Ireland, the UK and Spain to lend any money to anyone, but they did anyway.

    The CRA didn’t even apply to all the institutions in the USA that lent money. In fact it was the ones that weren’t regulated by it that made the most and the riskiest loans.

  30. Frank, the bankers in the US saw what was coming, so they shared the risk with others. That’s where the likes of RBS etc enter the play. That is how British banks got stung so heavily: they didn’t check where the money was going to. Sub-prime: says what it means.

  31. Allan, you could get 125% mortgages in the UK.

    The CRA certainly had nothing to do with that.

    The banks could do as they liked, and they did.

  32. Not only did the CRA not require skipping due diligence, but the CRA certainly didn’t oblige lenders in Ireland, the UK and Spain to lend any money to anyone, but they did anyway.

    Have no fear Frank. Such nonsense will reappear ad infinitum ad nauseum. Like similar nonsense on other topics.

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