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Do you believe, as I do, and Ron Paul does, that the way to stimulate the economy is consumer spending?
February 23rd, 2011 | 
Author: Question by Nite Owl, C.A.M.F.: Do you believe, as I do, and Ron Paul does, that the way to stimulate the economy is consumer spending?
Ron Paul’s comments found on his youtube channel, market driven forces need to get America out of this problem.
What also was cool was he said we can’t blame Democrats, but the Republicans who have been in power the last 8 years.
Way to go Ron Paul
Best answer:
Answer by ATTENTION: Testicles That Is All
Yes. And get rid of the Federal Reserve.
Know better? Leave your own answer in the comments!
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No one will listen to him as he doesn’t put out the Rock Star vibe.
Lier, that is capitalism. Don’t let Obama.Pelosi or Reid know you think that way. It is only big government spending, higher taxes, and controls on the wealthy (non-democrat) that will save us from doom and destruction.
That’s so obvious no wonder a political outsider had to say it. I may not agree with a lot Ron Paul says, but he stated the obvious and it is indisputably correct.
Look Nancy Pelosi says we need a dog park in CA and a really cool water slide in LA, and darn it, she is really ………………………..
Yes.
“What also was cool was he said we can’t blame Democrats, but the Republicans who have been in power the last 8 years.”
As much as I like Ron Paul, he’s pissed off at the Republican platform for ousting him in the campaign. That being said, Democrats deserve a hefty amount of blame as well.
Republicans should have pushed harder when trying to regulate fannie/freddy, but just b/c they were unsuccessful, you can’t blame the problem on that. The CRA was bound to fail…economists took notice in ’99. This is everyone’s fault — dem/rep/consumers/banks…all looking for the mighty dollar and in that, they had tunnel vision.
Consumer spending is part of the problem. If people aren’t employed, giving them money will supply a burst for 2 months and then we’re back to square 1.
There’s a fine balance b/n employing people and making sure people are confident enough to spend again…and that requires banks to loosen up the credit lines a little.
Tax cuts and incentives are the way to go.
There may be hope for him after all.
What has happened is that the derivatives market, a shadow economy of insurance “gambling” by investment bankers and brokers has collapsed.
[The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an "event of default" that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.]
http://www.countercurrents.org/brown200908.htm
This has made the Big banks, that small banks depend on for loans to have money to loan you, heavily in debt, insolvent, whatever…they are broke and no matter how much cash you pour in…there is not enough cash in the world to save them.
Obamas plan is to infuse new jobs at the low end and money and tax breaks that are below the reach of these banks (unless you are stupid enough to give it to them) in order to save the “real” economy.
Then the fake derivatives economy, can be allowed to collapse and let the markets sort themselves out.
Infusing money at the bottom will hopefully make the smaller banks stable and allow them to function without the big banks.
Infusing money at the top…just goes into the black hole created by the derivatives collapse.
See: http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/story.aspx?guid={B9E54A5D-4796-4D0D-AC9E-D9124B59D436}&print=true&dist=printTop
We haven’t had Republicans the last eight years we have had Neo Cons.
Ron Paul is the smartest man in Washington. Period!
http://www.campaignforliberty.com/
Here is the video you are talking about!
Its a good one
yes, this is why we need the stimulus package. I am glad that a Dr. understands circulation cause that is what this is, it is about our money circulation. Republcans thought Bush was doing a great job when our money was going over to Iraq & to his buddies which was cutting off our ciculation which is like stopped the blood flow in the body.
In a way. We need small business tax cuts too.
Dr. Paul is the only politician that understands economics. Here’s to a real conservative.
For once I agree with the guy…
How many of these banks are going to go and buy frozen pizzas, watches, jeans, shoes, TV’s, and other consumer goods with their trillion-and-a-half bailouts? How many corporations that get all this money plan to use it to buy tons and tons of products to keep commerce rolling?
No, no… they’ll carry on business as usual. Spend a bit here, pocket a bit here, do a perplexingly stupid thing here, right it off as a loss for tax purposes there, golden parachute there, etc.
The average everyman is the person who keeps the economy rolling. As soon as America realizes that, our problems will get better!
Consumers will not spend if they don’t have the money to spend, period! That is why these stimulus deals don’t work!
Corporations are dealing in out of control profiteering, which takes the extra money out of your pocket and mine and gives it to the wealthy.
Yes that’s exactly what needs to be done. Businesses fire workers because nobody is buying their products, they fail for these same reasons. And the biggest problem is that this stimulus package that, despite the fact that Obama has said is for consumer spending, people will put it in the bank, which as we have seen is a not-so-great idea.
He said blame both parties and the administrations of the last two decades.
Yeah, I posted the video in another question. It is absolutely correct.
No. I was in Britain when Margaret Thatcher tried to stimulate consumer spending. The result was a flood of imports from Asia paid for with borrowed money. A few more retail clerks were employed for a few months, but there was little if any lasting benefit. If America still had a manufacturing base to make consumer products, Ron Paul would be right. That is not the case. The stimulus would be better spent on R&D for the next generation of consumer products and building/upgrading domestic manufacturing plants to produce them.
Of course he’s right. He’s right about the Fed too.
You see, banks are required to have a certain amount of reserves available to borrow from other banks, which is set by the Fed. The interest rate (or federal funds rate) goes up when demand for money is more than is available from other banks that are willing to loan out money. To keep the rate down, the Fed buys bonds from the banks (by writing checks on itself, i.e. counterfeiting), giving them more money to loan out. When the rate is low, that means that the Fed is pumping more and more money into the economy via bonds from these banks. This increase in the money supply is what is called inflation. It isn’t real wealth, it’s just money that is created to keep the banks going in order to lend out to whoever. The bankers, politicians, corporate CEO’s, etc, get the newly created money first, so they spend it before it is circulated through the economy and devalued (windfall). The whole thing is a scam. If we were on a gold standard instead of a fiat standard, the interest rate and reserve requirement would be set naturally by market forces, instead of artificially by a human institution. This interference is also what causes malinvestment.
You can’t spend unless you have an income, and you can’t have an income unless you have a job. ‘Having a job’ is predicated on having ‘work that needs to be done’. Given the fact that the entire infrastructure of early 21st century America is a left over from mid 20th century America and earlier, it stands to reason that as just about everything we rely on to maintain first world status is worn out or on the verge of falling apart. There’s no denying that there’s a lot of work that needs to be done and this work is urgent and demands our immediate attention. Enter the ‘Stimulus’. Given the amount of work that needs to be done and the expense of doing it, ONLY the federal government is capable of getting this long delayed ball rolling. Certainly there’s is some ‘pork’ involved, but even at that the ‘pork’ will maintain a degree of employment and a needed degree of maintenance of both our physical and social infrastructure. At this point the value a ‘holding action’ on employment can’t be discounted. I give ‘pork’ at least one ‘thumbs up’ as it will help to maintain ‘consumer spending as we rebuild. Certainly the ‘private sector’ could do it, but the capital is a ‘great coward’, not likely to leap in without immediate profit in the short run. Government should think longer term…something it hasn’t done until President Obama took the first steps with the ‘Stimulus’. Government ‘can’, and private enterprise ‘won’t’. The ‘Stimulus’ will encourage ‘spending’…..consumer spending won’t encourage a significant ‘stimulus’ as the consumer is tapped out. See what I mean? No kiddin’!