Mr. Chew is correct about one thing: bond buyers have us by the short and curlies. How we got to this point or how we might find our way out seem to be subjects beyond Mr. Chew's curiosity, but I'll give you a hint: the Gini index has shot up as we've become more and more debt-financed.

@ Mafialligator

If the stimulus worked so well, then how come the economy is still in the tank and getting worse?

I think you'll find I didn't say it worked well, I said it worked as well as anyone could have expected. That's a HUGE difference. If I had a car with basically no transmission, only perfunctory brakes and no oil anywhere in it, and I managed to drive it to the corner store where it finally broke down for good, I would not be able to say it had worked well. It would be completely fair for me to say however that it had worked as well as anyone could have expected, given the condition it was in. As Bob Ghenghiskhan explained, the stimulus package ended up getting cut nearly in half in order to avoid being filibustered in the Senate. Given that the stimulus package was hobbled so, we can say it did about as well as anyone could have expected it to, in preventing a total collapse of the US economy.

@ Mafialligator i expected this response from someone, as it really seems to be the only response proponents of the stimulus have to claims that it didn't work. All in all, the stimulus cost 800 billion dollars in the short term, but the most conservative estimates place it as 1.2 trillion over the course of ten years, with some estimates putting it at 3.27 trillion over ten years. With this stimulus, interest rates at nearly 0%, and the quantitative easing of the Federal Reserve, how much more stimulus is necessary? It's easy to say afterwards that more spending was needed, but the fact is that it failed. Oh, and it cost more than the Iraq War when it was authorized.

http://www.foxnews.com/politics/2010/08/30/cbo-years-iraq-war-cost-stimulus-act/
oh, and this estimation about the stimulus really came true, right?
http://austrianeconomists.typepad.com/.a/6a00d83451eb0069e20120a914bd52970b-pi

@Putin33 the main problem with the austerity plan in the UK is that it is not true austerity, in that spending is lowered ant taxes are raised. the best plan is to end subsidies and loopholes, lower spending, and lower rates, broaden the tax base, and ensure that the spending cuts total more than projected tax revenue.

If you're gullible enough to read Fox News and Austrian Economists you deserve to be misled.

I don't see how the relative cost of the stimulus package and the Iraq War is relevant? Perhaps you can explain the connection, ;cause it's lost on me.

Secondly, I'm not claiming it didn't work. I'm claiming that it did work, to an extent. Things would be so much worse than they are now without it. And yes, more spending would have been needed after the stimulus package, assuming it had worked. Getting out of a recession like this was never going to be cheap and easy.

Being in Michigan, one of the states that always gets hit hardest by recessions/depressions, I'm seeing a lot of signs of things improving. New house construction has started again, a lot of the empty houses near me are getting filled, and places are actually hiring. There's a strip mall near me that was constructed with the bad timing of right when the recession hit and it has been mostly vacant since...but now, it's only one or two storefronts (out of 15) from full. And that's all growth in the last year or so.

I'm not going to look at what may or may not be responsible, but I also know that the feds put a lot of their GM stock back on the market.

@ Mafialligator you just continue to say that more spending was needed without really saying why. The reason for relating the spending to the Iraq War was to demonstrate the magnitude of the stimulus, which is nevertheless claimed to be ineffective. Oh, and if you're gullible enough to listen to the raving liberal Paul Krugman, a link to whom you posted earlier, you deserve to be misled.

It's easy to see how we got into to this mess. The same way Europe did.
Cradle-to-grave fiscally unsustainable social programs caused the mess.
It's easy to see how we get out of the mess.
Ending Cradle-to-grave fiscally unsustainable social programs.

The idiotic visions of the left wing statists who think that Social Security and Medicare can be fixed is sad to watch.

The baby boom began in 1946.
We are in the first year of the baby boomers reaching retirement age and we are running $1 Trillion annual deficits when we are already over $15 Trillion in debt.

The democratic party transformed by FDR and solidified by LBJ is committing suicide right before your eyes.

When the cradle-to-grave social programs end what do the Dems have to offer? Nothing.

The question isn't "if" concerning the cradle-to-grave state it's only when.

I also can't wait for "the people" to rise in revolt.
Look at the pathetic actions of "the people" in Greece.
They break windows, burn cars, shout "Revolution" and go back home because they are the same pathetic unmotivated, lazy, stupid, unambitious slobs who couldn't make it on their own in the first place. Those kind of people make for a poor "Revolution."

The real revolution in America will be at the ballot box as the 18-29 single crowd realizes that the taxation they are paying is going straight to the baby boomers and isn't building American's future in any way shape or form.

The same thing happened in the 1980 election.
2012 is going to see the Democrats get absolutely creamed.
Obama gone.
11-13 of the Democratic Senate seats up for reelection gone.
More gains for the Republicans in the House as well.

These won't be the big spender George W. Bush Republicans either.
There will be the take an axe to the monolithic state Republicans.

The Austrian School economists are the same voodoo practitioners who's supply side nonsense got us into this mess in the first place.

The reason more spending was needed is because in a time of a recession, to make up for lack of spending in the private sector the government needs to step in.

Your comparison to the Iraq war is completely meaningless. Yes, relative to the cost of the Iraq war the stimulus package was large. But really, that doesn't matter to the current discussion in the least. Relative to the stimulus package that was actually needed to rescue the economy, the stimulus package that actually went through was small.

Finally, the difference between what I said about Fox News and the Austrian School of Economics, and Paul Krugman, is that while Krugman has a point of view and he argues in favour of it, Fox News and Austrian School Economists say things that are patently untrue. Fox News regularly and deliberately report stories that are factually untrue, or intentionally planned to misrepresent reality. Austrian school economic practices are exactly what got us into this mess. By comparison nothing Krugman said in that Op-ed was untrue or misleading. It was all factual, and it was all honestly represented.

@Sacreddigits - you are seeing signs of recovery in Michigan? I am in Michigan as well...and yes, the automotive industry has had a turnaround, and this is trickling down into the rest of society. I think you have to give Rick Snyder some credit, though: Business owners in Michigan now have a *greatly* improved business tax climate and with the idiot Granholm gone, we can expect a little stability in the state. Prior to Snyder, you had 8 years of never knowing when and how much you taxes were going to go up....and it's rather hard to make investments into your business, or you bring on more workers, with that sort of financial threat hanging over your head.

Alright, Snyder has improved things for business...but the whole..."We can jackboot your local government if we feel like it" thing scares the HELL out of me. Especially since we've seen he's willing to use it.

Don't connect Austrian economics with Fox News. What got us into this mess was not austrian economics but rather rampant spending in wars and a federal reserve system that causes huge inflation. Andrew Jackson had the sense to end the Federal Reserve. Republican today have the same viewpoint as Democrats on war and the Reserve system. Social Programs can work fine and were not the problem, just a contributing factor to the debt. If we ended both the wars and the reserve system we could have a more balanced budget and social programs could run more smoothly

What scares the hell of me more than an Emergency Financial Manager is idiotic public-sector union thugs that refuse to make concessions while everyone around them is losing their jobs, taking paycuts, etc. But the union thugs - without this law - simply demand that the tax-payers cough up more money so they can continue having extravagant benefit packages that the private sector gave up *long* ago.

Beside, the original EFM law was passed by....ding ding ding....Democrat Jim blanchard....but it had no teeth. What is the point of an EFM if they can't pass laws? Besides, *without* an EFM that can break contracts, the only other option is for a community or school district to declare bancrupcy....at which time their contracts are render null and void by a Judge. So what is the difference? At least in this method, you have someone that *tries* to work with the unions first....such as in Detroit Schools, where the EFM just declared a 10% pay cut...but only AFTER he had *49* meetings with the *8* unions in the Detroit Public Schools. They wouldn't budge....they have hundreds of millions in deficiet....so what is the guy supposed to do???

I mis-spoke...the EFM can't "pass laws"...I meant to say what is the point of an EFM if they can't modify contracts.

Removing local elected officials, though, is scary. I've always believed in more rights for smaller governments.

Huge Inflation Prussian? Please post this inflation numbers you speak of?

Social Programs work fine and aren't a problem?
Then why are social programs 66% of an annual US budget that is $1Trillion in deficit annually but they are not the problem?
What has Greece, Portugal, Spain, Italy, and Ireland in trouble if it isn't their social programs?
Why has government spending in France and Germany increased by 50% as a percentage of GDP in the last five decades if it isn't social programs.
France and Germany aren't exactly busting the bank with defense spending.

So please go educate yourself on the inflation rates in the United States from the beginning of Bernanke's term in 2006 until now.

While you are at it, explain the trillion dollar annual deficit without putting any blame on social programs. Mission Impossible.

JPgredsox +2

Hey, I was right.

" in that spending is lowered ant taxes are raised"

Er...that's exactly what happened. Except the Tories raised regressive taxes like sales tax and the VAT to do it, instead of anything that would harm the rich. It failed miserably, like every other "austerity" program in the middle of a weak recovery. Republicans should not be allowed anywhere near fiscal or tax policy. They're miserable at running the economy. They have a horrible record on job creation throughout history. The Republican record is one of failure and corruption.

I think you're confusing the Republican record with the record of communism, Usefulidiot33. The 50's were pretty good under a Republican president, and so were the 80's.

Well to be fair Reagan and Eisenhower are best known as progress at home and defeat the commie bastards abroad...

Eisenhower presided over two recessions and Reagan had the worst post-war unemployment rate to date. Reagan had a worse jobs record than Carter, by a substantial margin.

I know you rightwingers like to rewrite history and delete everything that is inconvenient for you, but you're abysmal at managing the economy, or businesses, foreign policy or anything for that matter. You have the reverse midas touch.

Says the Stalinist.

I'm not a right-winger and I'm not sure as to the exact facts so I'll stop posting..:

Still crying about Hitler's defeat I see.

I can take issue with Stalin as a person and the fact that Stalinism is a collectivist dogmatist ideology that abolishes the notion of the individual...

Yeah, because saying Eisenhower was a good president makes me a Nazi. I'm so glad people are finally catching on to your bullshit.

I just can't give the Reagan and Eisenhower a clean bill of health either...

No, I answered your stupid and pathetic attempt at a pithy remark with what it deserves. You can't even substantiate your claims, you have to resort to this sort of thing anytime anybody holds you to account.

Invictus: "Blah blah blah North Korea blah blah Stalin blah blah blah typical blah blah".

And I imagine had you been alive during the 1930s and 40s. You, like the rest of your Republican friends, would have been cheering on Hitler and bemoaning our alliance with the Soviet Union (much like Buchanan and the libertarian crowd do today). Like everything else you people rewrote your party's sorry and disgraceful history of collaboration and mollycoddling fascism.