News Can the market alone fix the economy?

[mheslep]

Sorry mheslep,

If you want to play childish gotcha games I don't have time.

This forum has standards against blatant misinformation, observing them is not a gotcha game.

 

[Skyhunter]

This forum has standards against blatant misinformation, observing them is not a gotcha game.

Look first you accuse me of not providing a link. I provided it, you missed it. Your mistake not mine.

Nanosolar's production cost is $0.30 a watt and they are currently producing and selling panels to utility companies for ~$1.00 a watt. Someone as familiar with Nanosolar as you claim to be would know that.

My point is that the technology for solar power competitive with coal is available today. Granted the product is only being sold to strategic partners and utility companies, but it is here now, it is proven, and it works. Scaling up production is the next logical step. This is an area of investment that will put people to work and help green the economy.

 

[mheslep]

Electricity, mainly coal based, for industrial customers costs ~$0.05/kWh now. Large industrial sized solar photovoltaic power costs four times that, $0.21/kWh, in the sun belt, and more than double that cost again outside the sun belt ($0.47 or 9x). The main reason for this is the variability of received solar radiation. A sun belt area receives only 5.5 hours of peak equivalent sun hours per day, so that ~four watts of peak PV panel must be installed to keep up with one watt of fossil or nuclear power that generates 24/7. Furthermore, the pricing listed here does not include the cost of any storage devices to collect most of the PV generated power during the day and then release it at night. Thus without subsidies photovoltaic power is not yet comparable to coal, though it is slowly closing the gap.
http://www.solarbuzz.com/SolarIndices.htm

 

[russ_watters]

Look first you accuse me of not providing a link. I provided it, you missed it. Your mistake not mine.

Nanosolar's production cost is $0.30 a watt and they are currently producing and selling panels to utility companies for ~$1.00 a watt. Someone as familiar with Nanosolar as you claim to be would know that.

mshlep is right: you are making very specific claims and they need to be specifically referenced. You need to actually quote the source (and it needs to be reliable), not just link the company website.

Solar power is a holy grail and as a result, the internet - and the world - is rife with solar power scams. We see press releases and claims from companies who claim they have made an advancement and are just about ready to bring it to market -- and it never happens. So this extrordinary claim requires explicit verification.

Please understand: I'm not saying such a thing is impossible, just that we need to be careful with extrordinary claims.

This skepticism is not uncommon: http://en.wikipedia.org/wiki/Nanosolar#Discussion

 

[WhoWee]

Looking at the situation from where we were, or where we thought we were, versus now where we are, something needs fixing.

The government needs to adopt more effective, and fair, oversight.


Importantly, the entire (US and global) economy needs to be deleveraged, and people need to live within their means.

Low interest rates, a robust stock market and a housing boom all pulled cash from savings accounts...http://financial-education.com/2008/06/07/what-is-behind-the-decline-in-us-savings-rates/

It became apparent in 2005...we talked about it in 2006
http://www.msnbc.msn.com/id/11098797/

Now we want to save, but don't...http://articles.moneycentral.msn.com/Investing/Extra/USSavingsRateFallsToZero.aspx

And yet here we are (as a country)...with a current deficit of roughly 10% of the economy...$1.2 Trillion

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/06/AR2009010602849.html

...plus, Obama says we'll need to borrow about $775 Brillion now to stimulate the economy

http://news.yahoo.com/s/ap/20090107/ap_on_go_pr_wh/obama

...and over a $Trillion per year for years to come.

http://www.huffingtonpost.com/2009/01/06/obama-trillion-dollar-def_n_155710.html


I hope inflation isn't the governments answer to increasing US savings rates.

 

[mgb_phys]

You know the economy is in trouble when you can't tell the difference between the WSJ and The Onion http://online.wsj.com/article/SB123120525879656021.html

 

[mheslep]

...plus, Obama says we'll need to borrow about $775 Trillion now to stimulate the economy

That's billion not trillion.

 

[Astronuc]

...and over a $Trillion per year for years to come.

This is what really worries me. And Obama made some statement about exerting some discipline on federal spending.

We already pay more than $400 billion in interest on the debt. It looks like we'll end up paying more than $500 billion or $600 billion . . . . ! Does that make sense?

Perhaps the government will just print up $1 or 2 Trillion.


I was wondering this morning that AIG is supposed to repay their load of billions. Aren't the current bailouts suppose to be repaid with interest as well?

 

[Skyhunter]

I understand Russ.

And thanks for the Wiki link.

I am fairly confident that they disclosed their production costs to the http://www.nanosolar.com/blog3/?p=138"

Either way we will know this year, since that is when their consumer product will become available.

My underlying point is still valid. We are at the technological and economical tipping point. The size and scale of rebuilding our energy infrastructure is such that the solar industry alone could provide 5 million new jobs in the next two years Especially if you include all of the support such an industry would require in raw materials, transportation, logistics, sales, installation, and maintenance. Then there is the secondary jobs as the 5 million spend their money for goods and services.

That is only one area and it probably won't employ 5 million people in two years because there are many other areas that will see explosive growth. As we shut down or retrofit coal plants to sequester carbon. The http://www.eprida.com/eprida_flash.php4" of turning coal emissions into fertilizer is another industry that will see growth as we seriously address the climate crisis. DOE conducted the tests and their findings are consistent with the flash presentation.


Bottom line is the way Obama is going to fix the economy is by creating jobs. And he will create jobs by smart investment in sustainable energy technologies and infrastructure.

 

[WhoWee]

That's billion not trillion.

...typo...sorry

 

[mgb_phys]

That's billion not trillion

...typo...sorry

I think that explains how the whole thing happened?

 

[misgfool]

Obama's public construction plan seems like a correct remedy to the US situation. If people/corporations save for example 25% of income, from tax cuts/rebates of 100$ only 75$ go back to the economy. In contrast public investments spend 100$ straight away. If invested in energy infrastructure, it reduces the dependence on foreing energy imports and lays a foundation for cheap energy to manufacturing industry in the beginning of the next growth cycle as the railroads did to transportation. Second good move is to print money and get the inflation going so that banks have no choice but to start lending and people consuming.

 

[WhoWee]

This is what really worries me. And Obama made some statement about exerting some discipline on federal spending.

We already pay more than $400 billion in interest on the debt. It looks like we'll end up paying more than $500 billion or $600 billion . . . . ! Does that make sense?

Perhaps the government will just print up $1 or 2 Trillion.

I was wondering this morning that AIG is supposed to repay their load of billions. Aren't the current bailouts suppose to be repaid with interest as well?

This report shows $451Billion in 2008...up from $214Billion in 1988.
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

There's an old adage..."you can't borrow your way out of debt"...more true than ever now. Maybe the adage should be changed to "borrow or print" for the government?



By the way...Putin says Merry (Orthodox) Christmas!

Is anyone following the Russia/Ukraine/Europe natural gas situation
http://www.latimes.com/news/printedition/asection/la-fg-gazprom4-2009jan04,0,563599.story

http://news.yahoo.com/s/ap/20090107/ap_on_bi_ge/eu_ukraine_russia_gas

This may impact oil prices as well.
http://www.silobreaker.com/DocumentReader.aspx?Item=5_944660501

Total chaos...not good.

More than anything right now...we need stability, leadership, certainty, clarity and discipline.

 

[misgfool]

This report shows $451Billion in 2008...up from $214Billion in 1988.
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

There's an old adage..."you can't borrow your way out of debt"...more true than ever now. Maybe the adage should be changed to "borrow or print" for the government?

The (nominal) GDP in 1988 was $5.1 trillion and in 2006 $13.2 trillion. So debt costs as percentage of GDP are at about the same level.

http://en.wikipedia.org/wiki/Economic_history_of_the_United_States

It's interesting that the dollar sign is put before the figure when it's spelled after it.

 

[mheslep]

The (nominal) GDP in 1988 was $5.1 trillion and in 2006 $13.2 trillion. So debt costs as percentage of GDP are at about the same level...

Gross debt as a percentage of GDP has increased substantially since 1988:
1988: 51.9%
2007: 65.5%
2009: 69.3% (estimated)
http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf , table 7.1
also see
http://upload.wikimedia.org/wikipedia/en/thumb/3/3b/USDebt.png/350px-USDebt.png

 

[russ_watters]

I understand Russ.

And thanks for the Wiki link.

I am fairly confident that they disclosed their production costs to the http://www.nanosolar.com/blog3/?p=138"

Perhaps they did, perhaps they didn't - perhaps they lied, perhaps they were overconfident. None of that is relevant here: that statement of yours is completely useless because we don't know what they said, much less if it was true!

Either way we will know this year, since that is when their consumer product will become available.

We'll know if it is true, we won't know if it isn't. That's how these scams work.

My underlying point is still valid. We are at the technological and economical tipping point.

Well, it seems to me that that point requires evidence and what you provided, if true, would have been that evidence. Since you are unable to provide evidence, your point is therefore not valid, or rather, not verified: Maybe we are at a tipping point and maybe we aren't. We just plain don't have any evidence to suggest that we are. And given a situation where we have no evidence of an extrordinary event, it is prudent not to assume that the extrordinary event has happened.

The size and scale of rebuilding our energy infrastructure is such that the solar industry alone could provide 5 million new jobs in the next two years Especially if you include all of the support such an industry would require in raw materials, transportation, logistics, sales, installation, and maintenance. Then there is the secondary jobs as the 5 million spend their money for goods and services.

That is absolutely true. My concern, however, is that we'll spend a couple of trillion dollars over the next 10 years and end up with essentially nothing to show for it. This is a serious concern.

If, instead, we spend a couple of trillion dollars over the next 10 years (and spend it well) on nuclear power plants, at the end of those 10 years, we'll be about ready to start up 250 new nuclear reactors (at a pessimistic $8 billion apiece), roughly doubling our nuclear capacity and allowing us to shut roughly half of our high-polluting coal capacity.

If the goal is to create jobs, fine, we can just start mailing out checks for people to do anything, but if the goal is for that money to actually benefit society (in addition to creating jobs), we should do something we know will benefit society instead of something we hope will benefit society. This isn't a $10 billion research grant we're talking about (where if it doesn't pan out, it doesn't hurt us much) - a couple of trillion dollars spent incorrectly can have a devistating effect on the economy.

Bottom line is the way Obama is going to fix the economy is by creating jobs.

He's going to spend money to create jobs, yes. Whether that fixes the economy or not is debateable.

And he will create jobs by smart investment in sustainable energy technologies and infrastructure.

We shall see. So far, it does not appear that that is the case.

 

[WhoWee]

If your brother owned a restaurant and was struggling, you wouldn't go to the bank for a $500 or $1,000 loan so that you could take your family to the restaurant for dinner(s) and therefore stimulate your brother's restaurant...would you? I wouldn't.

This is basically how the "tax cut" will work...we just don't have to pay it back now...our relatives will pay for it later.

Russ is correct. We absolutely must have substantial long term returns on ANY amount of borrowed funds injected into the economy...especially when the amounts are estimated in the $Trillions.

Unfortunately, Obama doesn't seem likely to agree to tripling the number of the nuclear facilities anytime soon. http://www.newsweek.com/id/170348

I'm looking for his quote from around lunchtime today...he mentioned something about creating jobs installing insulation in government buildings to conserve energy and lower government utility costs...if anyone can find it, please post.

 

[WhoWee]

Here we go...Obama plans to conserve energy and create green jobs.

http://www.guardian.co.uk/business/feedarticle/8209973

 

[DrClapeyron]

I believe the best thing the US could do now to fix its economy is to sell as many weapons as it can to the Middle East, step up oil exploration of South America and perhaps most of all take away all duties, excise taxes, quotas, etc on imported automobiles like VW. I'll bet that gets the Big Three in gear.

 

[WhoWee]

I believe the best thing the US could do now to fix its economy is to sell as many weapons as it can to the Middle East, step up oil exploration of South America and perhaps most of all take away all duties, excise taxes, quotas, etc on imported automobiles like VW. I'll bet that gets the Big Three in gear.

Create a little chaos and shake things up?

I like the idea of making all home improvements and auto repairs tax deductible.

 

[misgfool]

Gross debt as a percentage of GDP has increased substantially since 1988:
1988: 51.9%
2007: 65.5%
2009: 69.3% (estimated)
http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf , table 7.1
also see
http://upload.wikimedia.org/wikipedia/en/thumb/3/3b/USDebt.png/350px-USDebt.png

So US has cheaper loans than before.

 

[WhoWee]

The Germans and French think our form of Capitalism is perverted and immoral...looking forward to changes under Obama's reign...

http://www.dw-world.de/dw/article/0,,3930542,00.html

 

[WhoWee]

Obama sounds like he's still on the campaign trail...only with scare tactics.

http://news.yahoo.com/s/ap/20090108/ap_on_go_pr_wh/obama_economy

 

[DrClapeyron]

Create a little chaos and shake things up?

1. Stablize the situation in the Middle East to insure that no country is defensless against any possible aggresors (Israel, Egypt, Iran).

2. Increase oil flow from neighbouring countries to mitigate issues which may arise half way around the world.

3. Give an incentive to automakers and autounions to clean up their act.

 

[WhoWee]

1. Stablize the situation in the Middle East to insure that no country is defensless against any possible aggresors (Israel, Egypt, Iran).

2. Increase oil flow from neighbouring countries to mitigate issues which may arise half way around the world.

3. Give an incentive to automakers and autounions to clean up their act.

You want to sell arms to Iran?

 

[mgb_phys]

You want to sell arms to Iran?

Worked last time - but I thought the new president was supposed to have NEW ideas?

 

[turbo]

Worked last time - but I thought the new president was supposed to have NEW ideas?

This is brand new! This time, we sell them Stingers, and don't let Israel, arms-dealers, etc, take a cut, AND we keep the money instead of funding right-wing insurgents in central America. See? Totally different!

 

[DrClapeyron]

The Chinese have begun selling weapons to Zimbabwe, supporting Mugabe's regime, and it is only a matter of time before Sudan, Tanzania and others begin similar purchases. There is a new cold war on the horizon: China vs the EU. The US needs to support its ally, China.

 

[jal]

I don't think Obama is using scare tactics. It's quite clear that he thinks that if nothing was done we would be in a worst situation than the depression. Many agree with that evaluation.
jal
-----
inserted:
http://change.gov/newsroom/blog/
Remarks of President-Elect Barack Obama
As Prepared for Delivery
American Recovery and Reinvestment
Thursday, January 8, 2009

 

[WhoWee]

Another Cold War, while quite possible, would be ridiculous...(here's an understatement) providing guns to angry people is a mistake.

The hearts and minds philosophy can work either way...one choice is kindness and helping/(re-)building OR the alternative is hate and killing/suppression. Fast profits are realized on the hate side (guns)...long term growth and prosperity is possible on the kindness side (food/clothing/medicine and homes).

When a society collapses into chaos (often from outside influence/armament...I doubt if modern day combatants would choose throw rocks at each other or sword fight)...the hate formula is often applied then followed with the kindness/rebuilding...a la the Iraq experience. War is fast and expensive...rebuilding is long term and expensive.

The problem will always be...who should make these decisions...what is the standard...will it ever not be short term profit motivated?

Yes, China is a trade partner of the US. They have cheap labor, resources and a desire to manufacture anything that will create jobs. They often work in conditions that are not permitted in the US. Many US workers would not work in Chinese plant conditions...such as no heat. Accordingly, US retailers and manufacturers alike have enjoyed lower manufacturing costs for over a decade...so have consumers. We shouldn't be angry that China has taken US manufacturing jobs...but we are...same with the trade deficit...we can't have it both ways.

So much for the way things are and how business as usual works.

If we're really going to fix this economy, we need to chart a new course with long term thinking. The Chinese plan in 200+ year terms...not 90 days (or 4 year political cycles) as is the Western practice.

Also, the answer isn't to re-tool to compete with China in the production of trinkets sold at WalMart...there are a few exceptions of course.

The REAL priorities of everyone on the planet should be long term survival...food, sanitation, shelter, power(gas and electric...not absolute), health care, conservation, financial/personal comfort and security...not war and destruction.

This is the real opportunity.

We have vast Oceans to protect and utilize, unlimited wind, solar and tidal energy, abundant natural gas, coal, oil and mineral resources, fertile soil, advanced technology resources and a continuing space exploration/development program.

The last thing we should be doing is trying to make a living as gun dealers and creating/fueling more conflicts.

Instead, we should sell under-developed countries (there's always money for guns) tractors and farm equipment and construction supplies and teach them to be self sufficient and productive. If you loan someone money to buy food...they eat the food and they are hungry again tomorrow. If you provide them the necessary tools and guidance to grow their own...or make something to earn a profit to buy their own...they will (if they choose not to help themselves...then let them starve).

In the US, everyone should have a job or own a small business. Nobody able to work should be unemployed or on welfare...there is no excuse with the type of "stimulus" ($Trillions) being proposed. If the proposed plan won't create full/substantial (long term) employment...it should be restructured.

Even the prison system in the US COULD be productive...if structured properly. Most prisoners are able-bodied and capable of working. More of the re-rehabilitation strategy should be job training and then job placement as a condition of release. For the long term inmates/lifers...there are plenty of outdoors projects (other than picking up trash or digging ditches) which can be monitored by guards...they need something to do and something to live for...other than gang activity or burdening the legal system with law suits. There is nothing wrong with a prisoner run farm system to feed themselves (so we don't have to feed them) and earn a profit to help their families on the outside.

I mention the prison system because it's the ultimate form of government care, supervision and management. To take a liberty...a captive welfare state. Again, hearts and minds...don't expect positive results from a negative experience.

People who have nothing to eat, nothing to live for, no hope and no means of survival are going to be hateful. Well fed, healthy, productive people...(people who have something to lose)...tend not to want to kill each other or remove themselves from comfort.

Anyone who is under the government care now will naturally cling to it's comfort...but if offered a better alternative...will choose to be self reliant...there is a lot of opportunity for everyone to grow, be prosperous and productive.

 

[mheslep]

The Chinese have begun selling weapons to Zimbabwe, supporting Mugabe's regime, and it is only a matter of time before Sudan, Tanzania and others begin similar purchases. ...

Do you have a particularly good source for that? Just curious.

 

[WhoWee]

The majority of US taxpayers have made investment decisions of some type in their lives...insurance, health care, consumer credit, utility choices, home mortgage, auto finance, savings accounts, checking accounts, money markets, CD's, 401 K's, pension funds, bonds and the stock market...some have experienced collection activity, bankruptcy and foreclosure. Overall, the US population has investment experience.

Many US citizens have also made small business investments and are accustomed to business risk.

The most experienced investors have engaged in private placements and IPO's.

Because of the nature of our economy (Capitalism) we have an educated and investment "aware" population.

If you think of our Govt as a corporation, Obama is the CEO, Congress is the Board, the various agencies are the management...and we are the shareholders...they serve us...and the Court protects our shareholder rights.

If you think of the proposed Obama stimulus package of (up to) $850Billion...as a private placement...it's the largest investment decision we (as citizens) have ever experienced.

With a population of 300 million people...the amount per person (based on $850B) proposed is $2,833...for every man, woman and child in the US ($19,833 for my household). This is on top of the $750Billion bank bailout which is already allocated at $2,500 per person ($17,500 for my household). My projected share is $37,333 (so far)...and I didn't even get a disclosure document (nervous humor).

My point is this. If you want me to invest $37,333 I want the best return on investment possible. Don't tell me you're going to use a shotgun approach and use the money where it's needed...or distribute the funds evenly to employees (or back to shareholders - sounds like a Ponzi) and let them spend it as they see fit...that's irresponsible money management. Don't tell me my investment is going to lose $trillions (MY household share of $5Trillion would be $116,667) more for years to come with no stop loss guarantee...come on...be serious!

The management in charge of this investment needs to prioritize and disclose Source and Use based on long term returns and growth...just like any other business plan.

It's time for the government to learn and utilize basic and proven money management and investment strategies...we need to hold Washington ACCOUNTABLE!

 

[mheslep]

...With a population of 300 million people...the amount per person (based on $850B) proposed is $2,833...for every man, woman and child in the US ($19,833 for my household). This is on top of the $750Billion bank bailout which is already allocated at $2,500 per person ($17,500 for my household). My projected share is $37,333 (so far)...and I didn't even get a disclosure document (nervous humor)...

When looking at long term US debt, I don't think it is reasonable to stack the expected stimulus package on top of the TARP financial money as if it were all the same. It is likely that most of the TARP money (bank bailout) will directly come back to the treasury, as it can mostly be viewed simply as deposits the government made into various banks. Treasury has an account number for those funds, as it were. The non-loan stimulus money, on the other hand, by definition can never come back to the treasury directly from the party to which it was given. The same goes for most all of the rest of government spending - social security, medicare, defense - once Treasury writes the check its gone.

The bank bailout has other problems, namely inviting more of the same in the future through moral hazard, and short term debt, but in my view it is not the same color of money as the stimulus.

 

[WhoWee]

I agree the two programs are separate and different.

The problem with TARP is perceived accountability and transparency. The funds were supposedly intended to un-freeze credit markets...not pay dividends to support share prices and fund acquisitions.

The jury is still out on TARP.

I think we can all agree the stimulus plan needs to be planned and executed better than TARP.

 

[DrClapeyron]

Do you have a particularly good source for that? Just curious.

Here you go.

Weapons bound to Zimbabwe via South Africa:
http://news.bbc.co.uk/1/hi/world/africa/7354428.stm

A Chinese ship carrying arms destined for Zimbabwe has been forced to leave the South African port of Durban four days after failing to unload.

Earlier, a South African judge ruled that the cargo of rocket-propelled grenades, mortar rounds and ammunition could not be transported overland.

Weapons bound to Sudan:
http://www.stoparmstosudan.org/
http://news.bbc.co.uk/2/hi/asia-pacific/7258059.stm

China has defended its sale of weapons to Sudan, amid growing criticism of its alleged failure to help resolve the humanitarian crisis in Darfur.

http://news.bbc.co.uk/2/hi/africa/7503428.stm

The BBC has found the first evidence that China is currently helping Sudan's government militarily in Darfur.

The Panorama TV programme tracked down Chinese army lorries in the Sudanese province that came from a batch exported from China to Sudan in 2005.

Kenya and Somalia pirates: http://muslimsinkenya.wordpress.com/2008/12/01/kenya-involved-in-arming-south-sudan-to-fight-for-secession/

The Somali pirates who recently hijacked a ship carrying Russian-made arms and tanks claimed that the weapons were bound for South Sudan. But the Kenyan government was adamant that they had been sent to Kenya, not South Sudan. The BBC World Service announced on October 7 that it had found evidence that the equipment had been intended for South Sudan, as claimed by the pirates. Analysts recalled that Russian-made military equipment had been passed to the Sudanese region through Kenya once before, pointing out that it strongly backs the West’s strategy to break up Africa’s largest country. The West’s current effort to turn Darfur (in West Sudan) into yet another supposedly independent country underlines how determined that strategy is.

I think something may be brewing on the eastern coast of Africa involving the "[URL Zimbabwe, Sudan and guns.[/URL] Of course these are small arms, sorry if I mislead anyone into thinking that the Chinese were selling jets, tanks, etc.

 

[mheslep]

Here you go.

Weapons bound to Zimbabwe via South Africa:
http://news.bbc.co.uk/1/hi/world/africa/7354428.stm
Weapons bound to Sudan:
http://www.stoparmstosudan.org/
http://news.bbc.co.uk/2/hi/asia-pacific/7258059.stm
http://news.bbc.co.uk/2/hi/africa/7503428.stm
Kenya and Somalia pirates: http://muslimsinkenya.wordpress.com/2008/12/01/kenya-involved-in-arming-south-sudan-to-fight-for-secession/

I think something may be brewing on the eastern coast of Africa involving the "[URL Zimbabwe, Sudan and guns.[/URL] Of course these are small arms, sorry if I mislead anyone into thinking that the Chinese were selling jets, tanks, etc.

Thanks.
Sure the Chinese deals with Sudan are famous, continuous, and large. This Zimbabwe -China arms relationship appears to consist of only this one ship event (?) of ~$1m in arms, and even then it appears the ship was eventually turned back from its S.African berth.
http://www.guardian.co.uk/world/2008/apr/24/zimbabwe.china?gusrc=rss&feed=networkfront

 

[Astronuc]

China is investing big time in Africa, e.g. in the copper industry in Zambia, and Zambia is a northern neighbor with Zimbabwe.

http://www.cadfund.com/en/Column.asp?ColumnId=21

Africa holds a tremendous amount of natural resources, particularly in places like Dem. Rep. of Congo, which has gold, diamonds, copper, col-tan, . . . . and West Africa with it's oil. China needs access to cheap raw materials, much like the US.

In Africa, China Trade Brings Growth, Unease
Asian Giant's Appetite for Raw Materials, Markets Has Some Questioning Its Impact on Continent
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/12/AR2006061201506.html

. . . .
And as in much of Africa, Ncube said, China's reach into Zimbabwe's economy is equally pervasive: The roads are filled with Chinese buses, the markets with Chinese goods, and Chinese-made planes are in the skies. Chinese companies are major investors in mining and telecommunications. The government in Beijing, meanwhile, is a crucial backer of Zimbabwe's authoritarian president, Robert Mugabe.
. . . .

 

[jal]

. . . .
And as in much of Africa, Ncube said, China's reach into Zimbabwe's economy is equally pervasive: The roads are filled with Chinese buses, the markets with Chinese goods, and Chinese-made planes are in the skies. Chinese companies are major investors in mining and telecommunications. The government in Beijing, meanwhile, is a crucial backer of Zimbabwe's authoritarian president, Robert Mugabe.
. . . .

If you got it flaunt it (t-bills) before the US goes bankrupt.
jal

 

[WhoWee]

I don't think this is fair to Obama...

http://news.yahoo.com/s/ap/20090111/ap_on_go_pr_wh/us_israel

they actually had the nerve to say...he'll have to decide whether or not to continue this "covert" operation...AFTER they've reported on it.

 

[Astronuc]

The stimulus package passed the house split on party lines. It's headed for the senate.

Yet - GOP governors press Congress to pass stimulus bill
http://news.yahoo.com/s/ap/20090131/ap_on_go_co/stimulus_gop_governors

NEW YORK – Most Republican governors have broken with their GOP colleagues in Congress and are pushing for passage of President Barack Obama's economic aid plan that would send billions to states for education, public works and health care.

Their state treasuries drained by the financial crisis, governors would welcome the money from Capitol Hill, where GOP lawmakers are more skeptical of Obama's spending priorities.

The 2008 GOP vice presidential nominee, Alaska Gov. Sarah Palin, planned to meet in Washington this weekend with Senate Republican leader Mitch McConnell of Kentucky and other senators to press for her state's share of the package.

Florida Gov. Charlie Crist worked the phones last week with members of his state's congressional delegation, including House Republicans. Vermont Gov. Jim Douglas, the Republican vice chairman of the National Governors Association, planned to be in Washington on Monday to urge the Senate to approve the plan.

"As the executive of a state experiencing budget challenges, Gov. Douglas has a different perspective on the situation than congressional Republicans," said Douglas' deputy chief of staff, Dennise Casey.

Not a single Republican voted with the majority last week when the House approved Obama's $819 billion combination of tax cuts and new spending. The president's goal is to create or preserve 3 million to 4 million jobs.

Republicans led by House Minority Leader John Boehner of Ohio complained that the plan is laden with pet projects and will not yield the jobs or stimulate the economy in the way Obama has promised.

The measure faces GOP opposition in the Senate, where it will be up for a vote in the week ahead.

. . . .

Interestingly - GOP senator tops list for commerce post
http://news.yahoo.com/s/ap/20090131/ap_on_go_ca_st_pe/gregg_commerce

WASHINGTON – President Barack Obama appeared Saturday to be leaning toward appointing a third Republican to his Cabinet, a move that would place the fiscally conservative Sen. Judd Gregg at the head of the Commerce Department even though a liberal Democrat was initially tapped for the post.
. . . .

 

[mheslep]

After following the debate for some time now on the "http://www.rules.house.gov/111/LegText/111_hr1_text.pdf" , that doubt this bill will do anything economically other than raise the federal debt by almost a trillion dollars.

At this point, the least that should be done is to follow former Clinton budget director Alice Rivlin's http://www.washingtonpost.com/wp-dyn/content/article/2009/01/27/AR2009012703655.html?hpid=topnews" to rip out all the baloney and leave only the true stimulus spending. The baloney can then go through a normal legislative process and be judged on its long term merits.

...Rivlin, who was President Bill Clinton's budget director, suggested splitting the plan, implementing its immediate stimulus components now and taking more time to plan the longer-term transformative spending to make sure it is done right. "Such a long-term investment program should not be put together hastily and lumped in with the anti-recession package. The elements of the investment program must be carefully planned and will not create many jobs right away," said Rivlin, a fellow at the Brookings Institution. The risk, she said, is that "money will be wasted because the investment elements were not carefully crafted."

 

[Astronuc]

After following the debate for some time now on the "http://www.rules.house.gov/111/LegText/111_hr1_text.pdf" , that doubt this bill will do anything economically other than raise the federal debt by almost a trillion dollars.

It might be correct to say that many/most of economists agree on the need for a stimulus, but I think there is great disagreement on the details. I would hope the administration and congressional leaders are consider all points of view - from liberal to centrist to conservative.

I would hope that the president would meet with executives and management of investment/financial/banking institutions and figure out the best way to stimulate the economy. In theory, the financial institutions have the analysts who can best analyze the conomic or various sectors and figure out how best to stimulate each sector. Renewable energy and more efficient products should seem worthy of priority, and infrastructure projects are another.

If people don't have jobs, and earn money, then they cannot buy goods and services, and those people (and companies) producing goods and providing services are unnecessary. About two-thirds of the economy is based on direct consumption.

Some interesting insight in - Our Love Affair With Malls Is on the Rocks
http://www.nytimes.com/2009/02/01/business/01mall.html

. . . . Here, ladies and gentlemen, is the crux of the problem: We are reliably informed that whatever part of the economic crisis can’t be pinned on Wall Street — or on mortgage-related financial insanity — can be pinned on consumers who overspent. But personal consumption amounts to some 70 percent of the American economy. So if we don’t spend, we don’t recover. Fiscal health isn’t possible until money is again sloshing into cash registers, including those at this mall and every other retailer.
. . . .

Maybe this is the way to regulate the economy -
American Express Kept a (Very) Watchful Eye on Charges
http://www.nytimes.com/2009/01/31/your-money/credit-and-debit-cards/31money.html

. . . .

In recent months, American Express has gone far beyond simply checking your credit score and making sure you pay on time. The company has been looking at home prices in your area, the type of mortgage lender you’re using and whether small-business card customers work in an industry under siege. It has also been looking at how you spend your money, searching for patterns or similarities to other customers who have trouble paying their bills.

In some instances, if it didn’t like what it was seeing, the company has cut customer credit lines. It laid out this logic in letters that infuriated many of the cardholders who received them. “Other customers who have used their card at establishments where you recently shopped,” one of those letters said, “have a poor repayment history with American Express.”

It sure sounded as if American Express had developed a blacklist of merchants patronized by troubled cardholders. But late this week, American Express told me that wasn’t the case. The company said it had also decided to stop using what it has called “spending patterns” as a criteria in its credit line reductions.

“The letters were wrong to imply we were looking at specific merchants,” said Susan Korchak, a company spokeswoman. The company uses hundreds of data points in making its decisions, she said, adding that the main factor in determining credit lines “has always been and still is the overall level of debt, relative to the card member’s financial resources.”
. . . .

So what is the best way to create jobs?

What is best way to stimulate the economy?

What should be do about health care? We can't afford $2+ trillion in health care annually.

What should we do about education?

What about taxes? Retirement?

How do we pay for it all, i.e. how does society live within its means?

 

[WhoWee]

Perhaps the real solution would be to focus the spending in a series of smaller initiatives...more manageable in size and scope.

If you want to "hit the nail on the head"...first you need a nail...then you have to aim and strike hard...if you hit a whole package of nails with a single blow...it doesn't work.

 

[WhoWee]

Has anyone seen any allocation for the Small Business Administration or other small business funding/support programs?

 

[Astronuc]

Has anyone seen any allocation for the Small Business Administration or other small business funding/support programs?

On page 77 of 647 of http://www.rules.house.gov/111/LegText/111_hr1_text.pdf (cited by mheslep)
TITLE VI—FINANCIAL SERVICES AND GENERAL GOVERNMENT
Subtitle B—Small Business
SMALL BUSINESS ADMINISTRATION
BUSINESS LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFERS OF FUNDS)
For the cost of direct loans and loan guarantees authorized by sections 6202 through 6205 of this Act,
$426,000,000 (about 0.05% ):

Small Business gets loans (77-103).

This bill looks like an ominbus spending bill.

DIVISION A—APPROPRIATION PROVISIONS
TITLE I—GENERAL PROVISIONS
TITLE II—AGRICULTURE, NUTRITION, AND RURAL DEVELOPMENT
TITLE III—COMMERCE, JUSTICE, AND SCIENCE
TITLE IV—DEFENSE
TITLE V—ENERGY AND WATER
TITLE VI—FINANCIAL SERVICES AND GENERAL GOVERNMENT
TITLE VII—HOMELAND SECURITY
TITLE VIII—INTERIOR AND ENVIRONMENT
TITLE IX—LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION
TITLE X—MILITARY CONSTRUCTION AND VETERANS AFFAIRS
TITLE XI—DEPARTMENT OF STATE
TITLE XII—TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT
TITLE XIII—STATE FISCAL STABILIZATION FUND

DIVISION B—OTHER PROVISIONS
TITLE I—TAX PROVISIONS
TITLE II—ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES
TITLE III—HEALTH INSURANCE ASSISTANCE FOR THE UNEMPLOYED
TITLE IV—HEALTH INFORMATION TECHNOLOGY
TITLE V—MEDICAID PROVISIONS
TITLE VI—BROADBAND COMMUNICATIONS
TITLE VII—ENERGY

So I wonder how much will go to lobbyist fees.

 

[mheslep]

Astronuc's name 'omnibus spending bill' is far more accurate. The Omnibus Spending Bill of 2009 also includes some nice Depression Era retro think. Per the http://www.washingtonpost.com/wp-dyn/content/article/2009/01/28/AR2009012804002.html?hpid=$":

The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package.

A Senate version, yet to be acted upon, goes further, requiring, with few exceptions, that all stimulus-funded projects use only American-made equipment and goods.

Smoot Hawley anybody? I read elsewhere that the buy US clauses raise the costs of infrastructure projects 25%. These guys not only don't see the cliff, they're mashing down pedal.

 

[Esoteric]

JPM economist claims Obama's stimulus plan will add 4 points to GDP Growth

Obama’s Billions May Add 4 Points to GDP Growth: Chart of Day

http://www.bloomberg.com/apps/news?pid=20601109&sid=aAXFCkjQWhrA&refer=home

By David Wilson

Feb. 3 (Bloomberg) -- President Barack Obama’s plan for stimulating the economy would add about 4 percentage points to second- and third-quarter growth, according to Michael Feroli, a JPMorgan Chase & Co. economist.

“Tax reductions, which should find their way into consumer spending relatively quickly,” would lift gross domestic product even before most of the planned spending kicks in, Feroli wrote in a report today.

The CHART OF THE DAY shows the amount of “fiscal support” that the proposal would give to GDP through next year, according to JPMorgan. The chart shows tax breaks, transfer payments such as extended jobless benefits, and assistance to state and local governments apart from direct federal spending.

About $140 billion would be offered to households, businesses and municipal governments in this year’s second and third quarters, the report said. The amounts shown in the chart are adjusted for the potential economic effects of each of the plan’s main components.

Obama’s proposal would have little effect on the pace of GDP growth in the fourth quarter and next year, the report said. At that point, “Gradually rising spending on infrastructure and other construction projects is offset by fading support from tax measures and aid to states and localities,” Feroli wrote.

Sixty percent of the federal government’s own spending would occur in next year’s fourth quarter or later, he wrote, citing estimates from the Congressional Budget Office.

 

[mgb_phys]

Obama’s Billions May Add 4 Points to GDP Growth

I think that tells you all you need to know about the validity of GDP as a measure of economic goodness.

 

[mheslep]

The American Recovery and Reinvestment Act of 2009

Sen Colburn has posted a list on his website of items he considers wasteful and non-stimulus.
http://coburn.senate.gov/public/index.cfm?FuseAction=LatestNews.PressReleases&ContentRecord_id=3d97fd6d-802a-23ad-4656-8435b17a3a0d

• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Dept. of Energy defunded last year because the project was inefficient
• A $246 million tax break for Hollywood movie producers to buy motion picture film
• $650 million for the digital television (DTV) converter box coupon program
• $88 million for the Coast Guard to design a new polar icebreaker (arctic ship)
• $448 million for constructing the Dept. of Homeland Security headquarters
• $248 million for furniture at the new Dept. of Homeland Security headquarters
• $600 million to buy hybrid vehicles for federal employees
• $400 million for the CDC to screen and prevent STD’s
• $1.4 billion for a rural waste disposal programs
• $150 million for Smithsonian museum facilities
• $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion
• $75 million for “smoking cessation activities”
• $200 million for public computer centers at community colleges
• $75 million for salaries of employees at the FBI
• $25 million for tribal alcohol and substance abuse reduction
• $10 million to inspect canals in urban areas
• $6 billion to turn federal buildings into “green” buildings
• $500 million for state and local fire stations
• $650 million for wildland fire management on Forest Service lands
• $150 million for Smithsonian museum facilities
• $1.2 billion for “youth activities,” including youth summer job programs
• $88 million for renovating the headquarters of the Public Health Service
• $412 million for CDC buildings and property
• $500 million for building and repairing NIH facilities in Bethesda, MD
• $160 million for “paid volunteers” at the Corporation for National and Community Service
• $5.5 million for “energy efficiency initiatives” at the VA “National Cemetery Administration”
• $850 million for Amtrak
• $100 million for reducing the hazard of lead-based paint
• $75M to construct a new “security training” facility for State Dept Security officers when they can be trained at existing facilities of other agencies.
• $110 million to the Farm Service Agency to upgrade computer systems
• $200 million in funding for the lease of alternative energy vehicles for use on military installations.
• State Medicaid Bailout: $87.7 billion Through 3 different mechanisms, the bill would provide additional federal funds to state Medicaid programs over the next 3 years. This is nearly $70 billion more than the governors asked President Obama for in December, and should be a loan to be repaid by the states.

Some of these are clearly egregious, they have no business in a so called stimulus bill that is supposed to be about job creation in a recession. Subsidy for Holywood movie producers to buy film? (That one was ripped out today). Smoking cessation? However, some of these on his list do seem intended to create jobs, even if they are otherwise debatable. That is, unless they require too much time to start up, or have an existing / redundant alternative already in place, it appears they should qualify as job creators.
-$2B. Futuregen is a big construction project for clean coal.
-$1.4B. Rural waste disposal. Sounds like a program to buy more trucks, build landfills.
-$6B federal green buildings. This is an upgrade to federal buildings that should eventually pay off and create lots of construction jobs. Its not additional office space, which the government has in large excess.

 

[mheslep]

I think that tells you all you need to know about the validity of GDP as a measure of economic goodness.

What is 'economic goodness'?