Wednesday, January 28, 2009
Un. F&%$ing. Believable
Tom Smith
The House stimulus bill. This would be really bad in normal times. In these times, it's very dangerous. I mean a trillion dollars of infrastructure spending would not be a good idea, but it would at least be, well, sincere. This monstrosity heaving itself out of the House is a recipie for an American lost decade and quite possibly worse. At a time like this to take a trillion dollars of borrowed money and just absolutely piss it away on rank pork? What kind of irresponsible low life votes for that? What could you be thinking? Our political system is really broken. We really are Japan, or worse, but instead of construction companies and bent banks we have public sector employees unions, insolvent banks and some weird sort of collective illusion that not only can we spend our way out of this mess, but that it doesn't even matter what we spend it on. And Obama signs anything like this swamp monster, I hereby take back all the nice things I have said about him.
https://rightcoast.typepad.com/rightcoast/2009/01/un-fing-believable-tom-smith-.html
Comments
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Posted by: CJS | Jan 28, 2009 5:32:45 PM
Oh yeah, one more thing: Don't forget that if the "stimulus bill" passes, it will be a combined effect with the monetary policy the Fed is enacting. http://www.nytimes.com/2009/01/29/business/economy/29fed.html?_r=1&hp
Posted by: CJS | Jan 28, 2009 5:39:31 PM
How about the Obama-Limbaugh plan?
http://online.wsj.com/article/SB123318906638926749.html
Posted by: Andrew B | Jan 28, 2009 9:46:56 PM
I don't think the primary risk right now is inflation. In order to get to inflation, the US first has to get to the point where the economy and spending have heated up enough that sellers are comfortable raising prices, and I don't see that happening any time soon. Bear in mind that between the stock market and real estate crashes, trillions of dollars in wealth were wiped out--it'll take a lot of money-printing to get us back even close to where things were. (And inflation wasn't exactly spiraling out of control at the top, either.) Remember--Japan racked up huge deficits under similar circumstances, and still ended up with deflation. Current TIPS yields are high, suggesting that the market is not expecting much inflation either. (Not that TIPS are necessarily a bad investment--personally, I don't expect the deflation that's implicitly priced into them right now.)
A more likely resolution than inflation, I think, is an eventual crash in the dollar, as foreigners finally run out of willingness and ability to soak up the torrent of Treasury debt to prop up their exports. That would be a good thing, boosting exports and cutting the value of all those foreign obligations the US has run up. It'd be mildly inflationary, but under current deflationary conditions, that's also arguably a good thing as well.
If you ask me, times like these, when just about everybody is either panicking like you or staying put, deer-in-the-headlights-style, are just the moment to hedge against mildly optimistic scenarios like the one I described. The stock market's not going anywhere--too many retiring baby-boomers will be trying to cash in over the next few years--but, say, high-quality foreign bonds might not be a bad play against the dollar right now.
Posted by: Dan Simon | Jan 28, 2009 10:14:15 PM
"What kind of irresponsible low life votes for that?"
The same irresponsible low lifes who wanted us to lose a war for their partisan advantage.
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