Bernanke urges U.S. Curb the deficit now

Discussion in 'Politics' started by Trinity, Jun 3, 2009.

  1. Trinity

    Trinity New Member

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    Bernanke urges U.S. to start work now to curb budget deficit

    Scary part of the article is...

    And yet:

     
  2. Trinity

    Trinity New Member

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    This is officially Bernanke's CYA action and warning to the Obama administration. That is the only reason to make these comments right now and have it quietly covered in the news. Bernanke will say..."See, I warned you." Offering no recommendations, it's left up to Obama to figure out what to cut, but Bernanke can definitely say he warned:

     
  3. lucky8

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    Bernanke has no room to talk about this issue. Perhaps Obama should tell Bernanke to stop throwing around trillions like it's fucking pennies. The Fed is the REAL problem here. Just wait for the inflation to hit...and it won't be because of an $800 billion stimulus bill. Rather, it will be due to the Fed's not-so-frivolous spending habits, racking up over $12 TRILLION in spending in the matter of the last 5 months...the Fed is actively devaluing our currency folks. The value of the money we owe China should be cut in half within the next 5-10 years, along with your savings. Why doesn't this piss anyone off? This is perhaps the biggest thing to EVER happen to America since the revolution. The consequences of the Fed's spending are going to be enormous. End the Fed.
     
  4. lucky8

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  5. Trinity

    Trinity New Member

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    Bernanke serves at the pleasure of the President. It is under Obama's say so that Bernanke is borrowing from Peter to pay Paul. Bernanke is holding up a house of cards trying to wait on a recovery. Bernanke's straight forward CYA is an indication of the real deal.

    This article is even more forthcoming. Is Bernanke Nudging Obama on Deficits?
     
  6. B_Nick4444

    B_Nick4444 New Member

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    I wonder if they really do want recovery from the recession, as one of its effects would be the return of inflation

    Given that Obama has done nothing to return a solid manufacturing base (read wealth-creating capabilities) to America (aided by "Americans" that continue to buy foreign-made cars and other products), and, given that he has surrounded himself with globalists, is unlikely to do so, when recovery comes, it will mean the private sector competing for investor dollars, which will mean higher interest rates

    Higher interest rates will be seen across the board, as rates will be raised on Treasury obligations to lure investors, (indeed will be necessary to attract investors) -- besides Federal Treasuries, of course, higher rates will have to be charged for loans, mortgages, credit cards, etc

    Given a lack of investor confidence, investment will be directed elsewhere -- with no wealth created here, Obama will have to continue borrowing from foreign nations

    The USA will fit the pattern of so many hopeless undeveloped nations that have been the subject of so many IMF studies, losing its sovereignty to the creditor nations

    The Third-World Presidency of Barack Hussein Obama will be complete
     
    #6 B_Nick4444, Jun 4, 2009
    Last edited: Jun 4, 2009
  7. lucky8

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    Actually, Bernanke doesn't serve at the pleasure of anybody. The Fed is independent with no regulatory controls. The Fed is not borrowing much of the money, money is borrowed through the sale of treasuries, not by the signature of a president. The trillions being spent is being manufactured, not on a printing press this time, but on computers. I'm not very comfortable with the fact the Fed has purchased $9 trillion worth of credit default swaps that, as of now and anytime in the remote future, will have little to no tangible value. Add that to the likelihood that 50-60% of the mortgage backed securities purchased by the Fed will in the end be valued at zero, and our money is suddenly worthless within a decade. Just wait until China stops buying and starts selling...
     
  8. SilverTrain

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    As prices have significantly deflated during this economic downturn, recovery will OF COURSE bring some price inflation.

    Interest rates have been at incredible lows. OF COURSE they will go higher in an economic recovery.

    No wealth being created here/hesitation of foreign investment---this process began ages ago.

    If you're going to cut and paste from propagandists, pick better ones.

    Christ.
     
  9. B_Nick4444

    B_Nick4444 New Member

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    yes indeedy

    point being that neither tweedle dee, nor tweedle dum (i.e., Dems or Repubs, or vice versa) is doing anything to reverse the process

    given that Obama's people are globalists, no "change" is foreseeable, and he has exacerbated the problem with the massive unprecedented deficits he has run up, along with his failure to address chinese currency manipulation, etc., etc., etc.
     
    #9 B_Nick4444, Jun 4, 2009
    Last edited: Jun 4, 2009
  10. Trinity

    Trinity New Member

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    Not at the President's pleasure, but he is pleasing the President. The actions taken by the Fed have been criticized by some as demonstrating less independence of late. President Obama has the option of replacing him in January if he felt Bernanke was out of control, but thus far the Administration is happy with what Bernanke has done:

    Bernanke has stated and reported in great detail his actions and why he took them in an effort to stablized markets and to initiate a recovery - to avoid economic collapse. Obama has yet to explain why his budgets going forward must quadruple the deficit after steps have been taken to stabilize the economy and to initiate a recovery.

    Without supporting every step taken by Bernanke and the Federal Reserve but recognizing it is pretty clear that Bernanke and the Obama administration both can claim the excuse of the need to stabilize the world economy initially which required us to take on higher deficit but it is not clear why Obama's spending in his 10 year budget projections continues to massively add to the deficit. In that sense, Bernanke's warning is far from hypocritical and in fact valid.

    Besides ending the fed, how would you suggest Bernanke address stabilizing the markets? And why do you think Obama is A-Okay with his current course of action?
     
    #10 Trinity, Jun 5, 2009
    Last edited: Jun 5, 2009
  11. TurkeyWithaSunburn

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    Who controls the Federal Reserve System?

    Banks!

    Declare national bankruptcy and bring in the Amero :crying:
     
  12. sargon20

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    I just don't understand. For the past 8 years as Bush started wars and cut taxes, two things that have never gone together in the past our VP said it:

    Cheney to Treasury: "Deficits don't matter"

    Former Treasury Secretary Paul O'Neill was told "deficits don't matter" when he warned of a looming fiscal crisis.


    O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.


    O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired.


    So now with government receipts down and more of the public needing assistance as private industry cuts jobs and benefits THEY worry about the deficits. The entire point of letting the government run surpluses in good times it can afford to run deficits in bad times. But nooooo conservatives can't handle that. It's MY money GIVE IT BACK.
     
    #12 sargon20, Jun 5, 2009
    Last edited: Jun 5, 2009
  13. lucky8

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    See that's the problem. The Fed's actions are really the only way to keep the system going. However, I can comment on what the Fed should have done to prevent this crisis...ya know...their job. For starters, the Fed should not have artificially kept the rates so low for so long. The economy became dependent on these low rates, and once the Fed raised them, the whole system came crashing to the ground.

    Look at the target rate...below 2% for 3 years, then within 1 1/2 years, they jacked the rate up to almost 6%. That kind of manipulation is what I'm talking about here. It really isn't as necessary as most people think, especially to that extreme. Think of it from a business stand point, because afterall, the Fed is a private bank, which means they need to make money. How do banks make money? Interest payments (and fees) from their customers. Who are the Fed's customers? Other than foreign investment banks, WE are their customers. They give us our money, and we pay interest on it, except now we've reached the point where we are paying the interest on the interest.

    What the Fed should have done was let the free market do its thing so supply and demand were the real determinants of rates, rather than artificially keeping them low to increase borrowing across the board.

    What the Fed should have done is cut the fucking discount window in January of '08 when the subprime crisis began to take hold.


    ...this is just the beginning of a long long list of "Federal" "Reserve" fuck ups if you begin to look at the history of recessions and interest rates.

    Am I really the only person who thinks it's odd that the Federal Reserve is named the "Federal Reserve" even though it's not a part of our government, and has no reserves? (unless you consider a printing press reserves) The people who control our money and interest rates are lying to us, and most people believe it. Some of our founding fathers would be very disappointed in us.

    ...Oh and Obama doesn't care because globalists all have the same agenda...
     
    #13 lucky8, Jun 5, 2009
    Last edited: Jun 5, 2009
  14. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    Actually there are a lot of us who do care. The Fed is a quasi-government entity, since it's directors are appointed by directly elected representatives. The Fed, esp. under Greenspan, did err in keeping rates too low in both '99, and '02-'03 - but they were abetted by both China and Japan, who for their own political reasons, bought massive quantities of Treasuries thereby further depressing US rates. For example, Japan in '01-02 printed 35T worth of Yen and used all of it to buy treasuries.

    By-in-large Bernanke has run a text book case counteracting the collapse of capital in the markets, although he was late on the draw, as it would have cost us all a lot less if he and Paulson had intervened in '07 when Countrywide collapsed. Now that he feels the crisis is subsiding, he's urging restraint, and rightfully so. On spending Congress, not the President, controls the purse, so Congress has to learn how to say no, something they have not done under control of either party. Of course, Obama could remove Big Ben, but his measures, like them or not, have mitigated the crisis. If Congress keeps spending, and the Fed monetizes the debt, significant inflation will emerge. Ironically, if the US savings rate climbs to 10%, it's now 6%, from 0.5% eight months ago, the US can internally fund our national deficit.

    Whether you like the Fed, or not, there is no doubt our system for all it's flaws, is better than the Euro zone's, because we have a central bank. Toxic assets purchased by the Fed last year will no doubt be worth more 15 years from now, if only because the growth in the money supply will have soared exponentially (heads I win, tails too). The rising tide of the US-China stimulus is beginning to stabilize the global economy, with no help from the EU, however it's still unknown if the slowing rate of decline will re-accelerate once the stimulus dollars are spent, and continued borrowing at present levels becomes both economically and politically unsustainable.
     
  15. Trinity

    Trinity New Member

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    That...is frightening.
     
  16. Trinity

    Trinity New Member

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  17. slurper_la

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