Can someone explain?

[TFOGGuys]

Can anyone explain in small words (I AM a motorcycle mechanic) exactly HOW borrowing nearly 1 TRILLION dollars is somehow supposed to rescue our economy?Isn't this a lot like refinancing your way to financial health? Assuming that interest is being paid on this debt (mostly to China), aren't our elected officials merely creating an illusion of improved economic health, and setting us up for an even bigger fall at some time in the future? I understand that in the short term (5-10 years) it will create and preserve jobs, and may give American industry some breathing room to make some changes in the way they do business, but really, is anything of value being accomplished here, or is it just feel good hearts and flowers bullshit? Or will the stimulus package merely overheat the economy and help gather speed for an even bigger crash?


I have been relatively fortunate in that my business has not been seriously damaged by the financial panic, so my view may be a bit skewed. I have a theory (conspiracy, maybe) that the current economic climate would not be so gloomy, had it not been for the media doing their very best chicken little impersonation. In hyping the severity of the situation, has the media helped create a self fulfilling prophecy? Are we creating this financial storm because we are reacting to the media's assertion that the recession was inevitable?

I actually started thinking about this when the weather forecasters got it wrong yet again this morning. I have to wonder if economists are cut from the same cloth.....


/random ponderings

[Devaclis]

Are we borrowing the money from China? I have not seen this verified anywhere. I am not sure China has 1 trillion to lend.

[rforsythe]

I have a neat prediction of the future... Since the idea is to borrow money, which is probably coming from foreign sources, and to find private investors to take up the toxic investments, I foresee a time where most of America isn't actually owned by America anymore. Even the state of CO was toying with the idea of selling bonds backed by the state's buildings and infrastructure, since they had nothing else to really back them with. If I were some foreign interest, I'd go buy a shit ton of those and do everything in my power to make the bonds worthless, just to force a default. Bam, now I own a state.

[TFOGGuys]

Much of our debt is being bought by China:

http://www.msnbc.msn.com/id/23957476/ (http://www.msnbc.msn.com/id/23957476/)

Ironically, it's substantially funded with money we used to buy cheap goods from them.

[Sortarican]

China buys our treasury notes.

Better question for me Jim is, when did a trillion in deficit spending on domestic concerns become worse than a trillion in deficit spending on a war?
(Public view also tweeked via the media.)

[rforsythe]

Are we borrowing the money from China? I have not seen this verified anywhere. I am not sure China has 1 trillion to lend.

I haven't seen it either, but it isn't like banks here can lend it to the same place which is giving it to them. And we can't just print up a trillion since it would devalue everything else. Taxing it out of the people doesn't work (despite California's attempts to the contrary). I'd think a lot of it might also come from Saudi sources, since they are rolling in cash over there.

[rforsythe]

China buys our treasury notes.

Better question for me Jim is, when did a trillion in deficit spending on domestic concerns become worse than a trillion in deficit spending on a war?
(Public view also tweeked via the media.)

I don't think one is worse than the other, except that we're twice as fucked now if we can't pay it back. Borrow a hundred mil here and there and countries might let it go. Borrow a couple trillion, and eventually someone is going to realize you are shit broke and come collecting.

[TFOGGuys]

China buys our treasury notes.

Better question for me Jim is, when did a trillion in deficit spending on domestic concerns become worse than a trillion in deficit spending on a war?
(Public view also tweeked via the media.)

I agree. We have no business occupying Iraq or Afghanistan. The "War on Terrorism" is at best as effective as the war on drugs. Historically, there was almost no Al Qaeda presence in Iraq in the Saddam Hussein era, only after we created a power vacuum and a focal point for them to assemble and oppose.

[Flip]

Can anyone explain in small words (I AM a motorcycle mechanic) exactly HOW borrowing nearly 1 TRILLION dollars is somehow supposed to rescue our economy?Isn't this a lot like refinancing your way to financial health? Assuming that interest is being paid on this debt (mostly to China), aren't our elected officials merely creating an illusion of improved economic health, and setting us up for an even bigger fall at some time in the future? I understand that in the short term (5-10 years) it will create and preserve jobs, and may give American industry some breathing room to make some changes in the way they do business, but really, is anything of value being accomplished here, or is it just feel good hearts and flowers bullshit? Or will the stimulus package merely overheat the economy and help gather speed for an even bigger crash?


I have been relatively fortunate in that my business has not been seriously damaged by the financial panic, so my view may be a bit skewed. I have a theory (conspiracy, maybe) that the current economic climate would not be so gloomy, had it not been for the media doing their very best chicken little impersonation. In hyping the severity of the situation, has the media helped create a self fulfilling prophecy? Are we creating this financial store because we are reacting to the media's assertion that the recession was inevitable?

I actually started thinking about this when the weather forecasters got it wrong yet again this morning. I have to wonder if economists are cut from the same cloth.....


/random ponderings

Faulty Logic? I love conspiracy theories! Ya know-If Bill Clinton was still in office this would have never happened.......:lol:

[Rhino]

Are we borrowing the money from China? I have not seen this verified anywhere. I am not sure China has 1 trillion to lend.

China and everyone else. As bad as it is here, its still better than anywhere else:

http://www.ft.com/cms/s/0/ba857be6-f88f-11dd-aae8-000077b07658.html



Mr Luo, speaking at the Global Association of Risk Management’s 10th Annual Risk Management Convention, said: “Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”
Mr Luo, whose English tends toward the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”