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Obama Puts the Economic Cart Before the Horse



February 27, 2009 – Comments (10)

In his first televised speech before Congress, President Obama asserted that prosperity will return once the government restores the flow of credit in the economy. It may come as a surprise to him, but an economy cannot run on consumer loans. Furthermore, credit stopped flowing in the U.S. for a very good reason: there was no more savings left to loan. Government efforts to simply make credit available, without rebuilding productive capacity or increasing savings, are doomed to destroy what’s left of our economy.

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10 Comments – Post Your Own

#1) On February 27, 2009 at 4:52 PM, kdakota630 (29.07) wrote:

Damn, I forgot to put in the heading that it's a Peter Schiff article.  Oh well.  At least I figured out a way to keep putting the articles here while staying within the limits of CAPs terms of service.

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#2) On February 27, 2009 at 5:44 PM, RonChapmanJr (29.81) wrote:

What terms of service were you breaking?  I've gotten in trouble for that before also.

Also, Obama has no idea what he is doing.  That becomes clearer with each passing day.

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#3) On February 27, 2009 at 5:51 PM, kdakota630 (29.07) wrote:

In the past I was copying and pasting Peter Schiff articles in their entirety, which is the violation they cited.  Quoting a couple of lines, or even a paragraph is allowed. 

Until today I never noticed a link that could take you to the article, which is the reason I formatted it the way that I did this time.

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#4) On February 27, 2009 at 5:52 PM, UltraContrarian (30.37) wrote:

Cutting and pasting an entire published piece of writing breaks US copyright law, which is why it is against TMF's terms of service.  If you only quote a small part that is allowable as "fair use."

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#5) On February 27, 2009 at 5:53 PM, jgseattle (26.43) wrote:

Interesting.  I have said that the US needs to rebalance the economy away from consumption.  I think the US needs to get to a positive savings rate exceeding 10%.  I think the US needs to invest in the future to eliminate 50% or more of our imported oil.

I do not know how the US becomes a producer of goods when labor is so expensive?  but I can agree that production needs to increase.  So to even make this harder I think the US has looked at the SUPPLY side so long it has forgotten the DEMAND side.  The only way all the supply could be consumed was by using credit.  Now we need to increase demand by allowing prices to fall and for wages to increase.

Not sure how you engineer that in an economy but combined with savings and investment in the future it could work.  (I know savings removes demand but it pays for investment)

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#6) On February 27, 2009 at 6:37 PM, kirkydu (89.99) wrote:

Obama is doing exactly what should be done.  I know east coasters won't like this, but he is clearly leveling the playing field between the part of the country that makes everything and the small part that just takes a middle man cut.  I'm sorry that the party is over on the east coast, but the rest of the country is going to pull out of this all pretty quick, it's the guys who don't make anything real who will suffer.  To that I say, about time.  If the east coast was a capo in the mafia it would have been offed a long time ago. Now the pretend important people will find out they need to actually contribute to the country to get paid.  Again, I say about time.

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#7) On February 27, 2009 at 7:20 PM, Billullo (< 20) wrote:


AMEN! im with you!

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#8) On February 27, 2009 at 7:30 PM, briyan (< 20) wrote:

We need to have a lower standard of living across the board to support a larger industrial capacity.  Many more people need to be employed in sectors producing physical goods, and far fewer need to be employed in service industries and paper industries like finance.  It's tough to move in this direction, however, since we have been pushing in the exact opposite direction for the last 100 years or more.

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#9) On February 27, 2009 at 7:36 PM, briyan (< 20) wrote:

kirkydu, I don't understand exactly what you mean -- how is Obama leveling the playing field to bring other areas up to par with "the east coast" ?

You say he is doing exactly what should be done, what is he doing?  Raping the taxpayers of the future in a futile attempt to prop up consumer spending and overvalued homes?  He does not express any desire to actually change course, his goal seems to be getting America "back on track" to it what it was doing a few short years ago.

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#10) On February 27, 2009 at 7:53 PM, Hudarios (< 20) wrote:

It's humorous and terrifying at the same time.  Washington's solution to a nation with too much private debt is to create more public debt. The people in power are acting like there's an infinite reservoir of taxpayer money to pay off future debt obligations ... these are the same taxpayers who couldn't pay some of their mortgages.

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