"Happy Days Aren't Here Again
by Peter Schiff
Have you heard the great news? The recession is over! It's true; I saw it on TV. Why fret about growing unemployment lines when banks are paying big-time bonuses again?
Proof of the turn was apparently revealed by the 2nd quarter GDP figures that showed that the economy declined by only 1%. After four consecutive quarters of negative GDP, the green shoots now assume that growth will resume over the summer. But before we pop the corks, it may be worthwhile to ask, "what really has changed, and what is responsible for our new lease on life?"
In truth, because of the continued profligacy of the government and Federal Reserve, the imbalances that caused the current recession have actually worsened. We are now in an even deeper hole than when the crisis began. Rather than wrapping up a recession, we are actually sinking into a depression. If things look better now, it's just because we are in the eye of the storm.
We must remember that recessions inevitably follow periods of artificial growth. During these booms, malinvestments are made which ultimately must be liquidated during the ensuing busts. In short, mistakes made during booms are corrected during busts - and in the recent boom we made some real whoppers. We borrowed and spent too much money, bought goods we couldn't afford, built houses we couldn't carry, and developed a service sector economy completely dependent on consumer credit and rising asset prices. All the while, we allowed our industrial base to crumble and our infrastructure to decay.
In order to lay the foundation for real and lasting recovery, market forces must be allowed to repair the damage. However, current policy is counterproductive to this end. Trillions in stimulus dollars have kept the party going, but now what? How does deficit spending by the government address the problems that brought about the crash? It doesn't; it just delays and worsens the hangover - and we have to hope we don't die of alcohol poisoning.
By interfering with the unpleasant forces of the recession, we simply trade short-term gain for long-term pain. By propping up inefficient companies that should fail, we deprive more effective companies of the capital they need to grow. By holding up over-valued asset prices, we prevent the prudent or less well-off from snatching them up and, in doing so, creating a new price equilibrium based upon reality. By maintaining artificially low interest rates, we discourage the very savings that are so critical to capital formation and future economic growth. In addition, the false economic signals the Fed sends the market prevent a more efficient re-allocation of resources from taking place and leads to even more bad economic decision being made. By running such huge deficits, we further crowd-out private enterprise by making it harder for businesses to invest or hire.
The recently passed "cash for clunkers" program (currently on-hold, as it ran out of funding in one week) is a perfect example of how government policy can make the economy worse. By incentivizing Americans to destroy fully paid-for cars so they can go deeper into debt buying brand new ones, the government weakens an already crippled economy. The last thing we want to do is subsidize Americans to go deeper into debt by buying more stuff. Don't they realize that is precisely the behavior that got us into this mess?
Think about it this way. If your friend were in trouble because he had too much debt, would you encourage him to take on even more? Wouldn't a real sign of progress be a reduction of debt, even if he had to cut back on his everyday expenses? What is true for an individual is also true for a collection of individuals, even if they call themselves a 'government.' If, as a country, we are even deeper into debt now than we were before, we are worse off. Period. The fact that the additional debt enabled better short-term GDP numbers is a long-term negative.
Since we have learned nothing from past mistakes, we are condemned to repeat them. As if we have not already suffered enough as a consequence of the Bush/Greenspan stimulus, Obama/Bernanke are giving ever larger doses, which will prove lethal to any recovery. The recession is over; long live the depression!
--MORE--"Who you gonna believe, Amurka?
The lying news media that sending smoke signals up your butt or some economist they never cite who is right?
Also see: Government Puts Brakes on Auto Sales, Acclerates on War Spending
I like to start you with a good insult these days to get that blood boiling.
"House OK’s more funds for 'clunkers'; Auto program may have run dry" by Erin Ailworth, Globe Staff | August 1, 2009
The week-old promotion which may have run out of money....
Theme of the day: TRILLIONS for BANKS and WARS, and SCRAPS for the REST.
Yesterday, the House voted 316 to 109 to take funds out of the $787 billion stimulus package that had been set aside for loan guarantees for renewable energy.
You're kidding, right?
The Senate is expected to deal with the issue next week, and it’s unclear whether members will approve it. Under the program, owners of certain old cars and trucks are offered $3,500 to $4,500 toward the purchase of a new, more fuel-efficient vehicle. Congress originally approved $1 billion for the program, funds that were supposed to last a few months.
But the promotion, aimed to boost slumping auto sales, has been so popular that many believe the money is gone. Officials don’t know for sure because of a backlog of sales that need to be processed, a problem that dealers have complained about all week....
White House officials insisted the program is still in effect, and the government would honor deals made under the promotion. But some dealers are skeptical.
I would be skeptical of this government at this point; the only things I see them funding are tyranny, war, and banksters.
What was the last thing the feds did right for you, America?
No, really? What was the last federal program that really worked?
'eh, 'eh?? Huh? See? Can't think of one, can you?
The confusion around cash for clunkers - which some car makers have been matching - couldn’t come at a worse time in Massachusetts. Yesterday, consumers were trying to beat a sales tax increase from 5 percent to 6.25 percent, which goes into effect today.
SUCKERS!!!!
Stoo-pid state!
My FRIENDS are ALREADY COMPLAINING, and I'M NOT BUYING COFFEE anymore 'cause it's 3 cents more every time. I'm making my own rot gut at home and choking it down.
Many of those consumers called local legislative offices, urging their lawmakers to keep the promotion going. Formally known as the Car Allowance Rebate System, the promotion was approved by Congress in June. In general, all trade-ins must be less than 25 years old, get 18 miles per gallon or less, and be scrapped. But from the onset, there were problems.
The program was supposed to start on July 1 but got delayed until July 24. The rules were complicated, and the list of qualifying vehicles and other requirements changed repeatedly, several dealers said. The program involved mountains of paperwork, and the government website that collected the submissions kept crashing, creating a backlog, they said.
It was unclear yesterday whether the Senate would approve more money for the program. Senator Debbie Stabenow, a Michigan Democrat, called the promotion a success and urged additional funding. However, Senator Dianne Feinstein, a California Democrat, and Senator Susan Collins, a Maine Republican, issued a joint statement asking that any extension come with higher fuel efficiency standards and greater emissions reductions.
Scrap the whole idea, how's that? Americans don't need a "deal" that gets them further in debt to banks with a horrid depression on the horizon.
“We’ve sold a lot of cars, and none of my cars have gotten funded yet,’’ said Raymond Ciccolo, president of the Village Automotive Group, which has sold up to 100 vehicles under the program. “We’re trying to wade between upsetting the customer and creating ill will, and just going on blind faith that the government might pay us.’’
My first thought is how that consumer is going to feel getting a rejection slip for the cash -- and did that dealer ever nail it with government and you, didn't he?
I CAN'T AFFORD BLIND FAITH ANYMORE, either!
Ciccolo wasn’t willing to take chances. Yesterday he stopped offering the cash for clunkers incentive at his seven dealerships, fearing that if the program ran out of money, he could be on the hook for several hundred thousand dollars.
The same thing happened to Chris Lemley, president of Sentry Auto Group in Medford, Dorchester, and Shrewsbury, who said that his salespeople struggled to enter deals until midnight on a system that kept crashing.
Ernie Boch Jr., head of Boch Automotive in Norwood, said he continues to offer the incentive but is making customers sign a contract saying they’ll pay up if the government can’t.
Aaaah, screw it.
Whirrrr, whirrrrrrr, whirrrrrrr, VROOM!!!!!
See ya!
He estimates that his dealerships have sold roughly 700 vehicles under cash for clunkers.
“You’ve got hundreds of people looking to do a deal. What are you going to say? ‘Oh, I’m sorry, the government is so [messed] up that I can’t do a deal with you,’ ’’ Boch said. “Being in the auto industry, if somebody wants to buy something, you want to sell it, especially in these hard economic times.’’
I shouldn't be laughing, but....
Boch’s contingency contract, however, put off at least a few customers, he said.
One of those was Ron MacPhee....
--more--"
WASHINGTON - The Obama administration will suspend the “cash for clunkers’’ program unless the Senate provides $2 billion more for the popular car incentive plan, Transportation Secretary Ray LaHood said yesterday.
Lahood? See: Another Silver Lining to the Economy
How about SUSPENDING a DAMN WAR?!
LaHood said he expects the current $1 billion pool to be exhausted by the end of the weekend. The House approved an additional $2 billion Friday and the administration is pressing the Senate to go along before its summer vacation begins at week’s end.
“If we don’t get the $2 billion from the Senate . . . we would have to suspend the program next week,’’ LaHood said in an interview on C-SPAN....
Shades of Paulson from last October, no?
At least one GOP senator questioned the need to speed the money.
Oh, no, who?
“This is crazy to try to rush this thing through again while they’re trying to rush through healthcare, and they want to get on to cap and trade electricity tax,’’ said Senator Jim DeMint of South Carolina. “We’ve got to slow this thing down.’’
Oh, stink! That's why I call it Massachushitts and have such a problem with the smug, self-rightous Yankee complex (and it's epidemic here). Still good people, and no different than the one's they think they are better than.
Obama officials scrambled last week to add money to the Car Allowance Rebate System, which is designed to get old, polluting vehicles off the road and scrapped while helping car dealers emerge from the recession. The $1 billion has led to the sale of 250,000 new vehicles.
Owners of gas-guzzlers can receive rebates of $3,500 or $4,500 toward the purchase of a new fuel-efficient car. LaHood said 62 percent of the traded-in vehicles were trucks and “these people are buying cars that get much better gas mileage.’’
The program helped lift
Then why all the job cuts?!!!
The Senate narrowly approved the initial money in June. But some lawmakers who voted for the plan, including Senators Dianne Feinstein of California and Susan Collins of Maine, have said the additional dollars should push consumers to buy more fuel-efficient vehicles and allow people to buy fuel-efficient used vehicles. Senator Jeff Bingaman, a New Mexico Democrat, has said he was concerned with the way the House paid for the extension, shifting $2 billion from a renewable energy loan program.
Fine. Give the money back to the taxpayer because its their's anyway.
DeMint questioned the government’s role in providing incentives for auto sales.
Or ANY SALES, for that matter.
“My children and grandchildren are going to have to pay for these cars, and we’re helping auto dealers while there are thousands of other small businesses that aren’t getting the help,’’ he said.
That's all right; those narrow little shoulders still have plenty of room. Heave up another usurious pile, they can take it.
LaHood said dealers will be reimbursed for deals in the pipeline and that the government will make a “good-faith effort’’ for transactions beginning today.
Oh, THAT is really ressuring!
A LYING, LOOTING GOVERNMENT is going to make a "good faith" effort.
Well, I gotta get going. I just bought this new Ford here with my cash for clunker deal. Dealer couldn't get it through the computer, but he said not to worry. Had me sign something, but it was so small I couldn't really make out what it was.
"Ford sales rise on ‘clunker’ credits" by Bloomberg News | August 3, 2009
SOUTHFIELD, Mich. - Ford Motor Co. said US sales rose in July, the first monthly gain from a year earlier since 2007, as buyers took advantage of the government’s “cash-for-clunkers’’ incentives.
Ford’s increase was due chiefly to the clunkers program, which offers credits of as much $4,500 for trading in older, less fuel-efficient models and buying cars and light trucks that get better fuel economy, said Ken Czubay, the automaker’s US sales and marketing chief....
And then the liars of government and economics can say the economy grew while more people got tossed out of work. Go figure.
--more--"