[heroineworshipper]

In 1930 it was creating jobs in exchange for sustenance. Now it's just creating money.

[Kingcoal]

$this->bbcode_second_pass_quote('Ferretlover', 'I')t's a "payday cash advance" that has an interest rate of 100%, where TPTB use Monopoly money for the loan, but expect real cash for the payback.

[Twilight]

A "stimulus package" in present circumstances is when the government voluntarily forgoes revenue from tax payers' credit card spending, allowing them to use 100% of their last remaining credit line on stuff. This allows a typical consumer to postpone bankruptcy 25% longer!

It can also mean a refunding of taxes, but I am not anticipating a cheque in the post any time soon.

[mattduke]

$this->bbcode_second_pass_quote('MrBill', '[')url=http://www.marketwatch.com/news/story/generational-fight-century-looms-taxpayers/story.aspx?guid=%7B52DEF8AE%2DE29F%2D4E35%2D829F%2D531289F138ED%7D&dist=morenews]The Greatest InterGenerational Theft Of All Time![/url]

[pup55]

Gotta agree with Mr. Bill on this one. It's time for some tough love.

We got our "stimulus package" seven years ago, when taxes were lowered, and spending simultaneously greatly increased. If a stimulus works, we should already have utopia, by that reasoning.

What we have now is Argentina, keeping the printing presses going to placate the wealthy, while the kids will pay later with either an inflated, worthless currency, or out of pocket through taxes.

No one will have the courage politically to stand up and say "enough". That will not get you any votes.

So it's going to get worse.

[mattduke]

$this->bbcode_second_pass_quote('pup55', 'N')o one will have the courage politically to stand up and say "enough".

[SchroedingersCat]

With the track history of the current administration, I am expecting some kind of emergency tax cut or credit made retroactive for 2007 taxes. Just enough to put an extra $1000 in the hands of Joe Sixpack by April. Then he can go out and get that new TV or couch and stimulate the economy.

Of course, by then he'll need it for food and fuel.

[cube]

$this->bbcode_second_pass_quote('MrBill', 'I')t is spending money you do not have by going even deeper into debt.

..................

The US needs a good recession. A bowel cleansing. And then a few decades of living frugally to pay down debt. Is it going to happen? No.

[gampy]

http://news.yahoo.com/s/nm/20080118/pl_ ... mocrats_dc

$this->bbcode_second_pass_quote('', 'C')linton's plan includes $40 billion in spending for heating assistance, an extension of unemployment insurance and investments in energy efficiency along with $30 billion to help low-income families hit by the mortgage crisis.

[Bas]

$this->bbcode_second_pass_quote('', 'W')hat exactly is a "Stimulus Package"?

[MrBill]

$this->bbcode_second_pass_quote('mattduke', '')$this->bbcode_second_pass_quote('MrBill', '[')url=http://www.marketwatch.com/news/story/generational-fight-century-looms-taxpayers/story.aspx?guid=%7B52DEF8AE%2DE29F%2D4E35%2D829F%2D531289F138ED%7D&dist=morenews]The Greatest InterGenerational Theft Of All Time![/url]

[alokin]

Some years ago I read an article in "Spiegel" that sooner or later the US economy will crash because of the private depth.
And what your government is doing right now is telling the folks " spent more money get more in depth" - this is crazy!
They're telling people who already pay a mortgage down to make more depth to buy a car. This is not fair, they know that lot's of families brake apart due to depth, that there are thousands who never will be able to pay their depth down.

For our family and our friends it was always clear that the only acceptable depth is a (reasonable) mortgage. Incredible buying a car, TV or whatever with money you don't have - everybody would have said you're crazy.

[evilgenius]

I could go into what a real stimulus package is but that wouldn't be the same as Georgie boy's idea. What he will do is cut taxes on the rich so that they can go out and buy up equities at their historic lows. Meanwhile, foreign money will be stimulating the economy by propping up the banking structure's liquidity needs. In due time, what with the hopeful elimination of inheritance taxes and reduced capital gains, a few thousand families will own about ninety percent of the real estate and two thrids of the means of production. That is all in accord with the post peak plan. Sorry, suckers.

[patience]

Stimulus Package? It's a short-term fix for a junkie. It's basically the same as transfer payments, only with the cost deferred.

Definition: Government aid = A transfusion from one arm to the other, with a LEAKY hose.

Bah! Humbug!

[dorlomin]

Madder and madder. I cant think of a more financialy irresponsable thing to do than increase the deficit and borrowing right now. What is going to happen when the recession hits and tax revenues drop anyway, with people going onto unemployment benefits? Watching the US and UK governments for the past 8 years has been going from mild displeasure to alarm and now to outright panic.

"One more quarter of growth and damn the torpedoes."

[Blacksmith]

One of the great problems of economic stimulation is that it does not work during periods of Stagflation and in my humble opinion that may be where we are heading.

[MrBill]

$this->bbcode_second_pass_quote('Blacksmith', 'O')ne of the great problems of economic stimulation is that it does not work during periods of Stagflation and in my humble opinion that may be where we are heading.

[wisconsin_cur]

Ok, worse recession since the Great Depression, so what can I expect? Correct me where I am wrong.

1. Stable fuel prices (due to reduced demand balanced by falling dollar). And I guess the Peak Oil debate falling off of the radar.

2. Falling and then increasing interest rates. So get out of variable interest rate debt. First that debt with no ceiling, then that debt with a ceiling (home equity line etc). Fixed interest debt may not be bad if you can reasonably expect to keep your job.

3. Prices of necessities rising faster than wages (necessities = that which we cannot put off buying). House prices might fall and, statistically even out the increased price of carrots and potatoes. Of course I do not need to buy a house, I do need carrots and potatoes.

4. Reduce costs. Start growing your own carrots and potatoes.

5. Increase streams of income. Sell carrots and potatoes, not houses.

As far as personal adjustments, what am I missing.
---------
edit: This related immedietly to the idea of stimilus package since I am trying to decide how to spend my check.

[MrBill]

wisconsin_cur I think the shape of the recession and therefore the recovery will depend on the public policy choices/mistakes that are made to deal with its fall-out.

Of course, your own personal view on when exactly oil peaked/or will peak, and its rate of decline, will shape your opinion of whether we can pull-out of a prolongued recession or not?

My baseline assumption is that we do have the energy to take us through 2030 at least, so I see this recession as not being triggered by peak oil. Many might strongly disagree with me. I am not trying to win converts to my ideas. They are just the sum of what I have read and believe to be true. Opinions are great. You can change them more often than your underwear! ; - )

That said. If I look at central and eastern Europe after the collapse of the USSR then I saw prices for everything imported go up as currencies lost their value. The price of everything made or grown domestically go down. I saw the price of labor go down as there was massive unemployment and currency devaluation. Especially in government jobs. The price of food was very cheap. As well as vodka. Keep the prolitariat stoned! ; - )

Basically, locals relied on their gardens to feed their families. Many have dachas or places in the country or small plots of land near the city. Then others - especially those retired and on fixed incomes - were trying to sell excess produce in local markets to earn a little pocket change.

I saw some heart wrenching things. Guys in suits and ties going through our garbage bin looking for stuff to recycle or to sell. Grandmothers on the corner selling whatever they could for whatever they could get. Shoppers wandering around in stores that could not afford to buy anything. And then, of course, the mafia thugs driving around in big Mercs and living it up at expensive bars, restaurants and nightclubs. All the class money can buy - not!

As most owned their apartments or houses the major expenses were utilities even though those prices were partially subsidized. The old and the infirm as well as those on fixed incomes based on old Soviet levels suffered the most.

Those are not my predictions for the US anytime soon, but I just think that you may be off in assuming that food is going to get a lot more expensive. But in any case there may be a lot less eating out and buying processed food, and much more cooking from scratch using cheaper ingredients. I still remember after the first oil crunches in the 70s our family switching from roast to hamburger. There was even a book I remember called 101 Ways To Cook Hamburger. I think it was a best seller at the time! ; - )

[wisconsin_cur]

Thanks MB, that does help.

You are not given to drama but my own brain is... that is why I am not a banker Though I have to agree that the immediate cause is not PO (and hence why PO will fall from the radar). I do think, however, the recovery will be... limited by the limits of production that we will experience, whether that will be flow rates, resource nationalism or export land who knows?

So if wages go down for all of the reasons you observed, the net effect is the same as if prices were going up. The percentage of income that goes to paying for "needs" goes up, leaving less for everything else. By preparing for one eventuality I think one is protected from the other?

Those around here would respond by refreshing their knowledge of gardening as well.

So I guess the general advice would be is to keep your powder dry? If you are in a good financial position stay there. If you are not try to get there. And when opportunities arise (there are always opportunities right?) be prepared to pull the trigger.

Unfortunately I am not very good at this game. My experinece at investments is akin to a conversation I had with a retired farmer I met a few months ago. "What kind of farming did you do?" I asked.

"Oh I lost money at every kind of farming!" Was his response.

Good laugh line but he must have made out like a bandit when he sold, I've seen his house.

Conservativism, at its rural best, is the highest goal I can hope for. It should be in my genes somewhere....

One last story:

My grandfather (mother's side) married in 1949. A few weeks after the ceremony he went to open a bank account and as he was sitting at the desk the Bank president walked out, introduced himself and said he wanted to congradulate him on your recent wedding.

Grandpa thank him and asked, "do you do this everytime someone opens a new account?" It was then that grandpa found out that his new father-in-law was the banks largest depositor. (and would later donate a lot of land for a hospital and regional airport) "but... but... they don't even have indoor plumbing." Was all that he could say.

I'm hoping I can immulate that with what is left of my working years.