Jackson Jambalaya

KF, thought you would be interested in this. Its from the AFP. "The US public debt topped 12 trillion dollars for the first time in history, Treasury officials disclosed Tuesday, moving past a key barrier that raised hackles in Congress."

http://tinyurl.com/y9kau6x

admire Whitney though still shocked she married a professional wrestler...

I don't think anyone ever said we were out of the recession, just " coming out" and that always involves the Ws of which she speaks.

This recession is worse than others, the debt is terrible. It will be a slow,rough go and disaster is still possible.

The idea, simplistically stated, is to prevent a dramatic drop into a depression by bolstering some areas while other areas build and improve until the overall economy begins to stabilize. Basically, we're talking about keeping the ship afloat until all the leaks can be repaired.

The question no one asks is " where would we be today doing nothing?" How about 25% unemployment, debt nearing the same levels from a decimated tax base when businesses no longer exist to pay taxes and even more individuals bankrupt?

I have misgivings about some of the measures taken, think there should be a more vigorous move to reinstate oversight measures that existed in the 50's. But, I'm not hearing much in the way of better plans than Berneke has devised and hope to hell it works. And, I expect the plan would look much the same in a Republican administration.

The guys that do this are really a pretty small group that share core concepts about the economy. None of them would have sunk the ship while everyone's still on board but tried to keep it afloat while the new ship's being built to come to the rescue.

But, "bearish" in the short term ( the next two years) isn't a bad idea. Just be sure to buy early on the way up over the next ten.

I disagree. The problem started when we bailed out Bear Stearns. If we don't bail them out, then Lehman and others instead would've sold their firms and avoided the disaster that happened in October 2008.

The TARP made things worse as the stock market immediately began tanking within a few minutes after its passage and didn't recover until sometime this year.

I frankly expect the economy to get worse as the goverment action taken over the last eight months begins to take hold. The huge deficits, the printing of money and devaluing of the dollar. Then there is the fact we have defacto price controls on mortgage interest rates right now that will be removed when the Fed starts getting out of the mortgage bond market.

I tend to agree with Santelli: LET THEM FAIL. We screwed Wells Fargo and Bank Of America by forcing them to take Wachovia, Merrill Lynch, and Countrywide and its bitten us in the ass. If a bank goes under, it goes under. Right now the dirty little secret is banks like Amtrust ARE failed banks but the FDIC is scared to pull the trigger on them. So in the end when they do fail, what we will have done is blown our wad on them and gained nothing from it in the end when they fail anyway. If we had let them fail a year ago, we wouldn't be in half the shape we are in. Oh, and what else would I have done? Instead of blowing $800 billion on stimulus and another $800 billion on bailouts, I would've just cut the corporate tax rate to zero. Cost: less than $300 billion. Think THAT wouldn't stimulate the economy?

This is going to mirror the 30's to some degree when the combination of Hoover and FDR's actions took effect and the economy got much worse.

I would agree with you , KF, if I thought the Bear Stearnes and Lehman problems were exclusive to those firms and not systemic.

I think black box derivatives, hedge funds,poorly thought out banking deregulation ( I'm not against deregulation per se, it's just these were lobbyist driven) and artificially propping up the housing market with the growth of subprime loans from less than 9% of total loans in to 40% of the loans by are huge factors during a Republican controlled Congress and Executive Branch period( source Dallas Federal Reserve).

I suspect we also agree that there are inherent dangers in having former Wall Streeters " fix" Wall Street. But, do remember the bailout began in a non-partisan effort and there may well be solid reasons for that.

The problem may not be "bailout" but rather how it's implemented.

We,also, are in agreement that the measures taken may not work and it may get worse. But, all economies recover over time one way or another. And, frankly, doomsday economic commentary doesn't help recovery and we all want recovery.