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Michael Myers
Byrne Robotics Member
Joined: 28 December 2004
Posts: 831
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| Posted: 01 October 2008 at 8:18am | IP Logged | 1
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"I think there's a lot of politics being played - it's a shame this had to happen right before an election. "
AGREED!
To springboard into opinion on your other comments regarding impetus for the Treasury plan, there's still another old school economic angle--beyond even addressing the crisis of confidence question that any, even half-way sound package offers--that provides the possibility of more insight into the aims of the Treasury Department and Federal Reserve System. It amplifies your comments on the liquidity problem.
The great concern driving both Treasury and the Fed Board is what would be a full-on "liquidity trap," rather than the year-long, sporadic "credit crunch" (periodic and not necessarily symptomatic of a full halt). The Fed conducts monetary policy largely by stimulating or truncating spending by manipulating the various interest rate targets; but, lowering interest rate targets doesn’t work in a liquidity trap because confidence is too low for the expansion of credit to work. When this happens at an institutional level, movement away from such policies can be slowed by the very self-reinforcing consequences of adopting them in the first place. To simplify, the remaining alternative is the Fed's other primary tool, increasing the monetary base by directly injecting capital. But, the rub is that in a true liquidity trap, the traditional methods used to increase the money supply (monetary base) in the system, through banks and other lending institutions, becomes "trapped" behind these institutions' sensing of the overall malaise; and reacting to risk outweighing high returns (those low interest rate targets of the Fed or central bank which are geared to make borrowing attractive in the first place) by tightening their lending policies. Why partake of the available capital when the risk reward might not justify it, in other words?
Avoiding--or extricating ourselves from, depending on your view of degree--this liquidity trap is the base rationale behind the Treasury Department's bail-out/rescue plan, IMO. Plain and simple, they think they have a means of completely negating the second element in the old liquidity trap scenario; that is, how to make the offer of capital too enticing to pass up to institutions in a position to effectively manage disbursement of such capital into the economy. And once lending institutions *have* partaken of the capital, it is in their best financial interests to lend it out, providing only that the reward outweighs the risk. Or, so goes the theory.
A lot lof people and politicians have voiced incredulity at the seeming incongruity of a "regrettably necessary rescue plan" which was not ostensibly concerned with cutting the best deal possible (a'la the RTC of the 90's and commercial mortgages); but, provided the reminder of liquidity trap theory, the response to congressional questioning over the proposal makes perfect sense in light of the genuine aim of the Fed and Treasury Department. That is, in the "helicopter drop" sense of monetarist theory. It just hasn't ever been tried in this fashion before, to my knowledge. Certainly, not to this extent.
The Fed and Treasury are trying to circumvent the old channels of a liquidity trap by simply buying out risk heavy debt and attacking the bottle-necks in a new fashion. It is far more than a variation on the early 'Nineties RTC proposal. Then, the RTC bought at market value, cents on the dollar, to a small profit on the eventual upside. Not so, in this case, as witnessed by Paulson and Bernanke answering the obvious objections to their proposed valuation before congressional questing. Over and over, it was on this point that senators and congressman kept returning. Well, they don't want to buy at market, and they are not concerned with a theoretical, eventual upside. They aren't trying to get out of a recession, they're trying to avoid one and their aim is to bypass the traditional bottlenecks of a liquidity trap.
This best explains the rationale of the Fed and Treasury wanting to conduct their buyouts along mark-to-model rather than mark-to-market valuation (under mark-to-market, the debt is only worth maybe .20 cents on the dollar on the downside)...they WANT to inject a huge sum of capital, over and above current market valuation, directly into the market in order to negate the settled presence of a liquidity trap. And the fact that the only time Paulson or Bernanke were forced to hem and haw was at congressional questions concerning their refusal to promise adoption of a mark-to-market system of valuation and their stated preference for the higher mark-to-model pricing method via reverse auctions under Fed control when confronted, over and over, with direct challenge on their refusal to promise adoption of the lower market value valuation of any piotential buys.
For the record, it was also a liquidity trap which was a VERY significant aspect of that era which contributed directly to the length and depth of the Great Depression. Then, you had a young Federal Reserve System, and a Republican president, actually acting to *contract* the system even further than had market forces. In part this was a necessary byproduct of the *then* gold standard (which was suspended by FDR due to its inherent limitations), but the fact remains that the Federal Reserve System was not able to significantly counter the contracting forces and that its actions resulted in a contracting money supply.
The difficulty is that the possible consequences of the outlined method represents a fundamental shift in American thought. Not just by way of the rewards of Capitalism's risk and the market notion itself (artificially delaying a business cycle offset), but also in the method of legislation almost demanded by the Treasury and Fed. Our Republic is predicated on a rational consideration of the passage of any measure...not some slap-dash grant just because some people are going to get burnt and somebody else has cried, "fire!" While I'm not in the boat with those who declare it a replay of the Iraq War resolution, it does bear an unhealthy resemblance to anti-terrorist legislation and "emergency" requests for funding. Legislation like the initial version of the Patriot Act was passed with almost the same "the-sky-is-falling-let's-just-do-something-even-if-it-isn't -the-right-thing-god-just-please-hurry" mentality.
The odd part is that, given only that initial three-page proposal, I can't argue on an economic level as to why the plan wouldn't have worked to offset recession even this late into the trends; while, as must occur inevitably in any healthy republic vis a vis oversight, the compromise proposals so far touted all miss the mark in one form or another. Some proposal is going to see enactment. We'll just have to see that final, melded formulation of the two congressional plans, to really judge anything. I hope it's better than the amended House Bill I read (with a few notable exceptions, like the FDIC and tax rate provisions, the proposed Senate Bill doesn't really seem all that much different, but it isn't available in toto...the problem now is that House Democrats are grumbling).
As it stood with regard to the rushed House Bill, I say better the devil you know than the angel you don't...and, as tough as it can sometimes be, we know how to deal with recession in an ostensibly capitalist market.
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Michael Myers
Byrne Robotics Member
Joined: 28 December 2004
Posts: 831
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| Posted: 01 October 2008 at 8:21am | IP Logged | 2
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Jodi, I can only try to give my take on putting the "Great Depression" into perspective as it contrasts with the current situation. Keep in mind, some unified theory of the Great Depression is as yet unrealized...Chairman Bernanke's only genuine claim to fame is, in fact, his work in the area of monetarist theory as regards the Great Depression. Frankly, I don't know quite where to start in describing the myriad of ways that the situation isn't comparable, but given our strained relationship thus far, I doubt a "you tell me how it is comparable" response is worth anybody's time. So...
By now, I suspect you've read all the numbers that demonstrate comparisons in the proper perspective: a 25% unemployment figure by 1933, a 50% foreclosure rate by 1935 compared to today; 744 failed banks in the first 10 months of 1933; an estimated 9000 bank failures for the decade as a whole; the idea that we've had about 15 banking failures in the last year.etc, etc, etc (FDIC Failed Bank List http://www.fdic.gov/bank/individual/failed/banklist.html , FDIC Bank and Thrift Failure Reports SEARCHABLE http://www2.fdic.gov/hsob/SelectRpt.asp?EntryTyp=30). The markets? The drop on Monday was only 7.9%...not anywhere close to the 20% drop you and I both lived happily through in the 1987 bust. Certainly nowhere close to the drop of the Great Depression at height, with the Dow dropping more than 40% in just two months. Well, these things--the almost endless statistics pointing out the inadequacy of such direct comparisons--only tell part of the story.
How are things *fundamentally* different, today?
Well, this is NOT a solvency issue, but a liquidity issue. As it stands, non-financial companies in the US have just under $1 trillion in cash *on hand*; and dedicated financial institutions hold many times that in reserve deposits. Not to mention, the proactive stance of the Treasury and Fed in demonstrating that they are more than willing to live up to their role as the ultimate lender of last resort. It was the Fed's inability to flood capital on the system that turned the initial banking collapse of 1929 and, then, recession of 1930, into the Great Depression of 1933.
In the Great Depression, also a recession (technically two seperate recessions), the situation was fundamentally reversed. The entire banking system faced threat of collapse in the 1930s. With no FDIC and no insurance market reserve regulation, when a bank collapsed, that money was *lost* to all concerned. The ENTIRE public economy took a direct hit at the very cornerstone of capital...private funds. This was a near systemic collapse. That's not only unlikely, today, but an impossibility in any legitimate sense. The very worst-case scenario is that losses in the banking or financial system get worse and the nation slips into a recession period of little to no growth for a few years. Bad enough, but not even close to the Great Depression's effects.
We all also enjoy a very different emphasis in our three economic sectors. In the 30's, the dominant sectors were agriculture and manufacturing. Today, thanks largely to technological innovation and the affluence it affords, our strongest sector is the Services sector and all of its multitudinous segments. In an economy of our size, this self-reinforcing cushion serves to protect us from the vagaries inherent in either of our two other sectors: agriculture (seasonal yield, weather catastrophe, societal trends in diet, etc) and manufacturing (surplus inventory, unavoidable technical obsolescence, sustainability, etc). During the Great Depression, in fact, overall economic output fell by a full third as the reliance was on agriculture and manufacturing. This is important, because the only segment in today's world which occupies such a prominent place is, of course, the financial segment of the Services Sector...and this isn't a question of solvency, nor redundancy .
All of this isn't to say that recessions are a good thing, obviously. People lose money, jobs, and security during ANY recession. With America's lynch pin role in the global economy, this effect is only exaggerated both at home and abroad. My sole point is that when you hear talk of a crisis, the very worst case scenario is a recession spreading over more than a year or two.
The consequences? Construction and financial institutions always get hit first and hardest. Not surprising, since both of these are leading segments in our Services sector and both run on lending capital. But the effects of a liquidity trap can quickly spread to other industries. If financial institutions aren't lending at a profit, then there is no reason to invest; without investment, there is less reason to lend. You can extrapolate, in waves and increments, to every other industry from just this two-pronged base. Take, for example, the automotive industry at both the manufacturing and retail levels. The consequences of a liquidity trap exacerbate all other negative factors of a recession, lengthening its duration and worsening its depth. Again, this was exactly the case with the Asian crisis of the late 90's (Japan, etc).
This is the threat we face, today, in worst-case form: a prolonged recession that we haven't seen to any degree since the early 'Eighties. America, however, doesn't face Japan's challenges in this regard, and we are both tough enough and financially secure enough to handle a recession of even this "worst-case" scenario imagining. I've gotta repeat, Jodi, even this is the very worst-case scenario.
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Michael Myers
Byrne Robotics Member
Joined: 28 December 2004
Posts: 831
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| Posted: 01 October 2008 at 8:23am | IP Logged | 3
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"Where I used to live many of my neighbors were senior citizens whose lives were shaped by the Depression. Some of them told me of their heartbreaking experiences. Not fun.
I'd say most senior citizens are really at risk. Social security gives a person around a thousand a month. That just barely covered bills prior to the runaway gas prices. There's savings. But because people are living a great deal longer than they expected (active, almost spry well into their 80's) those savings get used up. And of course they don't hesitate to use savings to help their children and grandchildren, which I've personally witnessed. Some of them work at McDonalds. Some of them are mortgaging their houses piecemeal in another wonderful "financial innovation" called the reverse mortgage.
Wiped out pension funds can really mess things up for them. They're just like younger people, in the sense that they have social lives, they want to go places, experience things. And they also need to eat. All of the stuff that's going down is going to make things very difficult for them. None of it is their fault.
(Of course, Alan Greenspan is in his late eighties, so I guess it's the fault of at least one of their own. )"
No argument from me on any of this, Joe. Well stated, frankly.
"Uh, Mike, at this point you're the only one drinking that flavor sensation. I applaud your magnificent dedication to those ideas, though."
Not quite, Joe, but I'm happy to oblige.
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Michael Myers
Byrne Robotics Member
Joined: 28 December 2004
Posts: 831
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| Posted: 01 October 2008 at 8:27am | IP Logged | 4
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Michael, we're going over old ground. Lacking time, I'm simply going to fall back on a quote and respond.
QUOTE:
| The main concern is the derivatives (of all sorts). You disagree? $700b would be eaten up very, very quickly. Those derivatives are rapacious. $700b is nothing compared to the credit swaps alone (and those are small compared to the derivatives as a whole). Ben Stein said about $62 trillion in credit swaps alone. Am I missing something? Please, no "notional" talk but what am I missing here? The $700b is a drop in the bucket. As the NY Times pointed out the Democrats (who are just as guilty) attempted to twist the arms of retiring Republicans into voting for this bill. |
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Once again, you believe Ben Stein, but not me....when I gave you the same figure last week? 'Such a heartbreaker.
As it is, the latest report from both Switzerland's Bank of International Settlements and the ISDA show the figure to have declined to approximately $54.6 trillion. 'Just for the record, but this decline shows exactly what I said in my last post concerning the issue of notional value. And, globally? According to Basel, $596-trillion (U.S. dollars) was the total notional value of worldwide outstanding over-the-counter (OTC) derivative contracts at the end of 2007. Now, think about that for a moment. This figure is easily more than twice the total amount of welth in the entire world! Do you get the picture?
Repeat these terms: face value, notional value, exposure value, trade settlement, MARKET VALUE
Michael, *Your understanding of the derivatives market is fundamentally in error*. Now, how do you discuss the derivatives market--either credit or equity; OTC or regulated--without understanding the notional value as it relates to actual exposure? The ENTIRE rationale of the derivatives market is BASED on notional value vs market-value exposure. The only relevant discussion of derivatives is in the notion of the incentive they provide for shorting a stock. I don't know which interview you're referring to, but Ben Stein understands both this fact and the concept of notional value upon completion to term...both the worth and the futility.
Read my *last* post to you on this subject discussing actual payoff in default. The only thing that has changed is a further drop in actual *market* value.
QUOTE:
| How much was tossed at markets worldwide the past several weeks? :::::SNIP:::::::It just didn't happen. Nothing just happens Mike. |
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You lost me at the relevance of the suicide. And yes, by definition, any large drop is a market correction.
QUOTE:
| You actually believe the people involved are so smart and so wise they have everything covered? |
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Which would explain my opposition to the compromise bill in the House, or the Treasury's initial proposal?
QUOTE:
| Can this be compared to the Depression of the 1930s? In a way it is probably much worse worldwide. One difference is that in the 1930s you didn't have 100s of trillions of dollars worth of derivatives did you? You had a different Ponzi scheme that was exposed by Pecora's hearings right Mike? That is what brought the regulation in. Criminal behavior. Fraud. |
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You mean the pooling scheme? Hey, didn't I already mention the separation of commercial and investment banking in, like, three or four posts going back a month? The relevance and aims of Glass-Steagal, specifically?
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| I am talking globally. This is global. It isn't confined to the US. |
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Uh, wasn't I the one who made a point of stressing the global nature of this situation in posts dating more than a month back, while you were still talking about China and Russia "doing just fine as long as they adhered to FDR-like policies" and others were talking about America's financial woes as though they were endemic to only America? Thanks for getting aboard.
QUOTE:
| You call the millions of deaths from starvation what? A correction? You actually call that a correction? Starvation? Or doesn't that figure into the equation? Is it market forces showing us there are just too many people? Or a depression? Granted, the starvation is mainly in Africa and Asia but doesn't that indicate anything to you at all? Nothing to do with economic policy? |
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Have I really called millions of "deaths from starvation" a "correction"? Really?
So, what do you offer? Preferably, a solution not involving a labored restructuring of every major government and developed economy in the world.
QUOTE:
| How about the foreclosures? We can't compare those to the Depression because there is no FDR to put a halt to them now. |
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Michael, we can't compare them because there is no rational comparison to be made, in either percentage of foreclosures in the mortgage population or in terms of effect upon the economy as a whole. Period.
QUOTE:
| If this isn't as bad as Paulson would have us all believe and it is just a mere business cycle why is he trying to scare everyone? Why are financial commentators attempting to suggest if this bailout doesn't pass the Devil will come to the Earth and eat us all? |
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Maybe, it's *your* perception of scale which needs to be adjusted. Recessions aren't fun for anyone. Your difficulty would seem to be accepting the fact that the entire economy isn't collapsing...for, yet again, another year.
On second thought, I think a lot of people's perception of scale needs to be readjusted. Oh, I know where you're coming from, Michael, but what is it about the gravity of a possible recession, even one of only a few quarters or a year, that others just don't seem to get? I mean, that might lead them to equate it directly to my inferring "Happy Days!" are here, again.
QUOTE:
| Incidentally, why was existing regulation not enforced Mike? If you're saying the regulation on the books is good enough but just wasn't being enforced maybe these new hearings will find out why. If the people some would like to give the steering wheel to are so intelligent why didn't they come up with this new global set of rules to deal with this sort of "correction" that is happening worldwide? |
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Read my post, again. I went to great pains to stress the fact that it wasn't deregulatuion so much as *ineffective* current regulation which was to blame for anything. The need remains "smart" regulation, not regulation for regulation's sake or as a band-aid to salve faults, real or perceived. By way of example, the SEC instituted a ridiculous ban on *all* short-selling...but the market has already started to employ inverse techniques to compensate and take up the slack. Clearly, this is an unintended consequence of the SEC gesture. It has to be SMART regulation.
As to global marketing regulations, take a look again at the temporary imposed ban on short-selling globally. The fact is, Michael, we DO already have a plethora of international regulations...they suffer just as our domestic regs from being outdated and poorly crafted with an eye towards current financial markets. BTW, I oppose the total ban on short-selling, temporary or not (right), but support the old naked-shorts and uptick rule being reinstated. We'll undoubtedly see more tailored regs at global reach in the future. Even now, a move is on to regulate the derivatives market both domestically and globally, with an eye towards thwarting the incentive to short-sell a stock into collapse.
THIS, is the problem with the derivatives market that you should be concerned about, not the empty notional value which you seem to completely misunderstand. For my part, I'm interested in the effects upon the overall market and how any regulations would affect the already *regulated* derivative trading of utility companies.
QUOTE:
| Mike weren't the markets going up and down long before we were born? You say after a week of manipulation we had a down day. Who manipulated the markets Mike? We just didn't have a down day. |
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No, you've misunderstood me. The manipulation was concerned only with market reaction to the bailout plan not passing the House. In short, why should the markets react favorably when they have to wait to see where the best deal lays?
And what I said was, that we were in for a *sustained* period of volatility. This volatility is perfectly reflected in the flight to quality shift to three-moth T-bills. Rates on three-month bills plunged to 0.06%, the lowest on record, and nobody can get enough of the safe haven they offer. So people are now investing $10,000 to get a grand return of...6 dollars in 3 months. If that's not hesitation at volatility waiting for the market to shake out, I don't know what would qualify. If nothing else, it shows that both domestic and foreign investors know what you and others don't seem to grasp...the USA isn't going anyplace, anytime soon.
In that post, I also mentioned both the upcoming jobs report and other issues as points of reference with direct bearing upon market reaction. This includes the third quarter earning reports...which 24/7 news somehow failed to factor into the mix. One of those not mentioned (though, I mentioned them to you about two weeks ago) in the last post was the settlement auctions on the 6th for the absorbed GSEs. I'd think you would have an interest in those...they'll involve the derivatives market.
QUOTE:
| And, if we are why should anyone listen to you? Clearly, you're involved in this as a broker or some functionary etc. *What else are you going to say*? |
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Michael, it's me and a cowboy hat...one Thin Lizzy LP...two stacks of porn...and a van down by the river. What you should worry about is coming to grips with the actual nature of the derivatives market and an economy that, despite all its shortcomings, will outlive us all.
Edited by Michael Myers on 01 October 2008 at 10:43am
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Michael Myers
Byrne Robotics Member
Joined: 28 December 2004
Posts: 831
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| Posted: 01 October 2008 at 8:31am | IP Logged | 5
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QUOTE:
| Go ahead and name me some economists that you feel are competent. The University of Chicago fellows were circulating a petition (they got like 100 economists according to the Chicago Trib) against the bailout last Monday. Then this Monday they changed their minds. One of the drafter's of that petition was moaning the bailout didn't pass in the Trib today. He sure had a quick change of heart. So are these economists at U. of C. experts? If so, then how come they changed their minds so quickly? Do they know what they are doing or have they spent too much time in the Ivory Tower and not enough on the trading floor? |
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Having demonstrated your penchant for "rephrasing" newspaper articles, would you like to be a little more specific?
I can say this, all of these guys understand the derivatives market:Just say no
Now, at the link, notice both the caveat and the preamble.
QUOTE:
| Given that millions die daily from starvation and you call that not a worldwide depression but a "correction" that is part of a business cycle. From just looking over your posts you don't even take into account worldwide conditions of people but you look at statistics that I don't really trust and I am no expert but I don't believe you are either (you might be though). I mean, water projects could create jobs and save lives and certainly money could be made off such sorts of deals right? Other such projects could bring a lot of money into the US and put a lot of those disputed BLS folks back to work (whatever their true number is). |
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Sure, other measures to combat recession fall under the purview of Congress--none of which were pursued under the Hoover administration of the early 30's--include incentives like cuts in tax-rates and a boosting of aggregate demand by an increase in net government spending. So, what are you suggesting? Japan's experience with hugely expensive, massive public works and deficit spending amounted to exactly nothing, in this regard. These infrastructure investment projects were undertaken with no other stated goal than to offset their nation's stagnate financial growth. Again, ALL proved utterly useless towards resolution of that stated goal.
So, what's your idea? I trust it involves more than nineteen miles of mag-lev track. Remember, China's domestic markets have now lost more than 50% of their value.
And hey, the BLS report was good enough for you to quote from, wasn't it?
QUOTE:
| Oh yeah, sorry to edit, but I am curious just how many municipal bankruptcies you think we will see? I say a lot. |
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Who can say? It's a relatively rare instance by any standard, though, and I wouldn't expect anything more than an uptick in recession.
In keeping with the Great Depression contrast: the land development boom of the 1920s followed by the depression of the 1930s sent over 2,019 municipalities, counties AND other governmental units into default on their obligations. According to A.M. Millhouse's "Municipal Bonds, A Century of Experience", municipal bond defaults jumped from 678 in November of 1932 ro 1,729 by January 1, 1934; with almost 12% of municipalities with a population of more than 30,000 in default nationwide by March 1, 1934.
Can you honestly say you expect to experience something similar in scope, today? With a straight face, I mean?
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Donald Miller
Byrne Robotics Member
Joined: 03 February 2005
Location: United States
Posts: 3597
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| Posted: 01 October 2008 at 8:36am | IP Logged | 6
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Here's an interesting thought that was sent to my in-box....reactions from those more in the now RE: the economy as to why this approach is worse than say bailing out the creditors?
This is an interesting Theory. I don't
know enough to determine if it would really work this way but I'm willing
to give it a try.
I'm against the $85,000,000,000
bailout of AIG.
Instead, I'm
in favor of giving $85,000,000,000 to America in a ""Real Stimulus
Package"".
To make the math simple, let's
assume there are 200,000,000 bonafide U.S. Citizens
18+.
Our population
is about 301,000,000 +/- counting every man, woman and child. So 200,000,000
might be a fair stab at adults 18 and up..
So divide 200
million adults 18+ into $85 billon that equals $425,000
My plan
is to give $425,000 to every person 18+ as a "Real Stimulus
Package".
Of course, it
would NOT be tax free.
So let's
assume a tax rate of 30%.
Every
individual 18+ has to pay $127,500.00 in taxes.
That sends
$25,500,000,000 right back to Uncle Sam.
You'd have to
pass a price freeze on consumer purchases, or you'd have some car manufacturer
selling their cars for $200,000.00; or $20.00 for a gallon of
gas.
But it means
that every adult 18+ has $297,500 in their
pocket.
A husband and
wife have
$595,000.
What would you
do with $297,500 to $595,000 in your family?
Pay off your mortgage -
housing crisis solved.
Repay college
loans - what a great boost to new grads.
Put away money
for college - it'll be there.
Save in a bank
- create money to loan to entrepreneurs.
Buy a new car
- create jobs.
Invest in the
market - capital drives growth.
Pay for your
parent's medical insurance - health
care
improves .
Enable
Deadbeat Dads to come clean - or else
Remember this
is for every adult U S Citizen 18+ including the folks who lost their jobs at
Lehman Brothers and every other company that is cutting back. And of course,
for those serving in our Armed Forces.
If we're going
to re-distribute wealth let's really do it...instead of trickling out a puny
$1000.00 ("vote buy")economic
incentive that is being proposed by one of our candidates for
President.
If we're
going to do an $85 billion bailout, let's bail out every adult U S Citizen
18+!
As for AIG -
liquidate it.
Sell off its
parts.
Let American
General go back to being American General.
Sell off the
real estate.
Let the
private sector bargain hunters cut it up and clean it
up.
Here's my rationale. We deserve
it and AIG doesn't.
Sure it's a crazy idea that can
"never work."
But can you
imagine the Coast-To-Coast Block Party!
How do you
spell Economic Boom?
I trust my fellow adult
Americans to know how to use the $85 Billion "Real Stimulus Package" more than
I do the geniuses at AIG or in Washington DC.
And remember, The Family plan
only really costs $59.5 Billion because $25.5 Billion is returned instantly in
taxes to Uncle Sam.
Thanks for your thoughts, Don
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Al Cook
Byrne Robotics Member
Joined: 21 December 2004
Posts: 12734
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| Posted: 01 October 2008 at 8:39am | IP Logged | 7
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The van down by the river comment just made me laugh out loud.
Think I woke myself up.
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Geoff Gibson
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Joined: 21 April 2004
Location: United States
Posts: 5744
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| Posted: 01 October 2008 at 8:44am | IP Logged | 8
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Personally, I favor the idea of judicial restraint for the following reason: federal judges are appointed for life, therefore they are free from accountability to the people. Their role should be as legal experts who interpret existing law, not as lawmakers themselves.
Our legislators in Congress are the people who should be making laws. It's no coincidence that they are elected by the citizens - government of the people, by the people and for the people, etc. If the people don't like the decisions they make, then they have the opportunity to replace them. But we can't do that with activist judges.
Yeah, I generally agree with your rational. I suppose I look at things somewhat differently vis a vis accountability but not in a truly substantive way. I think where I find some divergence is that sometimes there are, well lets say open spaces, between laws. And into that breach the judicary goes often because congress (or state legislatures) don't want to go there. Judges are afforded powers in both law and equity and I think thats a balancing act that even the best struggle with. Add to it that we have not, as nation, done away with common law (judically created law) which I do think has its place.
I hate the term "Activist Judges" by the way, but I understand what you mean.
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Joel Tesch
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Joined: 19 May 2006
Posts: 2834
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| Posted: 01 October 2008 at 9:03am | IP Logged | 9
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Here's an interesting thought that was sent to my in-box....reactions from those more in the now RE: the economy as to why this approach is worse than say bailing out the creditors?
Come on now...you should know by now that email chains are never right.
So divide 200 million adults 18+ into $85 billon that equals $425,000.
The problem is 200 million adults into $85 billion equals $425, NOT $425,000. Throws off the whole equation.
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Geoff Gibson
Byrne Robotics Member
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Location: United States
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| Posted: 01 October 2008 at 9:07am | IP Logged | 10
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I think this e-mail was referenced upthread. Of course at the speed this thread moves its hard to not to miss something!
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Todd Douglas
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| Posted: 01 October 2008 at 9:08am | IP Logged | 11
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Well, heck, Joel...with that succinct a summary, who needs this link to Snopes?
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William McCormick
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| Posted: 01 October 2008 at 9:13am | IP Logged | 12
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Hell, I'll take the $425. I can fill up my car, the wife's van and have enough left over to fill me up off the McDonald's dollar menu.
Edited by William McCormick on 01 October 2008 at 9:13am
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Topic Closed)
