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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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 Posted: Fri Jan 30, 2009 4:17 am Post subject: Economic bill passes the House without a single GOP vote |
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source
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After a day of frantic maneuvering to lock up the final votes, the House of Representatives narrowly approved President Clinton's five-year economic plan tonight, putting him on the verge of the most important victory of his young Presidency.
The vote, in doubt until the final gavel, was 218 to 216. All 175 Republicans voted against the measure, but they were joined by only 41 Democrats. The victory was provided by the 217 Democrats and one independent who stood with the President.
If only one more Democrat had voted with the opposition, the bill would have failed on a tie vote. The last two Democrats to vote and provide the margin of victory were Representatives Marjorie Margolies-Mezvinsky, a freshman who represents a heavily Republican district in the Philadelphia suburbs, and Pat Williams, who represents the entire state of Montana. 'Margin Was Close'
All week long, Democratic leaders had predicted that the bill would pass but did not know whose votes would provide the margin of victory. As late as dinner time, the final votes were not in line.
President Clinton praised the House tonight for "putting the national interest ahead of the narrow interest."
Speaking from the South Portico of the White House to jubilant aides, Mr. Clinton declared, "The margin was close, but the mandate is clear."
Mr. Clinton ended his remarks by saying, "I congratulate those who voted, I urge the Senate to follow their lead, and I look forward to continuing the battle tomorrow." |
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The President's plan is not perfect, said the Speaker of the House, Thomas S. Foley of Washington. But, he continued, "it is a critical beginning on that difficult road back."
Republicans, Mr. Foley said, were "marching in lock-step." He added, "We on this side must bear the burden of responsibility."
Representative Richard A. Gephardt of Missouri, the majority leader, said it was important "to see that the country we hand to the next generation is not as good but is better than the country that was handed to us." 'Change for the Worse'
Republicans said their opposition was not a matter of partisanship but of principle.
"This debate defines the difference between Republicans and Democrats," said Representative Dick Armey, Republican of Texas. "Democrats believe prosperity comes from bigger Government. Republicans know it comes from ordinary people acting on behalf of themselves and their families."
The change President Clinton stands for, Mr. Armey said, is "change for the worse." |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Fri Jan 30, 2009 6:31 am Post subject: |
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1993
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Jan 30, 2009 6:50 am Post subject: |
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Well, it is nice to see the Republicans are 'back'.
Whining about spending is too cynical for words, coming from them and their past 8 years. But I guess the people who insisted that the Repubs make a great opposition are right.
The stimulus will not fix the American economy. The debts need to be liquidated and this will take time. Citi, BofA etc will fail. The FIRE economy needs to die, die, die. It is a natural process (if you have Greenspan as Fed Chair).
I'd like to know where this consensus for "stimulus" came from and how it became dominant.
So, they will pass it and then this will happen:
1) Banking system to be nationalized. Banks cleaned up and spat out more sane.
2) Credit card, student loans and commercial real estate (a looming catastrophe) will fail. Causing round two.
3) The bond market will punish governments leading to increased debt costs, causing a serious fiscal crises among American states, European nations and the rest of the world.
4) etc
We really need our politicians to just calm down. The reference point here should not be the depression of the 30's, but 19-20-21. This depression past quickly, though was severe because the state didn't make it worse by doing what they are doing now.
http://www.prudentbear.com/index.php/commentary/bearslair?art_id=10164
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| In none of the 1921, 1947 or 1981 recessions did government engage in massive bailouts (the Chrysler bailout ─ only $1.5 billion, less than 0.1% of Gross Domestic Product ─ was passed in 1979, before the main leg of recession hit). Neither did the government indulge in stimulus packages in 1921, 1947 or 1981 (although President Reagan's tax cuts had some stimulative effect in 1982-83); instead its stand on public spending on all three occasions was markedly restrictive. Finally, at no time in 1921, 1941 or 1981 did the Fed run a negative real interest rate policy; instead real interest rates were positive in all three years, sharply so in 1921 and 1981. |
read the whole article for a great discussion of this topic. |
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mises
Joined: 05 Nov 2007
Location: retired
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Fri Jan 30, 2009 7:25 am Post subject: |
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Thank you Cato.
Thank you Ludwig Von.
(But still, the OP's story is from 1993.) |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Jan 30, 2009 7:31 am Post subject: |
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| ontheway wrote: |
(But still, the OP's story is from 1993.) |
I think Mith is trying to make a larger point.
Anyways:
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Global Worries Over U.S. Stimulus Spending
By NELSON D. SCHWARTZ
DAVOS, Switzerland � Even as Congress looks for ways to expand President Obama�s $819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all.
Few people attending the World Economic Forum question the need to kick-start America�s economy, the world�s largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the United Stated government, and its potential to drive up inflation and interest rates around the world, seems to getting more attention here than in Washington.
�The U.S. needs to show some proof they have a plan to get out of the fiscal problem,� said Ernesto Zedillo, the former Mexican president who helped steer his country through a financial crisis in 1994. �We, as developing countries, need to know we won�t be crowded out of the capital markets, which is already happening.�
Mr. Zedillo said that Washington, unlike most other countries, had the option of simply printing more money, because the dollar was a reserve currency for the rest of the world.
Over the long run, that could force long-term interest rates higher and drive down the value of the dollar, undermining the benefits that come with its special status.
Until now, most fears about surging government debt have focused on borrowing by European countries like Spain, Greece and especially Britain, which is also in the midst of a sizable bank bailout. That recently forced the British pound to a 23-year low against the dollar.
While the dollar�s status as refuge in a time of turmoil should prevent that kind of sell-off for now, a number of financial specialists warned that if fundamental factors like the lack of American savings and bloated budget deficits did not change, the dollar could eventually fall sharply .
�There aren�t that many safe havens,� said Alan S. Blinder, a Princeton economist who is a former vice chairman of the Federal Reserve in Washington, explaining why the dollar�s status as a reserve currency is unlikely to be threatened.
Instead, it is the dollar�s long-term value against other currencies that is vulnerable. �At some point, there may be so much Treasury debt, that investors may start wondering if they are overloaded in dollar assets,� Mr. Blinder said.
While the focus in Washington has been on putting together a stimulus package that will attract broader political support when it comes up for a vote in the Senate, here in Davos the talk has been about the coming avalanche of Treasury debt needed to pay for the plan on top of the bailout measures approved last fall, like the $700 billion Troubled Asset Relief Program, or TARP.
The stimulus was approved Wednesday by the House without Republican support, and could grow larger � mostly likely with additional tax cuts � to attract a bipartisan coalition.
American officials maintain they are aware of the challenge. A top White House adviser, Valerie Jarrett, promised in Davos on Thursday that once the stimulus plan achieved its intended affect, the United States would �restore fiscal responsibility and return to a sustainable economic path.�
To be sure, Congress and the White House will ultimately need to refill the government�s coffers, but how they might do that is barely on the radar screen in Washington at this point.
�Even before Obama walked through the White House door, there were plans for $1 trillion of new debt,� said Niall Ferguson, a Harvard historian who has studied borrowing and its impact on national power. He now estimates that some $2.2 trillion in new government debt will be issued this year, assuming the stimulus plan is approved.
�You either crowd out other borrowers or you print money,� Mr. Ferguson added. �There is no way you can have $2.2 trillion in borrowing without influencing interest rates or inflation in the long-term.�
Mr. Ferguson was particularly struck by the new borrowing because the roots of the current crisis lay in an excess of American debt at all levels, from homeowners to Wall Street banks.
�This is a crisis of excessive debt, which reached 355 percent of American gross domestic product,� he said. �It cannot be solved with more debt.�
While Mr. Ferguson is a skeptic of the Keynesian thinking behind President Obama�s plan � rather than borrowing and spending to stimulate the economy, he favors corporate tax cuts � even supporters of the plan like Mr. Zedillo and Stephen Roach of Morgan Stanley have called on the White House to quickly address how it will pay for the spending in the long-term.
�It�s huge,� Mr. Roach, the chairman of Morgan Stanley Asia, said. �President Obama has now laid out a scenario of multiyear, trillion-dollar deficits.�
The stimulus is widely expected to pass, but once it does, Mr. Roach said the focus would shift to �who foots the bill and what is the exit strategy. We don�t have the answer to either question.�
Mr. Zedillo, who remembers how Mexico was forced to tighten its belt when it received billions from Washington to keep its economy from collapsing in 1994, was even more blunt.
�People are not stupid,� Mr. Zedillo said. �They see the huge deficit, the huge spending, and wonder what comes next.� |
http://www.nytimes.com/2009/01/30/business/worldbusiness/30davos.html?_r=2&ref=business&pagewanted=print |
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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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| Posted: Fri Jan 30, 2009 8:12 am Post subject: |
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| Actually I was thinking the same thing, that the GOP somehow seems to be happier in opposition than in government, at least the GOP I've known since the 90s. They kind of remind me of the opposite of the NDP. |
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