Do you think Obama will fix the economy?

[The King Of Peasants]

Seeing as his economic plan looks rather like a continuation of Bushs' except with a larger stimulus do you think it will work?

[Andersen]

I think it’s very much out of his hands now. America can’t fix it on her own. The governments in Europe are trying to help the banks and re-start the economy. But it won’t happen unless the public change habits into spending. Not saving. But many people in the West have been living an expensive life. And now the bill comes.

Its funny how incompetent the banks have been. The situation is very bad, and I don’t think Obama can fix it within the first few years. But I believe that the world leaders will stop the economy from going totally out of control. But it will be bad - compared to the overall good 90's.

But hey.. It will be a nice time for the government to fund big investments to fight unemployment.

Its fun though.. People in Denmark (where I live) are really worried about the crisis. But still our unemployment levels are historically low.

[Dracula]

Noone can fix what has been done deliberately. I was surprised at the ammount of unreal credits/that had no real guarantee/ that have been given by the banks. It looks like they took the money for themselves. I don't see what a government can do with this.

[Freddie]

What I find funny is that the British governments solution to the current economic crisis is to spend our way out of it, the very thing that got us in this mess in the first place. There is some sound economic theory behind this that I should be able to quote as I’ve covered in my studies once or twice but I’m buggered if I can remember it.

[Panzerbear]

the only thing that will fix the economy is a free market.

what you have here is classic case of govt-imposed solutions for govt-imposed problems. a double up in my books.

we should allow our markets to hit the rock bottom in order to get a speedy recovery. thats part of natural business cycle. what govt it trying to do is merely prolong the status quo.

[Hekko]

the only thing that will fix the economy is a free market.

what you have here is classic case of govt-imposed solutions for govt-imposed problems. a double up in my books.

we should allow our markets to hit the rock bottom in order to get a speedy recovery. thats part of natural business cycle. what govt it trying to do is merely prolong the status quo.

While I agree to some extent with what you are saying I tend to differ with the complete Laissez-Faire attitude, in my oppinion structural problems should be allowed to hit rock bottom, so that we get rid of them, i.e. US-Auto industry.

Banks and inscurance companies on the other hand need to bailed out, even if they are to blame themselves for the situation, because it will be alot more expensive for avarage Joe if we let those crash.

Cash should also be spent on research and new technology, since this will create new jobs, aswell as boosting the stock exchanges.

And anyway, I don't think the Laissez-Faire policy would work in reality anyway, since the public would get uppset that those they have elected do nothing to help them out of the financial crisis, and start looking around for new policy makers.

[Panzerbear]

And anyway, I don't think the Laissez-Faire policy would work in reality anyway, since the public would get uppset that those they have elected do nothing to help them out of the financial crisis, and start looking around for new policy makers.

well, thats what exactly happened with ellection of Barack the Messiah, didn't it? lets see where strict govt regulations will steer America. just wait and see.

PS: you are mistaken regarding regarding capitalism. the poorly-managed companies declare bankruptsy and are sold to the highest bidder. banks never vanish. they are sold to their stronger competiters. same thing is with Auto industry.

[Hekko]

well, thats what exactly happened with ellection of Barack the Messiah, didn't it? lets see where strict govt regulations will steer America. just wait and see.

Say what you want but we live in interesting times indeed!

PS: you are mistaken regarding regarding capitalism. the poorly-managed companies declare bankruptsy and are sold to the highest bidder. banks never vanish. they are sold to their stronger competiters. same thing is with Auto industry.

Problem is in these troublesome times is that no one probably will want to buy a bankrupt bank, especialy since alot of banks are having troubles, and the bankrupt can't really buy the other bankrupt. Same thing with the Auto industry, people won't buy alot of cars the next couple of years, so expanding isn't really a great idea, so no one will want to buy it, aswell as the fact that they produce cars that will be extremly hard to sell (that's the reason for their problems isn't it), and changing the factories to produce smaller more economical cars will cost atleast some money, and that's money that could be spent elsewhere.

[Xan]

Obama seems capable and i think things will be better with him then under someone els but he is not superman so i think we will still face difficult times.

[Shrapnel]

What I find funny is that the British governments solution to the current economic crisis is to spend our way out of it, the very thing that got us in this mess in the first place. There is some sound economic theory behind this that I should be able to quote as I’ve covered in my studies once or twice but I’m buggered if I can remember it.

Basically if the government stops spending money, then the businesses who are having the money spent on aren't getting any money, which means they can't pay their workers and the workers get laid off. This increases reliance on social benefits and the workers will stop spending money as well, which means that other people will lose their jobs due to loss of business. So ideally, everyone would start spending their life savings on things which would mean that everyone would keep their jobs, however as this is unlikely to happen the government is spending the money. Another problem is that governments can only spend money on large projects, like building works which would be ideal in a long recession but seeing as this one is only expected to last two years, the projects will barely have time to get started let alone finish. And massive spending creating an even bigger deficit just means that we will have massive taxes once we're out of the recession. Labour's economic policies have been madness....


As for Obama, he has put together a decent economic team so i'm hopeful that he will prove more effective than Bush, he should do alright as long as he doesn't advocate Protectionism (highly taxing foreign goods so people spend more on home country goods), since then the whole world goes into Protectionism and we're in the next Depression..

[Rebel Jeb]

Obama? Fix something? Haha, yeah right.

[the_mango55]

Well, I think the Economy will right itself while Obama is in office, but I don't know how much he will have to do with it.

[Musthavename]

What I find funny is that the British governments solution to the current economic crisis is to spend our way out of it, the very thing that got us in this mess in the first place. There is some sound economic theory behind this that I should be able to quote as I’ve covered in my studies once or twice but I’m buggered if I can remember it.

What's worse is that Labour, who helped make this crisis worse, have had their poll ratings GO UP since the downturn.

Last night there was a quick news story about a Tory Economic advisor during the late 70s problems. Before that, the norm had been to keep up spending to keep unemployment to as low of possible. What they did, was cut spending and let it run it's course. The result, once the recession was over, we had far better prospects. Point is, the spending spree Labour is going on won't do anything, instead it'll just mean tax hikes in the future. The 2.5% cut in VAT was a pointless waste of money. Why would someone think "well, i'll buy stuff now because it's £2.50 cheaper for every £117.50 I spend"?

Back to the topic title, Obama won't fix it, no-one will. It'll run it's course, house prices will have fallen 30% or so, people will have saved up deposits, they'll start buying houses again, prices will level off, and banks will start lending. This recession will last throughout 2009, and probably a fair way into 2010, with or without help (admittedly, the Banks have needed to be bailed out, but that's it). What annoys me, is everybody screaming "WE MUST STOP THE HOUSE PRICE COLLAPSE". Why is nobody thinking "House prices are too high, they need to come down so people can buy them again!". At least in the UK, most of our problems are because huge property prices have finally caught up on people, don't know if that's mirrored anywhere else.

I'm just primarily annoyed at seeing my savings go down from 5-6% to 2%, other than that, because i'm a saver, I haven't felt any other negatives from the recession.

[Rush Limbaugh]

Oh he will fix it all right just as all socialists do. Hold on to your wallets. The new Carter Administration will soon be in office.

[jankren]

Before Obama created the world in six days and rested on the seventh day. This time I expect it wont be any longer than that.

[Dunecat]

Do you think Obama will fix the economy?

No.

Here is my prediction, and I'd be shocked if I'm wrong: He'll stimulate the economy like hell, and then a few years in the near future we face a worse recession, possibly a depression. Then we go to war.

[JP226]

What I find funny is that the British governments solution to the current economic crisis is to spend our way out of it, the very thing that got us in this mess in the first place. There is some sound economic theory behind this that I should be able to quote as I’ve covered in my studies once or twice but I’m buggered if I can remember it.

It's the multiplier effect, but any benefit that is caused by it is erased as the private sector implicitly and explicitily is crowded out from the economy.

[Viking Prince]

From another thread:

Originally Posted by Viking Prince
Obama Warns of Prospect for Trillion-Dollar Deficits

Looking years out, the future president announces -- Yep, we are going to spend like drunken sailors. We may be in a recession and yet banks are not willing to lend -- why? Well, would you lend at close to 0% rates when inflation may be looming around the corner? If I was a banker, the Obama press conference would have me raising rates on all debt where able -- this means credit cards and other tools for retail purchase transactions. Low interest car loans - forget it. Home improvement loans for those deciding to stay put -- not without 24% rates.

Remember -- trillion dollar deficits do not tell you about the planned growth in gevernment spending -- there may very well be net tax increases as well as the defiicit. As the percentage of the economy controlled by the government grows -- the chances of a recovery decline. Why? The government sucks all of the capital into government issued debt instrumants.

This may very well be a Keynsian nightmare of great proportions. Good luck America. We voted for hope and change. You now have a president that is hoping for change -- spare change and more out of your pocket.

So no -- Obama will not fix the economy, unless you mean in the sense that a horserace is fixed.

[Surgeon]

I'm willing to bet the economy might right itself during his term. How much he'll have to do with it, we will see, although frankly I don't think he will be involved too much. Probably won't stop people from giving him the credit for it.

Alternately, maybe the economy will get worse and the world will swim further up the creek.

[Valiant Champion]

No

And I will tell you why.

Because David Rockefeller already owns him just like he did Bush.

You cant trust our government anymore to protect our currency, jobs and businesses.