This is the first time someone else has put in in my words that I know of.

[The Buddha]

2001-2007 economic growth was fake because it was completely propped up by stimulus and hidden incentives, and some not so hidden ones too.

From http://bayarearealestatebubble.blogspot.com/

Stating the Obvious: Why the Stock Market Should Crash
(November 16, 2009)

The trillions squandered on "stabilization" is not leading to "recovery" of the real economy; it is only life support keeping a sick economy from imploding. The stock market rally rests on rapidly crumbling sand.

I'm not saying the stock market will crash, only that if it had any relation to the real U.S. economy that it should crash, and soon.

The current politics of experience (a key concept in Survival+) is so warped by misleading statistics and orchestrated propaganda that it feels strange to state the obvious and find it is "that which cannot be spoken": the credit-dependent, consumer-dependent U.S. economy is going down, and going down hard, and the trillions of dollars borrowed and spent by the U.S. government and Federal Reserve to crank up a recovery have failed completely, utterly and totally.

The basic idea of Keynesian policy is simple: when the wheels fall off the private, quasi-free enterprise economy, then the government borrows and spreads mountains of money around like fertilizer which will stimulate "green shoots" of recovery.

The forgotten key to successful Keynesian policy is a government which has not been borrowing and spending trillions of dollars even during an era of so-called "prosperity." When a government like the U.S. has been propping up "prosperity" with trillions in borrowed money for a decade, then doubling or tripling the "stimulus" in the hopes that the green shoots will be enduring is truly farcical.

If the economy needed several trillion dollars in deficit spending to eke out the meager jobless growth of 2001-2007, then why does anyone think that doubling or tripling that deficit spending will create an enduring boom?

The truth is the U.S. economy has been dependent on Federal stimulus for years, both the indirect stimulus of artificially low interest rates and unlimited liquidity, and the direct spending of hundreds of billions of borrowed dollars.

Even before the financial crisis, the Federal government was borrowing and spending $400 billion a year to prop up "prosperity." All that spending simply papered over the rot at the core of the economy:

Basically we cannot borrow and finance our way to prosperity because we have borrowed and financed our way into this mess.

Cool.
Buddha.

[yamahonkawazuki]

2001-2007 economic growth was fake because it was completely propped up by stimulus and hidden incentives, and some not so hidden ones too.

From http://bayarearealestatebubble.blogspot.com/

Stating the Obvious: Why the Stock Market Should Crash
(November 16, 2009)

The trillions squandered on "stabilization" is not leading to "recovery" of the real economy; it is only life support keeping a sick economy from imploding. The stock market rally rests on rapidly crumbling sand.

I'm not saying the stock market will crash, only that if it had any relation to the real U.S. economy that it should crash, and soon.

The current politics of experience (a key concept in Survival+) is so warped by misleading statistics and orchestrated propaganda that it feels strange to state the obvious and find it is "that which cannot be spoken": the credit-dependent, consumer-dependent U.S. economy is going down, and going down hard, and the trillions of dollars borrowed and spent by the U.S. government and Federal Reserve to crank up a recovery have failed completely, utterly and totally.

The basic idea of Keynesian policy is simple: when the wheels fall off the private, quasi-free enterprise economy, then the government borrows and spreads mountains of money around like fertilizer which will stimulate "green shoots" of recovery.

The forgotten key to successful Keynesian policy is a government which has not been borrowing and spending trillions of dollars even during an era of so-called "prosperity." When a government like the U.S. has been propping up "prosperity" with trillions in borrowed money for a decade, then doubling or tripling the "stimulus" in the hopes that the green shoots will be enduring is truly farcical.

If the economy needed several trillion dollars in deficit spending to eke out the meager jobless growth of 2001-2007, then why does anyone think that doubling or tripling that deficit spending will create an enduring boom?

The truth is the U.S. economy has been dependent on Federal stimulus for years, both the indirect stimulus of artificially low interest rates and unlimited liquidity, and the direct spending of hundreds of billions of borrowed dollars.

Even before the financial crisis, the Federal government was borrowing and spending $400 billion a year to prop up "prosperity." All that spending simply papered over the rot at the core of the economy:

Basically we cannot borrow and finance our way to prosperity because we have borrowed and financed our way into this mess.

Cool.
Buddha.

well said buddha, but tell that to obama, and presidents past

[The Buddha]

Problem is - well it goes clean back to 2001, so its in the non Obama realm. Sadly he continued the horrors started by Bush. And again McCain will not have done anything different where this is concerned.
However there was no way to rein it in once its crashed. It should have been reined in 03-04. of course the side effect there will ahve been to reduce the thing from getting out of control from then to 07, made for a smaller bubble.

And there has not been a single conservative president going back to Carter. Worse yet, not 1 economist has suggested this, and yes blogs have been spraying this out there but apparently no economist reads them.

Sadly I think keynsian economics itself is flawed. Even getting it right is like being the best student at gonzaga. Its flunking at best and disastrous or worse at its worst. I think sooner or later we will abandon the whole keynsian crap and go to a freidman type economic system.

Cool.
Buddha.

[Cal Price]

One of the things that has always puzzled me is that the revered economic thinkers, left, right, liberal, third way, whatever whatever invariably at some point end up referring to "The economic cycle" Are they all saying that regardless of how we, or anyone else, manages economies there is an inevitable cyclic chain of events that cannot be altered?
If so, I ask myself, and you, why bother?

There seems to have been a period where we "broke" the cycles by having world wars which I don't suppose anyone is advocating now, or are they? go figure. Incidentally if anyone thinks it IS a good idea, consider the world economies between the world wars, WW2 worked pretty well for the US which came out four times as wealthy as it went in but UK was bankrupt and in ruins as was pretty much the rest of the world, except perhaps Japan. Bit too risky to try again, it would probably simply accelerate China to world's primary economy even quicker.

[The Buddha]

Economic cycles yes but no president wants it on their record saying they were the president in the recession, its political suicide, however why dont second term presidents be hands off - yes that cos there is a few 100 senators who cant let it happen on their watch cos they have "aspirations".

Comming to think of it, recession is a great time to get a budget balanced - cos everythign is cheaper and you can of course print $ to cover your expenses. Needless to say it will be pointed to as the move that caused the great depression.

I love it when people buy stuff to improve the economy. That just is an indication of how gullible they are.

Cool.
Buddha.