Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Could Govt support a second Great Recession ?
Old 05-19-2015, 01:31 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Could Govt support a second Great Recession ?

For all the thinkers out there, if we had a great recession part two in the next couple years, could the US govt (and foreign) use the tools they did last time to get us through a second time?
dallas27 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-19-2015, 01:34 PM   #2
gone traveling
 
Join Date: Sep 2003
Location: DFW
Posts: 7,586
Tool #1 is cutting rates which currently have no more room to cut.
eytonxav is offline   Reply With Quote
Old 05-19-2015, 02:07 PM   #3
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,428
So dallas27, suppose you are a responsible party - member of Fed, President, Congress critter, etc.


With rates at zero, what would you do if the economy was in collapse? If you come up with a good plan, please share.
Tadpole is offline   Reply With Quote
Old 05-19-2015, 02:17 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 9,343
Not an unreasonable question to ask as currently on average we are already past due for another run of the mill recession.


Sent from my iPad using Tapatalk
Mulligan is offline   Reply With Quote
Old 05-19-2015, 02:20 PM   #5
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 2,223
Don't know for the US , but Japan has been holing on through many great recessions starting in the 1980's ( IMO ) , partly with the near zero rates and gov. stimulus spending.
Lakewood90712 is offline   Reply With Quote
Old 05-19-2015, 02:26 PM   #6
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 2,223
Quote:
Originally Posted by Tadpole View Post
So dallas27, suppose you are a responsible party - member of Fed, President, Congress critter, etc.


With rates at zero, what would you do if the economy was in collapse? If you come up with a good plan, please share.
$10,000 refundable tax credits for everyone, only requirement is that the money was spent, not saved.
__________________
" A person is smart, but People are dumb, dangerous, panicky animals, and you know it " Agent "K", Men in Black
Lakewood90712 is offline   Reply With Quote
Old 05-19-2015, 04:53 PM   #7
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,299
Quote:
Originally Posted by Lakewood90712 View Post
$10,000 refundable tax credits for everyone, only requirement is that the money was spent, not saved.
Cool! That's my excuse to buy that expensive Nikon D4s camera ($6k) and a couple of lenses that I've been drooling after wanting.
__________________
When I was a kid I wanted to be older. This is not what I expected.
Walt34 is offline   Reply With Quote
Old 05-19-2015, 04:58 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,525
Like Ben said, as last resort just shovel money out of that proverbial helicopter. I believe Ms. Janet has applied for her helicopter pilot's license... I think the government has lots of choices other than interest rates as long as the political will is there. If however, the Government response is like it was back in 1929 i.e. just stand back and let the market take care of things on its own- not so much.
ejman is offline   Reply With Quote
Old 05-19-2015, 05:42 PM   #9
Gone but not forgotten
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 6,335
Quote:
Originally Posted by dallas27 View Post
For all the thinkers out there, if we had a great recession part two in the next couple years, could the US govt (and foreign) use the tools they did last time to get us through a second time?
I don't think so.

As a thinker and an early member (1985), my choice would be for "A Just Third Way" ... Here:
Welcome to CESJ! - Center for Economic and Social Justice | Center for Economic and Social Justice

Few who have read Loiis Kelso's "The Capitalist Manifesto" come away unaffected.

I especially like the code of ethics:
http://www.cesj.org/about-cesj/what-...ode-of-ethics/
imoldernu is offline   Reply With Quote
Old 05-19-2015, 09:28 PM   #10
Full time employment: Posting here.
cooch96's Avatar
 
Join Date: May 2014
Location: Lakewood
Posts: 919
Imoldernu, I've been meaning to read a Capitalist Manifesto. I'll move it higher in my queue.

Does the Third Way involve using sound money?

As a free marketer, I'd welcome the government stepping aside and letting things sort themselves out and rebound. I think Amity Schlaes made a convincing point that the New Deal meddling prolonged recovery until AFTER WWII and many of the confusing and conflicting social programs were disbanded. The super wealthy would get hurt the most (relatively) and the poorest wouldn't notice a change. Those with talent and agile skills would rise and lift the economy.

Please pardon my Blue Skies verbiage, but I get emotional about red tape inertia.
__________________
Why be normal when you can be yourself?
cooch96 is offline   Reply With Quote
Old 05-20-2015, 05:46 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,317
Who knows. The Fed can print money till the cows come home. Lots of predictions for hyper inflation and destruction from the stimulus we already went through and here we are still waiting. Seems like eventually something has to give but Krugman would undoubtedly vote for an aggressive response and he knows more about this than we do. What I doubt we would see is an aggressive bipartisan response on the Hill which might really send a message.
__________________
Idleness is fatal only to the mediocre -- Albert Camus
donheff is offline   Reply With Quote
Old 05-20-2015, 06:01 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Quote:
Originally Posted by donheff View Post
What I doubt we would see is an aggressive bipartisan response on the Hill which might really send a message.

On that, i expect, we may all agree.



Sent from my iPhone using Early Retirement Forum
dallas27 is offline   Reply With Quote
Old 05-20-2015, 06:10 AM   #13
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,650
Quote:
Originally Posted by dallas27 View Post
For all the thinkers out there, if we had a great recession part two in the next couple years, could the US govt (and foreign) use the tools they did last time to get us through a second time?
Just finished reading Timothy Geithners book, found it very insightful.

In terms of recession fighting, I think so. Whether the political will is there to act on it, which is more important, seems impossible to answer upfront.

In terms of tackling another banking crisis, apparently the US congress took away some tools (emergency powers) to stop panics, so those won't be available anymore when disaster (first) strikes.
Totoro is offline   Reply With Quote
Old 05-20-2015, 01:51 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
Why worry about that bridge now?
Lsbcal is offline   Reply With Quote
Old 05-20-2015, 02:19 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Quote:
Originally Posted by Lsbcal View Post
Why worry about that bridge now?

...Said the globally recognized brilliant owners of LTCM before they brought the country down to it's knees.


Sent from my iPhone using Early Retirement Forum
dallas27 is offline   Reply With Quote
Old 05-20-2015, 02:30 PM   #16
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 2,223
Quote:
Originally Posted by dallas27 View Post
...Said the globally recognized brilliant owners of LTCM before they brought the country down to it's knees.


Sent from my iPhone using Early Retirement Forum
IIRC , some of the principals at LTCM received the Nobel prize a couple of years before they went into the dumpster .
Lakewood90712 is offline   Reply With Quote
Could Govt support a second Great Recession ?
Old 05-20-2015, 02:35 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Could Govt support a second Great Recession ?

Quote:
Originally Posted by Lakewood90712 View Post
IIRC , some of the principals at LTCM received the Nobel prize a couple of years before they went into the dumpster .

Ya, they solved a longstanding math problem of how to (perfectly) hedge risk, and properly price options. And they were right mathematically. In the real world they were right, and profited bigtime, until they were not. Ultimately, they lost a bet on how long it took the market to return to the correct pricing. The saying is that the market prices can remain irrational longer than your model can remain solvent, despite being right.


Sent from my iPhone using Early Retirement Forum
dallas27 is offline   Reply With Quote
Old 05-20-2015, 04:31 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
Quote:
Originally Posted by dallas27 View Post
...Said the globally recognized brilliant owners of LTCM before they brought the country down to it's knees.
Maybe you could expand on this?

I don't see the connection between LTCM and a general recession which was the OP concern. LTCM was a short term equity market crisis that did not get into the general economy.
Lsbcal is offline   Reply With Quote
Old 05-20-2015, 05:41 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Quote:
Originally Posted by Lsbcal View Post
Maybe you could expand on this?

I don't see the connection between LTCM and a general recession which was the OP concern. LTCM was a short term equity market crisis that did not get into the general economy.

They were the epicenter of the recession, and arguably put the world system at risk.


Sent from my iPhone using Early Retirement Forum
dallas27 is offline   Reply With Quote
Old 05-20-2015, 06:22 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
Quote:
Originally Posted by dallas27 View Post
They were the epicenter of the recession, and arguably put the world system at risk.
The LTCM problems were in the fall of 1998. There was a sharp downturn in August 1998 but no recession.
Lsbcal is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
FIRE calc and the Great Recession TNT FIRE and Money 8 01-24-2014 03:45 PM
The Great Recession IndependentlyPoor FIRE and Money 70 07-11-2010 05:40 AM
Could the recession be good for your health? Meadbh Health and Early Retirement 3 09-01-2009 07:46 PM
We could support ourselves from the taxes we pay chinaco FIRE and Money 18 06-13-2007 09:03 PM

» Quick Links

 
All times are GMT -6. The time now is 02:56 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.