Wednesday, July 08, 2009

Gallup Daily: State of the Nation

Gallup Daily: State of the Nation
This chart shows that dissatisfaction with the state of affairs in the US dropped from around 80% to 60% in the first four months of the Obama administration. People were swept up in the overall sense that "hope and change" were coming. But look what has happened since May. The level of dissatisfaction has gone back up steadily, and is now at 68%. This is not surprising, because unemployment has continued to climb, gas prices have gone back up, the housing market is still in the toilet, state and local budgets are horrifying, and people are worried about government debt and eventual tax increases. In other words, the hopey-changey laughing gas is blowing away in the wind of the recession.

The Democratic Party runs the national government, so it is time for them to show what they have to offer.


DBX said...

And the trouble is that so far, what we've seen is a continuation of the Bush second term -- a lot of borrowing and and a lot of featherbedding for the financial sector with very little to show for it.

My belief is that we're in a deep emergency -- an 1874 or a 1930 -- and truly radical steps are needed, directed at the root cause of the trouble, which is that one, consumers and businesses alike are grossly overindebted. And two, we import more than we export and have done for years. Where's the government policy addressing those two things?

An early 1930s-style stimulus won't work. That's what we're attempting now. Bank bailouts don't address the root of the problem which is that we're insolvent, not merely illiquid as we were in the 1930s, while stimulus monies keep construction from going belly up but don't actually add net new jobs. Besides, there's the problem, in a government still full of burrowed-in Bush-era incompetents, of actually mobilizing the stimulus money. Perhaps a mid-1930s-style stimulus might -- in other words, a jobs program -- but we're still left with that debt mountain looming over our heads if our increasingly indebted government can't sustain that kind of stimulus, which it probably can't.

So what about canceling a lot of that debt to start with? Forgiving a portion of student loan debt? Forgiving a portion of mortgage debt for people who haven't defaulted or walked away? Our options in this score continually become more limited as banks exercise their TARP warrants at a huge loss to the government, so there's real urgency in this area.

Evan McKenzie said...

I like that idea of targeted debt relief.

Anonymous said...

Funny how some folks continue to try to attribute this in some way to Bush. This isn't Bush's policy, this is Obama's policy. Moreover, whatever you want to say about Bush's policy of spending it pales in comparison with Obama's regime which has easily outspent Bush by 3 or more orders of magnitude and condemned generations of Americans to pay for propping up businesses, executives, and politicians that should have been permitted to fail. If you want to start solving the debt problem, how about addressing the credit card problems? Cap interest rates at 12-15% absolute max. If credit card companies have an issue with it they don't have to issue the card. Interest rates in the 30.99-34.99% range may be enriching a few credit card companies for a little while until that likewise fails. Such rates are wholly usurious.

You could also not "punish" people that lost their house through foreclosure. Most folks don't simply just decide to stop paying. They've lost jobs, had wages cut, etc. All you're doing is creating a glut of foreclosed homes and shrinking the number of people that can be made eligible to purchase them. In fact it would be nice if there was a trading system operated by the lenders that allowed homeowners to trade down without penalty. Reduced ability does not mean no ability so let them move and refinance to a smaller home instead of punishing them for foreclosure on a larger home that can't be sold. It's not really in the bank's best interest either because there won't be anyone left to take it off the bank's hands.