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Author Topic: What is a leader allowed to cut?
A Rat Named Dog
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Whenever the nation or a specific state faces a funding crisis, people come out in droves to demand a balanced budget — as long as you don't raise taxes and don't cut anything.

Wha-wha-WHUH? So, I'm curious what you folks think are legitimate ways to balance a budget that won't get a leader hanged.

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pooka
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I'm sure Howard Dean will tell us once he is nominated. [Wink]
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rivka
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[Evil] There are none. That's what makes politics so much fun! [Evil Laugh]
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Bokonon
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Dean's basically said he's "repealing the Bush Tax Cuts" (aka raising taxes). Of course that isn't enough to completely cover the deficit, that is in part caused by the downturn in the economy (loss of corporate tax receipts).

-Bok

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Tresopax
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Luxuries that can be cut in a crisis (in this order):

-Pork (you know what I'm talking about)
-Charity money to other states
-Military expenditures that don't address any imminent or immediate threat
-Arts/Entertainment Projects
-Government Employee Salaries / Leader Salaries
-Major nonessential long-term projects that haven't begun yet (Trips to the moon, massive highway projects, etc.)
-Programs aimed at social change (anti-smoking campaigns, etc.)
-Nonessential health care
-Funding for colleges and universities

If you get through all these, then raise taxes.

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Lalo
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I agree on most of those, Tres, but funding for high education is absolutely essential to promoting a productive long-term economy -- not to mention keeping the voting public educated. It needs to be available to everyone, and to do that, it needs to be able to keep open classes and low tuition. It's not a slashable budget.

Though I can see why Republicans wouldn't want an educated voting public. [Wink]

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pooka
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If pork were obvious, why do we still have any? Like I don't see why there needs to be an air force base in Utah. It seems like Hatch keeps getting elected (as senator) because he says he fights for it, and the way he fights for it (I'm guessing) is to tell the senate, or at least other republicans, that it is how he gets re-elected. I'm a conservative, but republicans who haul pork seem extra hypocritical to me.
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Rakeesh
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Why on Earth are funding to colleges and universities after A&E? And why is A&E before military expenditures? Yeesh!

Then again, I'd understand if you didn't include public education in that list. The most expeditious way to ensure the most people will go to college and graduate is that all the education prior to that be as universal, well-staffed, and well-funded as possible.

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fugu13
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We have pork because pork is what greases the political wheels.
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Rhaegar The Fool
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Your throat, US government, starts with US which stanmds for us, them, we, the government.
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Dan_raven
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Tres I disagree almost completely with your list.

-Pork (you know what I'm talking about)--no we don't. One man's pork is another man's neccesity.

-Charity money to other states--The idea behind money spent in other states is that it is cost effective in the long run. Money spent in other states stops expensive military expenditures.

-Military expenditures that don't address any imminent or immediate threat--we can pay 1 million now to stop that imminent or immediate threat. Japan was not an imminent or immediate threat until 12/7/41. Al Queada was not an imminent or immediate threat until 9/11

-Arts/Entertainment Projects-- OK. This one I would hate to loose, but of them all, I see as least economically productive. Of course, it is also the least expensive of the let.

-Government Employee Salaries / Leader Salaries-- Leaders salaries, yes. Cutting Government Employee's salaries is a great way to increase government corruption and insure our government is run by the least motivated people around. One of the big things that led the rash of accounting problems that drove our economy down was the fact that the stock market was and is being watched by people who make 1/20th of the salaries they could get working for Enron. We are lining up $30-45,000 accountants against those making $500,000-$1,000,000. and out numbering ours as well.

-Major nonessential long-term projects that haven't begun yet (Trips to the moon, massive highway projects, etc.)--It has been thought of in the past that these were projects useful to get money into the economy that increases business.

-Programs aimed at social change (anti-smoking campaigns, etc.) -- The healthcare money saved by getting people to quit smoking will far out weigh the costs of these programs.

-Nonessential health care -- again, one persons non-essential health care is another person neccesity. Stopping small treatments will lead to major problems with major expenses down the line. The person who can't afford the $3.00 aspirin today will be teh person getting the $40,000 Heart Bypass tomorrow.

-Funding for colleges and universities--as others have said, if we do not educate our students we will not have an educated workforce when the economy rebounds.

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Fooglmog
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I'm actually with rivka. No matter what you cut someone is going to cry foul.

But in a democracy it doesn't really matter if someone cries foul, as long as more people are happy with your decision then are upset by it, you stay in power.

Though in the US today, raising taxes is essentially political suicide. I you're concerned with your next term in office you cut pretty much every program before raising taxes, if you're concerned with the future of the country, you raise taxes. Most politicians choose the former.

-Fooglmog
Guy with no clue.

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Tresopax
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Dan,

It's easy to come up with some reason not to cut something - but what are you going to cut instead?

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Sopwith
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What to cut? Hmm, how about putting some of our expenses into the private sector?

1. Charge more for publicly-owned grazing lands.

2. Charge more for timber harvested from public lands.

3. Charge higher licensing fees for oil exploitation rights on our own reserves.

4. Tax Reservation Casinos at the same tax rate others have.

5. Have broadcasting companies shoulder some of the costs of the National Weather Service.

6. Double the fees for patents and quadruple the fees for Trademark registration.

7. Put a per container surcharge on shipped freight entering the US or increase the current charges.

8. Slap a requirement of a national minimum wage of $3.35/hour on any nation wishing to be part of NAFTA or have Most Favored Nation trading status. Then require accounting of wages paid by US companies sending their manufacturing abroad.

9. Cut back on direct grants to artists requiring them to face the same market pressures as other professionals. Retain funding of public school arts programs.

10. Increase broadcast licensing fees dramatically for corporations owning more than four stations.

11. Require full disclosure and full taxation of all off-shore banking done by American citizens and corporations to close down high-end tax havens.

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Robespierre
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quote:

Dean's basically said he's "repealing the Bush Tax Cuts" (aka raising taxes). Of course that isn't enough to completely cover the deficit, that is in part caused by the downturn in the economy (loss of corporate tax receipts).

I would be interested in seeing just how much the tax cuts have directly effected the budget. Considering the tax cuts are schedualed to come into effect gradually over 10 years, its hard to believe that even a major portion of the deficit is a result of cutting taxes. A trick that the democrats like to play on people is to tell them that Bush squandered a 5-6 trillion dollar surplus. As though the US government actually had 6 trillion dollars sitting around, with no idea what to do with it. The 6 trillion number was a projection over 10 years, adding up each year's total to the last, and without knowledge of the recession.
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Robespierre
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quote:

Slap a requirement of a national minimum wage of $3.35/hour on any nation wishing to be part of NAFTA or have Most Favored Nation trading status. Then require accounting of wages paid by US companies sending their manufacturing abroad.

How does restricting trade help our budget? Those jobs won't come back to the US, they may go to china or singapore, or where-ever, but not back here.
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Bokonon
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I believe approximately half of Bush created deficits will eventually be due to the tax cuts (if they remain on the books).

This is all based off of current Treasury projections, I believe, but the projections won't necessarily follow reality (it tends to just project the current environment, or some weighted average of the last X # of years I think, out to some number of years, with a conservative assumption of slow growth).

-Bok

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Sopwith
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quote:
How does restricting trade help our budget? Those jobs won't come back to the US, they may go to china or singapore, or where-ever, but not back here.
The operative words there were both NAFTA and Most Favored Nation... you catch both Central America and Asia.

Yes, jobs will come back to America from those places. On average that requirement would multiply the labor costs to manufacturers by a factor of 12. That cuts into the margin too much, especially when one factors in shipping. Textile and small item manufacturing, as well as furniture manufacturing would swing back to the US.

That puts jobs back in our economy, money in our people's pockets and our tax coffers in the end. If they choose to keep the jobs where they are now, then at least we can push some of these countries out of the sweatshop/slavery situations they currently embrace.

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Robespierre
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quote:

On average that requirement would multiply the labor costs to manufacturers by a factor of 12. That cuts into the margin too much, especially when one factors in shipping. Textile and small item manufacturing, as well as furniture manufacturing would swing back to the US.

That puts jobs back in our economy, money in our people's pockets and our tax coffers in the end. If they choose to keep the jobs where they are now, then at least we can push some of these countries out of the sweatshop/slavery situations they currently embrace.

This is the same logic FDR used to blast our economy to smithereens in the 30's. When you increase the cost of production of a manufactured good by 12 times, the job won't move. The job will be eliminated and the company will sit on its money. You don't think companies make 1200% profits on their goods do you? The prices of everyday goods will rise substantially, lowering the buying power of everyone, making any new minimum wage jobs(thas what they would be) meaningless.
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Sopwith
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Hmm Robes, I and apparently history kind of have this thing about FDR actually pulling the US out of the Great Depression and his later guidance turned this country into a manufacturing powerhouse laying the grounds for a very strong economy. YMMV, tho.

[ January 09, 2004, 06:08 PM: Message edited by: Sopwith ]

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The Rabbit
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It is the responsibility of a leader to make hard decisions. Running a huge deficit, the way our leaders are doing currently, is a way to push the hard decisions off to the next guy.
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The Rabbit
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quote:
This is the same logic FDR used to blast our economy to smithereens in the 30's.
The US GNP hit its minimum in 1932 the same time the unemployment rate and deflation rate hit their maximum. FDR did not take office until 1933 after which all the key economic indicators stabilized and then improved. Unless you are claiming that FDRs policies had a retroactive effect on the economy (which might happen in Sci Fi but has never yet been demonstrated in the real world), I don't see have you can claim that FDRs policies destroyed the economy during the 1930s.
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The Rabbit
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This is a new height in the right wing blame game. They first claimed that the economic boom under Clinton was due to tax cuts Reagan made over a decade earlier, then they claimed that the economic down turn under Bush II, was due to Clinton's policies. Now Robes is claiming that the reverse can happen too. If FDRs policies caused the depression even before they were inacted, then should we attribute the boom in the 90s to Bush II, or maybe we can credit Clinton with the collapse of the Berlin Wall.
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Fooglmog
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I'm wandering off topic slightly here, but I happen to hate the term "deflation", deflation does not exist people, only inflation. What people call deflation is simple the slowing of enflation on specific markets. (Or in rare cases the speeding up of inflation in most markets) Deflation is a fiction, it does not exist, so why refer to it?

-Fooglmog
Guy with no clue.

Edit: Corrected spelling errors.

[ January 10, 2004, 02:14 PM: Message edited by: Fooglmog ]

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pooka
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I think you mean inflation. I distinctly recall the economy slowing before the election of 2000 (remember the tech bubble?). The election itself caused considerable problems with the Dow, and then the terror attack of 2001 made matters worse. Overall, though, I think drawing conclusions from the 30's is not too productive.

I agree in principle with the idea of raising minimum wage in Nafta countries. It would be difficult to enforce. But maybe the tensions would result in folks paying attention to the issue again. Not that I'm pro isolationism.

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The Rabbit
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You've lost me Foog, I've never heard of "enflation" but every economic text and history text I've seen refers to deflation or dropping prices. Neither the OED or websters mention enflations, but both define deflation as an economic situation characterized by a rise in the value of money and a fall in prices, wages, and credit.

[ January 09, 2004, 06:45 PM: Message edited by: The Rabbit ]

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Robespierre
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quote:

I don't see have you can claim that FDRs policies destroyed the economy during the 1930s.

The great depression was brought about in 1929 for a number of reasons, none of which are the actions of FDR.

One of the major reasons the depression was so massive was the Smoot Hawley Act enacted by Hoover. This put a 59% tarrif on many of products with which our farmers, miners, and industrialists competed agaist foreigners. This was supposed to keep the cost of goods up and give money to farmers, miners, and labor. However, other countries retaliated with tarrifs on major US exports like cars and other manufactured goods. The result of this tarrif was to basically stop international trade.

When FDR took over, the economy was at its lowest. When he took over, one of the first programs he enacted was the Federal Industrial Recovery Act which set minimum prices on many items and made punishable by prison and fines the increasing of production capacity. The idea, again, was to keep prices high. People were actually put in jail for selling goods a lower price than the government allowed. An example is a dry cleaner in DC. He charged $0.35 to press a shirt when the NIRA Board stated that the minimum allowable price was $0.40. This was the case that eventually made it to the supreme court and determined the NIRA to be unconstitutional. This didn't happen until 1935 however, so basically for 2 years, the US was a socialist democracy with a centrally planned economy. FDR said that his program would eliminate "anti-social competition".

Banks were failing all throughout the depression, not just in 1929. FDR's Emergency Banking Act allowed him to close all banks nationwide, and supposedly only allow solvent banks to open. Of course this was not the case, and many of those banks that were reopned were allowed to fail. Then he decided to go after banks which survived the downturn, and claim them to be anti-competitive. However, because laws were passed in the 20's which made competition among banks of different areas illegal, many banks were not diverse enough in their holdings to survive.

Also, he tripled income taxes, added social security to the country's tax burden, and many other new taxes. The top marginal rate in 1940 was 91%.

quote:

This is a new height in the right wing blame game.

Have you ever actually looked at what the new deal was? Most people don't have a clue, yet we still here this mindlessness about FDR saving the country from the depression. While he kept the country poor from 33 to 37, there was actually another depression in 38, which is a direct result of many of his policies being enacted after he got his socialist judges on the supreme court. He had a 3/4 majority in congress and a supreme court in his pocket. He set about to prop up all his cronies and political allies with sweet deals that are still in use. The Damn Tennessee Valley Authority is still running, and taxpayers from all over the country are funding cheap electricity for the Tennessee Valley.
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Maccabeus
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Rob, if you think you're gonna get any complaints from me about the TVA, think again.

The TVA is the only reason I grew up with electricity at all. Nobody else would do it. Even if I agreed with you on principle--and I don't--I wouldn't have the heart or the guts to say I should've grown up disconnected from the rest of the world.

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Robespierre
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quote:

The TVA is the only reason I grew up with electricity at all.

You are mistaken. The TVA actually forced privately owned power plants out of business so they could establish a monopoly.
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Maccabeus
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Not here they didn't.
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Robespierre
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Even if they didn't shut any down(which they did), the rest of the country is still paying for you to get cheap electricity.

How do you think everyone else got electricity? Those issues were handled locally, by the people who would actually be using the power. Instead, the feds charge 98% percent of the people for the electricity that 2% use.

The whole program was a boondogle. Part of the reasoning for construction was to protect 10,000 acres of land from floods. How did they do this you ask? By flooding 750,000 acres. Is it possible that taking that much land, most of it farmland, out the economy had some effect on the people of Tennessee?

[ January 09, 2004, 10:51 PM: Message edited by: Robespierre ]

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The Rabbit
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quote:
so basically for 2 years, the US was a socialist democracy with a centrally planned economy.
Fixing prices hardly constitutes making the US a Socialist Democracy. If FDR had nationalized all the major industries -- that would be socialism. Price floors were a desperate attempt to stop deflation which was a driving force in Bank failures. Nixon did the reverse in the mid-seventies to stop run away inflation.

Your assessment of the impact of FDRs programs is at the very least controversial among economists.

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MattB
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quote:
When FDR took over, the economy was at its lowest. When he took over, one of the first programs he enacted was the Federal Industrial Recovery Act which set minimum prices on many items and made punishable by prison and fines the increasing of production capacity. The idea, again, was to keep prices high. People were actually put in jail for selling goods a lower price than the government allowed. An example is a dry cleaner in DC. He charged $0.35 to press a shirt when the NIRA Board stated that the minimum allowable price was $0.40. This was the case that eventually made it to the supreme court and determined the NIRA to be unconstitutional. This didn't happen until 1935 however, so basically for 2 years, the US was a socialist democracy with a centrally planned economy.
You ask later on if someone has "actually looked at what the New Deal was." What you've got here looks suspiciously like you copied and pasted a lot of information without examining or knowing much about it. For example, you incorrectly call the National Industrial Recovery Act the "Federal Industrial Recovery Act." In addition, this

quote:
Federal Industrial Recovery Act which set minimum prices on many items and made punishable by prison and fines the increasing of production capacity.
is spun a bit. Title I of the NIRA first eliminated antitrust laws, which is hardly a "socialistic" act. In addition, it required various industries to privately agree on price and wage controls and to establish "codes of fair competition." While the National Recovery Administration was involved, business leaders dominated the drafting of these codes, to the degree that many historians - and some of FDR's contemporaries - felt that the president was dominated by business. Now, while this represents something of a governmental mandate, it is hardly full-fledged "socialism" when you consider that several of FDR's advisors wanted him to fully nationalize industries like the railroads and power companies. The president refused to do this. Incidentally, I would be interested in any sources you might have for somebody put in prison under the NIRA, as I, somebody who has written a master's thesis on the Great Depression, have never heard of that.

quote:
FDR said that his program would eliminate "anti-social competition".
Consistent with what I've said above.

quote:
Banks were failing all throughout the depression, not just in 1929. FDR's Emergency Banking Act allowed him to close all banks nationwide, and supposedly only allow solvent banks to open. Of course this was not the case, and many of those banks that were reopned were allowed to fail. Then he decided to go after banks which survived the downturn, and claim them to be anti-competitive. However, because laws were passed in the 20's which made competition among banks of different areas illegal, many banks were not diverse enough in their holdings to survive.
The motives you're assigning FDR here are confusing. First he closes the banks, an act which you don't provide any reason for, then he fiendishly allows many to open, only to fail. Then he goes after the banks that don't fail. If he wanted to destroy the banking industry, again I ask, why didn't he just nationalize the national bank system, as many advisors pushed for him to do?

Half the banks in the country had failed by 1933. Roosevelt initially ordered a bank holiday to stop bank runs and resulting failures. Banks began reopening again seven days after the holiday was announced, after the government had deemed them stable. This was as much a confidence builder as anything else. The nation had more functioning banks in 1934 than it did in 1933, because Roosevelt had gotten the FDIC and other stablizing measures through Congress.

quote:
Then he decided to go after banks which survived the downturn, and claim them to be anti-competitive.
I'm not sure what you're talking about here. Maybe you could elaborate, with names of acts or other specifics.

quote:
Have you ever actually looked at what the new deal was? Most people don't have a clue, yet we still here this mindlessness about FDR saving the country from the depression. While he kept the country poor from 33 to 37, there was actually another depression in 38
Actually, from 1933 to 1937, unemployment went down and the stock market, wages, per capita income, and the GDP went up. Most historians feel that the "Roosevelt recession" of FDR's second term was the result of cuts Roosevelt made in governmental spending and work projects in 1937, due to the improved economy.

I wouldn't argue that FDR saved the country from the Depression - the Second World War did that - but he certainly did not make it worse. The New Deal was a bandage that stopped the bleeding, but didn't heal the wound.

quote:
which is a direct result of many of his policies being enacted after he got his socialist judges on the supreme court
Actually, the Roosevelt recession began before the Court that had struck down the NRA and AAA changed. Willis Van Devanter, one of the so-called "Four Horsemen" justices who opposed the New Deal, retired in the summer of 1937, allowing Roosevelt his first appointment - Hugo Black - then. He didn't appoint another justice until 1938. Nearly all the important pieces of New Deal legislation came before this time. Social Security, incidentally, was implemented in 1935, and was never struck down by the Court. Again, we quibble over what exactly 'socialist' was.

quote:
How do you think everyone else got electricity? Those issues were handled locally, by the people who would actually be using the power.
Actually, most rural areas of the country, particularly in the South and Midwest, got electricity thanks to the New Deal's Rural Electification Administration. [Smile]

Edited for UBB errors. D'oh.

[ January 10, 2004, 05:22 AM: Message edited by: MattB ]

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Sopwith
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And yes, the TVA brought much needed electricity to an area that would be so easy to forget today.

I grew up in an area helped by the REA (Rural Electrification Association) and supplied by the TVA. Of course, to Robe's world of economics, we were probably just a bunch of rubes, hicks and hillbillies.

He looks down his nose so forcefully that one wonders if he can see past his dramatically flaring nostrils.

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Maccabeus
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The TVA turned my home county from a poor backwater to a wealthy tourist center (Land Between the Lakes).

Now, I'll honestly say I'm not sure that's a good thing on the whole. Among the folks who got it in the neck were the people of Birmingham, the only blacks living in my county. And I don't know that it's all that great that a bunch of poor hick racists have become a bunch of wealthy arrogant racists. *sigh* But not everyone in the county is a bad person, and we all benefited from it.

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JonnyNotSoBravo
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From the recent news, I would guess that this thread was started because Gov. Schwarzenegger just unveiled his budget plan the other day and it called for tons of cuts across the board because he was keeping his campaign pledge not to raise taxes. What's interesting is that all the responses have been for national budgets...we're only up to a half trillion dollar deficit right? [Smile] And we're planning manned Mars and Moon missions! Cool!

[ January 10, 2004, 07:18 AM: Message edited by: JonnyNotSoBravo ]

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Maccabeus
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Perhaps Bush expects to find something valuable on the Moon or Mars. After all, as matters stand, we can make draconian cuts in services, tax people so much the services barely matter, or run a huge deficit. There's gotta be another option somewhere.
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TomDavidson
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Guys, we've had similar discussions with Robespierre before. Keep in mind that he's a strident Ayn Randian; to him, even if the economy gets better, increasing the tax rate counts as destroying the economy. So, even if the Depression ended under FDR's decades-long watch, FDR's manipulation of the income tax and creation of federal work programs counts as one of the hugest mistakes in history. [Smile]
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Robespierre
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quote:

What you've got here looks suspiciously like you copied and pasted a lot of information without examining or knowing much about it.

Copied and pasted form where? Every source I can find is a willing accomplice is spinning his policies as wonderful and so very useful. There are many points to be covered in this discussion, I would think my incoherent style should be apparent thoughout all my exposition on the basic facts.

quote:

For example, you incorrectly call the National Industrial Recovery Act the "Federal Industrial Recovery Act." In addition, this

Geezus, I apologize. Of all the dang Acts and Organizations and whatever else their names tend to blend together. Especially the National Industrial Agricultural Society of Banking Acts Organzation of Alabama Fruit Farmer Who Need New Underwear, or the NIASOBAOOAFFWNNU.

quote:

Title I of the NIRA first eliminated antitrust laws

In order to establish government dictated monopolies.

quote:

In addition, it required various industries to privately agree on price and wage controls and to establish "codes of fair competition."

So individuals chosen by FDR's administration set the prices. And of course they set prices to benefit the big boys, not any independent businesses. The term "various" makes its reach seem smaller, try thousands.

But the biggest reason to loath NIRA is that it throttled personal freedom. You want to open a bakery? Sorry, General Mills is already filling all current needs of baked goods, your bakery would amount to unfair competition. Or, even if you are allowed to open your bakery, NIRA will force you to charge the same amount for your products as General Mills does, so as to prevent any unfairness. NIRA destroyed small businesses and prevented many new ones from coming online. Since the supreme court agrees with me that this program is and was unconstitutional, the only debate that remains was what effect it had on the economy from 33 to 35.

quote:

Now, while this represents something of a governmental mandate, it is hardly full-fledged "socialism" when you consider that several of FDR's advisors wanted him to fully nationalize industries like the railroads and power companies.

Setting prices and production quotas for private industry is "something of a government mandate"? Who's spinning now?

Just because FDR could have gone much much further doesn't make what he did do any less repugnant. We didn't become the "People's Republic of America", but what FDR enacted was a socialist agenda. Most of his advisors were socialists as you mention. The only debate is in degree.

quote:

I would be interested in any sources you might have for somebody put in prison under the NIRA

Check the plaintiff of Nebbia v New York 291 U.S. 502(1934). The crime committed? The sold two bottles of milk below the $0.09 required minimum of NIRA.

quote:

as I, somebody who has written a master's thesis on the Great Depression

Thats impressive.

quote:

The motives you're assigning FDR here are confusing.

Damn right they're confusing. Why on earth would somebody claim to want to make the banking system more stable, then go and bust up large,stable banks? I certainly don't know why he did it.

quote:

Maybe you could elaborate, with names of acts or other specifics.

The Emergency Banking Act of 33. And of course he created FDIC which was shown for what it is during the 80's and the S&L scandal. Why should banks be careful with their money when the feds are going to bail them out of up to $100,000 per depositor?

quote:

Actually, from 1933 to 1937, unemployment went down and the stock market, wages, per capita income, and the GDP went up.

Of course, but how much? The point of this is that FDR made things worse. Had he not enacted his programs, we would have grown much faster, and people who were poor at the start of his administration may have been able to pull themselves up. Instead FDR created the greatest threat of all to people's livelihood, the idea that you need not work because the feds got your back.
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