Why Is Everyone a Fiscal Hawk NOW!

[TheRealMafoo]

HappySqurriel said:

Regardless of how much money the government spends:

1. House prices will continue to fall and people will keep losing their jobs which will keep foreclosures at (nearly) record rates; and people will continue to default on all loans.
   
2. Loans will be difficult to get access to because it will be difficult to sell the loan afterwords because no one knows the risk of these loans.
3. The lack of credit and the fear about the economy will prevent people from being good little consumers, which will result in far lower ecconomic output.
4. The lower ecconomic output will lead to greater fears about the ecconomy, and people will lose their jobs as a result.

Until the economy is on more solid footing it is moronic to throw money at it to try to fix it; it will only result in a higher national debt which will slow down the recovery.

 

People are suddenly aware of how much money the government is spending, and they care now, because of how insane it has become.

This ^^

Also, to respond to #2:

Banks now have a lot of surplus to spend, they just are not lending. The reason is not a lack of funds, but a lack of understanding on who is a good risk. You don't loan money to high risk businesses, regardless of how much you have. With the government stepping in to make sure no one fails, banks can no longer intelligently decide who is a good risk and who is not. We have bankruptcy laws in place to allow businesses to restructure, and add transparency. Currently, Washington does not want anyone to fail, the transparency is lost.

Capitalism without risk, never works. This is what Washington is trying to accomplish.