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Author: MrArbitrage Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1947222  
Subject: The Panacea to our Economic Emergency Date: 9/21/2001 3:27 PM
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The reason that I feel compelled to write this exposition is because we need prompt and UNPRECEDENTED action. The American economy is on the verge of the biggest disasters since the great depression. This is the equivalent of the perfect storm. I believe that we were heading into a severe recession BEFORE the terrorist attacks as we were on the tail end of one of the biggest speculative frenzies in history (although the reality was being mitigated by the Wall Street analysts). The terrorists took advantage of that fact, and kicked us in the gut while we were down. The negatives are all compounding in a way that has never before occurred SIMELTANEOUSLY in our national history.

There is a panacea but it will require guts and leadership. Just as it is difficult to tell the American people that some of them may have to pay the ultimate price to preserve our freedom, the Bush administration and the House & Senate are going to have to take some severe measures to save this economy.

The reason WHY it will take severe measures to save our economy is because the Federal Government has been illegally establishing programs and bureaucracies for decades that are clearly responsibilities reserved for the states. Those “programs” which are nothing but scams designed to purchase votes have PREVENTED the Federal Government from doing the very thing that our founding fathers created and chartered it to do, that is to PROTECT us! Now we have to issue these WAR BONDS and that is going to siphon a substantial amount of that “patriotic capital” from over priced stocks, causing a further decline.

Congress must put a FREEZE on most government programs (not social security or medicare).

Lay off 50% of Federal employees who work in those unconstitutional bureacracies.

Increase DEFENSE spending (as it should have done over the past decade)

Implement an EMERGENCY tax cut of 40%-50% ACROSS THE BOARD

A token tax cut WILL NOT have a significant effect on this economy. It is going to require the type of “drastic measures” to save the economy as the measures to fight terrorism require. It is for our own good.

The reason: With most of the tax dollars going to unconstitutional entitlement programs, the only way we can finance our defense is by deficit spending and going into debt, which the economy and markets do not like. The other options would be to raise our taxes to higher communism levels or to start up the printing press and plunder the American people, which is what they do in third world countries and would most likely cause insurrection. All of those options would devastate our economy, which is exactly what is going to happen if they don't take heed.

The knee jerk reaction to such a proposal is to respond by saying “they are going to throw the elderly out in the street” and “starve little children”, etc. That need not be the case. They can leave the entitlement programs in place for the people who are ACTUALLY physically INCAPABLE of providing for themselves. The rest of the people getting government subsidies are going to have to make sacrifices. McDonalds is hiring. Pappa Johns is hiring… The deal MUST be that if you are on welfare or any government program, you are going to have to go to work, even if it's fast food. If congress can't muster up the guts to do this – we may ALL be on welfare very soon. But if the great multitude of Americans suddenly find themselves with a 40%-50% tax cut, you are going to see some REAL spending. Some REAL earnings growth and some REAL stock growth, REAL GDP growth and yes – even a growth in the tax base which will result in more tax revenue down the road. Over the years we have awarded NOBEL prizes to economists who have asserted this reality, it is time for us to put our money where our mouths are.

If they decide to get suckered into that Keynesian philosophy and try to SPEND our way to prosperity, we are going to have to jack up taxes, which will be the final death blow to this economy.

Anyone who has read MrArbitrage over the past year knows that I have been bearish and have profited significantly for being so. I am quite concerned about this economy and it is going to take a tremendous act of courage if our President will lead this government to do so, but if he cannot give more than a token tax cut NOW, we may know what it was like for our forefathers to stand in the soup lines.

Subsequently, I don't believe that a capital gains tax would be a good idea AT THIS TIME, because believe it or not, there are people out there with big profits over the long term and this will encourage more selling than buying at this particular time.
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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 72808 of 1947222
Subject: Re: The Panacea to our Economic Emergency Date: 9/21/2001 7:16 PM
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The reason that I feel compelled to write this exposition is because we need prompt and UNPRECEDENTED action.

The action we really need the government to take on the economy really is almost unprecedented. The last time it was done was the Coolidge administration, when President Coolidge was encouraged by his Treasury Secretary to intervene and rescue the country from recession. His response was "Come talk to me in six months." Six months later, with NO government action, the recession was quite obviously over.

The Treasury Secretary spent the rest of the Coolidge administration quietly manipulating the economy to create a bubble. And got himself elected in 1928 in response. His name was Herbert Hoover. He intervened in the economy. And kept intervening. The typical previous US recession (aside from wartime) was over in LESS than three years; Hoover's recession was just hitting bottom. Hoover lost the WHite House to a man who promised to put an end to the intervention - but Franklin Delano Roosevelt was lying, and at the first hint of recovery added more government intervention which kept the depression going until it was masked by a wartime build-up.

And you want more intervention?

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Author: MrArbitrage Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73107 of 1947222
Subject: Re: The Panacea to our Economic Emergency Date: 9/23/2001 10:07 AM
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The Treasury Secretary spent the rest of the Coolidge administration quietly manipulating the economy to create a bubble. And got himself elected in 1928 in response. His name was Herbert Hoover. He intervened in the economy. And kept intervening. The typical previous US recession (aside from wartime) was over in LESS than three years; Hoover's recession was just hitting bottom. Hoover lost the WHite House to a man who promised to put an end to the intervention - but Franklin Delano Roosevelt was lying, and at the first hint of recovery added more government intervention which kept the depression going until it was masked by a wartime build-up.

And you want more intervention?
.

Wow, you really think the government ceasing to pilfer our money from us to create unconstitutional, wasteful programs and allowing us to take care of our families is going to hurt our economy.

The intervention<b/> which that ignomonious, over-hyped socialist FDR gave us was RESPONSIBLE for the wasteful big government we have today. He was the impetus that started our journey to socialism. The "intervention" which I propounded is the antithesis of the intervention to which you refered. I'm recomending that we UNDO the mess which was created over the years. If they hadn't spent all of their time creating these welfare schemes and opposing defense spending, we wouldn't have to issue WAR BONDS and possibly deficit spend to get the job done.

Those politicians who engaged in this unconstitutional prodigality, have in reality committed crimes against our country, they have willingly and flagerantly undermined our national security and I believe should be held accountable.

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Author: dovbaer Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73155 of 1947222
Subject: Re: The Panacea to our Economic Emergency Date: 9/23/2001 3:21 PM
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The intervention<b/> which that ignomonious, over-hyped socialist FDR gave us was RESPONSIBLE for the wasteful big government we have today. He was the impetus that started our journey to socialism. The "intervention" which I propounded is the antithesis of the intervention to which you refered. I'm recomending that we UNDO the mess which was created over the years. If they hadn't spent all of their time creating these welfare schemes and opposing defense spending, we wouldn't have to issue WAR BONDS and possibly deficit spend to get the job done.

Those politicians who engaged in this unconstitutional prodigality, have in reality committed crimes against our country, they have willingly and flagerantly undermined our national security and I believe should be held accountable.
-----------------------------------------

LET THE WITCH HUNTS BEGIN!!!

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Author: MrArbitrage Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1681606 of 1947222
Subject: Re: The Panacea to our Economic Emergency Date: 7/20/2011 10:58 PM
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If they decide to get suckered into that Keynesian philosophy and try to SPEND our way to prosperity, we are going to have to jack up taxes, which will be the final death blow to this economy.
- MrArbitrage Sept 21,2001

I guess I was right.

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