Sorry Mike, it’s still falling. A little more slowly then the Euro & Yen, so we’re left with the false impression that it’s strengthening, but it’s not.

It’s like driving 55 down the highway. Just because everybody is passing you, doesn’t mean you’re standing still.

Get out of the dollar while you can.

Yes, in the crudest sense, survival of the fittest is pretty harsh, though hopefully we wouldn’t dump the weaker children in the forest. (I’m not quite sure how Spartanism applies here, but okay.) I would hope that one of the results of evolution would be that we would develop some sort of relevant compassionate response, but to be honest, I don’t have the faintest idea. Anyway, I digress. (And in a moment, you’ll doubt I’ve evolved any compassion whatsoever, though you’d be wrong. I’m very compassionate; I just refuse to be a doormat.)

Though you seem to be rejecting my hypothesis outright, you do mention a few points I’d like to address:

First, I’m not ready to take on civilization–is it okay if we just go for the economy for now, and take civilization on another day?

I reject your premise outright that in order to build a civilization (economically) we must take the strong but also the weak along with us.

Here is reality: some people will be “thrown out onto the streets.” It happens. It is going to happen; it is happening right now. We need to deal with it in a sensible manner, not use it as an excuse make irrational justifications for making unsound policy decisions and spouting random hyperbole. And yes, I am referring to your comment, “If for no other reason than that those people may decide that we look just a little weak to them.”

I am not willing to live my life based on the fear that I may look just a little weak to someone. I want the right to live my life based on the idea that there is some sort of rational order to the universe, that there are some truths that are self-evident (though becoming less so by the second), and they include the pursuit of life, liberty and PROPERTY. (Jefferson blew it big time when he changed that to “pursuit of happiness.” Ah, the irony!)

Well. Bottom line is, I guess Darwinism isn’t going to help here. Got any other suggestions?

But if guessing is all we have going for us–and heaven help us if it is!–can we at least gather a few facts together first and try to approach something like “educated guessing”? Surely there is some way to come up with a few undisputable points, and start building a policy from there, rather than throwing a few marbles into a box, shaking it up, and seeing which corner they happen to end up in.

Survival of the fittest is an evolutionary concept, not a civilizational concept. (I think I just made that word up.)

In its crudest sense survival of the fittest would leave us to act like Spartans and dump the weaker children in the forest to be eaten.

We’re trying to build a civilization. Which means taking not just the apparently strong but some of the weak along with us. Of course this is broad strokes, and I don’t mean to imply that we have to keep zombie banks and hollow auto companies alive. But we do need to make sure that large numbers of people are not thrown out onto the streets. If for no other reason than that those people may decide that we look just a little weak to them.

I ignore it because it’s a reductio ad absurdam argument that rests on undemonstrated premises. We are not attempting to accrue massive debts forever. We’re trying to get through this particular sh-t storm.

We took on massive debt in WW2. We survived. In the aftermath we took on still more debt and prospered from the GI bill and the Marshall Plan among other debt-financed government plans. (Bail out Europe! No way! We’ll go broke!)

Most of us as individuals have taken on massive debt at one point or another — school loans, mortgages, medical expenses. And mostly we survive. We take on the debt to deal with a crisis or a specific need.

The question is not whether we can do this right now, but whether we can go on doing it forever. Well, as a rule you can’t do anything forever. The better question is where we’ll be 4 or 5 years from now when the storm has (we all hope) passed. What Mr. Obama is attempting to do is look down the road at that point, at health care and education, realizing that a wobbly educational system and massively expensive health care system have contributed to our present mess. And he’s looking at transparency and oversight so that we don’t get more Thains or Madoffs.

Can we take on more debt now? We have no real choice. (By the way, did you rail against the off-budget trillion we spent in Iraq?)

Must we begin to match taxes to expenses. Yes. Which is why I am willing to pay more.

Should we kick education and health care down the road, thus ensuring that long-term recovery will be even less likely? No. That’s the short-end thinking we’ve had for too long.

“I distrust most of the folks who sound certain. ” I agree.

My experience with those who speak with absolute certainty is they are either incompetent or faithful. Competent people tend to understand that they don’t have all the answers. They know what they know, and they know what they don’t know.

Regardless of job experience or education, everyone here is guessing. How many people would have guessed in 2001 how destructive the previous administrations fiscal policies would have been? I doubt many.

You are right when you say that I “don’t know this to be the case any more than Justin can prove the opposite. [I'm] both guessing. The entire world is guessing.” I apologize for the remark to which you refer.

Seeing as how we are facing uncharted territory (although this situation is being compared to the previous Great Depression, I’m not sure how that analogy will follow through, given the disparity between the world now and the world then), are there any things that we can agree on that are “facts,” things that we can all agree on to be valid premises, and then try to base our decisions on those?

Because to be honest (and I mean this seriously, and not just as a blanket condemnation of Obama’s economics), it is frightening to me that we are dealing with, as you say, “guesses,” when I get the feeling that many of these choices are being made without any context with reality.

I just wish someone would give me something real, instead of rhetoric about how we can’t let “15% of our population slip into economically devastating circumstances” because that would be “far more costly in the long run.”

Why 15%? Why that number? Would it be all right to let 14% slip? What if it were 50%?

And why would it be more costly in the long run? How does anyone know something like that–enough to bet our economic future on it? And has no one heard of evolution?

So speaking of which, how about this for a premise–Survival of the Fittest?

If we’re trying to create a policy based on more than just “guesses,” is that a place we could start? Can we agree that “survival of the fittest” is a valid time-tested principle we could argue from? If not, we need something else–some common ground that I hope exists somewhere.

I’m serious about this. I’m not usually a jerk (though I confess my last reply was on the snotty side, and I apologize). But I feel as if I’m Alice and I’ve just fallen through the rabbit hole, and the world around me has gone mad. It’s a little scary, to be honest. A little context would be nice.

I’d have no problem with that if it were both fair and practical. I was thinking about a stepped structure — e.g., 100% tax holiday up to first $50k earnings, 50% from $50-75k, and 25% up to maximum just over $100k. I see the point that someone who will earn $150k or $250k doesn’t need the holiday at all. So you could stop withholding for them too and require that they pay up at quarterly tax time or arrange an option to keep the withholding going. You’d have to take account of the fact that there are people who made $150k last year who are unemployed or earning less this year, so you couldn’t simply use 2008 tax returns.

To Justin about this comment:

“@John – I think that plan is interesting, but what we’re worried about right now is that people won’t spend the money, they’ll save it. That’s what happens in a deflationary period and that’s why the stimulus bill last year didn’t have much effect. I know I just used it to pay of credit card bills, which does virtually nothing to stimulate the economy.

“Also, Obama’s plan does have tax cuts in them. $275B worth. But it can’t be all tax cuts. Because those don’t address the biggest problems our country faces right now, which are massive budget shortfalls in nearly every single state, as well as a crumbling infrastructure that isn’t ready for 21st century competition. Looks like you say you agree with this spending, but I’m a little confused as to where you really stand on the overarching point the post is making.”

The spend-save tradeoff is real in that the more you earn, the more likely you are to save part of the windfall, so the “multiplier” impact on the economy is lower than direct federal spending for construction or whatever. BUT while the multiplier is lower, it is not non-existent. Plus, you have to compare the alternatives in terms of their timeliness. It’s clear that a dollar available through a tax cut now has an immediate effect but with a lower multiplier — even as low as 50 cents. But a dollar spent in 18 or 24 months has zero stimulative effect when it’s spent so a multiplier of $1.50 is useless. Worse, it may be harmfully inflationary when it happens in late 2010 or early 2011 or beyond.

Yes, Obama’s bill had lots of tax cuts, money for the states and for infrastructure. My “stand” is simple and clear: I supported all of that spending and cutting if it aimed to be out the door within at most 12 months, preferably 6, 8 or 10. Justin, calling it “stimulus” over and over doesn’t make it so. It’s not, if it does not kick in soon enough to drive federal accounts into deficit, which is what fiscal stimulus does. “21st century” investment in infrastructure may well be needed but committing to projects that may start in 2 years and end in 10 is something else. Perhaps it’s all good — but what if that commitment to spending becomes an obstacle to another badly needed, real stimulus in the fall? Or the bill for the “black hole” at the banks — the root problem of the current crisis — is really another $2 trillion, but we can’t come up with it because we’re committed to all this other stuff?

You haven’t responded to something Snoop said:

Michael, every nation that has ever done what we’re attempting to do has destroyed their currency. One must either accept or reject the basic premise that nations can continue to accrue debt indefinitely.

If you have an example of this kind of fiscal policy actually working in the long-run, I’d love to hear it. I could use a little ‘hope’ right about now.

Facts are stubborn things and the fact is that the Obama-Geithner-Bernanke strategy has failed every time it’s been tried.

Then with your psychic ability to predict currency markets you should have no difficulty riding out this downturn.

No, you’re the one ignoring reality. Like the reality of needing to get votes to support any particular plan. You can generate jeremiads til the cows come home, but none of it matters unless the president can get the votes.

Further, he has to look at broader political realities and foreign policy effects, all of which armchair economists can safely ignore.

As for them making it up as they go along: that’s just what I said. No one has the answer. But whatever answer we try to implement has to keep political reality in mind.

It’s a dollar bubble.

I will pop, and when it does the problems will really start.

I have also yet to see anyone here quarrel seriously with the suggestion that we MIGHT be able to get away with 2 or 3 years or so of drastic overspending if only because the entire global economy is in the shitter, so foreign investors lack safe havens and alternative favored currencies.

For clarity, let me just add that by “get away with” I simply mean that we would avoid an utter collapse and find ourselves with a slowly rebounding economy and an annual budget that is out of balance by the still-unfavored but at least more customary less than 5%. Of course there’d be the matter of our accrued debt to face, and the issue of how debt service on it would painfully impact annual discretionary expenditures.

I’d also like to endorse MR’s contention, not least because I too have been stressing it. My continued sense is that we’re all guessing. I distrust most of the folks who sound certain. Justin’s team of the certain folks seem driven by fear and want to keep doing “ready, fire, aim.” The snoop team of certain folks I distrust for their ongoing unwillingness to attribute any of this mess to Wall St fraudulence in favor of just blaming the gov’t.

I’m fine with blaming the gov’t for lots of awful stuff. And I’m fine with acknowledging that low interest rates granted by the fed gov for too long were ultimately a main driver, as long as we all take care to notice that the constituency for raising interest rates has been, over the past decade, just about ZERO. Along with all THAT entails about policies that were and were not possible.

But it troubles me how willfully opaque many fiscal conservatives are in refusing to forthrightly acknowledge just how colossal a black eye Wall St deserves for its role in fraudulently and carelessly packaging high risks as low risks. Wall street utterly failed to police itself, and it utterly failed to see the economic ramifications of its own actions. Apparently, according to many fincons, we are supposed to believe that if not for the gov’t's actions, the market would have responded rationally and efficiently and all this could have been avoided? Give me a F%^king break.

It also troubles me to see how very few conservatives think our government (of the people and FOR the people, by the way, not of the market and FOR the market) has any responsibility to take actions on behalf of the people whose lives are being damaged by the fallout from fraudulent market behavior.

The dollar has strengthened remarkably over the last few months. I hate to prick your balloon with facts, but I can buy a Euro for 1.27. I was paying 1.60 a few months ago. A rather dramatic improvement.

And you really want to talk about what the auto companies know? Really? They’re bankrupt and begging for taxpayers to save them from the consequences of their own inability to understand their own businesses.

Just as banks clearly did not understand their businesses. And insurance companies clearly did not understand their businesses. And the health care industry does not know its business.

You honest-to-God want to start that same tired “business knows best” nonsense at a point where the taxpayers are all that’s keeping auto companies and banks alive? It’s like arguing for Marxism in 1989. You’re in the realm of religious faith, not realism.

By the way, if you need one example of where the government invests, try the interstate highway system. How many cars do you think GM would be selling if the US government had not spent hundreds of billions in current dollars on interstates?

And I’ll give you a small bore example as well. For years the auto industry fought tooth and nail against government-mandated safety measures in new cars. I just bought a new car. My single overriding criterion? Safety. Which is why I own an Audi and not some other models I actually liked a bit better. Government-mandated safety improvements, which created a market for such safety improvements and resulted in my car purchase, and further will lessen the potential for a serious accident.

Your old time religion needs a more moderate interpretation.

Mr. Obama needs to protect the country from foreign invasion and be very careful with our tax dollars. He is not king of the economy — at least not yet. The best practicable solution to the economy needs to come from the private sector, because in fact, they have a much better real-time information flow and it should not involve hand-outs with no strings attached.

If you need one example of how well the federal government “invests” (a bad joke) your tax dollars — here it is: Corn Ethanol. Maybe we can subsidize Marsian based water-drilling

Quite honestly, I don’t think that there’s any reason to believe that Obama or Geithner or Bernanke have any better idea how to end this than anyone else. I’m convinced that — like Bush and Paulson — they’re just making it up as they go along, and ignoring reality while they do so.

If you have an example of this kind of fiscal policy actually working in the long-run, I’d love to hear it. I could use a little ‘hope’ right about now.