Do govt officials really believe their demagoguery about the deficit/govt spending or are they just talking to the “common” folks?

I know when I try to explain my limited understanding of fed accounting and deficit spending to friends, I’m looked at as if I’m speaking in tongues.

On the one hand, govt officials really have no problem running deficits as far as I can tell (even republicans) but when they go home they talk endlessly about our nation “borrowing” money from China, saddling our kids with debt, and on and on.

Great for Americans – further decimation of our domestic industry, further reduction of higher paying jobs, likely to be replaced by lower paying service jobs, and further exporting of our industrial base and technical expertise.

and aig was for all practical purposes put into liquidation.

agreed on the swap line issue. it’s just a simple policy blunder by leaders who don’t understand what they are doing.

the tarp was ill conceived by financially ignorant officials, and financial ignorance again allowed it to avoid the pertinent criticism and get passed by a financially ignorant congress.

and if the same financially ignorant policy makers had instead sufficiently supported domestic agg demand instead of worrying about irrelevant federal deficits there probably wouldn’t be any talk of bailouts of any kind.

As such, one could think of the $trillion+ reserves that Japan has as representative of that subsidy. That what it “cost” them to achieve dominance. The money could have been spent on domestic stimulus, which would have left them with a trade deficit and status as a net debtor, however, they chose the export route.

What I don’t get about this sentiment is why the invective targeted at our domestic industry? People are up in arms about a $25B bailout for detroit, but where is the outrage over nearing $200B for the FM/Mac? Where is the outrage over $100B (or more) for AIG? Where is the outrage over $700B dumped into the investment houses and banks (and who knows where else)? Where is the outrage over $600B (and growing) of Fed funneling of dollars into the Eurozone, defending THEIR banks and THEIR industry?

It seems to me that of all of these, $25B to defend our domestic industry and production is the MOST legitimate use of “taxpayer” money. So why the outrage over $25B for the auto makers, and the deafening silence over more than a TRILLION dollars for banks, investments houses, and foreign entities?

This is a knee-jerk reaction. It’s nothing more than an unreasoned response to unpleasant realities. Feeling like we got the shaft with respect to AIG and the rest, the other shoe has now dropped and it has landed square on top of any further talk of “bailouts” for anyone, no matter the relative value.

If you wanted to leave American industry as the bag-holder in en economic mess, you couldn’t have engineered this better from a social perspective, because now that congress has finished bailing out the financial sector (with little real effect on the economy I might add), Congress now has the voters hopping mad about ANY further bailouts, and actually has them hopping mad over small budget issues that would have much larger effects.

Let me ask all of you agitating against any aid to the auto industry – what do you think the effect of a GM bankruptcy would be on the economy? What would it do to the market? How would the ensuing rise in unemployment hit aggregate demand? How would the loss of relatively high paid auto jobs, likely offset by lower pay service jobs affect long term demand? “Darren”, you are seriously worried about $25B to the auto industry, but you aren’t concerned by the $trillions flowing out the front gate to other states and into the vaults of banks and investment houses?

41 if credit never became available and deficit spending was sufficient to sustain growth and employment the rest would follow ‘automatically.’

42 and 43. and i wouldn’t bail out the automakers even if they were run by mother Teresa.

instead, restore income and employment by adjusting what is currently overly tight fiscal policy and let the auto chips and the like fall where they may.