jbog,
First, I don't think Roubini has been nearly as negative as he has been portrayed. For him to say that we won't be out of the recession until early 2010, rather than middle-to-late 2009--as we're hearing from the Administration--doesn't seem unreasonably negative to me.
Niall Ferguson takes the conservative view which, I assume, is very close to yours. But in the discussion cited, I think the left-wing economists pretty much decimate his arguments, which doesn't necessarily mean that he is wrong. But you've got to give the Keynesian plan time to work. It's too early to make a judgment on any of this. (I heard a report last night that said only 4% of the stimulus plan has been spent.)
I keep hearing the Marc Faber types and the Cato Institute types telling us that the dollar is dead meat. I wouldn't be jumping on the grave of the dollar just yet. The rest of the world may be a lot worse off than the USA, and the dollar is still the best "safe haven" around.
Bernie Sanders points out that if we just raise the highest rate on people earning over $500,000 10%, we raise over $300 billion in tax revenues. There is plenty of room to soak the rich and redistribute some wealth. Of course, the right-wing and the Republicans will go nuts and start screaming "socialism" and "class warfare." But the concentration of wealth in this country has reached such an extreme--The top one percent in the US have more wealth than the bottom 90%. Just 400 families in the US saw their wealth increase by $670 billion in the first seven years of the Bush Administration!!! Of course, that's not "class warfare" when the distribution get concentrated upward; that's just "free enterprise" at work. And Hannity complains that the rich pay 70% of all the tax revenues. My answer: Let's make it 90% and wipe out the deficit.--so a little wealth distribution seems to be in order. And the deficit is probably overrated--Mr. "small government" Reagan doubled the deficit in eight years, as did George W.--because the wealth is there to tax. Yeah, you and the right-wing will scream that you don't raise taxes during a recession, but I think if you reduce the deficit and keep interests rates low, taxing the rich will not hurt the economy. (Of course, I realize that you don't agree with any of this.) The notion that the "rich" will stop investing is, of course, horse manure.
My worries come from other places: credit card debt, the so-called "third wave" (prime loans) of the mortgage/housing crisis, higher energy prices becoming a tax increae on consumers and dragging down the whole economy, a commercial real estate crisis, public debt (like here in my home state of California) leading to social catastrophe, etc.
"The impetus to propel us out of the recession" ought to come from the stimulus plan (I don't know why the money is not being spent.) and easing of the credit crunch. I don't see either one generating much "impetus" yet, hence my agreement with Roubini.
Bladerunner
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