Krugman: When everyone spends less or deleverages you have depression...

[EdwardBaiamonte]

because one man's spending is another man's income.

Krugmans solution is for government stimulus spending to make up the lost spending.

Everyone laughs knowing that artifical government spending will only create another artificial housing type bubble that eventually bursts causing even more need to deleverage and even more depression.

 

[Mad Scientist]

Correct. But then after a few years you have recovery.

What we have now is The Fed delaying the inevitable and making the recovery hole deeper by printing money.

It's like this: Do you want it Bad now or Worse later?

 

[EdwardBaiamonte]

Correct. But then after a few years you have recovery.

why would you have recovery rather than depression??????

 

[Joe Steel]

because one man's spending is another man's income.

Krugmans solution is for government stimulus spending to make up the lost spending.

Of course, Krugman is right. Krugman always is right. An economy is spending. When the private sector doesn't, the public sector must.

 

[EdwardBaiamonte]

When the private sector doesn't, the public sector must.

won't that just create another bubble that will burst and cause a depression like the current one????

 

[Joe Steel]

When the private sector doesn't, the public sector must.

won't that just create another bubble that will burst and cause a depression like the current one????

No. It will create economic activity and that will create more economic activity and so on until the economy booms...providing the stimulus is big enough. The problem with the stimulus of a few year ago is, it wasn't.

 

[EdwardBaiamonte]

When the private sector doesn't, the public sector must.

won't that just create another bubble that will burst and cause a depression like the current one????

No. It will create economic activity and that will create more economic activity and so on until the economy booms...providing the stimulus is big enough. The problem with the stimulus of a few year ago is, it wasn't.

yes but why isn't the activity a bubble destined to burst when the government spending stops? Do you know what a bubble is?? Please answer directly without evasion or admit as a liberal you lack the IQ to do so. Thanks

 

[Widdekind]

A recession is less bad, than blindly borrowing money, and spending the same on pointless & unprofitable projects. For example, borrowing billions of dollars, to pay people to watch grass grow, would not be a good "Fiscal stimulus". Public borrowings are not "automatically good". Public borrowings, on "huge Public projects", should be even more carefully considered, than private sector borrowings, by individual businesses, for merely "big private projects".

 

[ShackledNation]

Well what do you mean by not spending? Do you mean hoarding cash? Because few people do that. Even if they did, it would not affect production in any negative way.

If you don't spend, money is invested or saved in a bank. Both instances provide businesses more revenue options to expand.

If you put your money under a mattress, you are increasing the demand for money. This will increase the purchasing power of each dollar being spent, allowing it to obtain more. Prices will fall, including costs of production. So the level of production is not effected, it is just accomplished with fewer dollars of a higher purchasing power.

So if an economy is not producing, it has to do with a misallocation of resources that prevent successful production from taking place. Often this misallocation, if economy wide, is a result of monetary policy, such as price controls keeping the interest rate artificially low and massive money pumping into the economy. It completely distors the structure of capital, which is often ignored by Keynesian economists. That misallocation of resources was in housing with regards to the current problem.

 

[Rshermr]

because one man's spending is another man's income.

Krugmans solution is for government stimulus spending to make up the lost spending.

Everyone laughs knowing that artifical government spending will only create another artificial housing type bubble that eventually bursts causing even more need to deleverage and even more depression.

Of course, you can document that, right, ed. Of course you can not. Just more con dogma, from ed the tea party clown. Remember, ed, stimulus spending worked for Reagan.
Its just that you always, always, always spread the tea party dogma, that tax cuts and decreasing gov spending are the solution. But you can not point to a single case where that has worked in a bad economy.

 

[Rshermr]

Correct. But then after a few years you have recovery.

why would you have recovery rather than depression??????

Ed, you are an idiot. For the same reason that we had recovery under reagan. And under Roosevelt. You know the answer, just using the opportunity to spew tea party dogma.

 

[Rshermr]

won't that just create another bubble that will burst and cause a depression like the current one????

No. It will create economic activity and that will create more economic activity and so on until the economy booms...providing the stimulus is big enough. The problem with the stimulus of a few year ago is, it wasn't.

yes but why isn't the activity a bubble destined to burst when the government spending stops? Do you know what a bubble is?? Please answer directly without evasion or admit as a liberal you lack the IQ to do so. Thanks

A bubble is apparently what you have in your head. You seem fixated on bubbles. Bubbles do not, and have never occurred as a result of stimulus spending, you clown. If you disagree, show us all when it happened.

 

[EdwardBaiamonte]

Bubbles do not, and have never occurred as a result of stimulus spending, you clown. If you disagree, show us all when it happened.

any government spending is bubble spending, i.e., it is artificial or mal investment and will burst causing recession when the spending is withdrawn.

Sometimes it is obvious as in the case of the current depression wherein the bubble was created by the Fed's low interest rates that were specifically designed to stimulate the housing industry.

Often the bubbles are smaller like the Solyndra bubbles or the ethanol bubbles or wind bubbles or the cash for clunkers bubbles or the bridge to no where bubbles, but their cumulative affect is to prevent recovery by constantly directing resources and jobs to the wrong places. When that happens you have to wait for the free market to direct resources to their proper places. So, a recession, then, is the time it takes the Republican free market to correct the affects of liberal intervention.

For real recover you need supply incentives for broad based private sector sustainable production and consumption. Now you know why the USSR failed and why China got rich the second they switched to Republican supply-side.

Is it still over the liberal's head??

 

[EdwardBaiamonte]

For the same reason that we had recovery under reagan.

you mean the 2003 supply side tax cuts and minimal competition from China India Brazil Japan??? See how stupid you are??

And under Roosevelt.

.

dear, FDR was in the 1930's; it was called the Great Depression. OMG how old are you???? Its not fair to call you stupid if you're a child. How old are you?????

 

[ccravens]

Its just that you always, always, always spread the tea party dogma, that tax cuts and decreasing gov spending are the solution. But you can not point to a single case where that has worked in a bad economy.

I can:

1. The recession following WWI (Melon's tight money and gov't tax cuts)
2. The recession of the late 1950s (JFK's tax cuts)
3. The stagflation of the 70s and early 80s (THANKS Jimmy Carter!- RR tax cuts and tight money)

BTW, the supply side remedy isn't tax cuts and decreased gov't spending; it is tax cuts and a tightening of the money supply.

How about when we tried the OPPOSITE in bad economic times (massive gov't spending):

1. The New Deal (didn't come close to ending the depression)
2. The recession of 2008 (Stimulus I and II, and we're still in a recession!)


Oh, and the rhetorical trick you've used before is a farce. Ask a "spend your way out of a recession" person why it doesn't work (see #1 and 2 above), and they'll say: "well, it's just 'cause we didn't spend ENOUGH!" A point that can never be proved or disproved. What a cheap rhetorical trick. But they never seem to be able to explain how much would be "enough."

Seriously folks, we have to start thinking and not just spit out sound bites from MSNBC.....

 

[EdwardBaiamonte]

"well, it's just 'cause we didn't spend ENOUGH!" A point that can never be proved or disproved...

well, we are $16 trillion in debt and 40 cents of every dollar Barry spends out of his $4 trillion budgets is borrowed. I'm sure that proves it. Bush 43's first budget was less than $2 trillion.

Who could possibly say we aren't spending enough, except a perfectly 100% brain dead liberal?

 

[Rozman]

When the private sector doesn't, the public sector must.

won't that just create another bubble that will burst and cause a depression like the current one????

No. It will create economic activity and that will create more economic activity and so on until the economy booms...providing the stimulus is big enough. The problem with the stimulus of a few year ago is, it wasn't.

The problem with the stimulus of a few year ago is, it wasn't.

I totally agree we should do it now and start with what Krugman and the Libs might accept.
The next Stimulus should be at least 5 trillion dollars to start out with then do another
5 trillion dollars after 6 months.That should goose things a bit....

Good God these people are friggin crazy

 

[EdwardBaiamonte]

It will create economic activity and that will create more economic activity and so on until the economy booms...providing the stimulus is big enough.

But why would there be a boom rather than a depression? Doesn't artificial spending or mal-investment lead to a bubble and depression, much like the housing bubble that just burst and the depression we are currently in.


What you are in effect saying is that all we have to do is drop enough money out of helicopters and that will cause the economy to boom, as people spend it, rather than go into recession. Sadly there is no magical free lunch. Talking to a liberal is talking to a child or a brain dead adult.

 

[General_Zaroff]

any government spending is bubble spending, i.e., it is artificial or mal investment and will burst causing recession when the spending is withdrawn.

Oh dear, using absolutes are we? Where is your source for this? Anus doesn't count.

 

[Rshermr]

It will create economic activity and that will create more economic activity and so on until the economy booms...providing the stimulus is big enough.

But why would there be a boom rather than a depression? Doesn't artificial spending or mal-investment lead to a bubble and depression, much like the housing bubble that just burst and the depression we are currently in.


What you are in effect saying is that all we have to do is drop enough money out of helicopters and that will cause the economy to boom, as people spend it, rather than go into recession. Sadly there is no magical free lunch. Talking to a liberal is talking to a child or a brain dead adult.

Ed believes that we need an economic plan like that of hoover. Watched the unemployment rate move from 5% to over 20% while he reduced spending. So, lets try it again, says ed and the cons.
Ed believes we need an economic plan like that of Reagan. Did a major tax decrease and stopped spending for over a year, and watched the unemployment rate move from 7% to over 28%. So lets try it again, says ed.
Roosevelt had to begin the recovery with spending increases, bringing the unemployment down year by year. Stimulus spending worked then, but ed and the cons thinks it does not work any more.
Reagan had to fix his own unemployment and deficit problems. He increased taxes, borrowed enough to triple the national debt, and spent to stimulate the economy. It worked then, but ed and the cons thinks it does not work any more.
What is the definition of crazy, ed????

The right's stupidity spreads, enabled by a too-polite left | George Monbiot | Comment is free | The Guardian