Stimulus program

Listen carefully....Doing the same thing over and over and over and over again, while expecting a better result.

Actually we engaged in massive deficit spending in the 40's and brought the country leading to economic growth. Problem is won't work anymore because we no longer have a source of vast numbers of labor intensive reasonably good paying industries.
Horseshit.

The only thing that ended the Great Depression was WWII, after which the country went through a rather steep recession.

There still ain't no free lunch, bub.

Dude! Not you too! :banghead:

World War II didn't end the Great Depression, it was when the government took its chokehold off the market after WW2 that the Great Depression ended. Wars don't bring prosperity.
 
Any program of this size will need more than a year to prove itself a bad or good Idea. If the next half of the stimulus actually goes to rebuilding our infrastructure, I believe it will turn out to be a good idea. I'm all for a stimulus that creates jobs but I'm completely against one that simply perpetuates the bad business practices of wall street. Its time to put an end with to big to fail, capitalism only works if the risk of gambling is present. This country will always reward risks if the risk pays off but the moment we backup failure with tax dollars are system will fail every time.
 
Any program of this size will need more than a year to prove itself a bad or good Idea. If the next half of the stimulus actually goes to rebuilding our infrastructure, I believe it will turn out to be a good idea. I'm all for a stimulus that creates jobs but I'm completely against one that simply perpetuates the bad business practices of wall street. Its time to put an end with to big to fail, capitalism only works if the risk of gambling is present. This country will always reward risks if the risk pays off but the moment we backup failure with tax dollars are system will fail every time.

"Any program of this size will need more than a year ..."

A decade work for ya'?

The only stimulus in a capitalist economy is profit.

"Nor is this remote port in western Japan unusual. Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery.

Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience. While Japan is not exactly comparable to the United States — especially as a late developer with a history of heavy state investment in infrastructure — economists say it can still offer important lessons about the pitfalls, and chances for success, of a stimulus package in an advanced economy. "
http://www.nytimes.com/2009/02/06/wo...prod=permalink


"Beginning in 1991-1992, Japan adopted the spending approach now advocated by many in the U.S. Congress when it embarked on a massive nationwide program of infrastructure investment. Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component.
…
Combined with increases in other government spending programs, Japan’s efforts to spend its way to prosperity led to substantial increases in government spending as a share of GDP. … Japan’s failed policies had severe negative consequences for its economy and citizens. …[M]easured in inflation-adjusted GDP growth, Japan went from being a high-growth country in the 1980s to a slow-growth country during the 1990s. … For the average Japanese citizen, the chief consequence of this economic underperformance has been both a relative and an absolute decline in the nation’s standard of living, defined by per capita GDP as measured by the World Bank and adjusted for differences in purchasing power parity (PPP)."
Learning from Japan’s Big Debt Spending Failure » The Foundry
 
Dude! Not you too! :banghead:

World War II didn't end the Great Depression, it was when the government took its chokehold off the market after WW2 that the Great Depression ended. Wars don't bring prosperity.
Not so at all. The war provided lots and lots of positive production in the general economy. That it was ultimately aimed at being destroyed (at least in part) was what led to the very steep recession after the war ended.

Then, there was the massive increase in productivity (once industry got retooled for peace time industry) that was only natural after so much had been destroyed.

Now, concerning the question as to whether the unnecessary deaths and dismemberment of millions of people, and the mass destruction brought about by the war were worth it, is answered in a big "NO".
 
Any program of this size will need more than a year to prove itself a bad or good Idea. If the next half of the stimulus actually goes to rebuilding our infrastructure, I believe it will turn out to be a good idea. I'm all for a stimulus that creates jobs but I'm completely against one that simply perpetuates the bad business practices of wall street. Its time to put an end with to big to fail, capitalism only works if the risk of gambling is present. This country will always reward risks if the risk pays off but the moment we backup failure with tax dollars are system will fail every time.

"Any program of this size will need more than a year ..."

A decade work for ya'?

The only stimulus in a capitalist economy is profit.

"Nor is this remote port in western Japan unusual. Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery.

Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience. While Japan is not exactly comparable to the United States — especially as a late developer with a history of heavy state investment in infrastructure — economists say it can still offer important lessons about the pitfalls, and chances for success, of a stimulus package in an advanced economy. "
http://www.nytimes.com/2009/02/06/wo...prod=permalink


"Beginning in 1991-1992, Japan adopted the spending approach now advocated by many in the U.S. Congress when it embarked on a massive nationwide program of infrastructure investment. Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component.
…
Combined with increases in other government spending programs, Japan’s efforts to spend its way to prosperity led to substantial increases in government spending as a share of GDP. … Japan’s failed policies had severe negative consequences for its economy and citizens. …[M]easured in inflation-adjusted GDP growth, Japan went from being a high-growth country in the 1980s to a slow-growth country during the 1990s. … For the average Japanese citizen, the chief consequence of this economic underperformance has been both a relative and an absolute decline in the nation’s standard of living, defined by per capita GDP as measured by the World Bank and adjusted for differences in purchasing power parity (PPP)."
Learning from Japan’s Big Debt Spending Failure » The Foundry



Adam Posen of the Peterson Institute for International Economics is the go-to guy for understanding Japan’s lost decade. From prepared testimony for a Joint Economic Committee hearing tomorrow (no link):

The guarantees that the US government has already extended to the banks in the last year, and the insufficient (though large) capital injections without government control or adequate conditionality also already given under TARP, closely mimic those given by the Japanese government in the mid-1990s to keep their major banks open without having to recognize specific failures and losses. The result then, and the emerging result now, is that the banks’ top management simply burns through that cash, socializing the losses for the taxpayer, grabbing any rare gains for management payouts or shareholder dividends, and ending up still undercapitalized. Pretending that distressed assets are worth more than they actually are today for regulatory purposes persuades no one besides the regulators, and just gives the banks more taxpayer money to spend down, and more time to impose a credit crunch.

These kind of half-measures to keep banks open rather than disciplined are precisely what the Japanese Ministry of Finance engaged in from their bubble’s burst in 1992 through to 1998 …

Turning Japanese - Paul Krugman Blog - NYTimes.com

Unfortunately, as politically unpopular as it may be, nationalizing the banks is one of the best ways to uphold our capitalist economy...and even conservative economists would consider this proposition. The fact of the matter is, if you understand the economy, you understand how vital the banks are to its proper function. When the entire economy almost collapses over bad loans and regulators being unable to understand what it is they're supposed to be regulating, we're in some serious trouble. Now that the banks know they're "too big to fail," the issue of moral hazard becomes more pervasive.

Also, please read an economics textbook. Fiscal and monetary policy are both considered stimulus. While profit may be a driving force of an economy, those seeking profits in their own interest can do so in a way that destroys the interest of the common good.
 
Dude! Not you too! :banghead:

World War II didn't end the Great Depression, it was when the government took its chokehold off the market after WW2 that the Great Depression ended. Wars don't bring prosperity.
Not so at all. The war provided lots and lots of positive production in the general economy. That it was ultimately aimed at being destroyed (at least in part) was what led to the very steep recession after the war ended.

Then, there was the massive increase in productivity (once industry got retooled for peace time industry) that was only natural after so much had been destroyed.

Now, concerning the question as to whether the unnecessary deaths and dismemberment of millions of people, and the mass destruction brought about by the war were worth it, is answered in a big "NO".

There was no positive production in the general economy during WW2, there were shortages and rationing.

Rebuilding what was destroyed isn't a net positive for an economy, it's a negative. You now have less than you would have had nothing been destroyed and you could apply the resources needed for rebuilding towards new things.

Accepting that the war got us out of the Depression is accepting that government spending can get us out of a recession, because that's what a war is. Just another form of government "stimulus." Since government spending does not create real wealth we can safely conclude that wars do not end recessions.
 
If they had spent the last stimulus properly, we would not need a second one.

The government doesn't need to spend anything at all. They just need to get out of the way and let the market do its thing. It will recover if they let it and stop interfering.
 
If they had spent the last stimulus properly, we would not need a second one.

The government doesn't need to spend anything at all. They just need to get out of the way and let the market do its thing. It will recover if they let it and stop interfering.

To a large extent, you're right. But that was never gonna happen - because this crisis is just a tad too convenient for them..... They helped create it. I've already asked why and proposed my opinion as to why it was created.
 
The economy is recovering crowd has a problem. It was government spending that saved GDP. Without further inflow, the only growth would have to come from the private sector. They haven't "fixed" that yet, so the recovery is going to fall apart.
 
Any program of this size will need more than a year to prove itself a bad or good Idea. If the next half of the stimulus actually goes to rebuilding our infrastructure, I believe it will turn out to be a good idea. I'm all for a stimulus that creates jobs but I'm completely against one that simply perpetuates the bad business practices of wall street. Its time to put an end with to big to fail, capitalism only works if the risk of gambling is present. This country will always reward risks if the risk pays off but the moment we backup failure with tax dollars are system will fail every time.

"Any program of this size will need more than a year ..."

A decade work for ya'?

The only stimulus in a capitalist economy is profit.

"Nor is this remote port in western Japan unusual. Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery.

Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience. While Japan is not exactly comparable to the United States — especially as a late developer with a history of heavy state investment in infrastructure — economists say it can still offer important lessons about the pitfalls, and chances for success, of a stimulus package in an advanced economy. "
http://www.nytimes.com/2009/02/06/wo...prod=permalink



"Beginning in 1991-1992, Japan adopted the spending approach now advocated by many in the U.S. Congress when it embarked on a massive nationwide program of infrastructure investment. Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component.
…
Combined with increases in other government spending programs, Japan’s efforts to spend its way to prosperity led to substantial increases in government spending as a share of GDP. … Japan’s failed policies had severe negative consequences for its economy and citizens. …[M]easured in inflation-adjusted GDP growth, Japan went from being a high-growth country in the 1980s to a slow-growth country during the 1990s. … For the average Japanese citizen, the chief consequence of this economic underperformance has been both a relative and an absolute decline in the nation’s standard of living, defined by per capita GDP as measured by the World Bank and adjusted for differences in purchasing power parity (PPP)."
Learning from Japan’s Big Debt Spending Failure » The Foundry



Adam Posen of the Peterson Institute for International Economics is the go-to guy for understanding Japan’s lost decade. From prepared testimony for a Joint Economic Committee hearing tomorrow (no link):

The guarantees that the US government has already extended to the banks in the last year, and the insufficient (though large) capital injections without government control or adequate conditionality also already given under TARP, closely mimic those given by the Japanese government in the mid-1990s to keep their major banks open without having to recognize specific failures and losses. The result then, and the emerging result now, is that the banks’ top management simply burns through that cash, socializing the losses for the taxpayer, grabbing any rare gains for management payouts or shareholder dividends, and ending up still undercapitalized. Pretending that distressed assets are worth more than they actually are today for regulatory purposes persuades no one besides the regulators, and just gives the banks more taxpayer money to spend down, and more time to impose a credit crunch.

These kind of half-measures to keep banks open rather than disciplined are precisely what the Japanese Ministry of Finance engaged in from their bubble’s burst in 1992 through to 1998 …

Turning Japanese - Paul Krugman Blog - NYTimes.com

Unfortunately, as politically unpopular as it may be, nationalizing the banks is one of the best ways to uphold our capitalist economy...and even conservative economists would consider this proposition. The fact of the matter is, if you understand the economy, you understand how vital the banks are to its proper function. When the entire economy almost collapses over bad loans and regulators being unable to understand what it is they're supposed to be regulating, we're in some serious trouble. Now that the banks know they're "too big to fail," the issue of moral hazard becomes more pervasive.

Also, please read an economics textbook. Fiscal and monetary policy are both considered stimulus. While profit may be a driving force of an economy, those seeking profits in their own interest can do so in a way that destroys the interest of the common good.

The operative phrase in your post: "for understanding Japan’s lost decade.."

Did you see the terms "lost" and "decade."

Read carefully: this means that the stimulus isn't one.


"...please read an economics textbook..." This is the plaintive cry of the lost liberal. I've read them, I just am able to tell that they are nonsense.

Krugman: why do you suppose he gets all those awards from liberal organizations.

Some of us have gone through liberal universities, but have been able to rise above the indocrination.

There is hope for you: the Japanes are very smart, but are led by the same liberal establishments as we are. Hence the failed stimulus.

The mantra is always, "we didn't try it long enough," or "we just need more money."

Wise up.

This should really rumple your feathers: FDR's stimulus actually retarded recovery!
In 1935, the Brookings Institution (left-leaning) delivered a 900-page report on the New Deal and the National Recovery Administration, concluding that “ on the whole it retarded recovery.”

Here's how it should have been handled:
Warren Harding inherited one of the sharpest recessions in American history in 1921. By July it was over. Harding and Treasury Sec’y Mellon cut government expenditures by 40 %, allowing wages to fall, in a natural recovery to full employment. The cuts, and even sharper tax cuts under Coolidge, produced the long period of growth and rising living standards associated with the Roaring Twenties.
 
WHY did WWII end the Great Depression?

Let me help you. Because the US went deeply in debt borrowing money to fund the defense buildup. MASSIVE amounts of money.
And national defense is something the Federal Government is actually charged to do... not to give you bonuses for buying a car or to give you free healthcare or so many other little entitlement things that are in your little stim package

So massive deficits and accumulation of national debt is fine as long as we spend it on the military?

Are you serious?

As long as it is for national defense... not inherently the 'military'

Especially since without a country, we don't have freedoms, etc... not to mention that it is actually constitutional, and not something outside the enumerated powers that government is doing for the expansion of power

But nice try, winger
 

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