Stimulus To Solve Unemployment???

[PoliticalChic]

1. Upon ascending to the presidency, Obama urged his co-conspirators, the Democrat Congress, to spend taxpayer funds to stem unemployment. "The 2009 American Recovery and Reinvestment Act, with a price tag of $770 billion....In January 2009, the administration projected that passing the bill would bring unemployment to 5 percent by the end of 2013 and ensure that it didn’t surpass 8 percent."
Obama The 2009 Stimulus Package Worked 8216 Despite What Everybody Claims 8217 TheBlaze.com

a. "The real price tag for stimulus: Between $1 trillion and $1.7 trillion"
The real price tag for stimulus Between 1 trillion and 1.7 trillion - The Washington Post




2. The result of that "stimulus" reflects the result of all of Obama's policies: Failure
"In a February 2012 poll from the nonpartisan Pew Research Center, 66 percent of Americans said the federal government is having a negative impact on the way things are going in this country (versus 22 percent who say the impact is positive). A majority disapproves of the president’s 2009 stimulus, and according to a 2010 CNN poll, about three-quarters of Americans believe the money was mostly wasted."
Why the Stimulus Failed National Review Online





3. The reason is that stimulus by the government is a flawed policy when it is designed to cure unemployment. If the government decided a bridge were to be built, the reason behind that decision is monumentally important.

a. If the bridge is based on the public's clamor for better access, or less traffic, or related to transportation, well, this is necessary response, consistent with the functions of government.

b. But...if the bridge is being built "to provide employment," need for a bridge aside, it is merely an invention of a project, and inventing becomes the bureaucrat's function.

4. Consider the argument that building the bridge will provide x number of jobs.....the unspoken belief is that those jobs would not otherwise come into existence. But...where did the money to pay for those jobs come from?
Answer: every dollar given to those bridge workers was taken from other workers in taxes.

So...if the bridge cost $50 million, then $50 million (at least) had to be taken from the economy, from taxpayers.
Bridge illustration taken from "Economics In One Lesson," by Henry Hazlitt



a. And what would have happened to the $50 million had it not been taken?
Right....it would have remained in the economy producing jobs.

a. So...for every 'stimulus' job created by the bridge project, a private job has been destroyed.




The explanation for boondoggles such as Obama's 'Stimulus' is found here:
1. There seem to be only two ironclad rules of government:
Rule no.1: Always try to expand;

Rule no. 2: see Rule no. 1.
Beck, Balfe, “Broke,” p. 115

 

[DGS49]

But madame, you are wrong. The $50 million is not taken from the economy, it is borrowed from the future. All we have to pay right now is the interest on the bonds. For all practical purposes it is "created."

Like it or not, the doomsayers who have claimed that all this debt would drown the federal government have been proven - shall we say - pessimistic.

I hate Paul Krugman and everything he says, but maybe he's right. We are further into debt than anyone could have even imagined ten years ago and the sky has not fallen.

 

[Mad Scientist]

While I agree that Stimulus doesn't work it's not fair to say it's an Obama Policy.

It's a Banker Policy. The Privately Owned Federal Reserve's Policy.

Which at last count is roughly 7.7 Trillion of which only 75 Billion has been paid back.

 

[gipper]

1. Upon ascending to the presidency, Obama urged his co-conspirators, the Democrat Congress, to spend taxpayer funds to stem unemployment. "The 2009 American Recovery and Reinvestment Act, with a price tag of $770 billion....In January 2009, the administration projected that passing the bill would bring unemployment to 5 percent by the end of 2013 and ensure that it didn’t surpass 8 percent."
Obama The 2009 Stimulus Package Worked 8216 Despite What Everybody Claims 8217 TheBlaze.com

a. "The real price tag for stimulus: Between $1 trillion and $1.7 trillion"
The real price tag for stimulus Between 1 trillion and 1.7 trillion - The Washington Post




2. The result of that "stimulus" reflects the result of all of Obama's policies: Failure
"In a February 2012 poll from the nonpartisan Pew Research Center, 66 percent of Americans said the federal government is having a negative impact on the way things are going in this country (versus 22 percent who say the impact is positive). A majority disapproves of the president’s 2009 stimulus, and according to a 2010 CNN poll, about three-quarters of Americans believe the money was mostly wasted."
Why the Stimulus Failed National Review Online





3. The reason is that stimulus by the government is a flawed policy when it is designed to cure unemployment. If the government decided a bridge were to be built, the reason behind that decision is monumentally important.

a. If the bridge is based on the public's clamor for better access, or less traffic, or related to transportation, well, this is necessary response, consistent with the functions of government.

b. But...if the bridge is being built "to provide employment," need for a bridge aside, it is merely an invention of a project, and inventing becomes the bureaucrat's function.

4. Consider the argument that building the bridge will provide x number of jobs.....the unspoken belief is that those jobs would not otherwise come into existence. But...where did the money to pay for those jobs come from?
Answer: every dollar given to those bridge workers was taken from other workers in taxes.

So...if the bridge cost $50 million, then $50 million (at least) had to be taken from the economy, from taxpayers.
Bridge illustration taken from "Economics In One Lesson," by Henry Hazlitt



a. And what would have happened to the $50 million had it not been taken?
Right....it would have remained in the economy producing jobs.

a. So...for every 'stimulus' job created by the bridge project, a private job has been destroyed.




The explanation for boondoggles such as Obama's 'Stimulus' is found here:
1. There seem to be only two ironclad rules of government:
Rule no.1: Always try to expand;

Rule no. 2: see Rule no. 1.
Beck, Balfe, “Broke,” p. 115

You have explained Keynesian economics in one small post. This is the economic plan of leftists, liberals, and Big Ears.

Of course, you have also debunked it.

 

[sameech]

But madame, you are wrong. The $50 million is not taken from the economy, it is borrowed from the future. All we have to pay right now is the interest on the bonds. For all practical purposes it is "created."

Like it or not, the doomsayers who have claimed that all this debt would drown the federal government have been proven - shall we say - pessimistic.

I hate Paul Krugman and everything he says, but maybe he's right. We are further into debt than anyone could have even imagined ten years ago and the sky has not fallen.

The sky hasn't fallen but other things have:

 

[gipper]

But madame, you are wrong. The $50 million is not taken from the economy, it is borrowed from the future. All we have to pay right now is the interest on the bonds. For all practical purposes it is "created."

Like it or not, the doomsayers who have claimed that all this debt would drown the federal government have been proven - shall we say - pessimistic.

I hate Paul Krugman and everything he says, but maybe he's right. We are further into debt than anyone could have even imagined ten years ago and the sky has not fallen.

Regarding the idiot Krugman, since the sky has not fallen as yet, lets keep up the deficit spending to fix the economy. Such an economic policy, based on flawed logic, is idiocy.

One would think after the horrendous failure of FDR's economic interventions, our leaders would know government spending does not stimulate the economy. It harms it!!!

 

[gipper]

But madame, you are wrong. The $50 million is not taken from the economy, it is borrowed from the future. All we have to pay right now is the interest on the bonds. For all practical purposes it is "created."

Like it or not, the doomsayers who have claimed that all this debt would drown the federal government have been proven - shall we say - pessimistic.

I hate Paul Krugman and everything he says, but maybe he's right. We are further into debt than anyone could have even imagined ten years ago and the sky has not fallen.

The sky hasn't fallen but other things have:
View attachment 32282

That is a good graph....this is good too.

 

[JakeStarkey]

Well, there is our blessing for the day: the far right wingers are not in charge of the economy.

 

[PoliticalChic]

Well, there is our blessing for the day: the far right wingers are not in charge of the economy.

"....our blessing for the day...."

"Insolvency milepost: Debt accumulated under Obama sails past $7 trillion"
Insolvency milepost Debt accumulated under Obama sails past 7 trillion Hot Air


You know, it really isn't necessary for you to re-establish that you are an imbecile every single day...
...the impression is a lasting one.

Take a day off.

 

[sameech]

There are too many issues that warrant discussion to condense into a federal debt discussion. One aspect is that the value of currency is based on debt; but the bigger one is how long can we keep kicking the can down the road. The issue isn't whether $XTrillion is too much so much as it is, over the lifetime of a child born today, there is, depending on whose estimates you use, somewhere between $100-$200T gap in unstated federal debt based on the difference between expected revenue and expected expenses under current policies. Unstated debt consists of the future obligations that the government is committed to but that have not yet been budgeted.

 

[gipper]

There are too many issues that warrant discussion to condense into a federal debt discussion. One aspect is that the value of currency is based on debt; but the bigger one is how long can we keep kicking the can down the road. The issue isn't whether $XTrillion is too much so much as it is, over the lifetime of a child born today, there is, depending on whose estimates you use, somewhere between $100-$200T gap in unstated federal debt based on the difference between expected revenue and expected expenses under current policies. Unstated debt consists of the future obligations that the government is committed to but that have not yet been budgeted.

Yes. The USA is headed for default. Once we lose the world's reserve currency, all hell will break lose.

The news of late is the BRICS intend to set up their own currency. Our corrupt government officials and the banksters that own them, are not about to let that happen....without a fight.
Russian Finance Minister considers dumping dollars and move borrowing to BRICS - National Finance Examiner Examiner.com

This may be why Big Ears, the government run media, most Ds and Rs are doing their best to start WWIII.

 

[MisterBeale]

But madame, you are wrong. The $50 million is not taken from the economy, it is borrowed from the future. All we have to pay right now is the interest on the bonds. For all practical purposes it is "created."

Like it or not, the doomsayers who have claimed that all this debt would drown the federal government have been proven - shall we say - pessimistic.

I hate Paul Krugman and everything he says, but maybe he's right. We are further into debt than anyone could have even imagined ten years ago and the sky has not fallen.

Regarding the idiot Krugman, since the sky has not fallen as yet, lets keep up the deficit spending to fix the economy. Such an economic policy, based on flawed logic, is idiocy.

One would think after the horrendous failure of FDR's economic interventions, our leaders would know government spending does not stimulate the economy. It harms it!!!

But hey, if that doesn't work, as a last resort, we can always engineer another war and see if that helps, eh?

 

[PoliticalChic]

While I agree that Stimulus doesn't work it's not fair to say it's an Obama Policy.

It's a Banker Policy. The Privately Owned Federal Reserve's Policy.

Which at last count is roughly 7.7 Trillion of which only 75 Billion has been paid back.

No....it is a big government, Leftwing enterprise...

But you're correct....it doesn't work

The best approach for supporting the Stimulus, it seems...is to lie:
And when the projections fall short: “The number of jobs in the U.S. is currently 129.7 million. So to justify the Administration’s current claim of 2.8 million jobs “created or saved” by stimulus, they need to also claim that without that stimulus there would be only 126.9 million jobs.
That’s exactly what they do, displayed as the “baseline projection” level in the graphic below from an April 14, 2010 report.

An inconvenient truth, at least for the Obama Administration, is that once upon a time, in their January 2009 Romer/Bernstein Report they told America that without their stimulus there would be 133.9 million jobs. That’s right, in order to make it look like their stimulus has “created or saved” 2.8 million jobs, the Obama Administration first had to whack 7 million jobs from their previous estimates.” Breitbart News Big Government



5. So...of the two pillars of support for government projects:
a) that they create jobs....
b) and the suggestion that they create wealth that would not otherwise be produced.
Both are false, basically because neither for considers the cost of taxation.

a. The taxes required for large government projects destroy as many jobs in other areas of the economy as it creates for the project. One must use the 'eye of imagination' to see the unbuilt private homes, the unmade kitchen appliances, and the lack of other numerous goods and services.


6. Fighting for the truth is an immense task, for several reasons. First, any objections will be labeled 'obstructionist,' or 'reactionary.' Even more importantly, the bridge or the completed government project can be seen, as can the bridge workers....but the real costs, and damage to the economy, must be seen in the eye of imaging: only those educated to look beyond the surface will see it.

The argument for these government stimulus projects reminds of a line from George Bernard Shaw's "Saint Joan"...."What an utter fool! Couldn't he use his eyes?"


No....not eyes. Brains.

 

[PoliticalChic]

7. Why The Stimulus?

Short answer: as a slush fund to reward supporters, and provide a pathway for kick-backs. But certainly not as an anodyne for the economic disease that afflicted America.


8. First of all....the Stimulus didn't work. Even Obama said this: "It’s not growing quite as fast as we would like, because after a financial crisis, typically there’s a bigger drag on the economy for a longer period of time." Remarks by the President at a Facebook Town Hall The White House


a. Reinhart and Rogoff tried to support this fabrication in their book, "This Time Is Different."


b. Bill Clinton went even further: "At a recent Democratic fundraising event, former President Bill Clinton did his level best to explain away the slow growth and high unemployment of the Obama era. "If you go back 500 years," said Mr. Clinton, "whenever a country's financial system collapses, it takes between 5 and 10 years to get back to full employment. If you go back for the last 200 years, when buildings had been widely owned by individuals and companies, if there's a mortgage collapse it almost always takes 10 years." http://online.wsj.com/article/SB10001424052702303916904577378772704541942.html


And there's a man whose word one can count on.



OK? Now let's take the Obama/Clinton Axis to school:


9. "Neither historical data nor recent international comparison support Reinhart's and Rogoff's claim about the weakness of recoveries after financial crises."

Lott, "At The Brink," p. 113.


a. "A large contraction in output tends to be followed on the average by a large business expansion; a mild contraction, by a mild expansion."

Milton Friedman, "The Monetary Studies of the National Bureau," ch.12, in "The Optimum Quantity of Money and Other Essays."


b. "...since the 1880's, the average annual growth rate of real GDP during financial recoveries from financial crisis recession was 8%, while the growth rate from non-financial crisis recessions was 6.9%."

Bardo and Haubrich, "Deep Recessions, Fast Recoveries, and Financial Crises: Evidence From the American Record," Federal Reserve Bank of Cleveland, June 2012. http://www.clevelandfed.org/research/workpaper/2012/wp1214.pdf


c. "U.S. history provides no support for linking low employment and high unemployment in the current recovery with the financial crisis of 2007–2008." The Financial Crisis and Recovery Why so Slow - September October 2011 - Federal Reserve Bank of Atlanta


d. In January 2009, prior to the Obama Stimulus, the WSJ had surveyed economic forecasters. They predicted an increase of 0.8 % in unemployment by December of 2009. Instead, 4 months after the Stimulus...it had climbed by 2.1 %, while in Canada....up 1 %. Lott, Op. Cit.


Keynesianism will never die for the simple reason that it gives politicians a reason, an excuse, to spend other people's money.

 

[Moonglow]

name me one government that does not spend other peoples money?

 

[Moonglow]

China has been using stimulus funds to help their economy and it's working, but then again they don't have to deal with evangelical repubs...

 

[PoliticalChic]

name me one government that does not spend other peoples money?

Now, although that was not your intent, it is an interesting question.

After all....if the Obama-Stimulus resulted in far better results than a nation that didn't use a stimulus in similar circumstances.....
...that might suggest that I'd made a missssssss....missttttttt....missssttaakkk.....mistake.

How unusual would that be???

OK....you've called my bluff.

Now...I'll bury you.



10. Here is an interesting, if not dispositive, test of Keynesian Theory.

If Keynes was correct, the American economy should have performed well compared with countries that followed others policies.

That is not the case: Canada provides an interesting contrast, as our economies are closely interconnected.


a. Canada is our largest trading partner. Any cutback by American consumers directly affects Canadian-made goods.


b. Here is the difference: the Canadian government had chosen not to introduce any new big government programs, even though revenues had fallen, and the deficit grew. The US debt as a share of GDP rose by 33 % from 2008 to 2012. Canada's debt rose by just over 13%.
"Moreover, the Canadian government didn’t just cut the growth rate of spending, a favorite trick of U.S. politicians who want to claim the mantle of fiscal conservatism. It also cut absolute spending on many programs in dollar terms."
Canada s Budget Triumph Mercatus


Ready?

11. Canadian and US unemployment rates increased in lockstep from August 2008 to February 2009, when Obama's Stimulus was passed. After that, Canada began to substantially outperform the US in job creation, the supposed point of the stimulus. In the US, unemployment rose to 10.1 % by October 2009, and remained at least at 9.5% for the next 14 months. Canadian unemployment peaked at 7.7 % in July and August of 2009, and has been falling ever since.
Lott, "At The Brink," p. 102-103.


a. When the American unemployment rate in September 2011 was stuck at 9.1 %, Canada's had fallen to 6.3%. The US had increased by 1.3 % since Obama became President, while Canadian unemployment had already fallen below its January 2009 level.
Lott, Op. Cit.



How ya' like that, booyyyyyyeeeeee?

 

[Moonglow]

He shoulda gave the US taxpayers the dough instead of the G-D rich people, like when Boosh did it twice during his presidency.
Believe me when I say, I was livid when they said the rich needed to be saved...

 

[Moonglow]

We need another massive spending spree like Reagan did to help unemployment....

 

[JakeStarkey]

Well, there is our blessing for the day: the far right wingers are not in charge of the economy.

"....our blessing for the day...."

"Insolvency milepost: Debt accumulated under Obama sails past $7 trillion"
Insolvency milepost Debt accumulated under Obama sails past 7 trillion Hot Air


You know, it really isn't necessary for you to re-establish that you are an imbecile every single day...
...the impression is a lasting one.

Take a day off.

Tell us what our wealth has grown too in the last six years, bright eyes.

Hiding in your little kitchen in your little flat with only this do. Sad to be you.