What works to stimulate the economy, what has never worked to stimulate the economy.

Discussion in 'Economy' started by Maple, Oct 15, 2009.

  1. Maple
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    Maple Senior Member

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    What works- across the board tax cuts, what does not-stimulus money. Government does not create jobs- the private sector does. Good article, a little history for all to see.

    Harvard economics professor Gregory Mankiw, who served as chairman of President George W. Bush's Council of Economic Advisers, offers the following example: if you hire your neighbor for $100 to dig a hole in your backyard, and he hires you to do the same in his yard, then government statisticians will report that the economy has created two jobs and increased GDP by $200. But it is unlikely that, having wasted all that time digging, anyone is really better off.

    President Barack Obama's aides have said the new administration is only interested in ideas that can be historically and empirically proven to work. Well, the historical and empirical data proves that the fastest way out of economic downturns is letting individuals and businesses keep more of their money, creating more incentives to produce.




    Reason Foundation - The Benefits of Tax Cuts and Alternatives to Stimulus Spending
     
    Last edited: Oct 15, 2009
  2. Maple
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    Maple Senior Member

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    What?? no comments on this article, I guess everyone agrees then that the no stimulus stimulus bill isn't working. Where are you libs on this, common defend your guy and his bill. This is no fun at all. LOL
     
  3. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Don't forget that Dems consider FDR (Average unemployment 17% for EIGHT FUCKING YEARS!!!) to be a "Great" President
     
    Last edited: Oct 15, 2009
  4. Elutherian
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    Elutherian BadMother****er

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    The best stimulus is no stimulus at all. The Free Market knows what it's doing, cause the people know what they're doing. The Government just makes shit worse.
     
  5. Diuretic
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    Diuretic Permanently confused

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    Some interesting ideas there but a few points don't make much sense to me.

    The road out of this recession is one that creates sustained economic growth, not short-term spending increases.

    But to keep the economy from going under government has to spend to create a stimulus in the short term until the economy climbs out of the hole and gets going again.

    After the economy has been saved from destruction, I think this make sense.

    Myth? It works, what's this "myth" business? Stimulus spending of itself doesn't "misdirect resources", bad policy decisions on the stimulus spending does that.

    "Fails to increase aggregate consumption, only creates temporary jobs, and adds to the national debt"

    Surely stimulus spending increases aggregate consumption? Isn't stimulus spending a method of creating it?

    Temporary jobs? Perhaps but perhaps not. It might save some from losing their jobs which I think is good not just for the individuals concerned but also the economy generally. And some of those temporary jobs might convert to permanent when the economy picks up again.

    National debt. I would have thought that the national debt would be improved later by increased economic activity. I don't know what would happen to the national debt if the economy went belly up but I bet it's a horrible look.

    Oh, tax cuts right? But wouldn't that lower government income and contribute to the national debt? In a crappy economy I would think that most of us would save those tax cuts rather than spend the money - seems like a bit of a hit and miss approach. Monetary policy might be more useful - lower interest rates when the economy is on the down and increase them when the economy is on the up and inflation looms.

    I remember stagflation. Caused in part by the oil shock if I recall correctly. Terrible time. The world got over it though.

    Cut taxes eh? Interesting idea.
     
  6. Mad Scientist
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    Mad Scientist Deplorable Gold Supporting Member Supporting Member

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    The Gubamint, actually the privately owned Federal Reserve, promotes the "Boom-Bust" economic cycle and inflation with it's monetary policy.

    If we had just stayed on the gold standard and outlawed the Fed I believe the economy would have remained relatively stable.
     
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  7. Oddball
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    Oddball BANNED Supporting Member

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    I ripped that one off of the DVD and resized it for an avie, man! :)....Glad you like it.
     
  8. BasicGreatGuy
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    BasicGreatGuy Aut libertas aut mors

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    Get government out the equation. That will be a good start.
     
  9. The Rabbi
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    The Rabbi Diamond Member

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    Oy, didnt you read the article? No, stimulus spending does not work. It has never worked. Gov't cannot create jobs any more than it can create money. It can only take from one party and give to another. The net is the same.
    Changing the environment to encourage investment and savings works to stimulate the economy.
     
  10. Diuretic
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    Diuretic Permanently confused

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    Oy vey yerself :D

    Of course I read the article. I read some claims, didn't see any evidence for them, just some very ambiguous references. As I said, I'm not tutored in economics, I need all the help I can get to understand the discussions and that article didn't help me much.

    Stimulus spending doesn't work? What, ever? Anywhere?

    Government can't create jobs? I know what you mean I think but I think that's too broad a statement, you might want to sharpen it up a bit.

    Investment is good but do savings stimulate the economy? I would have thought savings, which are absolutely necessary, would be a sort of dampener for the economy. Mind you, insufficient savings by individuals would be bad for an economy too, we all need to be a bit prudent (well if we're not working for Goldman Sachs :D) and savings are good.

    How can there be encouragement in investment in a failing economy anyway? Surely that happens as a matter of course after the stimulus has saved the economy doesn't it?
     

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