4 1/2 Years of Stimulus has not created jobs

[usmcstinger]

For 4 1/2 years the Obama Administration has attempted to use the keynesian economic theory to solve our limping economy. It has failed!

Has Keynesian Economics ever worked?

The American Spectator : Fatal Flaws of Keynesian Economics

Forbes Search

Where in the world is Keynesian economics working? ? Ted Biondo - Rockford, IL - Rockford Register Star

Is it rational to do something that always fails over and over again and expect a different outcome?

 

[jasonnfree]

For 4 1/2 years the Obama Administration has attempted to use the keynesian economic theory to solve our limping economy. It has failed!

Has Keynesian Economics ever worked?

The American Spectator : Fatal Flaws of Keynesian Economics

Forbes Search

Where in the world is Keynesian economics working? ? Ted Biondo - Rockford, IL - Rockford Register Star

Is it rational to do something that always fails over and over again and expect a different outcome?

JM Keynes vs right wind funded American Spectator is what this is. No surprise.
The economy was close to a meltdown four and a half years ago. It's not now. We really have no way of knowing if a McCain presidency would have done better. It was like no other emergency in the past since the depression of the thirties. Maybe the stimulus wasn't big enough? Also don't forget republicans declared war on obama and vowed to block anything he would try to improve things. This hasn't helped. Keynesianism vs Austerity is a subject going on in these economic forums. How many countries have pulled out of slumps using austerity?

 

[Toronado3800]

For 4 1/2 years the Obama Administration has attempted to use the keynesian economic theory to solve our limping economy. It has failed!

Has Keynesian Economics ever worked?

The American Spectator : Fatal Flaws of Keynesian Economics

Forbes Search

Where in the world is Keynesian economics working? ? Ted Biondo - Rockford, IL - Rockford Register Star

Is it rational to do something that always fails over and over again and expect a different outcome?

I would disagree 100% with your title but may be interested in hearing and reading more anti stimulus points.

Consider where I work. Lets say things are dragging along and we take out a loan (print money). When we spend that loan on supplies and employees it creates or saves jobs. So did/does Obama's and Reagan's deficit spending.

Now the return on investment a year for a business, ten or more years for a country must be considered and that is debateable.

 

[Rshermr]

For 4 1/2 years the Obama Administration has attempted to use the keynesian economic theory to solve our limping economy. It has failed!

Has Keynesian Economics ever worked?

The American Spectator : Fatal Flaws of Keynesian Economics

Forbes Search

Where in the world is Keynesian economics working? ? Ted Biondo - Rockford, IL - Rockford Register Star

Is it rational to do something that always fails over and over again and expect a different outcome?

Wow. That post is about the most incorrect ever. Full of untruths.
So, stinger, you use a bunch of very, very right wing web sites to prove what you want to prove. Problem is, they are totally partial. And totally wrong.

Now, I could bring you the estimates by moveon.org. But then, I have integrity. You should look the term up. Because you could use some.

Stimulus does indeed work. But perhaps you can show us where lowering taxes has EVER worked.

Then, you say the obama stimulus crated no jobs. So we could believe your far right wing nut case sources, or we could go to moveon.org. OR (and here is a thought you probably have not entertained) we could use a non-partial source. One believed by repubs and dems alike. And known to be impartial. Like, say, the cbo.

And here is the problem for your hypotheses, stinger. They say you are TOTALLY WRONG. They say, as a matter of fact, that the stimulus created a whole lot of jobs. Maybe as many as 3.3 million jobs.

Now, do you see the difference between none and 3.3 million???
http://www.cbo.gov/sites/default/files/cbofiles/attachments/08-23-2012-RecoveryAct.pdf

 

[Mr Natural]

Looks like the "Job Creators" are not doing their jobs.

 

[Whereisup]

Normally, a stimulus creates jobs, and some jobs have been created.

However, the other side is partly right in that the stimulus hasn't created as many jobs as it should have.

When two sides are partly right, that is a red alert to look into what is going on.

I will note several thing but I suspect that there are other factors I don't know about that some people might know, and could bring up.

First, there is a hole in the economic boat. We are running a deficit with other nations in the 400 billion to 600 billion dollar a year range, depending on the year. To make that worse, we borrow to pay for the deficit, so then have to pay interest on the loans. So the debt to foreign lenders and the amount we have to pay each year is compounding.

The stimulus would work well if it were all spend within and kept within the United States. However, with the money we have going out of the country, through the economic boat hole, a large part of the stimulus leaves the United States, and therefore, the stimulus creates fewer jobs than it would have if the money had stayed in the country.

Second, if was promised that the wealthy would use their tax cuts to fund new jobs in the United States. They have failed, perhaps refused, to do so, which keeps many new jobs from being funded. The wealthy have been using their tax savings on things that don't create new jobs in America.

If the wealthy would just start spending the yearly tax savings they have acquired starting with the Reagan tax cuts, we would see a surge of new jobs.

Third, we are paying off the costs of major criminal activity, which is what a large part of the bailouts the Bush administration was designed to do. The criminal activity was huge. At the time of the crisis, it is estimated that the number of derivatives out which could fail was in the hundreds of trillions of dollars, compared with a small Gross World Product of about 60 trillion dollars per year. How did criminals manage to do something that massive?

The scam centered in the credit default swaps. The name itself makes people avoid thinking about what a credit default swap might be and what it might do. However, a credit default swap is essentially an insurance policy on an investment, and it was especially used to insure mortgage bundles.

Now, a peculiar thing about credit default swaps was that they could be taken out by people who didn't actually own the investment. It would be like all your neighbors could buy fire insurance on your house, and then when your house burned, they could each collect the fully amount. It sounds insane, but that is what was being done with credit default swaps.

Then, a number of the largest banks began selling mortgage bundles guaranteed to fail. To do this, they had to knowingly give bad loans to homeowners that they knew the homeowners would end up defaulting on.

Then, those in the know purchased credit default swaps on the mortgage bundles guaranteed to fail, so there were many insurance policies on each mortgage bundle guaranteed to fail. What the bail-out did was to buy up enough bad mortgages so that the mortgage bundles guaranteed to fail did not fail after all. The people who owned those credit default swaps therefore unexpectedly lost their money because the mortgage bundles didn't fail as the banks had promised.

Before that happened, individuals had time to earn up to a billion dollars in profits, and I have read that the Chinese government made a lot of money on the credid default swaps that China had purchased..

The economic damage ftom these criminal actions was so great that the stimulus hasn't been able to work as well as it should have.

Jim

 

[Sunni Man]

The American people don't care about the stimulus or how many jobs Pres Obama has created.

He gave them gays in the military and supports homo marriage.

So his 5 yrs. in office is seen as an outstanding success. ..

 

[Toddsterpatriot]

Normally, a stimulus creates jobs, and some jobs have been created.

However, the other side is partly right in that the stimulus hasn't created as many jobs as it should have.

When two sides are partly right, that is a red alert to look into what is going on.

I will note several thing but I suspect that there are other factors I don't know about that some people might know, and could bring up.

First, there is a hole in the economic boat. We are running a deficit with other nations in the 400 billion to 600 billion dollar a year range, depending on the year. To make that worse, we borrow to pay for the deficit, so then have to pay interest on the loans. So the debt to foreign lenders and the amount we have to pay each year is compounding.

The stimulus would work well if it were all spend within and kept within the United States. However, with the money we have going out of the country, through the economic boat hole, a large part of the stimulus leaves the United States, and therefore, the stimulus creates fewer jobs than it would have if the money had stayed in the country.

Second, if was promised that the wealthy would use their tax cuts to fund new jobs in the United States. They have failed, perhaps refused, to do so, which keeps many new jobs from being funded. The wealthy have been using their tax savings on things that don't create new jobs in America.

If the wealthy would just start spending the yearly tax savings they have acquired starting with the Reagan tax cuts, we would see a surge of new jobs.

Third, we are paying off the costs of major criminal activity, which is what a large part of the bailouts the Bush administration was designed to do. The criminal activity was huge. At the time of the crisis, it is estimated that the number of derivatives out which could fail was in the hundreds of trillions of dollars, compared with a small Gross World Product of about 60 trillion dollars per year. How did criminals manage to do something that massive?

The scam centered in the credit default swaps. The name itself makes people avoid thinking about what a credit default swap might be and what it might do. However, a credit default swap is essentially an insurance policy on an investment, and it was especially used to insure mortgage bundles.

Now, a peculiar thing about credit default swaps was that they could be taken out by people who didn't actually own the investment. It would be like all your neighbors could buy fire insurance on your house, and then when your house burned, they could each collect the fully amount. It sounds insane, but that is what was being done with credit default swaps.

Then, a number of the largest banks began selling mortgage bundles guaranteed to fail. To do this, they had to knowingly give bad loans to homeowners that they knew the homeowners would end up defaulting on.

Then, those in the know purchased credit default swaps on the mortgage bundles guaranteed to fail, so there were many insurance policies on each mortgage bundle guaranteed to fail. What the bail-out did was to buy up enough bad mortgages so that the mortgage bundles guaranteed to fail did not fail after all. The people who owned those credit default swaps therefore unexpectedly lost their money because the mortgage bundles didn't fail as the banks had promised.

Before that happened, individuals had time to earn up to a billion dollars in profits, and I have read that the Chinese government made a lot of money on the credid default swaps that China had purchased..

The economic damage ftom these criminal actions was so great that the stimulus hasn't been able to work as well as it should have.

Jim

Then, those in the know purchased credit default swaps on the mortgage bundles guaranteed to fail, so there were many insurance policies on each mortgage bundle guaranteed to fail.

So Wells Fargo wrote bad mortgages, bundled and sold them and then bought CDS on that bundle? Never seen any proof of that, you have a link?

What the bail-out did was to buy up enough bad mortgages so that the mortgage bundles guaranteed to fail did not fail after all.

The bail out did not buy bad mortgages.

The people who owned those credit default swaps therefore unexpectedly lost their money because the mortgage bundles didn't fail as the banks had promised.

So the buyer of the policy didn't make money and the seller of the policy didn't lose money. So what?

The economic damage ftom these criminal actions was so great that the stimulus hasn't been able to work as well as it should have.

What criminal actions?

 

[EdwardBaiamonte]

Consider where I work. Lets say things are dragging along and we take out a loan (print money). When we spend that loan on supplies and employees it creates or saves jobs. So did/does Obama's and Reagan's deficit spending.
.

very very very very different situations. You lack the IQ to be here. In one case a loan is taken out by the most knowledgable people in the world in that business( its owners) from local bankers, and it must be a net positive loan to be paid back for the business to survive. So its really a life and death matter by local experts.

Federal libturd distant bureaucrats with other people's money that doesn't have to paid back is 100000% opposite and soviet. Now do you know what capitalism is>???

 

[Rshermr]

Consider where I work. Lets say things are dragging along and we take out a loan (print money). When we spend that loan on supplies and employees it creates or saves jobs. So did/does Obama's and Reagan's deficit spending.
.

very very very very different situations. You lack the IQ to be here. In one case a loan is taken out by the most knowledgable people in the world in that business( its owners) from local bankers, and it must be a net positive loan to be paid back for the business to survive. So its really a life and death matter by local experts.

Federal libturd distant bureaucrats with other people's money that doesn't have to paid back is 100000% opposite and soviet. Now do you know what capitalism is>???

Now, now, ed. He is not "here". The "here" you are talking about is where you are. And it is an asylum. Now, go take your meds.

 

[JakeStarkey]

For 4 1/2 years the Obama Administration has attempted to use the keynesian economic theory to solve our limping economy. It has failed!

It replaced every job lost because of the Bush-created Great Recession and added millions more.

 

[Rshermr]

Toddsterpatriot says the following about the charge of crimes by the big banks:

What criminal actions?

The actions for which our gov has required the banks to pay penalties rather than try to take them to court and convict them. So, we will never know what would have happened had they been taken to court. What did they pay penalties for? Here is a quick list:
"There’s been a rash of mega-settlements between the government and the nation’s largest banks in recent years over allegations of foreclosing on people without just cause, knowingly making bad loans and reselling the debt, making false statements to rob from retired pensioners, laundering money for drug cartels, repressive regimes and terrorists, and agreeing to settlements and then ignoring them, to name a few."
http://www.rawstory.com/rs/2013/05/...w-why-criminal-bankers-arent-being-locked-up/

However, if an individual was charged with these actions, for which the banks are paying penalties, then I think we all really understand that there would be hard time coming to them. So, I hope you are not suggesting these mega banks are paying for settlements for things they did not do. Or are you??

 

[Toddsterpatriot]

Toddsterpatriot says the following about the charge of crimes by the big banks:

What criminal actions?

The actions for which our gov has required the banks to pay penalties rather than try to take them to court and convict them. So, we will never know what would have happened had they been taken to court.

However, if an individual was charged with these actions, for which the banks are paying penalties, then I think we all really understand that there would be hard time coming to them.

Could you point out the criminal acts in that post?

 

[Rshermr]

Toddsterpatriot says the following about the charge of crimes by the big banks:

What criminal actions?

The actions for which our gov has required the banks to pay penalties rather than try to take them to court and convict them. So, we will never know what would have happened had they been taken to court.

However, if an individual was charged with these actions, for which the banks are paying penalties, then I think we all really understand that there would be hard time coming to them.

Could you point out the criminal acts in that post?

Todd, me boy, you know that there is no criminal act if one does not go to court. You know, like Bernie did.

But then, are you suggesting that megabanks are paying penalties for actions that they did not commit??
You were quick on the reply. I added to my post after you replied to it. So, here again:

"There’s been a rash of mega-settlements between the government and the nation’s largest banks in recent years over allegations of foreclosing on people without just cause, knowingly making bad loans and reselling the debt, making false statements to rob from retired pensioners, laundering money for drug cartels, repressive regimes and terrorists, and agreeing to settlements and then ignoring them, to name a few."
http://www.rawstory.com/rs/2013/05/1...ing-locked-up/

I am not suggesting, you see, that we put bankers in jail. I am suggesting that they need to be tried, and if found guilty, THEN sent to jail. I do not believe there is any possible reason for leaving the bankers alone, with the exception that they pay politicians a lot of money.

 

[oldfart]

For 4 1/2 years the Obama Administration has attempted to use the keynesian economic theory to solve our limping economy. It has failed!

Has Keynesian Economics ever worked?

The American Spectator : Fatal Flaws of Keynesian Economics

Forbes Search

Where in the world is Keynesian economics working? ? Ted Biondo - Rockford, IL - Rockford Register Star

Is it rational to do something that always fails over and over again and expect a different outcome?

I took the time to follow all three links. The Forbes link provides an index of articles bashing Keynesianism. If you have actually read any of the articles there, tell me which ones and what you think they "prove"; otherwise I won't waste the time reading your padding.

As for the "Rock River Valley's Leading Information Source", the article is an incomprehensible hash of an AP story.

The American Spectator article is a piece of fluff, giving no evidence and simplistically (by that I mean "See Spot run." level) defining two concepts of the "Chicago School" which have no apparent relationship to the article's title. As an example of how bad the article is, the author proudly proclaims the famous "Chicago School" economist Robert Lucas Jr,. winner of the 1995 Nobel. While true that Lucas received his PhD from the University of Chicago and teaches there, Lucas is not a Chicago School economist. In fact he is a founder of the New Keynesian movement!

So all of your links amount to zip and I wasted a half hour which I am sure you regard as a win. I sincerely doubt that you actually read ANY of your cited sources, they have all the earmarks of being the results of a google search thrown together without reading.

Why don't you try something novel, like picking an idea, stating it in your own words, providing the logic that supports it and the evidence that supports the logic? Might be fun, huh?

 

[Whereisup]

In general, there are actions which are criminal de facto even if not de jure.
In this case, however, laws in the area of fraud would apply.

The laws involving treason would also apply, because the scam almost destroyed the United States, and might have if the government intervention had not been successful.

I do think that the fact that the government was able to intervene is that the majority of the wealthy, when the learned what had happened, were opposed to what had been done with the credit default swaps. The wealthy are usually not saints, but most of them are not monsters either. So a majority of the wealthy were not supportive of the scam.

Although it is true that there is a lack of full enforcement of laws against management level crime, there was probably a different main motive here. The government was probably afraid that arresting people and making it clear what had happened would lead to worldwide panic. But that is just a guess.

All the information is in media reports, but the details were spread out and the media did not put them together for the public. Still, if you wish to learn more, you can google the various details.

I'm afraid my background kind of sets me up to try to be as supportive as possible of all the social classes simultaneously, because my relatives include upper class individuals, middle class individuals, and lower class individuals. That gives me an unusual perspective.

Within that perspective, I want everyting to go well for all.

By the way, it isn't really a matter of who to hurt to correct the budget problem. It is a matter of how to grow the economy enough so that nobody will have to be hurt.

Jim

 

[oldfart]

Consider where I work. Lets say things are dragging along and we take out a loan (print money). When we spend that loan on supplies and employees it creates or saves jobs. So did/does Obama's and Reagan's deficit spending.

Now the return on investment a year for a business, ten or more years for a country must be considered and that is debateable.

You got it exactly right on two major points. First in a major downturn, there are lots of resources not being used at all. They have an opportunity cost of zero. The actual marginal cost of a project boils down to it's prime cost (raw materials, transport, etc), something well below long-run marginal cost or average cost. It's like a bankruptcy or workout, you lose money but not as much as you would with a shutdown. This is the "bad project" scenario where almost anything that keeps people working is a gain.

Your second home run is that in the long run we are better off if instead of bad projects we sponsor good projects that increase future productive capacity through infrastructure development and repair, education and job training, research, and creating physical plant.

 

[oldfart]

You raise some interesting issues!

Normally, a stimulus creates jobs, and some jobs have been created. However, the other side is partly right in that the stimulus hasn't created as many jobs as it should have.

You have to be careful here, there are more than two sides. Conservatives attack the stimulus for even existing, they want "creative destruction" to take its course as Andrew Mellon (Hoover's Secretary of the Treasury, and yes, THAT Andrew Mellon) advocated. Most of the traditional Keynesians sided with Christine Romer that the stimulus was only about half the size needed. Larry Summers who basically came up with the proposal negotiated it as a political settlement and loaded a bunch of pork into it. So you have at least three sides.

First, there is a hole in the economic boat. We are running a deficit with other nations in the 400 billion to 600 billion dollar a year range, depending on the year. To make that worse, we borrow to pay for the deficit, so then have to pay interest on the loans. So the debt to foreign lenders and the amount we have to pay each year is compounding.

Actually due to the low interest rates and Operation Twist the interest on foreign-held public debt as a percentage of GDP has fallen rather dramatically.

The stimulus would work well if it were all spend within and kept within the United States. However, with the money we have going out of the country, through the economic boat hole, a large part of the stimulus leaves the United States, and therefore, the stimulus creates fewer jobs than it would have if the money had stayed in the country.

As noted above, the interest isn't the problem. Theoretically stimulus encourages spending and some of that spending is on imports. I don't think this has been much of a problem either.

Second, if was promised that the wealthy would use their tax cuts to fund new jobs in the United States. They have failed, perhaps refused, to do so, which keeps many new jobs from being funded. The wealthy have been using their tax savings on things that don't create new jobs in America.

I don't recall anyone other than the Koch brothers paid minions advancing that argument. It's like the bank bailout was supposed to result in more bank lending to support the real economy; and banks did just the opposite. By early 2010 I think everybody recognized this as wishful thinking.

If the wealthy would just start spending the yearly tax savings they have acquired starting with the Reagan tax cuts, we would see a surge of new jobs.

The wealthy will not increase consumption, because by definition they can already afford anything they really want. They will not invest, unless they expect the venture to be profitable. So what they have been doing is hoarding cash like financial investments.

Third, we are paying off the costs of major criminal activity, which is what a large part of the bailouts the Bush administration was designed to do. The criminal activity was huge. At the time of the crisis, it is estimated that the number of derivatives out which could fail was in the hundreds of trillions of dollars, compared with a small Gross World Product of about 60 trillion dollars per year. How did criminals manage to do something that massive?

Preaching to the choir. Like Senator Warren, I wonder when the jail time starts.

The scam centered in the credit default swaps. The name itself makes people avoid thinking about what a credit default swap might be and what it might do. However, a credit default swap is essentially an insurance policy on an investment, and it was especially used to insure mortgage bundles.

Actually it's a lot worse than that. Read Sheila Bair's book (head of the FDIC) and check the index for "mezzanine tranche".

And welcome aboard! Jamie

 

[oldfart]

So Wells Fargo wrote bad mortgages, bundled and sold them and then bought CDS on that bundle? Never seen any proof of that, you have a link?

Wells Fargo wasn't the worst player by far (check out Citi and B of A). The best source listing the proof is the detailed description, based on published emails among the major players is Sheila Bair (head of the FDIC at the time): "Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself".

 

[AmazonTania]

Normally, a stimulus creates jobs, and some jobs have been created.

However, the other side is partly right in that the stimulus hasn't created as many jobs as it should have.

The stimulus has not created any meaningful jobs and prevented a restructure of the economy which was so desperately needed. The economy is never going to create any jobs by preserving the past jobs of the bubble economy.

The scam centered in the credit default swaps. The name itself makes people avoid thinking about what a credit default swap might be and what it might do. However, a credit default swap is essentially an insurance policy on an investment, and it was especially used to insure mortgage bundles.

Now, a peculiar thing about credit default swaps was that they could be taken out by people who didn't actually own the investment. It would be like all your neighbors could buy fire insurance on your house, and then when your house burned, they could each collect the fully amount. It sounds insane, but that is what was being done with credit default swaps.

Then, a number of the largest banks began selling mortgage bundles guaranteed to fail. To do this, they had to knowingly give bad loans to homeowners that they knew the homeowners would end up defaulting on.

Then, those in the know purchased credit default swaps on the mortgage bundles guaranteed to fail, so there were many insurance policies on each mortgage bundle guaranteed to fail. What the bail-out did was to buy up enough bad mortgages so that the mortgage bundles guaranteed to fail did not fail after all. The people who owned those credit default swaps therefore unexpectedly lost their money because the mortgage bundles didn't fail as the banks had promised.

Before that happened, individuals had time to earn up to a billion dollars in profits, and I have read that the Chinese government made a lot of money on the credid default swaps that China had purchased..

The economic damage ftom these criminal actions was so great that the stimulus hasn't been able to work as well as it should have.

Jim

The derivatives market is indeed huge, but credit default swaps did not play a significant role. The main derivatives usage are interest rate swaps. Credit Default Swaps are 1/20th of the entire derivatives market. It's relatively tiny.

Secondly, no one actually knew these MBS were guaranteed to fail. These toxic assets were rated Triple A by the major NRSRO entities. With credit default swaps, if a corporation or bond credit worthiness comes into question, a third party insurer would post collateral up to 20% of the notional amount. The problem with these CDS was that insurance companies allowed counter parties the right to increase the amount of collateral they demanded. This was a big problem regarding AIG's decline into insolvency.

There was nothing inherently bad about Credit Default Swaps. They're basically like insurance policies for bonds. The bonds were toxic. What happened regarding Credit Default Swaps was typically the same as a run on a bank. Traditional lending can be just as dangerous as investing into CDS. There is nothing criminal about it, although it is widely misunderstood.