Stimulus package helps Japan out of recession.

[tigerbob]

Japan has come out of recession after its economy grew by 0.9% in the April-to-June quarter.

The growth comes after four consecutive quarters of contraction.

Correspondents say the rise is due to a huge government stimulus package and it is unclear whether the momentum will be sustained when this is concluded.

Recent figures show other economies coming out of recession, including Germany, France and Hong Kong, a sign the global slowdown is easing.

BBC NEWS | Business | Japan's economy leaves recession

Seijiro Takeshita, director of Mizuho Financial Group, the second largest financial firm in Japan, told the BBC that the growth had largely come from a government stimulus package.

BBC NEWS | Business | Japan growth 'due to stimulus'

Let's hope the economic upturns in places like Japan are a good indicator for the US as well. After all, spending to stimulate the US economy has not been insignificant.

It will be interesting to see whether this is sustained.

 

[The_Halfmoon]

Japan's been fighting for a decade and a half to win back its economic prosperity... and stimulus has consistently failed in its history. I hope it is genuinely recovering, as it is waaaay too soon to tell at the moment.

I don't propose to be any sort of an expert on Japan, but it is a very troubled economy... I read somewhere that their national debt is 170% of GDP... if that's correct, that is simply insane and Japan has a very tough road ahead.

 

[PoliticalChic]

Japan has come out of recession after its economy grew by 0.9% in the April-to-June quarter.

The growth comes after four consecutive quarters of contraction.

Correspondents say the rise is due to a huge government stimulus package and it is unclear whether the momentum will be sustained when this is concluded.

Recent figures show other economies coming out of recession, including Germany, France and Hong Kong, a sign the global slowdown is easing.

BBC NEWS | Business | Japan's economy leaves recession

Seijiro Takeshita, director of Mizuho Financial Group, the second largest financial firm in Japan, told the BBC that the growth had largely come from a government stimulus package.

BBC NEWS | Business | Japan growth 'due to stimulus'

Let's hope the economic upturns in places like Japan are a good indicator for the US as well. After all, spending to stimulate the US economy has not been insignificant.

It will be interesting to see whether this is sustained.

Wrong.

Japan is exactly the example of the inadequacy of government stimulus programs.

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/world/asia/06japan.html?_r=1&partner=permalink&exprod=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


Beware of a double bottom to this recession!

 

[Polk]

Japan's stimulus programs have been ineffective due to their small size. While they've added up to quite a bit over the years, the theme has been to pass stimulus and the instant the economy starts to recover, pull back on it. The results are not good.

 

[PoliticalChic]

Japan's stimulus programs have been ineffective due to their small size. While they've added up to quite a bit over the years, the theme has been to pass stimulus and the instant the economy starts to recover, pull back on it. The results are not good.

I don't know you well enough to recognize your political slant, but your explanation of Japan's economy is in accordance with the two most frequent explanations by our leftist friends, when their theories or programs fail:

"It's different this time,"

or

" It wasn't tried enough," as in why the Soviet Union failed.

Your response is pretty much the latter.

Note:
"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."

and

"Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component."

and

" Japan’s failed policies had severe negative consequences for its economy and citizens."

Compare the effects with those of Harding's in fighing the recession of 1920:

"America's greatest depression fighter was Warren Gamaliel Harding. An Ohio senator when he was elected president in 1920, he followed the much praised Woodrow Wilson— who had brought America into World War I, built up huge federal bureaucracies, imprisoned dissenters, and incurred $25 billion of debt.

One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did.. On July 12, 1921, Harding went to the Senate and urged tax and spending cuts."
N-Philes :: Forums - View Single Post - The not-so-great depression of 1920-21

BTW, the 11th President was one of my favorites.

 

[Gudrid]

The only stimulus in a capitalist economy is profit.

That doesn't make sense to me. Profit doesn't stimulate anything; profit is the result of a successful economy. Capital investment is a stimulus, no matter if the investment capital is coming from the private sector or the public sector. The question is whether it's a successful investment or not. In that regard, I don't think we'll know til Spring at the earliest. And I think all the people who are trying to say "the stimulus package is working fantabulously" or sayin g"the stimulus package is our doom!" are all premature. We don't know yet. The best economist in the world will tell you it's partially a guessing game, and highly qualified economists disagree on this issue.

 

[PoliticalChic]

The only stimulus in a capitalist economy is profit.

That doesn't make sense to me. Profit doesn't stimulate anything; profit is the result of a successful economy. Capital investment is a stimulus, no matter if the investment capital is coming from the private sector or the public sector. The question is whether it's a successful investment or not. In that regard, I don't think we'll know til Spring at the earliest. And I think all the people who are trying to say "the stimulus package is working fantabulously" or sayin g"the stimulus package is our doom!" are all premature. We don't know yet. The best economist in the world will tell you it's partially a guessing game, and highly qualified economists disagree on this issue.

Shows a kind of gap in your understanding of human nature.

Profit is the reason one risks one's time and treasure.

It is the life's blood of risk.

There is an old saying, "there is no education in the second kick of a mule," yet some of us keep saying that Japan's stimulus plan would work if only we gave it more time, or more government largess. The same experiences over and over, yet some wish to try them again.

FDR's stimulus, actually retarded recovery, as other nations recovered sooner.

Study the Harding approach.

 

[KittenKoder]

Japan has come out of recession after its economy grew by 0.9% in the April-to-June quarter.

The growth comes after four consecutive quarters of contraction.

Correspondents say the rise is due to a huge government stimulus package and it is unclear whether the momentum will be sustained when this is concluded.

Recent figures show other economies coming out of recession, including Germany, France and Hong Kong, a sign the global slowdown is easing.

BBC NEWS | Business | Japan's economy leaves recession

Seijiro Takeshita, director of Mizuho Financial Group, the second largest financial firm in Japan, told the BBC that the growth had largely come from a government stimulus package.

BBC NEWS | Business | Japan growth 'due to stimulus'

Let's hope the economic upturns in places like Japan are a good indicator for the US as well. After all, spending to stimulate the US economy has not been insignificant.

It will be interesting to see whether this is sustained.

Apples and oranges.

 

[Gudrid]

Shows a kind of gap in your understanding of human nature.

Profit is the reason one risks one's time and treasure.

There is no single "the reason." Power is another reason for such risks. And the satisfaction of providing employment for others. And building a legacy. There's all sorts of things that you're failing to understand about human nature. Beyond that, the profit motive continues as a motivator whether the economy is bad or not.

Either way, economically profit is an end and investment is the means. Profit can be reinvested, but investment can come from other sources as well. I think your analysis is being tainted by your desire to trash the stimulus plan based on the source. Personally, I don't know whether the stimulus is going to work or not. And neither do you.

 

[PoliticalChic]

Shows a kind of gap in your understanding of human nature.

Profit is the reason one risks one's time and treasure.

There is no single "the reason." Power is another reason for such risks. And the satisfaction of providing employment for others. And building a legacy. There's all sorts of things that you're failing to understand about human nature. Beyond that, the profit motive continues as a motivator whether the economy is bad or not.

Either way, economically profit is an end and investment is the means. Profit can be reinvested, but investment can come from other sources as well. I think your analysis is being tainted by your desire to trash the stimulus plan based on the source. Personally, I don't know whether the stimulus is going to work or not. And neither do you.

I like the idea that there can be a number of motivations, but in a capitalist society, the easiest way to judge the success of one's endeavor is the bottom line.

Now, most businesses in the US are small businesses. It is your opinion that the greatest number of these are motivated by building a legacy, what ever that means, or employing others,... or would most thinking folks say that the majority of businesses are based on the profit motive?

Count, if you will, the number of 'Mother Theresa's" in your ken, and show how employers open their doors merely to employ folks. If true, why would they lay folks off during a recession?

Are the numbers even close? Even in the same universe???

No, don't infer where I didn't imply. I trash the stimulus plan because it never worked; it is trash. Your guess about my motivation makes no sense, unless you would like to argue that I have something against the Japanese, as well.

Your argument is a variation on the latest Obamunist defense, i.e. anyone who disagrees with the administration must be a racist. Nor am I intimidated.


For purposes of comparison, go back and review the Stakhanovite Movement within communism.

 

[Gudrid]

I like the idea that there can be a number of motivations, but in a capitalist society, the easiest way to judge the success of one's endeavor is the bottom line.

Of course it is. But the discussion was whether or not it was the only stimulus., which is what you stated

Now, most businesses in the US are small businesses. It is your opinion that the greatest number of these are motivated by building a legacy, what ever that means, or employing others,... or would most thinking folks say that the majority of businesses are based on the profit motive?

I would say that the business owners I know are motivated by a combination of the above. I really can speak beyond that which I've encountered without it being pure speculation. What I meant by building a legacy was a business that can be passed down through generations, providing for future generations , things like that. Sorry if I said that in a confusing manner.

And as I said, the profit motive is there whether the economy is up or down. It is a constant. Which means logically that something else (or, more logically, several something else's) acts as a stimulus to the economy during a slowdown.

I trash the stimulus plan because it never worked; it is trash.

You have no idea if it worked. We aren't that far in the process yet.

Your argument is a variation on the latest Obamunist defense, i.e. anyone who disagrees with the administration must be a racist. Nor am I intimidated.

No, my argument in that regard is based on how you present yourself in your posts by my reading in my limited time here. Terms like "obamunist" are usually a bit of a giveaway. But if that's not the case, then I'm sorry if I've misjudged you. As far as being intimidated - why on earth would you even apply that word to this situation?

For purposes of comparison, go back and review the Stakhanovite Movement within communism.

That really isn't comparable to a stimulus package. We've had stimulus packages throughout our history during slow economic times. Heck, Bush had stimulus money that he threw out, yet the country didn't turn communist. Sometimes stimulus packages work and sometimes they don't. We simply aren't at the point where we know for sure yet whether this one is going to work.

Policymakers have gotten better at economic stimulus as the decades have passed, experts say. Stimulus bills were enacted during five of the past seven recessions — in 1964, 1971, 1975, 1981 and 2001. Efforts made in the 1960s and 1970s were relatively ineffective. By 1981, lawmakers had learned to act faster to stave off recession. The tax cuts of 2001 were swiftest of all.

History offers lessons for economic stimulus - USATODAY.com

 

[Polk]

I don't know you well enough to recognize your political slant, but your explanation of Japan's economy is in accordance with the two most frequent explanations by our leftist friends, when their theories or programs fail:

"It's different this time,"

or

" It wasn't tried enough," as in why the Soviet Union failed.

Your response is pretty much the latter.

Note:
"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."

and

"Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component."

and

" Japan’s failed policies had severe negative consequences for its economy and citizens."

The program didn't fail though. It was implemented in a faulty manner. It's like a specific medicine being the treatment for a disease, but only as long as you give a dosage of 100mg, then saying the medicine doesn't work because you only give the patient 50mg.

 

[PoliticalChic]

I like the idea that there can be a number of motivations, but in a capitalist society, the easiest way to judge the success of one's endeavor is the bottom line.

[quote}Of course it is. But the discussion was whether or not it was the only stimulus., which is what you stated [quote/]
I was trying to be nice to you. It's frivolous to claim business is about anything but profit.
Leaving a business that loses money to the family is far from a 'legacy.' How many buggy whip companies are still treasured as family legacies?

Now, most businesses in the US are small businesses. It is your opinion that the greatest number of these are motivated by building a legacy, what ever that means, or employing others,... or would most thinking folks say that the majority of businesses are based on the profit motive?

I would say that the business owners I know are motivated by a combination of the above. I really can speak beyond that which I've encountered without it being pure speculation. What I meant by building a legacy was a business that can be passed down through generations, providing for future generations , things like that. Sorry if I said that in a confusing manner.

Nonsense. Most of your post is speculation, as you cannot document the legacy or the really fantasy-land that folks open business just so they can employ others.

And as I said, the profit motive is there whether the economy is up or down. It is a constant. Which means logically that something else (or, more logically, several something else's) acts as a stimulus to the economy during a slowdown.

Do you realize that you just argued against your premise? Profit is the key.

you have no idea if it worked. We aren't that far in the process yet.

Yeah, I do. As usual, it's always 'not enough time,' or 'we didn't put enough into stimulus,' or what ever the excuse du jour is.
Remember this:
"The report also includes a graphic predicting unemployment rates with and without the stimulus. Without the stimulus (the baseline), unemployment was projected to hit about 8.5 percent in 2009 and then continue rising to a peak of about 9 percent in 2010. With the stimulus, they predicted the unemployment rate would peak at just under 8 percent in 2009
Did Obama PROMISE to keep unemployment below 8 percent if the stimulus passed? - Yahoo! Answers

"In January, President Obama pressed for an $800 billion economic “stimulus” package to turn the economy around. Though the bill largely consisted of increased spending on traditional liberal priorities, the President claimed that it would “create or save” 3.5 million jobs. The President’s economic advisors predicted that unemployment would rise to 9 percent by 2010 if Congress did not pass the stimulus bill, but that with the stimulus unemployment would stay below 8 percentage points. In that case, the stimulus must be judged a failure. The figure above shows the projections the administration made in January with and without the stimulus bill, and the actual unemployment rate since then. Unemployment has risen not only above what the President’s advisors predicted would happen if the stimulus passed, but above what they estimated would occur without the stimulus. "
Unemployment Spike Defies ‘Stimulus’ Claims » The Foundry

BTW, same for FDR's stimulus:
As a matter of fact, FDR’s own treasury secretary Henry Morgenthau said this about the New Deal spending:

“We have tried spending money. We are spending more than we have ever spent before and it does not work… And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”
Obama’s Administration Admits Stimulus Has FAILED

Here, right on cue, is the old "we just need more..."
"It is clear from the data that there needs to be more fiscal stimulus in the second half of the year than there was in the first half of the year," White House economic adviser Lawrence H. Summers said. "Fortunately, the stimulus program designed by the president and passed by Congress provides exactly that."
Power of Stimulus Slow to Take Hold - washingtonpost.com


No, my argument in that regard is based on how you present yourself in your posts by my reading in my limited time here. Terms like "obamunist" are usually a bit of a giveaway. But if that's not the case, then I'm sorry if I've misjudged you. As far as being intimidated - why on earth would you even apply that word to this situation?

For purposes of comparison, go back and review the Stakhanovite Movement within communism.

That really isn't comparable to a stimulus package. We've had stimulus packages throughout our history during slow economic times. Heck, Bush had stimulus money that he threw out, yet the country didn't turn communist. Sometimes stimulus packages work and sometimes they don't. We simply aren't at the point where we know for sure yet whether this one is going to work.

Policymakers have gotten better at economic stimulus as the decades have passed, experts say. Stimulus bills were enacted during five of the past seven recessions — in 1964, 1971, 1975, 1981 and 2001. Efforts made in the 1960s and 1970s were relatively ineffective. By 1981, lawmakers had learned to act faster to stave off recession. The tax cuts of 2001 were swiftest of all.

History offers lessons for economic stimulus - USATODAY.com

As for "are usually a bit of a giveaway." of what? That it is clear that President Obama and his administration, infiltrated as it is with leftists of all stripes, (are you aware of this? Are you copasetic with it?)is incompetent in dealing with the crisis? Is that what you meant? If not, please elucidate.

What is clear is that you are an Obama apologist, rather than one who makes an objective attempt at judging the Stimulus Package.

And the Stakhanovite movement underscored the failure of communism and the necessity for reward, i.e. profit.

 

[PoliticalChic]

I don't know you well enough to recognize your political slant, but your explanation of Japan's economy is in accordance with the two most frequent explanations by our leftist friends, when their theories or programs fail:

"It's different this time,"

or

" It wasn't tried enough," as in why the Soviet Union failed.

Your response is pretty much the latter.

Note:
"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."

and

"Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component."

and

" Japan’s failed policies had severe negative consequences for its economy and citizens."

The program didn't fail though. It was implemented in a faulty manner. It's like a specific medicine being the treatment for a disease, but only as long as you give a dosage of 100mg, then saying the medicine doesn't work because you only give the patient 50mg.

Good thing you know better than the Japanese!

If only you had been there to advise them.

Did you consider dropping them a note?

 

[Polk]

I don't know you well enough to recognize your political slant, but your explanation of Japan's economy is in accordance with the two most frequent explanations by our leftist friends, when their theories or programs fail:

"It's different this time,"

or

" It wasn't tried enough," as in why the Soviet Union failed.

Your response is pretty much the latter.

Note:
"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."

and

"Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infrastructure investment was a major component."

and

" Japan’s failed policies had severe negative consequences for its economy and citizens."

The program didn't fail though. It was implemented in a faulty manner. It's like a specific medicine being the treatment for a disease, but only as long as you give a dosage of 100mg, then saying the medicine doesn't work because you only give the patient 50mg.

Good thing you know better than the Japanese!

If only you had been there to advise them.

Did you consider dropping them a note?

Noting I'm in my early 20s, I would have been a little young for it at the time.

I guess it's fair to say it's more complicated than I'm making it sound. There is pressure to reduce spending and pay down the debt once it looks like the economy is rebounding. Often, that pressure comes much too soon. The same thing happened here during the Great Depression.

 

[Gudrid]

Noting I'm in my early 20s...

Not to be rude - and seriously it's not meant negatively - but this explains a lot about this conversation. Like why you think profit motive is somehow appropriate to a conversation about stimulus packages. It's apples and oranges. It's like someone asking whether they should invest in GE, and the response being "investment doesn't make you money. The desire for profit makes you money." Profit motive is the why (one of them, anyway), not the how. Stimulus packages, investment, etc., is the how.

As for "are usually a bit of a giveaway." of what?

Of the fact that you're mixing partisanship in with your judgment. Research should be neutral. And you clearly can research. Now learn how to use that skill correctly - by approaching the issue from a neutral standpoint. After that comes choosing sides on an issue. And your followup to that sentence quoted above merely illustrates the attitude further.

What is clear is that you are an Obama apologist, rather than one who makes an objective attempt at judging the Stimulus Package.

That's a rather absurd statement considering I haven't offered any sort of judgment on the stimulus package. You're the one who's judging the stimulus package. I've said repeatedly that we don't know yet. That's called withholding judgment.

I realize that in partisanland, only universal condemnation of one side or the other is considered acceptable. But I'm afraid that's not how I roll. But frankly, it's exactly how I rolled when I was in my early 20's - research to prove my "side" was the bestest ever, rather than research to learn. I grew out of it. I suspect you will too. Most people who take the time to really research issues eventually come to the realization that there is no good "side" when it comes to politics, among other things. Good luck.