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

[Maple]

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

 

[Maple]

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

 

[CrusaderFrank]

Don't forget that Dems consider FDR (Average unemployment 17% for EIGHT FUCKING YEARS!!!) to be a "Great" President

 

[Elutherian]

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.

 

[Diuretic]

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.

A healthy recovery plan consists primarily of tax cuts, with a mix of reduced barriers to investment, appropriate regulation, and the right monetary policy.

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

The myth that stimulus spending works is based on the theory that increased demand for products, encouraged by government spending, will promote increased production and thus spur economic growth. Yet, stimulus spending misdirects resources, fails to increase aggregate consumption, only creates temporary jobs, and adds to the national debt.

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.

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.

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.

The U.S. economy stagnated during the 1970s but was revived from its intense inflation, unemployment, and recession by the pro-growth policies of the Reagan era, not stimulus spending. Tax cuts and appropriate monetary policy improved the economy after spending increases under former Presidents Ford and Carter had failed.

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.

 

[Mad Scientist]

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.

 

[Oddball]

I ripped that one off of the DVD and resized it for an avie, man! ....Glad you like it.

 

[BasicGreatGuy]

Get government out the equation. That will be a good start.

 

[The Rabbi]

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.

A healthy recovery plan consists primarily of tax cuts, with a mix of reduced barriers to investment, appropriate regulation, and the right monetary policy.

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

The myth that stimulus spending works is based on the theory that increased demand for products, encouraged by government spending, will promote increased production and thus spur economic growth. Yet, stimulus spending misdirects resources, fails to increase aggregate consumption, only creates temporary jobs, and adds to the national debt.

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.

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.

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.

The U.S. economy stagnated during the 1970s but was revived from its intense inflation, unemployment, and recession by the pro-growth policies of the Reagan era, not stimulus spending. Tax cuts and appropriate monetary policy improved the economy after spending increases under former Presidents Ford and Carter had failed.

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.

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.

 

[Diuretic]

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.

A healthy recovery plan consists primarily of tax cuts, with a mix of reduced barriers to investment, appropriate regulation, and the right monetary policy.

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.

The U.S. economy stagnated during the 1970s but was revived from its intense inflation, unemployment, and recession by the pro-growth policies of the Reagan era, not stimulus spending. Tax cuts and appropriate monetary policy improved the economy after spending increases under former Presidents Ford and Carter had failed.

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.

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.

Oy vey yerself

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 ) 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?

 

[Foxfyre]

The problem with 'stimulus spending' is that it favors some at the expense of others. The guy who gets the lucrative contract is pleased. He doesn't mind an increase in his taxes and he'll probably vote for the same President and members of Congress again.

The guy who sees no benefit but is forced to pay taxes to pay that other guy is not going to believe that stimulus spending is effective in helping Americans. And there are a whole lot more of him than there are of the other guy.

Yes, some government spending has positive effect. Infrastructure spending to sustain and suport existing private growth is a good use of tax payer monies. Infrastructure spending on speculation to attract private growth backfires negatively too often to be a good strategy. Much defense spending--a constitutional requirement for the federal government--does provide foundation for permanent contrators and jobs in the private sector who support the national defense. Such permanent jobs return the investment in adding to the national economy and funneling taxes back into the system. They probably don't fully pay for themselves, but they definitely blunt the cost of what would be spent if the goverment did it with government employees.

Temporary, short term jobs provide temporary short term stimulus and are not a good use of government resources.

Any government spending that favors one group over another cannot help but encourage and generate graft, corruption, and malfeasance among both those authorizing the money and those receiving it.

Obama and company should have have focused on cutting government spending to the bare essentials while providing tax and profit incentives to generate confidence and growth in the private sector, and I think we would have seen the deficit only marginally increased and we would definitely be pulling out of the recession now. Because he chose to increase the national nipple and has initiated policies to threaten, frighten, or otherwise inhibit private business, we have seen hundreds of billions of dollars wasted and little hope for national prosperity in the near future.

 

[Diuretic]

The problem with 'stimulus spending' is that it favors some at the expense of others. The guy who gets the lucrative contract is pleased. He doesn't mind an increase in his taxes and he'll probably vote for the same President and members of Congress again.

The guy who sees no benefit but is forced to pay taxes to pay that other guy is not going to believe that stimulus spending is effective in helping Americans. And there are a whole lot more of him than there are of the other guy.

Yes, some government spending has positive effect. Infrastructure spending to sustain and suport existing private growth is a good use of tax payer monies. Infrastructure spending on speculation to attract private growth backfires negatively too often to be a good strategy. Much defense spending--a constitutional requirement for the federal government--does provide foundation for permanent contrators and jobs in the private sector who support the national defense. Such permanent jobs return the investment in adding to the national economy and funneling taxes back into the system. They probably don't fully pay for themselves, but they definitely blunt the cost of what would be spent if the goverment did it with government employees.

Temporary, short term jobs provide temporary short term stimulus and are not a good use of government resources.

Any government spending that favors one group over another cannot help but encourage and generate graft, corruption, and malfeasance among both those authorizing the money and those receiving it.

Obama and company should have have focused on cutting government spending to the bare essentials while providing tax and profit incentives to generate confidence and growth in the private sector, and I think we would have seen the deficit only marginally increased and we would definitely be pulling out of the recession now. Because he chose to increase the national nipple and has initiated policies to threaten, frighten, or otherwise inhibit private business, we have seen hundreds of billions of dollars wasted and little hope for national prosperity in the near future.

The problem with 'stimulus spending' is that it favors some at the expense of others. The guy who gets the lucrative contract is pleased. He doesn't mind an increase in his taxes and he'll probably vote for the same President and members of Congress again.

The guy who sees no benefit but is forced to pay taxes to pay that other guy is not going to believe that stimulus spending is effective in helping Americans. And there are a whole lot more of him than there are of the other guy.

Doesn't an economic system which relies on competition actually favour some at the expense of others though? Not everyone gets a prize, only those deserving of it.


Yes, some government spending has positive effect. Infrastructure spending to sustain and suport existing private growth is a good use of tax payer monies. Infrastructure spending on speculation to attract private growth backfires negatively too often to be a good strategy. Much defense spending--a constitutional requirement for the federal government--does provide foundation for permanent contrators and jobs in the private sector who support the national defense. Such permanent jobs return the investment in adding to the national economy and funneling taxes back into the system. They probably don't fully pay for themselves, but they definitely blunt the cost of what would be spent if the goverment did it with government employees.

I think possibly that the government looks to stimulating the private economy rather than involving itself. It seems to me that dealing itself in (eg using its employees) is self-defeating.


Temporary, short term jobs provide temporary short term stimulus and are not a good use of government resources.

I agree, I dislike “make work” programmes but sometimes it has to be done. And sometimes the effect can be lasting. Think of the Juan Cabrillo Monument in San Diego. At the time it may have seemed a “make work” waste of funds but hey I went out there for a look last time I was in San Diego (okay I was visiting a friend nearby at Point Loma but I took the opportunity to have a look at the monument).


Any government spending that favors one group over another cannot help but encourage and generate graft, corruption, and malfeasance among both those authorizing the money and those receiving it.

That's the same for any form of government spending. Open tenders are a good idea. They would have been a good idea in the BushCheney government rebuilding of Iraq too, pity they weren't used sufficiently. All those no-tender bids – easy money for favoured corporations.

Obama and company should have have focused on cutting government spending to the bare essentials while providing tax and profit incentives to generate confidence and growth in the private sector, and I think we would have seen the deficit only marginally increased and we would definitely be pulling out of the recession now. Because he chose to increase the national nipple and has initiated policies to threaten, frighten, or otherwise inhibit private business, we have seen hundreds of billions of dollars wasted and little hope for national prosperity in the near future.

Cutting government spending to the bare essentials may be okay when an economy is steaming along. In fact it might be required to stop the economy overheating, I don't know. But in a contracting economy the only way to generate confidence and growth is to stimulate demand. The deficit is the legacy of BushCheney, not Obama.

 

[The Rabbi]

Oy vey yerself

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 ) 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?

You dont have to tell us you've never taken econ, it already is evident in your post.
No, stimulus spending doesnt work. It has never worked.
Gov't can "create" jobs only at the expense of someone else. This is the entire point. Gov't doesn't create anything, it only shifts resources from one area to another. Usually in the least efficient way.
Savings and investment are really the same thing. If you save money you really give it to someone else to invest. It might be the bank where your account is lending the money to a builder. It can be lots of things. The only time it doesnt is if you stick the money in a mattress.
IN any economy some businesses do well, others not so well. A strong company likes to see a downturn. It wipes away its competitors and allows it to pick up assets cheap and position for the recovery. Businesses respond to incentives and if the incentive is right, they will start building for expansion even in a recession.

 

[rdean]

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

How can you point out an article and completly "miss the point"?

You might want to reread it. Infrastucture investment IS critical to America's future. For some reason, Republicans have this unfounded idea that "tax cuts" is the answer and the ONLY answer. When the Middle Class get's a hundred bucks and the rich get a million, that's hardly going to stimulate anything.

Think about it. Why is "infrastructure" important and NOT a "waste of money"?

6. Tax cuts on anything related to infrastructure investment

If infrastructure investment is critical for America's future, the government should encourage private investment in roads, bridges and schools. The government could waive or reduce taxes on profits made from private equity that is put into building roads, bridges, broadband access and schools. Companies that are hired to do the infrastructure work could also be allowed to operate like non-profits: for instance letting construction firms buy materials tax-free. There are billions of private equity dollars waiting to invest in infrastructure. The fewer barriers there are to this type of investment the faster capital markets will thaw.

---------

When it's said, "Companies that are hired", who do you think does the "hiring". Yep, you got it. The government.

 

[Maple]

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

How can you point out an article and completly "miss the point"?

You might want to reread it. Infrastucture investment IS critical to America's future. For some reason, Republicans have this unfounded idea that "tax cuts" is the answer and the ONLY answer. When the Middle Class get's a hundred bucks and the rich get a million, that's hardly going to stimulate anything.

Think about it. Why is "infrastructure" important and NOT a "waste of money"?

6. Tax cuts on anything related to infrastructure investment

If infrastructure investment is critical for America's future, the government should encourage private investment in roads, bridges and schools. The government could waive or reduce taxes on profits made from private equity that is put into building roads, bridges, broadband access and schools. Companies that are hired to do the infrastructure work could also be allowed to operate like non-profits: for instance letting construction firms buy materials tax-free. There are billions of private equity dollars waiting to invest in infrastructure. The fewer barriers there are to this type of investment the faster capital markets will thaw.

---------

When it's said, "Companies that are hired", who do you think does the "hiring". Yep, you got it. The government.

Infra structure jobs are temporary jobs, once that bridge is built the job is over. I agree with most of the other posters, we needed some stimulus to help the states out in a recession, but government needs to get out of the way and let business do it. The sad fact of the matter is, is that more money from the no stimulus stimulus bill went to the Arts and Entertainment industry than it did to small business which employs over 70% of Americans. We are not seeing any job growth from this bill and unfortunately it will be a long time before business's can start hiring again.

 

[Mr Natural]

Back in the fifties, we had tax rates up in the 90% range and it was the most prosperous era for the middle class in American history.

 

[The Rabbi]

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

How can you point out an article and completly "miss the point"?

You might want to reread it. Infrastucture investment IS critical to America's future. For some reason, Republicans have this unfounded idea that "tax cuts" is the answer and the ONLY answer. When the Middle Class get's a hundred bucks and the rich get a million, that's hardly going to stimulate anything.

Think about it. Why is "infrastructure" important and NOT a "waste of money"?

6. Tax cuts on anything related to infrastructure investment

If infrastructure investment is critical for America's future, the government should encourage private investment in roads, bridges and schools. The government could waive or reduce taxes on profits made from private equity that is put into building roads, bridges, broadband access and schools. Companies that are hired to do the infrastructure work could also be allowed to operate like non-profits: for instance letting construction firms buy materials tax-free. There are billions of private equity dollars waiting to invest in infrastructure. The fewer barriers there are to this type of investment the faster capital markets will thaw.

---------

When it's said, "Companies that are hired", who do you think does the "hiring". Yep, you got it. The government.

Infra structure jobs are temporary jobs, once that bridge is built the job is over. I agree with most of the other posters, we needed some stimulus to help the states out in a recession, but government needs to get out of the way and let business do it. The sad fact of the matter is, is that more money from the no stimulus stimulus bill went to the Arts and Entertainment industry than it did to small business which employs over 70% of Americans. We are not seeing any job growth from this bill and unfortunately it will be a long time before business's can start hiring again.

How often does this have to be repeated? States did not need to be helped in a recession. There were several states that are doing fine, because they have appropriate tax and spend policies. Profligate states like MI and CA that can't control spending are the ones with problems. Does helping them really help in the long term, or does it send a message that they don't need to reform their wicked ways and get their house in order because Uncle will bail them out?

 

[The Rabbi]

Back in the fifties, we had tax rates up in the 90% range and it was the most prosperous era for the middle class in American history.

Back in the 50s we also had lynchings of Negros and a prosperous middle class. Accident? You decide.

 

[Diuretic]

Oy vey yerself

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 ) 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?

You dont have to tell us you've never taken econ, it already is evident in your post.
No, stimulus spending doesnt work. It has never worked.
Gov't can "create" jobs only at the expense of someone else. This is the entire point. Gov't doesn't create anything, it only shifts resources from one area to another. Usually in the least efficient way.
Savings and investment are really the same thing. If you save money you really give it to someone else to invest. It might be the bank where your account is lending the money to a builder. It can be lots of things. The only time it doesnt is if you stick the money in a mattress.
IN any economy some businesses do well, others not so well. A strong company likes to see a downturn. It wipes away its competitors and allows it to pick up assets cheap and position for the recovery. Businesses respond to incentives and if the incentive is right, they will start building for expansion even in a recession.

Stimulus spending, it appears, has worked.

An excerpt from an interesting column:

The cash shovelled out the door of Treasury and into household pockets and the new buildings provided to schools, whether they need them or not, will have little lasting effect in themselves. But to the extent that they kept consumers spending and provide work for tradesmen, they mean a smaller rise in unemployment.

Howard's legacy was money for the stimulus we had to have | The Australian

 

[Diuretic]

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

How can you point out an article and completly "miss the point"?

You might want to reread it. Infrastucture investment IS critical to America's future. For some reason, Republicans have this unfounded idea that "tax cuts" is the answer and the ONLY answer. When the Middle Class get's a hundred bucks and the rich get a million, that's hardly going to stimulate anything.

Think about it. Why is "infrastructure" important and NOT a "waste of money"?

6. Tax cuts on anything related to infrastructure investment

If infrastructure investment is critical for America's future, the government should encourage private investment in roads, bridges and schools. The government could waive or reduce taxes on profits made from private equity that is put into building roads, bridges, broadband access and schools. Companies that are hired to do the infrastructure work could also be allowed to operate like non-profits: for instance letting construction firms buy materials tax-free. There are billions of private equity dollars waiting to invest in infrastructure. The fewer barriers there are to this type of investment the faster capital markets will thaw.

---------

When it's said, "Companies that are hired", who do you think does the "hiring". Yep, you got it. The government.

Infra structure jobs are temporary jobs, once that bridge is built the job is over. I agree with most of the other posters, we needed some stimulus to help the states out in a recession, but government needs to get out of the way and let business do it. The sad fact of the matter is, is that more money from the no stimulus stimulus bill went to the Arts and Entertainment industry than it did to small business which employs over 70% of Americans. We are not seeing any job growth from this bill and unfortunately it will be a long time before business's can start hiring again.

I'd think most construction jobs are "temporary jobs". Once the job is done, the building is built, the bridge is built etc. then the company doing the job will look for more jobs and its employed workers and sub-contractors will do the same. In a strong economy that would be relatively easy, where the economy is in a slump then the demand has to be created by government. That's my understanding of the approach being taken.