Why we want stimulus now and worry about deficits later

[saveliberty]

7. Most Keynesians have no real understanding of economics and are liberal entitlement children.

You missed this one Editec.

It was private sector economic growth that allowed for the infrastructure development of the 50s and 60s. If all that infrastructure investment was growing the economy, the 70s wouldn't have been a recession.

 

[hortysir]

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

...and that is accomplished by printing money. What a bunch troll crap.

Well, you are too brainwashed to know that the government has to print money all the time just to keep the economy going.

And you are too full of shit to admit that this
vvvvvvvvvvvvvvvv
US never printed money to offset the debt
was a LIE

 

[Toddsterpatriot]

we need more stimulus to help the economy closing the gap (which basically means creating more jobs) -- because it will also reduce the deficits.

Indeed. Look at the UNPRECEDENTED economic growth in the 50s and 60s. This was a time when government was vigorously investing in infrastructure along with pouring money into the middle class through a variety of programs and entitlements. The multiplier effect of these things created the most powerful economy America has ever had.

The greatest benefit of the postwar economy was the sheer amount of money the government put in middle class wallets. The reason this is a good thing can be explained with one word: demand. When demand is strong - when there is surplus or disposable income sitting inside the bank accounts of the middle class consumer - the capitalist has an incentive to invest and add jobs so that he can capture that money. The reason the economy is so weak right now is because the middle class is overspent and underpaid - and their entitlements have been stripped so that the mega-wealthy can have even bigger tax breaks (which tax breaks will not turn into investments/jobs because there is no demand).

AGAIN: The capitalist will not invest in new production, nor will he add one job until there is money lying in middle class wallets to capture. Keep in mind: there are two models that put money in middle class wallets - 1) the postwar model, which consists of high wages/benefits/entitlements and 2) the Reagan model, which replaced high wages with credit cards (-which is why we saw household debt skyrocket with the rise and solidification of the Reagan era).

Starting with Reagan, American shifted from stimulating middle class consumption to giving tax breaks to the wealthy. The theory was that if more money ended up in the wallets of the wealthy, there would be more investment in the domestic economy and more job growth. Tragically, the opposite happened. We saw investment and job growth shift overwhelmingly to China. It was a ruse. The Reagan model - through a process called globalization - merely gave capital more mobility so that it could bypass American labor for sweatshop labor. On the Reagan model, the benefits flow overwhelmingly to a narrow group of Americans (who benefit wildly from ultra-low labor costs... not to mention the lax environmental standards in 3rd world countries. Capital makes a higher return when it can pollute rivers and skies because polluting rivers and skies is cheaper than investing in advanced technological production methods).

You got to hand it to the Reagan system. It was ingenious. They managed to sustain consumption for 30 years by expanding credit markets. They created a brilliant universe of borrowing so that Americans could increasingly leverage their own future earnings. And what choice did they have? Once they freed capital to invest in 3rd world labor markets and thereby ended the high wage system for American workers, they needed another means to sustain domestic consumption. Credit was the only answer, and the Reagan Revolution expanded consumer debt better than any system before it.

Unfortunately, you can't borrow forever. Eventually, you bump into your borrowed-against future. Eventually, credit markets crash and consumers go bankrupt.

We are lying in that bed.

Silly Ronnie. You can't replace high wages with credit cards.

America got Punk'd by a "B" rate actor who simply made one group of Americans wealthy at the expense of an entire nation. He also told us not to worry about Mideast oil because it would satisfy global demand for over a 100 years without any problem. We swallowed the Reagan poison and now we are in the final stages of death. Nobody gets it. The game is over.

The greatest benefit of the postwar economy was the sheer amount of money the government put in middle class wallets.

It's like magic!

 

[ilia25]

Let's go back to the OP.

It says we need more "stimuls" because we have idle capacity that is costing us GDP (in the forms of jobs and goods).

Fair enough.

Given the Boiking's open hostility to producers, what's in it for them to utilize that idle capacity?

And if there's no market to move what's produced then what's the point?

You've just repeated the Keynesian point. The economy is depressed because of insufficient demand, hence the fiscal stimulus could pull it out.

 

[ilia25]

...and that is accomplished by printing money. What a bunch troll crap.

Well, you are too brainwashed to know that the government has to print money all the time just to keep the economy going.

And you are too full of shit to admit that this
vvvvvvvvvvvvvvvv
US never printed money to offset the debt
was a LIE

US never in their history printed money to "offset" the debt.

NEVER.

 

[ilia25]

The more stimulus the more debt, the more debt, the more money printed to offset the debt

Stop telling these fairy tales. US never printed money to offset the debt, and it is not going to start tomorrow.

We are already doing it, the reserve is printing more, the more that is printed and let into circulation devalues the dollar, drops the debt percentage and causes inflation.

Those are fairy tales. Fed, as always, keep printing just enough money to hit their inflation target (which is 2-3%). No more, no less.

 

[Londoner]

It was private sector economic growth that allowed for the infrastructure development of the 50s and 60s. If all that infrastructure investment was growing the economy, the 70s wouldn't have been a recession.

There is a tendency for those on the Left to think that all economic growth comes from government stimulus, whereas the Right believes that it comes from the private sector.

With all due respect, I think it might be a little more complicated.

Look at the consumer electronics boom that came from the technology developed by the Cold War Pentagon and Space programs. You will see a complicated partnership between the private sector and government. Look at the multiplier effect that came from this technology, and the profits it enabled . . . all of it heavily dependent on government lead investment.

(Government provides a scale of investment that the private sector lacks; this is why business flocks to Washington for subsidies and favors. This is why business funds elections. Son, capital craves the leverage of government.)

Look at the lobbying industry in general. The private sector invests billions to secure trillions in public subsidies.

Study the development of the computer and internet and you will see a dense network of relationships between the Pentagon and the private sector. It is a simplification to separate government and the private sector, not least because the private sector doesn't want the separation: indeed, they crave government money. (Please turn off talk radio son)

Study one of the my favorite Presidents, Dwight Eisenhower - specifically the government funded and managed interstate system, which opened up the entire country to business, which gained a reliable, efficient, quick method for transporting goods and opening new markets. Again, if you study the interstate system (and if you pencil out all the avenues of profit it made possible) you will see - at its base - a complicated AND EFFECTIVE partnership between the private sector and government. (The private sector denies the partnership so they can keep more of the resulting profits for themselves. And they invest some of their largess in Talk Radio for the purpose of convincing people like you to come to message boards and post sillyness)

Study the history of Boeing, specifically its relationship to the government. And then trace that history up to the commercialization of aviation, a source of massive profits. You will not be able to untangle the private sector from government in this instance either. (This is why all businesses flock to Washington once they get big enough - because they want the financial leverage of big brother.)

Let's not even talk about the relationship between the Cold War Pentagon and private institutions like Stanford and MIT, where research and technology vital to the private sector was developed. Do you know any of this?

Son, please be careful with talk radio. The Hoover Dam, which is the reason why the modern industrial Southwest exists, was not made by private investments. No company was big enough, nor did they have the incentive to build something as large as the Hoover Dam (or the Interstate System, or the Space Program which created so much of the consumer electronics technology that fueled the Reagan boom).

Profit has always come primarily from a partnership between government and the private sector. In fact, these two poles are so intertwined that it makes no sense to speak of them as separate entities. The only people who think they are separate are naive voters who drink their party's Kool-aid.

Son, you trust government too much. By government I mean the Republican party which has created an infrastructure to funnel the profits of business into opinion management. Turn off talk radio. Turn off your computer. Turn off your TV. Go to a library. Read-up on the history of this country, specifically where the infrastructure of the modern industrial state comes from. You might discover that it's more complicated than you've been lead to believe. Don't do it for yourself - do it for the rest of us. Until you educate yourself, you will continue to vote for corrupt politicians who protect the status quo. We cannot afford your ignorance any longer (respectfully)

 

[saveliberty]

I have multiple areas of study in my degree which was earned back in 1983. As to the primary drivers of the economy, my view point is correct. I understand economics well enough to see that government has costs which are not recovered in the services they inefficiently provide. Profit does not primarily come from partnerships with government. Don't know what your smoking, but take a giant step back from being the condecending blowhard you are.

 

[ilia25]

It was private sector economic growth that allowed for the infrastructure development of the 50s and 60s. If all that infrastructure investment was growing the economy, the 70s wouldn't have been a recession.

There is a tendency for those on the Left to think that all economic growth comes from government stimulus

Frankly, I can't imagine that anyone, left or right, can have such ideas. The stimulus, by definition, is a temporary measure to jolt the economy out of depression. Beyond that any stimulus is useless -- it is like if you keep the starter on after the engine is running.

 

[saveliberty]

It was private sector economic growth that allowed for the infrastructure development of the 50s and 60s. If all that infrastructure investment was growing the economy, the 70s wouldn't have been a recession.

There is a tendency for those on the Left to think that all economic growth comes from government stimulus

Frankly, I can't imagine that anyone, left or right, can have such ideas. The stimulus, by definition, is a temporary measure to jolt the economy out of depression. Beyond that any stimulus is useless -- it is like if you keep the starter on after the engine is running.

That's the first two things we agree on ilia (part in bold). Londoner's generalizations are the second.

 

[saveliberty]

(Government provides a scale of investment that the private sector lacks; this is why business flocks to Washington for subsidies and favors. This is why business funds elections. Son, capital craves the leverage of government.) ~ Londoner

Here I thought is was because representatives wanted to be seen as doing something for their voting public. They think its helping. So they take capital from one place and redistribute it elsewhere.

 

[thereisnospoon]

It was private sector economic growth that allowed for the infrastructure development of the 50s and 60s. If all that infrastructure investment was growing the economy, the 70s wouldn't have been a recession.

There is a tendency for those on the Left to think that all economic growth comes from government stimulus

Frankly, I can't imagine that anyone, left or right, can have such ideas. The stimulus, by definition, is a temporary measure to jolt the economy out of depression. Beyond that any stimulus is useless -- it is like if you keep the starter on after the engine is running.

That is not what you have maintained at all.
You insist that excess government spending is needed to make the economy work. You have maintained that it if the federal government is permitted to spend freely the result would be economic growth.
You also insist the existence of "temporary spending/taxes"....As we know from studying the history of taxation, there is no such thing as temporary taxation or spending.
I can think of no government program which has been permanently defunded.
The Bush admin wisely defunded AMTRAK, but that was rescinded by the democrats and now once again, AMTRAK is bleeding money at great expense to the American taxpayer.
No, I am not anti rail travel. Quite the contrary. I would like ot see a privately operated national rail system that could compete with the use of private vehicles and the air carriers.
The taxpayers should not be funding a failed idea such as AMTRAK. Let it die and be taken over by the private sector. If freight lines can be run privately, so can passenger service.
AMTRAK is a glaring example of the inability of the federal government to do anything within budget with any kind of efficiency.

 

[ilia25]

There is a tendency for those on the Left to think that all economic growth comes from government stimulus

Frankly, I can't imagine that anyone, left or right, can have such ideas. The stimulus, by definition, is a temporary measure to jolt the economy out of depression. Beyond that any stimulus is useless -- it is like if you keep the starter on after the engine is running.

That is not what you have maintained at all.
You insist that excess government spending is needed to make the economy work.

Look, your reading comprehension is your problem.

Look at the first post -- it has a chart showing a depressed economy and that is the reason we need a stimulus.

You have maintained that it if the federal government is permitted to spend freely the result would be economic growth.

It would, but only because we are in a depression. And I never said "freely", but the stimulus should be big enough to give a sufficient jolt (Obama stimulus wasn't).

You also insist the existence of "temporary spending/taxes"....As we know from studying the history of taxation, there is no such thing as temporary taxation or spending.

Obama stimulus was temporary, wasn't it?

So no, the left are not fixed on the government spending -- but the rights are. To them it's anathema, and this is the reason why this depression has been lasting so long.

 

[thereisnospoon]

Frankly, I can't imagine that anyone, left or right, can have such ideas. The stimulus, by definition, is a temporary measure to jolt the economy out of depression. Beyond that any stimulus is useless -- it is like if you keep the starter on after the engine is running.

That is not what you have maintained at all.
You insist that excess government spending is needed to make the economy work.

Look, your reading comprehension is your problem.

Look at the first post -- it has a chart showing a depressed economy and that is the reason we need a stimulus.

You have maintained that it if the federal government is permitted to spend freely the result would be economic growth.

It would, but only because we are in a depression. And I never said "freely", but the stimulus should be big enough to give a sufficient jolt (Obama stimulus wasn't).

You also insist the existence of "temporary spending/taxes"....As we know from studying the history of taxation, there is no such thing as temporary taxation or spending.

Obama stimulus was temporary, wasn't it?

So no, the left are not fixed on the government spending -- but the rights are. To them it's anathema, and this is the reason why this depression has been lasting so long.

"We" don't need stimulus..You believe you do. The fact that the two stimulus did nothing to improve the economy and in fact few people if any know where all that money went. And to date no real permanent jobs can be attributed to the nearly one trillion dollars of expense.
The Obama stimulus is not temporary. Not when we still have the debt which will NEVER be paid off. The stimulus was merely a discretionary slush fund.
This is not the kind of government we can sustain.

 

[saveliberty]

Obama stimulus was temporary, wasn't it?

So no, the left are not fixed on the government spending -- but the rights are. To them it's anathema, and this is the reason why this depression has been lasting so long.

No it wasn't temporary, it was renamed quantitative easing. The reason the recession has lasted so long is because Obama is under the mistaken idea government can create jobs through spending.

 

[kaz]

Now is the WRONG time to be worrying about deficits. When you're having a heart attack, costs are secondary.

Costs yes. But spending money on candy bars and ice cream when you're having a heart attack isn't. And that's what "stimulus" spending is. The only spending that will produce economic value is spending that leads to economic productivity. Government spending leads to zero productivity. Which is why it's like eating a candy bar and ice cream when you're having a heart attack.

What about trying having Government get out of the way of business for a change? We haven't tried that since Reagan. Do you remember what happened when Reagan did it, even a little?

 

[sealybobo]

The chart above shows a deeply depressed economy. The US still produce about 1 trillion less in annual GDP than they are capable of. Not only it results in a lot of human suffering, but it also starves the government of tax revenues, creating huge budget deficits.

Therefore we need more stimulus to help the economy closing the gap (which basically means creating more jobs) -- because it will also reduce the deficits.

Remember Bush didn't want a recession on his watch so he sent everyone $500 bucks? Where were the tea baggers back then? How come Republicans understood and apprciated that stimulus but can't understand we need one now?

Because they want Obama to fail?

 

[Full-Auto]

The chart above shows a deeply depressed economy. The US still produce about 1 trillion less in annual GDP than they are capable of. Not only it results in a lot of human suffering, but it also starves the government of tax revenues, creating huge budget deficits.

Therefore we need more stimulus to help the economy closing the gap (which basically means creating more jobs) -- because it will also reduce the deficits.

Remember Bush didn't want a recession on his watch so he sent everyone $500 bucks? Where were the tea baggers back then? How come Republicans understood and apprciated that stimulus but can't understand we need one now?

Because they want Obama to fail?

Union payoffs are not stimulus that everyone gets. Everyone got a check unless you made too much. Bastards

 

[saveliberty]

The chart above shows a deeply depressed economy. The US still produce about 1 trillion less in annual GDP than they are capable of. Not only it results in a lot of human suffering, but it also starves the government of tax revenues, creating huge budget deficits.

Therefore we need more stimulus to help the economy closing the gap (which basically means creating more jobs) -- because it will also reduce the deficits.

Remember Bush didn't want a recession on his watch so he sent everyone $500 bucks? Where were the tea baggers back then? How come Republicans understood and apprciated that stimulus but can't understand we need one now?

Because they want Obama to fail?

I don't want him to fail. He just does it on his own.

 

[sealybobo]

The chart above shows a deeply depressed economy. The US still produce about 1 trillion less in annual GDP than they are capable of. Not only it results in a lot of human suffering, but it also starves the government of tax revenues, creating huge budget deficits.

Therefore we need more stimulus to help the economy closing the gap (which basically means creating more jobs) -- because it will also reduce the deficits.

Remember Bush didn't want a recession on his watch so he sent everyone $500 bucks? Where were the tea baggers back then? How come Republicans understood and apprciated that stimulus but can't understand we need one now?

Because they want Obama to fail?

I don't want him to fail. He just does it on his own.

People like you said Bush was doing a good job while we were bleeding 7 million jobs and now you say Obama isn't doing good while he's adding 300,000 jobs a month.

Interesting.