Obama Voters: Buyer's Remorse?

Off Topic Politics & World Issues
41

[quote]Jeffe wrote:
Anyone who thinks that they can “create” jobs by pouring tax money into a struggling economy would have failed their first semester at any business school.

The U.S. has a limited population. Of that population, some are too young, too old, too sick or otherwise unable to work. Of those that are able to work, some are uneducated and can’t read, some are highly intelligent and educated but are physically unable to perform heavy labor.

You can not, ever, create a job without taking a job away from another sector or industry. You also can not feed an economic recession more and more money and expect a positive outcome. [/quote]
Wrong, hire an unemployed person

[quote]
A little history…
In the 1920’s there was a significant recession following the slowdown of wartime production. The governments response then was to do as little as possible. They changed interest rates and restricted credit, but beyond that they relied on the public sector to revive itself. The outcome…the “Roaring Twenties!” [/quote]
Wrong, the roaring twenties were caused by EASY credit, enormous amounts of buying on margin which created huge bubbles (sound familiar) - not the free market. It was also the recovery following WWI.

[quote]
The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.[/quote]

Yes, the plan was to spend money to get money moving again. You’ll recall that while the New Deal didn’t get America out of the Depression, World War II did. WWII was basically just a magnified New Deal - MORE spending, MORE stimulus.

If you read anything written by proponents of stimulus, they will tell you that the reason stimulus didn’t work in the GD is because it was never tried (not enough money), not that it never worked. It took WWII (an even bigger stimulus) to finally work.[/quote]

[quote]And now here we are again…a slight recession exacerbated by runaway government spending, absurd “Bail-Outs” and a total disregard for the lessons of our past.

A degree in Business and History should be a requirement for ANYONE running for a Federal Public Office. It would certainly help weed out all the assholes who fancy themselves “Visionary” who think they can turn a nation around with some nice speeches.

Hitler and Stalin ran their countries beautifully (at least in their design) by virtue of speeches and military force. That does not work in capitalist democracy where low taxes, sensible government spending, corvettes and SUV’s rule. [/quote]

Again, stimulus was never officially tried on a big enough scale so there is no telling whether or not it will work. It has never been done before on this scale, therefore stating that history has categorically rejected projects of this kind is a lie.

It pisses me off that people here are so ignorant of the other sides of the argument. I’m not explicitly saying I support stimulus, but its not nearly as black and white as its being portrayed. If you guys want the economic argument I’d be happy to supply it.

42

[quote]shookers wrote:

You do realize there is a helluva a lot of economic support for the idea of a stimulus right?

You saying it makes ZERO economic sense is a gross hyperbole, ignoring the voices of many renowned economists.[/quote]

I think part of this is about establishing faith in the system again… whether or not the bailout really saves anyone may not be as important as just getting things moving again.

But yes, there are a lot of economists who support it, and not being an expert myself, I tend to believe them. It is better than, as 100meters said, sitting on our haunches like Hoover and letting things continue to slide. There’s a reason he’s known as one of the worst presidents.

And no, I don’t have faith in the market to rectify itself. So that means that the government must do something. They’re doing something… and we’ll see how it goes.

43

[quote]FightinIrish26 wrote:
shookers wrote:

You do realize there is a helluva a lot of economic support for the idea of a stimulus right?

You saying it makes ZERO economic sense is a gross hyperbole, ignoring the voices of many renowned economists.

I think part of this is about establishing faith in the system again… whether or not the bailout really saves anyone may not be as important as just getting things moving again.

But yes, there are a lot of economists who support it, and not being an expert myself, I tend to believe them. It is better than, as 100meters said, sitting on our haunches like Hoover and letting things continue to slide. There’s a reason he’s known as one of the worst presidents.

And no, I don’t have faith in the market to rectify itself. So that means that the government must do something. They’re doing something… and we’ll see how it goes.[/quote]

It’s really quite a simple explanation.

Let’s suppose there is 2% deflation. This means, on the whole, companies will lose money because they pay for costs prior to receiving matching revenues. That is, revenues will be 2% lower than they otherwise would be. In addition, they disincentivize investment, because if one waits longer, they can get things cheaper. (I.E., I’ll just wait 1 more month to buy a car for prices to fall).

Since companies on the whole lose money and some invariably go bankrupt, unemployment increases. Since unemployment increases, the flow of money decreases as well causing even more deflation. This continues inevitably until an exogenous force can stop the spiral (the government).

A similar phenomenon occurs when savings exceed consumption for a prolonged period of time. Money leaving businesses exceed revenues (because a % of all dollars are saved), thus inevitably making businesses lose money. Again, as they go bankrupt, deflation begins, people save more (because holding money actually makes you richer during deflation), and the economy spirals.

The above two scenarios are the principle motivations for “stimulus”. If the government spends more to offset the increased saving and inevitable deflation - America escapes the spirals described above.

44

[quote]shookers wrote:
100meters wrote:
Jeffe wrote:

The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.

Idiot.
increase employment
increased productivity
increased GDP.

The only catch was trying to spend less in '37? bowing to pressure to balance the budget. Then we slipped back down.

So, textbook response to the current situation is to spend, hence the stimulus.

Last I checked, the depression continued for 7-8 years following FDR’s time in power. You can’t seriously suggested he was successful?
[/quote]

100meters won’t let silly things like the facts affect his judgment.

45

http://blogs.abcnews.com/politicalpunch/2009/02/obamas-budget-a.html

The LIFO elimination during a period on deflation will be a disaster for business.

I had hopes that we would dodge a prolonged contraction. I don’t have that hope any longer.

46

[quote]100meters wrote:

An understanding of economics and history is obviously the EXACT reason we’ve done what we’ve done.

Silly neo-hooverists. Now go on about the 30 million dollar marsh mouse, or some other made up thing.
[/quote]

wrong again.

47

[quote]100meters wrote:
Jeffe wrote:

The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.

Idiot.
increase employment
increased productivity
increased GDP.

The only catch was trying to spend less in '37? bowing to pressure to balance the budget. Then we slipped back down.

So, textbook response to the current situation is to spend, hence the stimulus. [/quote]

simple minded and quite wrong…again.

48

[quote]shookers wrote:

You do realize there is a helluva a lot of economic support for the idea of a stimulus right?
[/quote]
this tells me nothing. logic and reason are not democratic.
[qutoe]
You saying it makes ZERO economic sense is a gross hyperbole, ignoring the voices of many renowned economists.[/quote]

how about this…

it makes zero economic sense unless you are ok with long term damage to avoid short term discomfort.

What is the interest on the money we are borrowing?
What % inflation should we expect?
If there are magically calculated multiples for gov’t spending and tax cuts, what are the reduction multiples for increased taxation and gov’t consumption?

Please show me how this is a good long term investment.

49

[quote]shookers wrote:
Jeffe wrote:
Wrong, hire an unemployed person
[/quote]
How? You think this is what will happen?

Let’s assume this is correct. How is this different than “stimulous”?

recovery from what?

wrong. war and destruction is not stimulous. at least not for those consuming military provisions or being destroyed. it certainly woudl be for those not engaged but selling provisions and being paid to rebuild. why don’t we just spend more money in iraq and afganistan if this is so effective? let’s just double up on planes, tanks, bullets, ect. do a search for “adam smith” and “broken window”.

100% wrong. you need to quit reading articles for awhile and start reading books. Articles can be a good way of collecting small amounts of facts and a limited view of a specific effect. They are not agood resourse for forming solid economic principal or policy.

Maybe we should just get rid of all text books and rely solely on web articles for education. We can just take little snippets from various “experts” without understanding the underpinnings of their theory, or the logic they used to arrive at their conclusions.

You must think through any action much more thoroughly than can be prestented in an article. If I am going to simply accept what one or many economist are presenting, I must at least understand their logic.

Every economic action has a benefit but also has a cost. How many articles praising the stimulous talk in any great detail about the long term cost.

I would like for you to define what big enough would have been. Even if we assume this is true, how do markets respond to blind experiments with no logical explaination or predictible result?

so if a little spending did more harm than good, maybe we should just try spending some multiple of that. You are going to have to explain the logic here.

it is quite black and white. go ahead and supply what ever you feel is relavent.

50

[quote]dhickey wrote:
shookers wrote:

You do realize there is a helluva a lot of economic support for the idea of a stimulus right?
[/qutoe]
this tells me nothing. logic and reason are not democratic.

[quote]
You saying it makes ZERO economic sense is a gross hyperbole, ignoring the voices of many renowned economists.

how about this…

it makes zero economic sense unless you are ok with long term damage to avoid short term discomfort.

What is the interest on the money we are borrowing?
What % inflation should we expect?
If there are magically calculated multiples for gov’t spending and tax cuts, what are the reduction multiples for increased taxation and gov’t consumption?

Please show me how this is a good long term investment.[/quote]

51

[quote]shookers wrote:

Yes, the plan was to spend money to get money moving again. You’ll recall that while the New Deal didn’t get America out of the Depression, World War II did. WWII was basically just a magnified New Deal - MORE spending, MORE stimulus.

If you read anything written by proponents of stimulus, they will tell you that the reason stimulus didn’t work in the GD is because it was never tried (not enough money), not that it never worked. It took WWII (an even bigger stimulus) to finally work.

[/quote]

Really?

So how does this work?

An economy builds stuff that is more or less useless for an average citizen like bombs and tanks.

Then, it kills a few million people.

Afterwards, everyone is better off, even though all the infrastructure is geared towards building bombs and tanks.

Bonus points if you can explain why it does not seem to work this time around, with two wars at once.

52

[quote]shookers wrote:
FightinIrish26 wrote:
shookers wrote:

You do realize there is a helluva a lot of economic support for the idea of a stimulus right?

You saying it makes ZERO economic sense is a gross hyperbole, ignoring the voices of many renowned economists.

I think part of this is about establishing faith in the system again… whether or not the bailout really saves anyone may not be as important as just getting things moving again.

But yes, there are a lot of economists who support it, and not being an expert myself, I tend to believe them. It is better than, as 100meters said, sitting on our haunches like Hoover and letting things continue to slide. There’s a reason he’s known as one of the worst presidents.

And no, I don’t have faith in the market to rectify itself. So that means that the government must do something. They’re doing something… and we’ll see how it goes.

It’s really quite a simple explanation.

Let’s suppose there is 2% deflation. This means, on the whole, companies will lose money because they pay for costs prior to receiving matching revenues. That is, revenues will be 2% lower than they otherwise would be. In addition, they disincentivize investment, because if one waits longer, they can get things cheaper. (I.E., I’ll just wait 1 more month to buy a car for prices to fall).

Since companies on the whole lose money and some invariably go bankrupt, unemployment increases. Since unemployment increases, the flow of money decreases as well causing even more deflation. This continues inevitably until an exogenous force can stop the spiral (the government).

A similar phenomenon occurs when savings exceed consumption for a prolonged period of time. Money leaving businesses exceed revenues (because a % of all dollars are saved), thus inevitably making businesses lose money. Again, as they go bankrupt, deflation begins, people save more (because holding money actually makes you richer during deflation), and the economy spirals.

The above two scenarios are the principle motivations for “stimulus”. If the government spends more to offset the increased saving and inevitable deflation - America escapes the spirals described above.
[/quote]

First of all yes, they would receive 2% less, but what they would receive would be worth more, because their wages, machines and whatever else would also constantly become cheaper.

Then, yes again, an economy with a slow deflation is an economy that saves a lot of money. That however is the natural state of things and only because of Keynes does anyone consider this to be a problem.

Oh my, the horrors of capital accumulation!

In fact, the constant spending a forced inflation leads to is also responsible for the boom-bust cycle, because it leads entrepreneurs to believe that their are resources that are in fact not there.

The idea that no one ever spends money on things that get constantly cheaper is obviously wrong regarding gas, food and lodging and since you own a computer or even a digital camera you do not practice what you preach and neither does anybody else.

53

[quote]shookers wrote:
It’s really quite a simple explanation.

Let’s suppose there is 2% deflation. This means, on the whole, companies will lose money because they pay for costs prior to receiving matching revenues. That is, revenues will be 2% lower than they otherwise would be. In addition, they disincentivize investment, because if one waits longer, they can get things cheaper. (I.E., I’ll just wait 1 more month to buy a car for prices to fall).
[/quote]
they will not wait forever. this is the fundemental logic of speculation.

this logic is fundementally flawed.

How do we know that an otherwise healthy market will spiral out of control during the bust cycle if not for gov’t intervention?

capitalists will have to eventually seek investment and consumers will have to consume. Over speculation (boom0 and under speculation (bust) are not incredibly harmful if left to their own devices. Corrections will be made and markets will return to normal. the best investments that can be made are during the bust.

gov’t intervension has turned relativly mild and common boom bust cycles into recessions and depressions tht effect the economy as a whole, rather than a particular industry.

the fact that overspeculation in one industry can have catasprophic effect on the economy as a whole is an indication of a systemic problem.

you need to revisit speculation and the business cycle. You need to think about what causes overspeculation in a particular industry. I can assure you it is not arbitrary happen stance.

again, seriously flawed logic. you are completely discounting the fundemental underpinning of any market, speculation and supply and demand.

markets weren’t created by gov’t and they cannot be saved by gov’t planning. planned economies always fail as compared to free markets. economic knowledge is not concentrated in washington. it is ditributed amongst the market. people are experts in their own field and can make the appropiate speculation. gov’t cannot.

if you put all the most brilliant economists in the same room, they could not plan an economy. no brilliant economist would try. even the great socialist economists figured this out. for some reason the keynesians have not.

Savings are investment unless you keep yours under your matress.

this is so wrong in so many ways. you really need to read some of the following:

Basic Economics - Thomas Sowell
Applied Economics - Thomas Sowell
Economic Fact and Fallacy - Thomas Sowell
Economics in One Lesson - Henry Haslett
Free to Choose - Milton Friedman

I can almost assure you will be hooked after reading one or two of these. There are even better books after these.

54

[quote]shookers wrote:
100meters wrote:
Jeffe wrote:

The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.

Idiot.
increase employment
increased productivity
increased GDP.

The only catch was trying to spend less in '37? bowing to pressure to balance the budget. Then we slipped back down.

So, textbook response to the current situation is to spend, hence the stimulus.

Last I checked, the depression continued for 7-8 years following FDR’s time in power. You can’t seriously suggested he was successful?
[/quote]

Are you kidding? Well in the REAL WORLD a recession indicates a shrinking economy and since the New Deal FACTUALLY:
a. increased employment
b. increased productivity
c. increased GDP
so much so that it brought one of the most significant economic recoveries of ALL TIME between 33 and 38. So yeah successful would be a “suggestion”. And again further success could have been achieved via even more new deal. (Note the dip in 37/38 when he tried to balance the budget)

But my God, what a shockingly ignorant statement you posted.

55

[quote]John S. wrote:
shookers wrote:
100meters wrote:
Jeffe wrote:

The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.

Idiot.
increase employment
increased productivity
increased GDP.

The only catch was trying to spend less in '37? bowing to pressure to balance the budget. Then we slipped back down.

So, textbook response to the current situation is to spend, hence the stimulus.

Last I checked, the depression continued for 7-8 years following FDR’s time in power. You can’t seriously suggested he was successful?

100meters won’t let silly things like the facts affect his judgment.[/quote]
He didn’t bother to address the facts numbnuts. Of course, neither are you. Idiots.

56

[quote]100meters wrote:
shookers wrote:
100meters wrote:
Jeffe wrote:

The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.

Idiot.
increase employment
increased productivity
increased GDP.

The only catch was trying to spend less in '37? bowing to pressure to balance the budget. Then we slipped back down.

So, textbook response to the current situation is to spend, hence the stimulus.

Last I checked, the depression continued for 7-8 years following FDR’s time in power. You can’t seriously suggested he was successful?

Are you kidding? Well in the REAL WORLD a recession indicates a shrinking economy and since the New Deal FACTUALLY:
a. increased employment
b. increased productivity
c. increased GDP
so much so that it brought one of the most significant economic recoveries of ALL TIME between 33 and 38. So yeah successful would be a “suggestion”. And again further success could have been achieved via even more new deal. (Note the dip in 37/38 when he tried to balance the budget)

But my God, what a shockingly ignorant statement you posted.[/quote]

this is all anecdotal. you need to answer

at what cost

and compared to what

Again, you have no concept of the difference between correlation and causation.

57

Dhickey are you that naive? You seem to say “THAT WONT HAPPEN, NO IT WONT MARKETS ARE PERFECT NO MATTER WHAT.” You haven’t actually explained how the economy escapes the spiral I explain above.

FYI, I’m read 2 of those books you’ve posted - they’re great, but they’re basic and not technical. Have you read the General Theory? I highly suggest it so you can better understand peoples’ rebukes of it. Paul Krugman’s new book also does a good job of outlining the current case for stimulus (or so I hear).

Orion, the WWII worked for the same reason that this stimulus is INTENDED to work. If you increase demand temporarily (through government), businesses will profit who hire more people and the economy restarts.

Also, comparing the minuscule effects of Iraq and Afghanistan to WWII is laughable. In WWII, not only did the USG run an enormous deficit - but Europe spent billions (likely trillions in todays dollars) on American weapons and products. This combined “stimulus” greatly increased demand and restarted the struggling economy.

58

[quote]dhickey wrote:
shookers wrote:

You do realize there is a helluva a lot of economic support for the idea of a stimulus right?

this tells me nothing. logic and reason are not democratic.
[qutoe]
You saying it makes ZERO economic sense is a gross hyperbole, ignoring the voices of many renowned economists.

how about this…

it makes zero economic sense unless you are ok with long term damage to avoid short term discomfort.

What is the interest on the money we are borrowing?
What % inflation should we expect?
If there are magically calculated multiples for gov’t spending and tax cuts, what are the reduction multiples for increased taxation and gov’t consumption?

Please show me how this is a good long term investment.[/quote]

Go read up on Japan’s national debt.

59

[quote]dhickey wrote:
100meters wrote:
shookers wrote:
100meters wrote:
Jeffe wrote:

The Depression, arguably the most desperate time in U.S. history…what was the plan to get us out of the depression? Huge public works. Dams, bridges, tunnels, blowing up mountains. Whatever could be done to spend government money. The outcome? A decade of economic disaster.

Idiot.
increase employment
increased productivity
increased GDP.

The only catch was trying to spend less in '37? bowing to pressure to balance the budget. Then we slipped back down.

So, textbook response to the current situation is to spend, hence the stimulus.

Last I checked, the depression continued for 7-8 years following FDR’s time in power. You can’t seriously suggested he was successful?

Are you kidding? Well in the REAL WORLD a recession indicates a shrinking economy and since the New Deal FACTUALLY:
a. increased employment
b. increased productivity
c. increased GDP

so much so that it brought one of the most significant economic recoveries of ALL TIME between 33 and 38. So yeah successful would be a “suggestion”. And again further success could have been achieved via even more new deal. (Note the dip in 37/38 when he tried to balance the budget)

But my God, what a shockingly ignorant statement you posted.

this is all anecdotal. you need to answer

at what cost

and compared to what

Again, you have no concept of the difference between correlation and causation.[/quote]

My goodness you’re willfully ignorant.

60

[quote]shookers wrote:
Dhickey are you that naive? You seem to say “THAT WONT HAPPEN, NO IT WONT MARKETS ARE PERFECT NO MATTER WHAT.” You haven’t actually explained how the economy escapes the spiral I explain above.

FYI, I’m read 2 of those books you’ve posted - they’re great, but they’re basic and not technical. Have you read the General Theory? I highly suggest it so you can better understand peoples’ rebukes of it. Paul Krugman’s new book also does a good job of outlining the current case for stimulus (or so I hear).

Orion, the WWII worked for the same reason that this stimulus is INTENDED to work. If you increase demand temporarily (through government), businesses will profit who hire more people and the economy restarts.

Also, comparing the minuscule effects of Iraq and Afghanistan to WWII is laughable. In WWII, not only did the USG run an enormous deficit - but Europe spent billions (likely trillions in todays dollars) on American weapons and products. This combined “stimulus” greatly increased demand and restarted the struggling economy.[/quote]

It’s not like the opposition really has much power to stop the growth of government spending and intervention (if they even really care), so I think we’ll find out just how effective or ineffective these ideas really are. Perhaps, once and for all.