If only it would worked like this (loans, insurance, small business)

[LesFex]

I agree with user_id, reasoning is not at all 3rd grade which is Keynesian theory of total spending in the economy and its effects on output and inflation.

[ufcrules1]

Originally Posted by Waterboy526

I'm sorry I didn't know we were on the happy feelings board.

I never said I had the fix to our economy. My hope is that capitalist ideals will get us through this crisis. I just don't think bigger government will or ever has solved anything.

Go back up and read your post to the OP. No reason to put someone down like that. Ideas need to be encouraged, especially in a time like this.

[Waterboy526]

You're right, I'm sorry if I offended anyone and I never said it was 3rd graders reasoning, just response. It's very simple reasoning however, and it would be great if it could work out as easy as that. Unfortunately it's not that easy.

Like a previous poster said, it's easy enough for the "guvment" to do, but who wants to be the first private business to jump on that? Talk about taking a gamble with your company. Not many companies are going to hire people just for the hell of it. You would need a concerted effort by all companies and then you would need to get people to spend again once they get these jobs. Shouldn't we be encouraging people to start saving more, instead of spending all of their paycheck? Should our business model be to spend everything you have just to grow the economy?

[ufcrules1]

Originally Posted by Waterboy526

You're right, I'm sorry if I offended anyone and I never said it was 3rd graders reasoning, just response. It's very simple reasoning however, and it would be great if it could work out as easy as that. Unfortunately it's not that easy.

Like a previous poster said, it's easy enough for the "guvment" to do, but who wants to be the first private business to jump on that? Talk about taking a gamble with your company. Not many companies are going to hire people just for the hell of it. You would need a concerted effort by all companies and then you would need to get people to spend again once they get these jobs. Shouldn't we be encouraging people to start saving more, instead of spending all of their paycheck? Should our business model be to spend everything you have just to grow the economy?

I agree with your post 100%. We should be encouraging people to save more and to prepare for their futures. The government on the other hand is encouraging people to stay in homes they couldn't afford in the first place. They are trying to delay the inevitable.

[GregW]

Consider what would happen to the finance industry if most people started saving money instead of borrowing. A pay as you go economy would devastate banks and importers and cause a massive deflation in the existing process as sellers had to compete with savings accounts for the spender's dollars.

This could be achieved if the banks were told to provide savings accounts at 5% above inflation with full guarantees. Credit cards would be very difficult to get and their interest rate would be no more then 10% over inflation. The government would try to keep inflation as close to zero as possible.

Tax steeply progressive federal tax rates would be set to keep a balanced budget by steep cuts in Defense spending while providing UHC for the entire population.

This is just another 3 grade suggestion from an armature economist.

[Stac2007]

Originally Posted by user_id

Actually, the OP's reasoning is a simplification of what the government is doing as we speak. Its basic Keynesian policy. You cure a general glut by spending, but since you can't control what businesses do you increase government spending. This will increase employment and increase aggregate demand throughout the economy.

In short your reasoning is not 3rd grade at all, its right along the lines of Keynesianism. Nice to see someone actually thinking about the economy!

Not every one believes in Keynesianism economics. It’s usually an economic theory often accepted by democrats, especially liberal ones.

[subsound]

Originally Posted by user_id

In short your reasoning is not 3rd grade at all, its right along the lines of Keynesianism. Nice to see someone actually thinking about the economy!

Agreed, it's a good thing to have a good idea rather then running around shouting "Economic collapse run for your lives" like many people. Keynesian economics works in economies in recession, depression, and even devastation (such as Europe after WW2)...the problem is that it limits the growth you can get with recovery, so it's a short term solution. Commanding Heights was a good book detailing the evolution of Keynes theories from WW2 to about 2000 in the world, but about as dry as one can get.

[Stac2007]

Originally Posted by subsound

Agreed, it's a good thing to have a good idea rather then running around shouting "Economic collapse run for your lives" like many people. Keynesian economics works in economies in recession, depression, and even devastation (such as Europe after WW2)...the problem is that it limits the growth you can get with recovery, so it's a short term solution. Commanding Heights was a good book detailing the evolution of Keynes theories from WW2 to about 2000 in the world, but about as dry as one can get.

Keynesian economics does not produce long term jobs, but does rack up long term debt. Only WW2 got us our of the great depression.

[subsound]

Originally Posted by Stac2007

Keynesian economics does not produce long term jobs, but does rack up long term debt. Only WW2 got us our of the great depression.

The problem is it does, just not the same jobs at the start as at the end...plus it gives people who would be out of work money for basics and gets things done. Keynes theories helped Europe come back from a bombed out shell that was devastated in WW2.

[tallrick]

Government is a consumer, not a producer. The smaller we can have a government, the better everyone's life will be. Unless you produce you fail. Imagine being stranded on a deserted island rich in gold, silver, iron, copper, natural gas, oil, etc and having to live in a grass hut and scrounge for food. Debt is slavery and only gives temporary wealth. You must produce things to live and extra production means the difference between the standard of living in Malawi and the standard of living in Texas.