Obama will ruin the economy (Stimulus at $900 billion) (bankrupt, live)

[tallguylehigh]

Originally Posted by Jerseyt719

If we really want to get out of this mess, we need to manufacture products that we can actually use and more importantly sell and take away the demand for foreign goods. It creates jobs, it creates supply, it begins a cycle of economic prosperity.

We need to quit going overseas for everything. We need to be more self sufficient.

I disagree. "Quit going overseas" I interpret to mean that global trade will slow down or halt, which is never a good thing. It was the final nail in coffin solidifying the Great Depression with the Smoot-Hawley tariff pact and would be even more disastrous now given our very delicate economic and financial relationship with China (they buy debt, we buy goods, rinse and repeat).

What we need to get out of this mess is to INNOVATE. We are never going to beat China, India, Vietnam on prices for goods already moved overseas (textiles, etc). We would simply be chasing our tail.

The US needs to use its more sophisticated work force to become the hotbed of technologies for the future. Things like alternative energy, nanotechnology, pharma, biotech, etc are the kinds of things that are huge untapped resevoirs that we need to corner in order to employ individuals.

Making widgets for $0.05 cheaper than something from overseas isn't going to do anything long term.

[elflord1973]

Originally Posted by sholden

But I agree Roosevelt, or at least is economic advisors, made a necessary severe recession into the Great Depression by applying ridiculous Keynesian and central planned principles to the economy. And Hoover kicked the thing off with the same thing - government intervention to try and pump up the economy.

Protectionist trade policy and a central policy of reduced output are not "Keynesian principles".

Does anyone argue that deficit spending (the main thing being proposed in the stimulus) made the great depression worse ?

[elflord1973]

Originally Posted by theoakman

Sure, drastically reduce spending.

I understand that balanced budgets are good in the long run, but is a down turn the perfect time to balance a budget ? That runs contrary to what most economists say.

The solution to the problems at hand are to stop spending money, stop borrowing money, and stop running huge deficits.

The problem at hand is deflation, not deficit. I agree with most of your policy prescriptions, (I'd add, instead of taxing profitable companies and bailing out losers, why not lower corporate tax ?)

but I don't see how reduced spending solves the problem of deflation. In fact it seems that you've presented a solution for inflation to the problem of deflation.

[wileynj]

Originally Posted by tallguylehigh

I disagree. "Quit going overseas" I interpret to mean that global trade will slow down or halt, which is never a good thing. It was the final nail in coffin solidifying the Great Depression with the Smoot-Hawley tariff pact and would be even more disastrous now given our very delicate economic and financial relationship with China (they buy debt, we buy goods, rinse and repeat).

What we need to get out of this mess is to INNOVATE. We are never going to beat China, India, Vietnam on prices for goods already moved overseas (textiles, etc). We would simply be chasing our tail.

The US needs to use its more sophisticated work force to become the hotbed of technologies for the future. Things like alternative energy, nanotechnology, pharma, biotech, etc are the kinds of things that are huge untapped resevoirs that we need to corner in order to employ individuals.

Making widgets for $0.05 cheaper than something from overseas isn't going to do anything long term.

I completely get it but for now, a SHORT TERM solution is what we need in order to get the AMERICAN economy moving again. One small step for us Americans will equal one big step for the world - long term.

[theoakman]

I understand that balanced budgets are good in the long run, but is a down turn the perfect time to balance a budget ? That runs contrary to what most economists say.

Please name "most economists" because I can name about 10 great economists off the top of my head that historically have shown that deficit spending makes things worse. Loose monetary policy and deficit spending hurts the long term health of your economy. It gives you a bigger problem down the road. They already tried this solution in 2001 after the recession due to the dot.com fallout. Deficit spending and 1% interest rates. It gave you a bigger bubble and a bigger recession. Most economists you read are keynesians. Keynesian economics has made a come back for some odd reason despite the fact that it was shown to not work. The most likely reason is that people associate Bush with free market advocates when the reality is, he was anything but one.

The problem at hand is deflation, not deficit. I agree with most of your policy prescriptions, (I'd add, instead of taxing profitable companies and bailing out losers, why not lower corporate tax ?)

I'm not big on taxing corporations. I just don't like the way the government has unfairly given corporations tax cuts over small businesses which effectively squeezes out the little guy.

but I don't see how reduced spending solves the problem of deflation. In fact it seems that you've presented a solution for inflation to the problem of deflation.

You don't see how it solves the problem. Deflation means lower prices. Get rid of the spending, you can get rid of the income tax, and you can effectively raise wages for the employee. On top of that, you effectively lower wages for the employer to pay because the employee can afford to take on a lower wage if he's not paying income tax. So at the end of the day, the employee takes home more, the employer pays out less, and the government takes in less. This will increase real wages and employment. That's the real solution.

The government doesn't know how to spend money smart. No one spends money effectively unless it's their own. I can already giver you an example. Obama proclaimed that it was a good thing to replace the federal fleet of cars with hybrids claiming it saves the government money and energy. He's full of crap. That's like telling you to trash your 3 year old Volkswagen and buy a hybrid right now because it will save you money. You can't get the most "bang for your buck" by getting rid of the vehichles you already have. Furthermore, Hybrids are a waste of money. Why not bring back the Geo Metro? It's cheaper to build and gets better gas mileage. Oh that's right, they don't call it "green" despite the fact that it uses less fuel.

[sholden]

Originally Posted by elflord1973

Protectionist trade policy and a central policy of reduced output are not "Keynesian principles".

Does anyone argue that deficit spending (the main thing being proposed in the stimulus) made the great depression worse ?

Yes, everyone except Keynesian economists (and since that's what is taught in school and talked about on TV it is the majority view I admit).

[Aylalou]

Originally Posted by theoakman

no, it's more like, if you would listen, I wouldn't have to scream. Go read about the Agricultural Adjustment Administration and then decide who knows what they are talking about. Until you read about the AAA, you have no business speaking on this matter.

Oh, now I get it. You prefer dictatorships wherein they tell you exactly what to read so you just spout propaganda.

[elflord1973]

Originally Posted by sholden

Yes, everyone except Keynesian economists (and since that's what is taught in school and talked about on TV it is the majority view I admit).

Who precisely do you mean by "everyone except Kerynesian economists" ?

And how do you attribute the longevity of the depression to deficit spending when there were a number of obviously boneheaded policies implemented at the same time ?

[theoakman]

Originally Posted by Aylalou

Oh, now I get it. You prefer dictatorships wherein they tell you exactly what to read so you just spout propaganda.

rofl, dictatorships, propaganda? I told you to go read Milton Friedman. Do you know what Milton Friedman wrote about? FREEDOM! Go read and learn about what freedom is instead of spouting random accusations.

[theoakman]

Originally Posted by elflord1973

Who precisely do you mean by "everyone except Kerynesian economists" ?

And how do you attribute the longevity of the depression to deficit spending when there were a number of obviously boneheaded policies implemented at the same time ?

All the boneheaded policies were funded by deficit spending. You can even have well intentioned policies funded by deficit spending that end in disaster. We mean well when we want to rebuild or bridges and roads. But wait til the construction unions get a hold of those government contracts and see how fast they blow up in our face when they purposely drag out all these projects for years to collect more money.