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As I said above, cutting spending increases unemployment and further reduces revenues which cause greater deficits.
In an contradicted economic environment (like what we have now,) cutting government spending (which is a GDP component) lowers consumption. With lower consumption, firms reduce employees. Those employees have lower incomes and cut spending of their own, further reducing GDP. With lower GDP comes lower tax revenues that contribute to the deficit. Thus, this policy neither helps the economy nor lowers deficits -- and that's what the UK is learning the hard way.
Reducing government jobs that put a strain on the tax payers is a good thing. In the public sector there's way too many people getting paid too much to do too little. The more the pubic sector shrinks the more the private sector can grow.
Since you mentioned open boarders, I heard something on the news about Mexicans slowing down in their migrating due to lack of job opportunities in this recession. That was an eye opener.
Maybe the orator's secret plan is to starve em out??
Reducing government jobs that put a strain on the tax payers is a good thing. In the public sector there's way too many people getting paid too much to do too little. The more the pubic sector shrinks the more the private sector can grow.
That's just a silly meme with no evidence supporting it. (If you disagree, provide evidence.)
You sound like the people in "the Life of Brian," yelling, "what have the Romans ever done for us?" -- but in your case, it's "what has the government ever done for us?"
The fact is that government actions facilitate the private sector. As a small example, in the 18th and 19th centuries, the government built canals that made easy what was formerly a difficult job for manufacturers getting goods to market. In the 1950s, the government built the interstate highway system that vastly allowed the private sector to expand. Contrary to your theory that 'government activity shrinks the private sector,' electrification of rural areas by the government (because it was unprofitable for any private utility) vastly grew food production and farm wealth.
Moreover, the government also provides consumer confidence by inspecting meat, testing drugs and establishing standards. Those that believe that the government does no good believe in spoon-feed myths.
Second, then there is the matter of the size of the civil workforce. There are fewer federal employees now than in 2000, when population was less.
Third, who said anything about the stimulus money going to public employees? This is the where the stimulus money went:
Quote:
Look at the peak quarter of stimulus (pdf), which was the first quarter of 2010. I’m going to rearrange the categories a bit. Here’s how I read it: at annual rates (in other words, actual numbers in the quarter were only 1/4 as large), the total budget impact was $357 billion. Of that, we had:
Tax cuts and refundable tax credits: $151 billion
Aid to individuals (mainly unemployment insurance and food stamps): $70 billion
Aid to state and local governments: $103 billion
Everything else: $33 billion.
Those that really don't believe in government should go try living in Somalia for a while to get an understanding of what it's like not to have government.
If you look at the results of austerity in the UK under their conservative PM, it's nothing to emulate. David Cameron swept to power, he promptly cut spending, and, since then, the UK's economy--and tax revenues--have taken a dive.
When you cut spending, you also reduce future tax revenue, which defeats the purpose of trying to "close the deficit" in the first place.
The austerity argument--that "business confidence" will spike as soon as everyone sees that the government is finally getting its fiscal house in order--is a crock: Despite UK prime minister David Cameron's slashing and burning, no one's confident, and the government just had to revise its growth expectations downward.
The UK example is prime evidence that the conservative voodoo that the GOP is trying to sell in the U.S. that cutting spending is going to increase employment, is baseless as policy and has nothing but slogans -- and not evidence -- supporting it. Focusing on cutting spending, which increases unemployment and further reduces revenues which cause greater deficits makes no economic sense.
that depends on how radically you cut spending, and what condition the economy is in when you do the spending cuts. for instance when government spending was cut radically in 1921, it actually helped the economy. today that kind of spending cut will hurt the economy, but a 15% cut in spending wont. and neither will the elimination of ridiculous spending programs that have been on the books for decades but are no longer needed, and many of the spending that was done as a result of the steal from us package passed by congress in 2009, you know the one where obama promised that we had to have it so that the unemployment rate didnt go above 8%, and later obama admitted that the "shovel ready projects" were not so shovel ready after all, and then he laughed about it.
You see it in places like Europe and Asia. Even Canada. All of them are adopting and promoting a conservative economic plan.
How come liberals in the US seem to be the only one's opposed to getting our act together, financially?
What's the deal?
Compared to European Conservatives US liberals look like rightwingers. Furthermore since when has Europe been adopting and promoting a conservative economic plan? Though I guess since Conservatives are running those countries it must be a Conservative economic plan. More and more European countries are approaching default.
As to Asia China has been implementing economic stimulus after economic stimulus. Where as our infrustructure is crumbling and we are too cheap to repair it China is building entire cities no one lives in.
Last edited by Randomstudent; 07-16-2011 at 02:51 PM..
You see it in places like Europe and Asia. Even Canada. All of them are adopting and promoting a conservative economic plan.
How come liberals in the US seem to be the only one's opposed to getting our act together, financially?
What's the deal?
Comparing the economies of other countries to the US is rather ridiculous. You can't apply the same approach universally and expect nirvana, but then I read plenty of ignorant stuff from conservatives on this forum.
Quote:
Originally Posted by malamute
I think liberals are hell-bent on making the USA into the world's flop house.
Just like they want open borders and allow anyone to come here and be allowed to access the government handouts or be allowed to take what few jobs exist out there ahead of American citizens who are to remain on unemployment.
Liberals don't believe any amount of debt could be a problem and they believe that there are limitless dollars to confiscate from working Americans.
You don't know Jack. The economy right now is not Obama's fault, nor is it even Bush2's fault. The bankers are steering our economy and they own whichever person/party is in the Oval Office. No rational person would take your extremist view seriously because it's so over-the-top ignorant. It's like all those other conservatives that say that liberals love abortions, liberals love living on other people's money, liberals want society to collapse, and then your "liberals love debt" (or words to that effect). I mean c'mon. Learn how to argue a real point instead of making up stupid claims that serve to embarrass you. If liberals don't care about debt, how do you explain Reagan and Bush2's meteoric additions to the national debt? Black and white thinking should be saved for binary code, not politics and other human concerns.
Comparing the economies of other countries to the US is rather ridiculous. You can't apply the same approach universally and expect nirvana, but then I read plenty of ignorant stuff from conservatives on this forum.
You don't know Jack. The economy right now is not Obama's fault, nor is it even Bush2's fault. The bankers are steering our economy and they own whichever person/party is in the Oval Office. No rational person would take your extremist view seriously because it's so over-the-top ignorant. It's like all those other conservatives that say that liberals love abortions, liberals love living on other people's money, liberals want society to collapse, and then your "liberals love debt" (or words to that effect). I mean c'mon. Learn how to argue a real point instead of making up stupid claims that serve to embarrass you. If liberals don't care about debt, how do you explain Reagan and Bush2's meteoric additions to the national debt? Black and white thinking should be saved for binary code, not politics and other human concerns.
that depends on how radically you cut spending, and what condition the economy is in when you do the spending cuts. for instance when government spending was cut radically in 1921, it actually helped the economy. today that kind of spending cut will hurt the economy, but a 15% cut in spending wont. and neither will the elimination of ridiculous spending programs that have been on the books for decades but are no longer needed, and many of the spending that was done as a result of the steal from us package passed by congress in 2009, you know the one where obama promised that we had to have it so that the unemployment rate didnt go above 8%, and later obama admitted that the "shovel ready projects" were not so shovel ready after all, and then he laughed about it.
The 1921 recession was a different kind of recession that bears no resemblance to today's recession and has few useful lessons for the kind of slump we’re facing now. The 1920-21 recession was basically an inflation-fighting recession. What you had was a postwar bulge in prices, which was then reversed.
Instead, it looks like the 1981-82 period: a recession was brought on by tight monetary policy aimed at limiting inflation, and was followed by a rapid recovery when monetary policy was relaxed. Scholars can argue whether fiscal policy played much of a role because the government wasn't much of a consumer back then.
The 1921 recession was a different kind of recession that bears no resemblance to today's recession and has few useful lessons for the kind of slump we’re facing now. The 1920-21 recession was basically an inflation-fighting recession. What you had was a postwar bulge in prices, which was then reversed.
Instead, it looks like the 1981-82 period: a recession was brought on by tight monetary policy aimed at limiting inflation, and was followed by a rapid recovery when monetary policy was relaxed. Scholars can argue whether fiscal policy played much of a role because the government wasn't much of a consumer back then.
actually we can learn fro every recession if we are willing to take the time and study them, see what worked and what didnt. and you are right, it is different from what is going on today. perhaps a better case to study for this recession is the great depression. all the spending the hoover and FDR did to try and get us out of the depression failed as it is failing now. couple that with increasing taxes during the depression, which is what obama wants to do now, and constantly adding regulations, which is what obama is doing now, and demonizing business, FDR and obama both did and are doing that, all creates a complete lack of confidence in the economy, and without confidence as to what is going to happen in the near future and later on as well, business is not going to expand, and start ups are not going to happen much.
in either case it is the government that is causing the problems we have right now. i said back in 2008 when the fiscal crisis first hit that the basics of our economy were sound, even though the economy was in recession. that is less true today than it was then. i also said if the government makes the right moves, the economy will rebound fairly quickly, but if they dont then this will last for some time to come. well the government has made all the wrong moves since 2008 by trying to prop up the economy rather than let it crash fully like it should have, and then rebuild naturally.
we had banks that were too big to fail, and we had to save gm and chrysler because we couldnt let the country that invented the automobile lose its auto industry(obamas words not mine as i know that germany was where the first viable automobile was created in 1886 by carl benz).
in the end profligate government spending, higher taxes, printing money out of thin air, and more regulation is only going to kill the economy by causing higher prices, and more unemployment. we have to fix the systemic problems in the way government does its job or regardless of whether or not we get spending under control, this economy will crash.
The monthly data for industrial production show a near three-year collapse under President Hoover, ending when FDR came to office in March 1933. Production rocketed by 44 percent in the first three months of the New Deal and, by December 1936, had completely recovered to surpass its 1929 peak.
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. More and more European countries are approaching default.
