Is there any evidence to support that government spending will improve the economy?
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Perhaps no one, if the government can contract with a private industry that can provide an essential service better and at a lower price - which it often does. Private sector outfits have to compete for the jobs. That's capitalism.
OK. So the government contracts with a private company. That private company is paid by money from the government. That money comes from...
The taxpayers, who get the same service better and cheaper than if they would pay the government to do it themselves.
Net savings.
Happens all the time, every day. Like I said above, when it works, it doesn't make news.
Let's break it down.
1) A lot of these contractors are unnecessary. Regardless if it's done cheaper or not, that doesn't change the facts that government creates a misallocation by paying private contractors. Defense contractors are a prime example, they cost billions of dollars to the government and produce nothing of value to the average American. Just because they're a contractor and have to compete for such contracts making it cheaper, doesn't mean it still isn't expensive or that the economic priniciple behind it is changed.
2) There are no "savings" because the government is still shelling out billions for meaningless work and the military industrial complex.
No, SOME of them are likely unnecessary. How many that is depends on the legal procurement structure of the government entity doing the service procurement.
Florida, for example, is pretty strict and everything has to be done in full view of the public. Other states...have systems more prone to corruption.
Run a tight ship and it's not a problem. Sadly, the Feds do not run a tight ship. That can and should be changed.
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Regardless if it's done cheaper or not, that doesn't change the facts that government creates a misallocation by paying private contractors.
That's a gross generalization. But...
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Defense contractors are a prime example, they cost billions of dollars to the government and produce nothing of value to the average American
This is a good example. Now which party keeps funding these thieves? Most procurement doesn't happen that way, and consequently you never hear about it.
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Just because they're a contractor and have to compete for such contracts making it cheaper, doesn't mean it still isn't expensive or that the economic priniciple behind it is changed.
Doesn't mean it isn't, either. The real world doesn't live by absolutes.
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2) There are no "savings" because the government is still shelling out billions for meaningless work and the military industrial complex.
Sheesh.
Sometimes there are savings, sometimes not. Again with the absolutes. With proper oversight, you will get savings.
No, SOME of them are likely unnecessary. How many that is depends on the legal procurement structure of the government entity doing the service procurement.
Florida, for example, is pretty strict and everything has to be done in full view of the public. Other states...have systems more prone to corruption.
Run a tight ship and it's not a problem. Sadly, the Feds do not run a tight ship. That can and should be changed.
That's a gross generalization. But...
This is a good example. Now which party keeps funding these thieves? Most procurement doesn't happen that way, and consequently you never hear about it.
Doesn't mean it isn't, either. The real world doesn't live by absolutes.
Sheesh.
Sometimes there are savings, sometimes not. Again with the absolutes. With proper oversight, you will get savings.
Anyway, back to the topic of whether or not the stimulus provided true economic growth, and not just a bump in the GDP numbers.....
Anyway, back to the topic of whether or not the stimulus provided true economic growth, and not just a bump in the GDP numbers.....
There were approximately 2.4 million fewer Americans working in June 2011 than there were when President Barack Obama signed the economic stimulus bill on Feb. 17, 2009, according to data from the Bureau of Labor Statistics (BLS).
According to the BLS, there were approximately 141.68 million people counted as “employed” in America back in February 2009. By June of 2011, that number had fallen to approximately 139.33 million, yielding a net reduction in jobs of approximately 2.4 million.
When the economic stimulus – the American Recovery and Reinvestment Act -- was created, Obama promised that the then-$787-billion spending package would create or save 3.5 million jobs, saying it would preserve the “American dream” for millions of people.
August marks the 31st straight month that unemployment has been higher than the 8 percent level Obama promised it would stay below when the stimulus was signed.
The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.
What I want to know though, is did this really improve the economy and not just the GDP number?
What methods do you use to distinguish between these two concepts?
For example, take the housing bubble. It was built on bullsh*t and lies, but for a short period of time, it increased our private sector, our GDP, and it employed many, many people. A lot of wealth was created in the form of increased housing prices, and a lot of wealth was destroyed in the form of a declining currency.
When looking at the 2004-2007 period, how do you distinguish between the bubble, and the "real" economy?
It seems to me that if you can elucidate an answer to that question, it will help you answer your own question about how to seperate "real" growth from simply "goosing the GDP" with debt and stimulus. All you need to do is apply the same logic you used to seperate the housing bubble from GDP, since the two events were very similar.
I am more than willing to admit that government spending, especially in the case of the stimulus, prevented a reduction in the GDP number and infact, may have contributed to its growth.
But is there any evidence that the economy improved.
Of course there is evidence. Obama spent $12 TRILLION and the economy grew $500 Billion.
Did the economy actually grow because Obama spent $12 TRILLION, or did it grow for other reasons?
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Originally Posted by VTHokieFan
What I want to know though, is did this really improve the economy and not just the GDP number?
GDP as measured is nonsensical. It does not factor in Cost Inflation.
The Commerce Department has been collecting usable information that would more accurately portray the economy for years, since at least 1994, and why they don't use that information, I don't know, but it would give a greater picture of what's actually happening.
Now that the stimulus money is gone we're back to talking about our crumbling infrastructure which should have gotten fixed with stimulus money but the red tape and duration prevented localities from doing the real infrastructure work.
The real infrastructure work needed (needing) to have been done would have costs us at least $2,000,000,000. The stimulus money, half of which was tax cuts, didn't come close to enough money.
Are you for the privatizing of public roads (i.e. a NAFTA superhighway across Texas) where the profits go to Spain or Australia? Do you think we can get fair contracts from private corporations where no additional taxpayer money will be spent on privately owned business ventures?
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