News: America's "War on Capitalism": Why More Govt. Stimulus Is a Bad Idea" (percentage, accounting)

[GraniteStater]

America's "War on Capitalism" Why More Govt. Stimulus Is a Bad Idea: Tech Ticker, Yahoo! Finance

[Lincolnian]

No more stimulus. Fund the "Shovel Ready" projects that were touted in the original stimulus and put real people to work fixing our crumbling roads and bridges. Stop lining up additional government bureaucrats to meter out the cash and use the existing personnel instead.

[subsound]

People can shout about it all they want, but it's not socialism...it's Keynesian economics. It helps the bad times by stimulating the economy by replacing the consumer, it worked for the great depression and the destruction in Europe in WW2. If it is socialism you would have to say most of the worlds economies from 1929 to 1972 were socialist (including the US), and they were more controlled at that point as well.

It's never good to go spending so much into debt, but on the other hand the debt is not entirely Obama's child after 6 months in office. People tend to ignore that it has been running for more then 7 decades. It was at it's lowest point under Carter, increased from 40% GDP to 70% GDP under Reagan, and under Clinton there was a budget surplus (from Bush Sr.'s tax increases and economic boom) that was being used to pay off the national debt that then re inflated under Bush Jr (U.S. National Debt Graph: Since Great Depression). It's still much lower now as a percentage of GDP then under Truman.

[floridasandy]

Originally Posted by subsound

People can shout about it all they want, but it's not socialism...it's Keynesian economics. It helps the bad times by stimulating the economy by replacing the consumer, it worked for the great depression and the destruction in Europe in WW2. If it is socialism you would have to say most of the worlds economies from 1929 to 1972 were socialist (including the US), and they were more controlled at that point as well.

It's never good to go spending so much into debt, but on the other hand the debt is not entirely Obama's child after 6 months in office. People tend to ignore that it has been running for more then 7 decades. It was at it's lowest point under Carter, increased from 40% GDP to 70% GDP under Reagan, and under Clinton there was a budget surplus (from Bush Sr.'s tax increases and economic boom) that was being used to pay off the national debt that then re inflated under Bush Jr (U.S. National Debt Graph: Since Great Depression). It's still much lower now as a percentage of GDP then under Truman.

that is simply not true. at no time did we have a budget surplus. our debt has been steadily increasing, no matter which president was in the white house. the real danger is that we have had a steadily decreasing manufacturing sector which our government does not seem to take into account with its massive spending agenda, and with a negative growth GDP (which we have now) our economy is at serious risk.

[subsound]

Originally Posted by floridasandy

that is simply not true. at no time did we have a budget surplus. our debt has been steadily increasing, no matter which president was in the white house. the real danger is that we have had a steadily decreasing manufacturing sector which our government does not seem to take into account with its massive spending agenda, and with a negative growth GDP (which we have now) our economy is at serious risk.

We had to have budget surpluses at some point in history or else the total deficit built in Truman's era (at over 120% GDP) would have only grown bigger, but it shrunk through several presidencies till Reagan came to office at 40% of GDP. It didn't just grow out of it, at a low 3% interest rate on the debt over 30 years the US would have to maintain over an 8% growth rate per year (no recessions or faltering or change in interest rates) for those 30 years in order to just grow out of it...with an economy this size it's not possible.

I think you have your terms mixed up, the deficit was still there (you can't take that away in 3 years) but the revenue exceeded expenses. Not nearly what people say at $559 Billion, the biggest projection was at the end of the bubble, but still a surplus over expenditures for that year.

"Clinton presided over the longest period of peace-time economic expansion in American history, which included a balanced budget and a reported federal surplus.[6][7] Based on Congressional accounting rules, at the end of his presidency Clinton reported a surplus of $559 billion."
Bill Clinton - Wikipedia, the free encyclopedia

[hindsight2020]

Furthermore, Keynesian economics DID NOT WORK. It is the biggest wishful thought in the history of economic theory and it's bunk. It did not get us out from the great depression and it's not going to get us out of this one either. You cannot borrow your way back up from debt and you cannot place the burden of solvency on the fiat itself, that's the textbook definition of being insolvent. Bookie will cometh soon and then we'll be hosed. In the mean time the govt tells the people all is well with the world while it bails out his true masters (the banking cartel and international financiérs) and appeases the masses with empty rhetoric while it desperately prays to Jesus and Mary that another inflationary bubble takes over and brings the status quo back to the conscience of the populace, in this case "green technology" is the flavor of the year, like clockwork.

Like an instructor pilot told a classmate of mine, back when we were back in Air Force pilot training, as it pertained to his apparent inability to fly acro to standards: "Johnnie, come checkride time, my advice to you is to close your eyes and pull, you'll have as good a chance as you have now". In essence, this administration might as well close its eyes and pull and that be just as good a crapshoot as the belief keynesian economics is anywhere a suitable solution to our economic flying bag of dog poo.

[subsound]

Originally Posted by hindsight2020

Furthermore, Keynesian economics DID NOT WORK. It is the biggest wishful thought in the history of economic theory and it's bunk. It did not get us out from the great depression and it's not going to get us out of this one either.

Um, know something before you post it...makes your points easier to defend.

"Keynes's ideas influenced Franklin D. Roosevelt's view that insufficient buying-power caused the Depression. During his presidency, Roosevelt adopted some aspects of Keynesian economics, especially after 1937, when, in the depths of the Depression, the United States suffered from recession yet again following fiscal contraction. But to many the true success of Keynesian policy can be seen at the onset of World War II, which provided a kick to the world economy, removed uncertainty, and forced the rebuilding of destroyed capital. Keynesian ideas became almost official in social-democratic Europe after the war and in the U.S. in the 1960s."

Keynesian economics - Wikipedia, the free encyclopedia

"After World War II, the authors believe the work of economist John Maynard Keynes came to be widely accepted in Western economies. Keynes believed in government regulation of the economy, and the authors underline this as Keynes' great influence and prestige. In the authors' opinion, these so-called "commanding heights" were often owned or severely regulated by governments in accordance with Keynes' ideas.

The authors then discuss how the political change of the 1980s ushered in a change of economic policy."

Commanding Heights: The Battle for the World Economy - Wikipedia, the free encyclopedia


I don't think Keynes is a good theory, it helps when you are in severe economic hardships but hangs around like a dead woodchuck when times are good (even worse when people don't pay the money back). I'd rather bring a more free market approach, but still not socialism.

The other factor is, what else are you going to do about the recession? If the government wasn't injecting money into the economy, saving banks and the big auto companies, even more people would be out of work. Provide another solution if you don't like what's happening. Just being a critic is easy and chanting figure something else out to those in economic control...having actual solutions is hard.

[floridasandy]

Originally Posted by subsound

We had to have budget surpluses at some point in history or else the total deficit built in Truman's era (at over 120% GDP) would have only grown bigger, but it shrunk through several presidencies till Reagan came to office at 40% of GDP. It didn't just grow out of it, at a low 3% interest rate on the debt over 30 years the US would have to maintain over an 8% growth rate per year (no recessions or faltering or change in interest rates) for those 30 years in order to just grow out of it...with an economy this size it's not possible.

I think you have your terms mixed up, the deficit was still there (you can't take that away in 3 years) but the revenue exceeded expenses. Not nearly what people say at $559 Billion, the biggest projection was at the end of the bubble, but still a surplus over expenditures for that year.

"Clinton presided over the longest period of peace-time economic expansion in American history, which included a balanced budget and a reported federal surplus.[6][7] Based on Congressional accounting rules, at the end of his presidency Clinton reported a surplus of $559 billion."
Bill Clinton - Wikipedia, the free encyclopedia

you might want to take a look at these charts:
American Debtor Psycho: $49 Trillion in Debt. The Real Reason why the Credit Crisis is Bigger than you Think.

[subsound]

Originally Posted by floridasandy

you might want to take a look at these charts:
American Debtor Psycho: $49 Trillion in Debt. The Real Reason why the Credit Crisis is Bigger than you Think.

It's pretty similar in what it's trying to show, not as a % of GDP though but actual dollars. If you take the CPI from 1976 to 2009 and adjust $1 then it is now worth ~$3.78, that's a pretty big inflation just by the value of money, which makes at all increases grow pretty dramatically. A $9.2 trillion debt now would be equal to ~$2.43 trillion debt in 1976 dollars (using CPI), which is not good at all...but on the other hand much less alarmist then picking non adjusted money.

It shows pretty clearly as well the decrease in national debt (not much, but a little) at the end of Clinton's presidency, and the dramatic increase in debt during Bush Jr's presidency. Well before Obama was inaugurated.

[thatguy1]

Originally Posted by subsound

"Clinton presided over the longest period of peace-time economic expansion in American history, which included a balanced budget and a reported federal surplus.[6][7] Based on Congressional accounting rules, at the end of his presidency Clinton reported a surplus of $559 billion."
Bill Clinton - Wikipedia, the free encyclopedia

Which is easy to do given two fabricated market bubbles and the debt/deficit in those times. That is when the problems were created we are facing today...at least in part.