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I also see a lack of understanding of macro economics -- people don't understand demand side recession. We have high unemployment because demand (sales) are down and business does not need labor nor a need to buy machines that would increase capacity. They already have enough capacity.
Speaking of someone who doesnt understand macro economics..
YOU CANT REMOVE HUNDREDS OF BILLIONS OF OF THE ECONOMY AND THEN EXPECT PEOPLE TO SPEND MONEY THAT ISNT THERE
Just what dept. are you talking about paying or did you mean debt??????
Foodstamp disbursements are miniscule compared to our national debt.....and you just meant abusers......same with welfare....so the amount would be but a fraction of the total "system".
Stop Corporate subsidies(welfare)......that may save a bit more money and mainly just hurt those poor CEO's receiving food stamps; so they can survive their bad and greedy business decisions that nearly destroyed our economy. .
Thanks big rep 4u.
U know Im amazed at posters here who post 24/7, yet claim to "own their own business" ....lol. The far right on this forum must get paid to post here, the rest of us are at university or work. Thanks again Pittston
I pay my own way , own property, and dont post from Mom and dads basement computer...lol.
Leaving money in people's pockets, borrowing it, or taking it from existing tax revenue to push it out into the economy does not, in fact, remove it from the economy. In the long-term it must be repaid, so it is removing some of it in the sense, but ideally the economy is churning and generating revenue to pay the debt during a non-crisis period.
You seem to not understand the difference between short-term stimulus when jobs are being lost or not created and long-term payment when private jobs are being created.. Same problem with that study you think proves your point and why a vast majority of economists agree with us and not you.
Bit by bit we’re getting information on the Obama stimulus plan, enough to start making back-of-the-envelope estimates of impact. The bottom line is this: we’re probably looking at a plan that will shave less than 2 percentage points off the average unemployment rate for the next two years, and possibly quite a lot less. This raises real concerns about whether the incoming administration is lowballing its plans in an attempt to get bipartisan consensus.
In the extended entry, a look at my calculations.
The starting point for this discussion is Okun’s Law, the relationship between changes in real GDP and changes in the unemployment rate. Estimates of the Okun’s Law coefficient range from 2 to 3. I’ll use 2, which is an optimistic estimate for current purposes: it says that you have to raise real GDP by 2 percent from what it would otherwise have been to reduce the unemployment rate 1 percentage point from what it would otherwise have been. Since GDP is roughly $15 trillion, this means that you have to raise GDP by $300 billion per year to reduce unemployment by 1 percentage point.
Now, what we’re hearing about the Obama plan is that it calls for $775 billion over two years, with $300 billion in tax cuts and the rest in spending. Call that $150 billion per year in tax cuts, $240 billion each year in spending.
How much do tax cuts and spending raise GDP? The widely cited estimates of Mark Zandi of Economy.com indicate a multiplier of around 1.5 for spending, with widely varying estimates for tax cuts. Payroll tax cuts, which make up about half the Obama proposal, are pretty good, with a multiplier of 1.29; business tax cuts, which make up the rest, are much less effective.
In particular, letting businesses get refunds on past taxes based on current losses, which is reportedly a key feature of the plan, looks an awful lot like a lump-sum transfer with no incentive effects.
Let’s be generous and assume that the overall multiplier on tax cuts is 1. Then the per-year effect of the plan on GDP is 150 x 1 + 240 x 1.5 = $510 billion. Since it takes $300 billion to reduce the unemployment rate by 1 percentage point, this is shaving 1.7 points off what unemployment would otherwise have been.
Finally, compare this with the economic outlook. “Full employment†clearly means an unemployment rate near 5 — the CBO says 5.2 for the NAIRU, which seems high to me. Unemployment is currently about 7 percent, and heading much higher; Obama himself says that absent stimulus it could go into double digits. Suppose that we’re looking at an economy that, absent stimulus, would have an average unemployment rate of 9 percent over the next two years; this plan would cut that to 7.3 percent, which would be a help but could easily be spun by critics as a failure.
And that gets us to politics. This really does look like a plan that falls well short of what advocates of strong stimulus were hoping for — and it seems as if that was done in order to win Republican votes. Yet even if the plan gets the hoped-for 80 votes in the Senate, which seems doubtful, responsibility for the plan’s perceived failure, if it’s spun that way, will be placed on Democrats.
I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.â€
Let’s hope I’ve got this wrong.
Quote:
Originally Posted by pghquest
Speaking of someone who doesnt understand macro economics..
YOU CANT REMOVE HUNDREDS OF BILLIONS OF OF THE ECONOMY AND THEN EXPECT PEOPLE TO SPEND MONEY THAT ISNT THERE
I think that comment shows how little you know. Money isn't being removed from the economy. The government isn't crowding out private investment -- proof is how low interest rates are. The government isn't taxing either. So where is the government removing the money from?
Leaving money in people's pockets, borrowing it, or taking it from existing tax revenue to push it out into the economy does not, in fact, remove it from the economy.
It sure in the hell DOES remove the money out of the economy.. WHERE THE HELL DO YOU THINK IT COMES FROM? There is a reason they have debt auctions all the time, its to REMOVE MONEY from from the economy, and put it in the governments pocket..
Quote:
Originally Posted by Bluefly
In the long-term it must be repaid, so it is removing some of it in the sense, but ideally the economy is churning and generating revenue to pay the debt during a non-crisis period.
And if the government is removing the money from the economy, through the treasury auction process, then what money is left to invest and expand businesses? The fact is investors have to BUY the treasuries, which REMOVES THE MONEY FROM THE ECONOMY
And your ideally the economy is churning and generating revenues to pay the debt, this is also false, because the CBO projects long term negative effects of the stimulus bill. Their reports actually say it will lower the GDP .2% beginning somwhere around 2019. If the GDP is lower because of the stimulus, there is not "more" to pay back.
Quote:
Originally Posted by Bluefly
You seem to not understand the difference between short-term stimulus when jobs are being lost or not created and long-term payment when private jobs are being created..
I very much understand the difference, and I've read just about every single report involved with dealing with the issue. And numerous reports lately have said the stimulus bill actually LOWERED jobs that would have been created, 550,000 jobs to be exact.. http://web.econ.ohio-state.edu/dupor/arra10_may11.pdf
You cant take money out of the economy, remove the amount of equity which would normally get invested, and then think you are going to improve a dam thing because you dont.. You tighten the money supply, you make less money float into the economy, and you REDUCE the amount of spending which LOWERS jobs..
I guess even I can get my facts wrong. Lie? Isn't that a bit harsh? Invite your mother for Thanksgiving because you forgot the manners she taught you.
When you talk so factual, and the talk is WRONG.. yes, its a lie... I even linked you to the report to show the job projection chart used, and it quotes slighly under $800B in spending..
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Originally Posted by MTAtech
Let's also be aware that Paul Krugman predicted all this in Jan 2009:
And many others have been predicting this since early 2000's... Bush being one of them..
Quote:
Originally Posted by MTAtech
I think that comment shows how little you know. Money isn't being removed from the economy. The government isn't crowding out private investment -- proof is how low interest rates are. The government isn't taxing either. So where is the government removing the money from?
Bull ****.. The Government puts their bonds up for auction through the US Treasury, and this is open to investors to buy.. When investors are buying bonds, they ARENT buying other assets.. The low interest rates are to try to encourage borrowing, and it keeps the us treasury rates low.
If you borrow $1 trillion dollars from the economy, and then put it back in as spending, you haven’t added anything. You’ve just created a huge debt for the taxpayers at the same time that they are trying to lessen debt in the private sector.
It sure in the hell DOES remove the money out of the economy.. WHERE THE HELL DO YOU THINK IT COMES FROM? There is a reason they have debt auctions all the time, its to REMOVE MONEY from from the economy, and put it in the governments pocket..
And if the government is removing the money from the economy, through the treasury auction process, then what money is left to invest and expand businesses? The fact is investors have to BUY the treasuries, which REMOVES THE MONEY FROM THE ECONOMY
And your ideally the economy is churning and generating revenues to pay the debt, this is also false, because the CBO projects long term negative effects of the stimulus bill. Their reports actually say it will lower the GDP .2% beginning somwhere around 2019. If the GDP is lower because of the stimulus, there is not "more" to pay back.
I very much understand the difference, and I've read just about every single report involved with dealing with the issue. And numerous reports lately have said the stimulus bill actually LOWERED jobs that would have been created, 550,000 jobs to be exact.. http://web.econ.ohio-state.edu/dupor/arra10_may11.pdf
You cant take money out of the economy, remove the amount of equity which would normally get invested, and then think you are going to improve a dam thing because you dont.. You tighten the money supply, you make less money float into the economy, and you REDUCE the amount of spending which LOWERS jobs..
Haha. Just because you scream something over and over, doesn't make it true. I truly just don't think you understand where stimulus money comes from.
Once again - you reveal you don't grasp the intention of stimulus. It's not meant to be a long-term benefit. Everybody knows in the long-term stimulus spending has a negative impact. It's designed to get through a crisis and is used by every developed nation.
Again - long-term versus short-term. You keep SCREAMING about how horrible it is because you act like a job created in 2013 is the same as one created in the depth of a financial crisis.
Haha. Just because you scream something over and over, doesn't make it true. I truly just don't think you understand where stimulus money comes from.
You ignoring the fact that the money was borrowed, doesnt mean it wasnt borrowed.. Man would I like what you say is true, the tens of millions I've borrowed, I can simply pretend isnt a debt.. What land do you live in that this is true, I'm moving there
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Originally Posted by Bluefly
Once again - you reveal you don't grasp the intention of stimulus. It's not meant to be a long-term benefit. Everybody knows in the long-term stimulus spending has a negative impact. It's designed to get through a crisis and is used by every developed nation.
I know dam well what the "intention" of the stimulus was.. It doesnt matter if it was meant to be a short term benefit because IT WASNT.. This is a prime example of how Democrats play their supporters as fools.. You think we can create debt by borrowing, proclaim you are creating jobs, while pretending that the money wasnt removed from the economy to begin with.. Adding 500,000 government jobs, and reducing 1,000,000 private industry jobs, does not = a net job producer.. Taking money out of the economy through selling of treasuries, doesnt get the nation through a crisis, it simply removes the amount of money that normally would have been used to buyup bankrupt office buildings, housing, businesses, you know, things that would have pumped up the economy
There is no coincidence that countries that DIDNT employ this strategy, had much greater economic growth than countries that do, and now that the stimulus spending is over, our country is starting to recover. This plan has NEVER worked in the history of man kind. Insanity, its doing the same thing over and over again, but expecting different results. That sums up this plan perfectly.
Quote:
Originally Posted by Bluefly
Again - long-term versus short-term. You keep SCREAMING about how horrible it is because you act like a job created in 2013 is the same as one created in the depth of a financial crisis.
Ooh here, lets try a math problem for you..
Construction job, slated to be started in 2013, but because of the stimulus package, it was done in 2009.. What is the NET job increase from that job? ZERO.. If the construction project was supposed to create 100 jobs in 2013, it created 100 jobs in 2009, and in 2013, the number of jobs it will create is ZERO.. If you MOVE when a job is done, the NET boost to the job market is ZERO.. Elementary math is all thats needed for this equation..
Quote:
Originally Posted by Bluefly
Study up on these topics and then get back to me.
I have studied greatly the subject.. this method of stimulating has NEVER EVER EVER worked and reports lately have indicated that what I said was going to happen years ago, is EXACTLY what is happening..
Did you even read the report I linked to showing the JOB LOSSES because of the stimulus bill? Considering you replied 3 minutes after I posted, I doubt it
Haha. Just because you scream something over and over, doesn't make it true. I truly just don't think you understand where stimulus money comes from.
Do you? Obviously NOT. But I'll tell you - it eventually comes from the taxpayer.
So..obama took $1+ trillion from the taxpayer and distributed to a long, varied list of pet liberal projects...that didn't create a dang thing.
Once again - you reveal you don't grasp the intention of stimulus. It's not meant to be a long-term benefit. Everybody knows in the long-term stimulus spending has a negative impact. It's designed to get through a crisis and is used by every developed nation.
My god. Are you AWARE that obama's stimulus still has money left over, that the impact was supposed to dissipate late 2010? It is WRONG to even call his porkulus a "stimulus". Stimulus, by the very definition, means IMMEDIATE stimulus/impact to the economy, which we all know his porkulus did not achieve.
Again - long-term versus short-term. You keep SCREAMING about how horrible it is because you act like a job created in 2013 is the same as one created in the depth of a financial crisis.
Study up on these topics and then get back to me.
My gosh, he's totally owned the debate on the subject...and you don't even realize it.
Quote:
Did you even read the report I linked to showing the JOB LOSSES because of the stimulus bill? Considering you replied 3 minutes after I posted, I doubt it
They never do. They get their talking points and "truth", "facts" from the White House....even though the numbers have been thoroughly debunked and exposed as fraudulent ages ago.
Excellent points, as usual.
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big rep 4u.
Are you AWARE that obama's stimulus still has money left over, that the impact was supposed to dissipate late 2010? It is WRONG to even call his porkulus a "stimulus". Stimulus, by the very definition, means IMMEDIATE stimulus/impact to the economy, which we all know his porkulus did not achieve. 
