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Why base it on GDP? If we build a missle and blow it up the next day GDP improves. big deal
Keep ignoring the fact that the people could not purchase quality goods.
Another example why left wing kooks are wrong, if the government borrows trillions of dollars increasing the debt, and then spends it, it bumps the GDP up today, but this also means future GDP would have to decrease as the government needs to pay the funds back and the borrowed interest.
They dont ever think long term about negative ramifications of their programs.. Its all about "today".. Very short sighted
GDP had recovered well before that, as had many other economic factors. Unemployment might have reached single digits as early as 1938 or 1939, except for FDR's pledge to control deficits in 1937 (sounds familiar). Spending cuts caused employment to go back up again because the private sector employment had not recovered (also sounds familiar, and perhaps more familiar if more cuts go through).
Not control deficits, just control.
The reason for the double dip was FDR made the same mistake twice. He raised wages in certain industries again. Wages jumped 11 percent in one year. The steel industry saw a 33 percent increase in 6 months. Items that could barely be purchased were now out of range for those NOT receiving the wage hikes since prices now went up because of the wage hikes. Prices rose and only those that could afford the higher prices did not feel the affects.
The Tax on Undistributed Profits took money away that companies use in down times to retain employees and use in technology.
The SS payments took money out of the hands of the private sector, the job creaters.
The Fed took more money out of circulation by making banks have higher reserves.
Another example why left wing kooks are wrong, if the government borrows trillions of dollars increasing the debt, and then spends it, it bumps the GDP up today, but this also means future GDP would have to decrease as the government needs to pay the funds back and the borrowed interest.
They dont ever think long term about negative ramifications of their programs.. Its all about "today".. Very short sighted
Basically, the left wing has no understanding of cause and effect. If they did and where honest with the results there would be no left wing.
The difference was that the 2009/2010 stimulus was geared differently. Remember, the GOP members of the Senate demanded 40% of the stimulus be converted into tax-cuts. Another chunk was aid to the states to avoid layoffs.
Yeah, well, Keynes said tax cuts, government spending and works projects are the was to recover from a depression. It appears war is far more efficient.
The reason for the double dip was FDR made the same mistake twice. He raised wages in certain industries again. Wages jumped 11 percent in one year. The steel industry saw a 33 percent increase in 6 months. Items that could barely be purchased were now out of range for those NOT receiving the wage hikes since prices now went up because of the wage hikes. Prices rose and only those that could afford the higher prices did not feel the affects.
This is not the likely cause.
The fact is that WPA was cut in the summer of 1938, and unemployment rose by 5 percent in the following six months. That's a pretty strong tip about what caused what. Demand for labor doesn't just drop five percent for no reason. It only drops that far that fast when employers in the private sector face a sudden, unexpected crisis (financial meltdown, widespread credit freeze, bank failures -- that kind of stuff). There was nothing in the private sector that happened like that.
What happened is that the country at that time was dependent on federal dollars for employment. Government put people to work where the private sector did not. When the government shuttered production, unemployment rose with it. Almost instantaneously. There's not even a credible debate about this. Anything to the contrary is a rewrite of history.
Quote:
Originally Posted by Loveshiscountry
The Tax on Undistributed Profits took money away that companies use in down times to retain employees and use in technology.
This is complete and utter nonsense. I'm sorry, mate. I've been an employer, and I'll tell you straight up: in the private sector, nobody gets hired and retained in down times for the heck of it. Well, except for the family business, or the owners who have completely lost touch with reality and don't plan on staying in business much longer. Otherwise, it's very simple: the private sector acts according to the laws of supply and demand. If consumer demand goes down, there is no reason to 'retain employees around in down times.' In down times, companies aren't looking to retain employees, nor or they necessarily looking to use technology; they're looking to increase demand. That means competing with value, either with more service, lower prices, or better products, or a combination of all three.
Quote:
Originally Posted by Loveshiscountry
The SS payments took money out of the hands of the private sector, the job creaters.
The Fed took more money out of circulation by making banks have higher reserves.
The SS payments increased taxes, which was a bummer, but it also redistributed money and put it in the hands of consumers, which, in most cases, increased overall consumer demand. We're talking about averages here: there are surely regions in the country that were not particularly sensitive to the rise in social spending, one way or the other.
You mean like FDR tried to do? Are ignoring the fact that crops were plowed under because FDR would not allow them to be sold at a lower price?
You can make comparison between successful policies and ones that are not successful during similar circumstances.
Perhaps you could post a link to that first statement? FDR introduced the commodities program to give food to people (precursor to food stamps) to give farmers a market for their products.
As far as the second statement, like someone said upthread, it all ties together. It's still "Crystal Ball Economics".
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