Why the Stimulus is Needed
One point becomes clear when looking at the current state of the US economy: without a stimulus we are in deep trouble. Consider the following points from the latest FOMC statement from the Federal Reserve:
Information received since the Committee met in December suggests that the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly. Conditions in some financial markets have improved, in part reflecting government efforts to provide liquidity and strengthen financial institutions; nevertheless, credit conditions for households and firms remain extremely tight. The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant.
Let's take a look at some charts to get more detail on the Federal Reserve's statements:
The year over year change in industrial production is approaching the rate of change of the mid 1970s recession.
Housing starts are at their lowest level in over 40 years
The year over year rate of change in employment is approaching the level of the 1980s double dip recession.
And this chart from a recent IMF report indicates that global industrial output and manufacturing shipments are falling off a cliff.
Let me add a few other data points:
The year over year rate of change in personal consumption expenditures are falling off a cliff. For an economy that depends on consumer spending for 70% of its growth, this is devastating.
In addition, the latest GDP report is not good:
The Bureau emphasized that the fourth-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4). The fourth-quarter "preliminary" estimates, based on more comprehensive data, will be released on February 27, 2009.
The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment that were partly offset by positive contributions from private inventory investment and federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
Let's look at this from another angle. The equation for GDP (Gross Domestic Product) is Consumer spending (C) + Investment (I) + Net Exports (E) + Government Spending (G) = GDP.
We've already covered personal consumption. It's dropping hard and fast (see the chart above). As for total private domestic investment, consider the following percentage changes from the preceding quarter starting in the 4th quarter of 2007: (-)11.9%, (-)5.8%, (-)11.5%, 0.4%, (-)12.3%. Because the US is a net importer the exports part of the equation is moot. That means the only thing holding up the US economy is government spending. And considering the mammoth drops in investment and consumer spending in the latest report (-12.3% and -3.5%, respectively) neither of these numbers appears ready to turnaround anytime soon.
Now -- let's look at several possibilities for action. First, let's do nothing. While no path is guaranteed, the following points illustrate the inherent problems of that course of action:
What would the economy look like without fiscal stimulus? ... The lack of stimulus means that the collapse in private spending drives the economy down much further. Without the stimulus, GDP growth stays negative for all four quarters of 2008 , and the year averages minus 3.6% growth, instead of minus 2.5%. And the recovery in 2010 is far more anemic, with growth of just 0.7%, instead of 2.2% in [IHS Global Insight's] baseline [forecast]. Without the stimulus, the unemployment rate rises to 10.2% in mid-2010, a full percentage point above the baseline. The loss of jobs is both deeper and more prolonged. Without stimulus, the cumulative loss in jobs peaks at 6.9 million in the second quarter of 2010, rather than at 5.0 million in the fourth quarter of 2009. -Nigel Gault, IHS Global Insight
There are some Republicans who are arguing that tax cuts are the answer. But there are several problems with that. The first is tax cuts were advertised as an engine of job creation in 2003 and we got one of the lowest rates of job creation on record:
President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. That's almost 22 months of recession during his 96 months in office.
His job-creation record won't look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton's administration and only slightly better than President George H.W. Bush did in his four years in office.
Here's a picture of the data:
In addition, recent history demonstrates that tax cuts will go to savings and paying down debt rather than consumption. In addition, there is little reason for business to invest in production right now:
Start with the tax side. The plan is to give a tax cut of $500 a year for two years to each employed person. That's not a good way to increase consumer spending. Experience shows that the money from such temporary, lump-sum tax cuts is largely saved or used to pay down debt. Only about 15 percent of last year's tax rebates led to additional spending.
The proposed business tax cuts are also likely to do little to increase business investment and employment. The extended loss "carrybacks" are primarily lump-sum payments to selected companies. The bonus depreciation plan would do little to raise capital spending in the current environment of weak demand because the tax benefits in the early years would be recaptured later.
That leaves pure spending. Professor Mark Thoma had a great excerpt on this topic recently. Consider the following:
Is Public Expenditure Productive?: From the 1930s to the late 1980s, macroeconomists viewed government spending as rather homogeneous. They asked whether government spending crowded out private investment, drove up interest rates, or spurred consumer spending. They argued whether funding government expenditures by taxation had different effects than funding by issuing new government debt. They gave relatively little attention, however, to the different ways the government spends its money-on defense, on roads, on food stamps, and so on. Economist David Aschauer of Bates College dramatically altered macroeconomists' view of government spending with a paper he wrote in 1989, however. Aschauer's analysis places a particular kind of government spending - nonmilitary public investments, such as roads - at center stage. Aschauer finds government investment is so important for private sector productivity that a decline in public sector investment might account for much of the productivity slowdown observed in the 1970s and 1980s.
Aschauer asks whether private sector productivity is improved by public sector investments, and whether public sector investments have a different effect on private sector productivity than does other government spending. He assumes a Cobb-Douglas style of production function and uses two dependent variables - output and a measure of productivity called "total factor productivity - to study the effects of government spending on productivity. Aschauer assumes that both output and productivity depend on labor, the private capital stock, the public nonmilitary capital stock (for example, roads), and, perhaps, on other government spending. He also allows output to depend on the intensity with which the capital stock is being used, as measured by the capacity utilization rate of the private sector.When Aschauer estimates an output equation that accounts for labor, capacity utilization, and a time trend, his Durbin-Watson statistic is 0.63. Either there is serial correlation in the model's underlying disturbances, or an important variable has been omitted. When Aschauer adds the public stock of nonmilitary capital to the output equation, the Durbin-Watson statistic no longer evidences serial correlation, and public capital becomes statistically significant. The public, nnonmilitary capital stock is also significant in Aschauer's productivity equation. Public investment expenditures translate into higher private sector productivity and higher private sector output.
Aschauer finds no evidence of public military capital raising output or productivity, nor does he find the flow of spending on on capital goods to have any effect on output or productivity. Public spending raises private sector productivity to the extent that public sector spending is on nonmilitary capital goods. How government spends its money matters! It is not government spending, as such, that spurs private productivity, but rather specific government investments in capital goods that makes the private sector more productive.
We could reasonably worry that that the direction of causation runs not from government spending to output, but the other way around, from output (which translates into income) to government spending. But if this were the reason for Aschauer's findings, we would expect both military and nonmilitary capital to reflect such an effect of output on expenditure. The fact that only public-sector spending on nonmilitary capital goods shows a link with output suggests that the effect we see reflects a causal effect running from nonmilitary capital to output, and not the other way around.
Let me add some real world examples. From my blog:
Ever wonder how China gets 10% growth? It's called infrastructure spending; in some ways they are essentially building new cities over there. Done properly it provides an incredible competitive advantage to a country. Also consider this: Asia has invested heavily in elementary education -- education through high school. Their education is stringent at those levels. Guess what? It made the work force incredibly productive and helped the economy as a whole.
There's an old maxim in business: you've got to spend money to make money. That's where we are now as a country. We've exhausted the possibilities of the buy-everything-you-can-on-the-planet school of economic thought. We're in debt up to out eyeballs -- we are in fact choking on all of the debt we have wrapped up in consumption. We need to change models. That means we need to invest in new technologies and improve our basic infrastructure to attract and support this new business. It's really that simple.
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The Bush administration's labor market record still remains the worst since the Hoover administration.
"Thanks to the Supreme Court, Bush managed to get one of the slightly less than 3 million (net) jobs created during his eight years in office. That's 375,000 jobs a year, the most pitiful record since 1939 when the Bureau of Labor Statistics started collecting the numbers.
Not just the worst record ever, mind you. But far worse. During Dwight Eisenhower's two terms, only 438,000 jobs were generated annually. But the population was half what it is now. During Bill Clinton's two terms, 2.9 million jobs were generated each year.
In the past 64 years, net job creation when Democrats were President totaled 57.5 million jobs. When a Republicans were, net job creation totaled 36.2 million jobs. But even that stark difference doesn't show the the whole picture. Republicans held the Presidency for 36 of those years, meaning they accounted for an average of just over 1 million jobs generated per year. The Democrats for just over 2 million jobs a year.
That's right, average annual job creation under Democratic presidencies since 1944 has been twice as good as under Republicans."
http://www.dailykos.com/storyonly/2009/1/9/152744/0270/240/682161
Comparing job creation numbers between Presidents is meaningless because dramatically more depends on the timing of the business cycle and economic fundamentals unrelated to Presidential policies than anything else. Comparing job creation between Democratic Presidencies and Republican Presidencies is completely meaningless as it gives no relevance to policy, what party controlled congress, innovation unrelated in any way to Presidential policy, and of course the timing of the business cycle. Note, for example, that the policies of Truman correlated in no way to those of LBJ, or that NIxon's policies were in no way similar to Reagans, or Clinton's were in no way similar to Carter's That simple analysis just means absolutely zero, nada, zilch.
The Republicans war on wages, unions, regulations, and the minimum wage has accomplished what it intended- weakening workers bargaining power, security, and wage rates.
"The results are simple: Democratic presidents have consistently higher economic growth and consistently lower unemployment than Republican presidents. If you add in a time lag, you get the same result. If you eliminate the best and worst presidents, you get the same result. If you take a look at other economic indicators, you get the same result."
Why? "Under Democratic presidents, every income class did well but the poorest did best.......Republicans were polar opposites. Not only was their overall performance worse than Democrats, but it was wildly tilted toward the well off. (What's more, the trendline is pretty clear: if the chart were extended to show the really rich — the top 1% and the top .1% — the Republican growth numbers for them would be higher than the Democratic numbers.)
In other words, Republican presidents produce poor economic performance because they're obsessed with helping the well off. Their focus is on the wealthiest 5%, and the numbers show it. At least 95% of the country does better under Democrats.
http://www.washingtonmonthly.com/archives/individual/2005_05/006282.php
"Democrats and Republicans have followed different approaches to the economy for as long as there have been Democrats and Republicans. According to “Unequal Democracy,” by Larry M. Bartels, a professor of political science at Princeton, Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats."
"That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut."
"It is well known that income inequality in the United States has been on the rise for about 30 years now .But Professor Bartels unearths a stunning statistical regularity: Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all."
"Beginning with the Reagan presidency, however, growth differences are smaller and tax and transfer policies have played a larger role. We know, for example, that Republicans have typically favored large tax cuts for upper-income groups while Democrats have opposed them. In addition, Democrats have been more willing to raise the minimum wage, and Republicans have been more hostile toward unions."
http://www.nytimes.com/2008/08/31/business/31view.html
"Professor Bartels of princeton, who wrote Unequal Democracy: The Political Economy of the New Gilded Age, found that income would be more equal today than in the 1950s had our national prosperity been shared under Republican presidents as it was under Democrats. Instead, our nation is increasingly one of haves and have-nots, mired in income inequality more severe than at any time since the days of robber barons."
"This is no surprise in light of the parties' differing views of workers and their rights. One dependable way for employees at the lower end of the income scale to demand a piece of increased productivity and profits is through joining unions or threatening to do so. Democrats traditionally are supportive of this while Republicans are generally hostile."
"Contrast that with the administration of President Bush, who has unleashed government to hobble unions and their organizing efforts. In just one illuminating example, Bush's 2009 budget request seeks 100 times more money to regulate unions than to ensure that employers follow wage and hour laws and other labor protections. In dollars per regulated entity, Bush has budgeted $2,500 per union and union local and only $26 per employer, according to the Economic Policy Institute."
http://tampabay.com/opinion/columns/article619262.ece
"President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. That’s almost 22 months of recession during his 96 months in office.
His job-creation record won’t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton’s administration and only slightly better than President George H.W. Bush did in his four years in office.
The current President Bush, once taking account how long he’s been in office, shows the worst track record for job creation since the government began keeping records." (Bush created 3 million jobs in eight years in office. At the same time the population grew by 22 million. His payroll expansion of 2.3% ties his father for the worst performance on record.)
http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/
The Bush to Clinton comparison looks like that because of the timing of the business cycle and the fact that Clinton began from a much lower base than Bush did.
"But Bush's tax cuts and spending increases — and clear disdain for the pay-as-you-go approach that had brought deficits down in the 1990s — brought a return to permanent deficits."
"When Reagan slashed taxes on capital gains and high earners in the early 1980s, inflation was pushing the middle class into top tax brackets, financial markets had been stuck in a funk for 15 years and income inequality had been declining for almost five decades. Bush came to Washington facing almost diametrically opposing economic conditions, yet he offered up the same solutions as Reagan."
"What is true is that most Bush-era financial regulators were less than enthusiastic about the very act of regulating."
There wasn't an energy policy. (In fact, Cheney let energy CEO's write the administration's policies behind closed doors.)
Every Administration spins the economic truth. But the Bush White House took this disingenuousness to new levels. The surest way to get yourself fired as a Bush economic adviser was to say something that was true. Paul O'Neill was ousted from Treasury for warning about deficits.......This disdain for reality and expertise, made it impossible for the Administration to react intelligently to real-world economic problems.
http://www.time.com/time/specials/packages/article/0,28804,1872229_1872230,00.html
"Bush pursued a governing agenda that favors the factions they represent: tax cuts for the misanthropic wealthy; deregulation, and cuts in public services at all levels; an all-out offensive against labor rights;."
Research and Dugan. Allowing medical care to be entangled with the profit motive guarantees that only those most able receive the best medicine. Our health care is over built and overly redundant by a quarter or 50%.
To bring costs and services into some equilibrium and rationality, we must have a regional approach, regional administration and Federal continuous oversight. There should exist enough hospitals, health centers and so on for the population served and no more since health careby its very nature is a monopolistic function. The number of doctors should be regulated by the number permitted in the licensed medical schools. Too many doctors. like too many lawyers, invite corruption and fraud.
Giving more Federal monies to medical schools, hospitals, and so on is not a solution. Revamping medical care into a rational efficient system is a solution that must continuously be assessed to militate against suffocating bureaucracy or rampant fraud.
Such an approach would see the resurrection of the best medical care in the world.
I don't know if it's overbuilt.
If we covered the other 50M people, would we have enough?
Look to Scandinavia : the highest standard of living, highest happiness index, lowest misery index, best medicine in the world and it covers everyone and cost half what the USA system costs.
This is a pay back,special interest bill. It is written by special interests for special interests. It is not an American people bill. It is not a stimulus bill.
It will add some new jobs that are being cut furiously by State and local governments and add new government jobs that must be funded forever by borrowed money. It throws massive monies at the dysfunctional public and higher education and health bureaucracies, when reorganization for efficiency and effectiveness are the solutions.
It does not create massive new jobs for rebuilding or otherwise adding value to the American Republic. It does not assist those unemployed with employment from the private sector. It does not anticipate the next millions of unemployed down the road two or 3 or 5 or 10 years. It has no evidence of long ranged planning.
This generation believes that there is a quick fix for everything when we are finding that hundreds of billions already spent can't even be accounted for, much less have any influence over the course of discouraging events.
Let's get this chimerical promise passed, then concentrate on strategies for massive employment programs that produce added wealth and productivity to America.
The Government. buys from the private sector.
comparing the TARP money to the infrastructure investment is deceptive.
Medicare is 10 times as efficient as the private health care industry.
"Medicare is 10 times as efficient as the private health care industry."
No, it is not.
credit comes from savings, not more credit.
"The lack of stimulus means that the collapse in private spending drives the economy down much further". Stimulus spending is assumed to come from government - via the taxpayer - for special interests to "invest" in American. Ie. rape and pillage the pocketbook once again, greater this time.
A stimulus would only work if we cut federal spending elsewhere to bring the budget into true balance. 70% depends upon consuming.....well gee Hale. And you're supporting more consumption as a partial remedy?
Why not production and savings? When the government "stimulates", they only can take away from the productive sector of society and give it to the unproductive sector of society. The destruction of the currency is only perceived as softer, gentler, kinder. Nonetheless, it is destroyed.
What we need is a recession. Quick, dirty, over. Been a stalwart citizen and saved on a measely income? Perfect: buy up a house that is illustrating its true market value right now.
Screw the banks and wallstreet. They should be in jail just like Enron. I just don't understand your clinging to a failed system. We simply can not grow our way out of this, this time.
One of our Federal Reserve dudes, Richard Fisher, has now warned against "Buy America" which as I gather could be over stimulative!
Should we assume from his remarks that we are supposed to buy, instead, plastic toxic garbage from China at Walmart (America's largest employer) and pray to God that our less than patriotic corporations invest more in China and the Philippines as Intel has done?
I can't say that his advice is very stimulative for the U.S. -- nor is there any multiplier effect to be observed.
This same bozo seems not to have read Hamilton who was a mercantilist in many respects. Nor is he aware that we became an economic super power being against free-trade; using extensively the revenue and protection tariff to amass a huge trade surplus. In fact there is a positive correlation between free-trade (another name for offshoring and outsourcing) and the decline of the American empire beginning in 1973 (and we wonder why Nixon went to China).
The idea that the US has been in decline since 1973 is ridiculous. The US policy toward freer trade began in the late 1940s by the way, not 1973. Also note that the US economy has substantially outperformed every other advanced world economy since the 1980s. Freer trade has resulted in a significant increase in living standards for all on net. It may have created dislocations this decade because it happened too fast, but that will be corrected in time.
Which option is "buying American": buying a car from a Japanese company made here by American workers, or buying a car from an American company made in Mexico by Mexican workers? Given the way the American auto companies have corrupted Congress to stop stricter CAFE standards, and do all they can not to pay their taxes, I'll go for the cars made by the American workers, no matter who owns the company. The "little people" still have to pay their taxes, after all, and whatever they have left they tend to spend here.
I've said this more times than I can count but I'll do it again. It's silly to count the total number of jobs created during a President's tenure because that's mostly dependent on the exact timing of that Presidency to the business cycle.. Regarding George W Bush's record, he began from a very high base because the 2001 was so shallow and so few jobs were lost, plus he became President immediately following a historically long and significant boom period. It's simply an empty argument/criticism. I agree with Bonddad, however, that tax cuts may not be that effective because the savings rate is creeping up. I think there should be a permanent cut in the payroll tax for people under a certain income level. These are the people most likely to spend the money, especially if not given in one lump sum. The cut should be on the business side too, which should help small business and take away an incentive to hire workers abroad rather than in the US. About govt crowding out private investment, this happened to a significant extent in the 1930s when the TVA entered the utility business. (They began competing directly with private utilities, taking away their profits and incentive to invest - it probably cost the country several hundreds of thousands of jobs in that decade). I don't think this would be an issue now, however.
a government created job is worthless if the paycheck you receive doesn't buy anything. and that is exactly what will happen.
Who was the TVA crowded out by bringing electricity to rural areas in the 1930's? No private firms were standing in line to bring electricity to rural Tennessee and West Virginia. Your statement is revisionist history. Dugan, it must be nice to look at life through such filtered glasses. I love how you let Bush off the hook for his policies and the resultant job lose claiming its all part of the business cycle. Bush decided not to regulate subprime lenders, he decided to loosen regulation like the net capital rule whose repeal allowed investment banks to borrow money at 40 to 1 leverage ratios, he decided not to use his SEC to regulate Wall Street, or confront the problems inherent in having credit rating agencies make profits from the very outlets whose credit they rated. You insist that the only thing that works is supply side tax cuts kind of nonsense which has failed in the past, and then you gloss over the evidence of the failures of these policies. It is dishonest!
TVA crowded out a ton of private investment by utilities in the 1930s. Read any book by or about Wendell Wilkie. This is not revisionist history by any stretch of the imagination. What I said was actually well known in the 1930s. FDR even backed off on competing against private utilities after 1938 because he realized how detrimental his policy had been to the economy and employment. The regulation you speak of regarding sub-prime was opposed mostly by the Democrats by the way. Bush also tried to increase regulation of Fannie and Freddie which the Democrats vehemently opposed. Last, I didn't say anything about supply side tax cuts.
"President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data, and economists across the ideological spectrum increasingly view his two terms as a time of little progress on the nation's thorniest fiscal challenges."
"The number of jobs in the nation increased by about 2 percent during Bush's tenure, the most tepid growth over any eight-year span since data collection began seven decades ago. Gross domestic product, a broad measure of economic output, grew at the slowest pace for a period of that length since the Truman administration. And Americans' incomes grew more slowly than in any presidency since the 1960s, other than that of Bush's father."
"From 2002 to 2006, the housing boom generated about 600,000 to 800,000 jobs that otherwise would not have been created -- about 10 percent of total job growth in that span, according to the consulting firm IHS Global Insight. Such data, expert say, suggest the economy was not as fundamentally strong as it seemed."
"Even excluding the 2008 recession, however, Bush presided over a weak period for the U.S. economy. For example, for the first seven years of the Bush administration, gross domestic product grew at a paltry 2.1 percent annual rate."
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/11/AR2009011102301.html?hpid=topnews
Again, this info is based more on timing of the business cycle than the economic policies of his administration. Income and job growth were lower relative to past business cycles because it started from an already high base. Income growth started from a much lower base for Clinton because incomes dropped off substantially in the early 90s recession and much of the upside in incomes was merely recovering what had been lost in that recession. George W didn't have that luxury because incomes never fell off much in the 2001 recession.
"The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents."
"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.
"Bowing to aggressive lobbying _ along with assurances from banks that the troubled mortgages were OK _ regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way."
http://www.huffingtonpost.com/2008/12/01/bush-administration-weake_n_147311.html
The average tax rate paid by the richest 400 Americans fell by a quarter to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million, new IRS data show.
http://www.bloomberg.com/apps/news?pid=20601103&sid=ar5uxG_wV87A&refer=us
It was Democrats who opposed crackdowns on no-money down interest only mortgages. Also, the fact that Americans paid less taxes is a good thing, not a bad thing. And the reality is that folks in the highest income bracket pay the largest percentage of total federal income taxes (60%) than at any time since WW2.
I don't understand what the Federal Reserve's problem is, they continued raising rates as oil soared to new heights, all while wages were stagnant. (some inflationary spiral?)
I guess the braking action wasn't fast enough for their tastes?
So now they can fight deflation. Lets see....pour more gas into the car with a large hole in the gas tank. The next question is now long will it last?
So far I have seen nothing in the stimulus package that could possibly have much effect on any industrial economy. Would anyone care to tell the world just how spending $300 million on preventing sexually transmitted diseaes is going to stimulate anything. The guys who go out trawling for prostitutes are quite stimulated enough.
The economies of the west will recover, human beings are clever, creative and resourceful. The efforts of politicians and academics with their insane belief in the efficacy of economic and social planning will have little to do with any recovery other than to obstruct its progress.
http://greenteeth.blog.co.uk/2009/01/26/recession-is-a-success-for-the-government-5452356/
Vvery good. Have you considered running for office?
The pay cut and DC living wold be quite the sacrifice.
.
There is another maxium
this a socialistic wet dream not a stimulus bill..........
From bondad, I see grapghs that I can map to specific econmic events and policy.
From you I get right wing talking points with no basis in reality (OK.. that is a redundant statement)
I have to agree with Ron Paul: The only real economy saver is to completely pull out of Iraq.
What we are seeing is the end of the "growth" based economic model. Our economy has outgrown demand and this is the contracting period. Hopefully we will bounce back with an economy balanced in the favor of services with great reduction in consumer goods.
In the long run, the task of feeding 5.7 billion mouths (growing exponentially) will prove beyond our scope.
If this was an actual stimulus package, I would agree that it is necessary. This is nothing but a pork-laden spending bill that will do very little to help the economy or create jobs.
Sorry about above:
Any deficit spending adds to the economy. That is the only reason the economy didn't tank four years ago. We live on an unsustainable borrowing binge and the party has to stop sooner or later.
If one wants the stimulus package to work you give the money to poor people who will spend it right away. If you give it to the middle class, they will use it to pay back some of the money they have already borrowed to stimulate the 2007 economy.
And your past predictions have panned out how exactly?
"Labor Pains for John Edwards
As much as everyone on this blog hates to hear it, Hillary is going to get the nomination. Just get used to it. She will destroy Obama, who is a political novice. All Obama did was run for his state office in a democrat/latte liberal area of Chicago. The Senate campaign was a joke. Hillary will get her machine going and use all her (and Bill's) political connections and strategy.
posted Sep 25, 2007 at 12:41:39"
Sound familiar?
????
So how does building a bridge or refurbishing a road, or hiring teachers not create jobs?
oh, they create jobs alright. but the paycheck coming from those jobs won't buy sh*t. because, any printing of money on a deficit will destroy the currency. and with the currenty precipice, it is guaranteed.
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