Spendifferous Stimulus

Onceler said:
No; I think the majority can definitely be wrong.

That doesn't change the fact that - absence evidence to the contrary - majority opinion in a field of study still carries some weight.

That's why I asked what you had behind your opinion.
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where i am leaning in my opinion:

‘We’re Spending More Than Ever and It Doesn’t Work’
Posted January 14th, 2009 at 7.28pm in Entitlements, Entrepreneurship.
“We have tried spending money. We are spending more than we have ever spent before and it does not work.”

Sound like, oh, Rep. John Boehner of Ohio or some other exasperated Republican stalwart lamenting proposals to spend our way out of the recession?

Listen again:

“I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises.”

Sound more like a liberal Democrat pushing job creation — say, Harlem’s Rep. Charlie Rangel?

What about this:

“I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!”

Surely this must be House Speaker Nancy Pelosi or another leading Democrat denouncing President Bush’s economic policies.

Wrong. Wrong. And wrong again.

The words are those of none other than Henry Morgenthau Jr. — close friend, lunch companion, loyal secretary of the Treasury to President Franklin D. Roosevelt — and key architect of FDR’s New Deal.
The date: May 9, 1939. The setting: Morgenthau’s appearance in Washington before less influential Democrats on the House Ways and Means Committee.

Morgenthau made this “startling confession,” as historian Burton W. Folsom Jr. calls it, during the seventh year of FDR’s New Deal programs to combat the rampant unemployment of the Great Depression.

“In these words, Morgenthau summarized a decade of disaster, especially during the years Roosevelt was in power. Indeed average unemployment for the whole year in 1939 would be higher than that in 1931, the year before Roosevelt captured the presidency from Herbert Hoover,” Folsom writes in his new book, “New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America.”

http://blog.heritage.org/2009/01/14/were-spending-more-than-ever-and-it-doesnt-work/
 
Oh...that explains it.

See, I'm dealing with the economic conditions we find ourselves in today, not those of 70 years ago.

Thanks for clarifying.
 
Onceler said:
Oh...that explains it.

See, I'm dealing with the economic conditions we find ourselves in today, not those of 70 years ago.

Thanks for clarifying.
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then why does obama keep comparing our situation to the great depression? says this spending will help us like then....are you saying obama is out of touch and wrong on that? or does he get a pass because he has a (d) next to his name...

see, i also believe that if we do not learn from history, we are doomed to repeat it...
 
i might be wrong about obama saying that, it could be that i have heard liberals say it and then heard obama's name saying it will get worse...
 
Yurt said:
actually, nope, i checked, obama has at least mentioned it once, back on the campaign trail....

sucks to be you
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Nowadays "Catastrophe" is the word that is used to push it 'fastfastnowdon'twaitvoteyesnoworwedies!'
 
Dungheap said:
Yeah, I mean. Obama has only been talking about doing this since the day after he was elected. Three months is not fast.
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It hasn't been three months. Exaggeration at best.

There were people here posting articles of how we'd be eating our pets (yes, hyperbole) if we hadn't passed it before Friday. Shoot "nobel prize award winning economists" (Krugman) pretty much is saying it exactly as I stated it. And if you don't think that "catastrophe" speak isn't fueling fear then you are just a partisan hack that can only pretend to be "outraged" when somebody on the right uses the same technique.
 
Yurt said:
actually, nope, i checked, obama has at least mentioned it once, back on the campaign trail....

sucks to be you
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He mentioned it "once"? What was the context?

Did he "keep saying it," as you implied? Did he say "we have to spend now as we did then?"

Regardless, that's not really what we're debating (using that word loosely), but I understand your need to distract at this point.
 
Onceler said:
He mentioned it "once"? What was the context?

Did he "keep saying it," as you implied? Did he say "we have to spend now as we did then?"

Regardless, that's not really what we're debating (using that word loosely), but I understand your need to distract at this point.
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how the heck is it a distraction by me??? the issue is raised nearly daily by liberals and obama is using fear mongering that if we don't spend, spend, spend we are going to have a catastrophe....

and this spending bill is exactly what fdr did in the great depresssion, hence my reminder that it did not work in the great depression. it is wholly relevant and here is your dear leader making the reference:

About Thomson Reuters.Obama: U.S. in worst crisis since Depression
Tue Oct 7, 2008 9:12pm EDT
Email * Print * Share* Reprints * Single Page[-] Text [+] Market News
Bank rescue plan could extend gains Nikkei up 1.3 pct as exporters gain on yen, U.S. hopes Stimulus and bank rescue hopes boost Wall Street * Video
More Business & Investing News... NASHVILLE, Oct 7 (Reuters) - Democratic presidential candidate Barack Obama said on Tuesday that the United States is in the worst financial crisis of the Great Depression as he opened a debate with Republican rival John McCain.
Obama said the U.S. government should ensure that Wall Street executives do not benefit from bonus payments from failing companies and that if elected, he would seek a tax cut for most Americans.

"We are in the worst financial crisis since the Great Depression, and a lot of you I think are worried about your jobs, your pensions, your retirement accounts," he said.

(Reporting by Steve Holland, Editing by Frances Kerry)



© Thomson Reuters 2009 All rights reserved
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http://www.reuters.com/article/governmentFilingsNews/idUSN0749084220081008

i'm truly amazed you did not know this and yet you voted for the guy....sad
 
Although some economists supported the bank and auto bailouts and although many more support a major federal stimulus package, this economist holds that both measures are counter-productive. Both are likely to prolong the economic slump and not shorten it.

This may seem harsh but the ultimate cure for a recession is recession. Economic booms malinvest labor and capital and recessions are necessary to clean out these malinvestments. Declining prices allow consumers to more easily purchase products (homes, autos) in excess supply; inventories are reduced and supply and demand are brought into balance. And declining profits weed out business organizations and managers that have invested poorly during the boom; bankruptcy allows resources to flow to more profitable areas of the economy. A sustainable recovery is now possible.

It should be obvious that random bailouts can short-circuit the recovery process by propping up poorly performing companies and slowing resource reallocation. With tens of billions in lost profits, General Motors and Chrysler have demonstrated vast inefficiency; yet taxpayer bailouts will preserve their poor management and high-cost union jobs. Worse, other more efficient automobile suppliers will lose sales to Detroit’s dinosaurs and may themselves require subsidies. It just never ends.

http://www.independent.org/newsroom/article.asp?id=2410
 
Yurt said:
Although some economists supported the bank and auto bailouts and although many more support a major federal stimulus package, this economist holds that both measures are counter-productive. Both are likely to prolong the economic slump and not shorten it.

This may seem harsh but the ultimate cure for a recession is recession. Economic booms malinvest labor and capital and recessions are necessary to clean out these malinvestments. Declining prices allow consumers to more easily purchase products (homes, autos) in excess supply; inventories are reduced and supply and demand are brought into balance. And declining profits weed out business organizations and managers that have invested poorly during the boom; bankruptcy allows resources to flow to more profitable areas of the economy. A sustainable recovery is now possible.

It should be obvious that random bailouts can short-circuit the recovery process by propping up poorly performing companies and slowing resource reallocation. With tens of billions in lost profits, General Motors and Chrysler have demonstrated vast inefficiency; yet taxpayer bailouts will preserve their poor management and high-cost union jobs. Worse, other more efficient automobile suppliers will lose sales to Detroit’s dinosaurs and may themselves require subsidies. It just never ends.

http://www.independent.org/newsroom/article.asp?id=2410
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http://krugman.blogs.nytimes.com/2008/12/27/hangover-theorists/


Hangover theorists


Somehow I missed this: via Steve Levitt, John Cochrane explaining that recessions are good for you:
“We should have a recession,” Cochrane said in November, speaking to students and investors in a conference room that looks out on Lake Michigan. “People who spend their lives pounding nails in Nevada need something else to do.”
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So the hangover theory, which I wrote about a decade ago, is still out there.

The basic idea is that a recession, even a depression, is somehow a necessary thing, part of the process of “adapting the structure of production.” We have to get those people who were pounding nails in Nevada into other places and occupation, which is why unemployment has to be high in the housing bubble states for a while.

The trouble with this theory, as I pointed out way back when, is twofold:

1. It doesn’t explain why there isn’t mass unemployment when bubbles are growing as well as shrinking — why didn’t we need high unemployment elsewhere to get those people into the nail-pounding-in-Nevada business?

2. It doesn’t explain why recessions reduce unemployment across the board, not just in industries that were bloated by a bubble.

One striking fact, which I’ve already written about, is that the current slump is affecting some non-housing-bubble states as or more severely as the epicenters of the bubble. Here’s a convenient table from the BLS, ranking states by the rise in unemployment over the past year. Unemployment is up everywhere. And while the centers of the bubble, Florida and California, are high in the rankings, so are Georgia, Alabama, and the Carolinas.

So the liquidationists are still with us. According to Brad DeLong,

Milton Friedman would recall that at the Chicago where he went to graduate school such dangerous nonsense was not taught
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But now, apparently, it is.


Update: Not to mention the idea that employment is dropping because workers don’t feel like working.
 
good lord....people were living off of money they didn't have, buy new cars, houses thinking it will always keep going up...just like the stock market bubble...oh wait, the market recessed and found more stable ground....

you really think the stock market bubble shoudl have just kept growing? the housing market...just keep growing? it was unfeasible and unrealistic growth that is now correcting itself....but enter in the government to throw money and keep those false values up...

not going to work

markets correct, or are you actually claiming markets NEVER need correction?
 
Yurt said:
good lord....people were living off of money they didn't have, buy new cars, houses thinking it will always keep going up...just like the stock market bubble...oh wait, the market recessed and found more stable ground....

you really think the stock market bubble shoudl have just kept growing? the housing market...just keep growing? it was unfeasible and unrealistic growth that is now correcting itself....but enter in the government to throw money and keep those false values up...

not going to work

markets correct, or are you actually claiming markets NEVER need correction?
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You clearly don't understand anything Krugman just said, because you are just spouting memorized and laughable talking points you lifted from a right-wing pundit you favor and not responding to his points.
 
Watermark said:
You clearly don't understand anything Krugman just said, because you are just spouting memorized and laughable talking points you lifted from a right-wing pundit you favor and not responding to his points.
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blah blah....you can't respond to the points i raised hence you ad hominem
 
evince said:
"Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms [while] the U.S. economy grew at average annual growth rates of 9 percent to 10 percent," writes University of California historian Eric Rauchway.



According to Federal Reserve chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression." In fact, even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corp. was "the structural change most conducive to monetary stability since ... the Civil War."


1937-1938 FDR had tried to balence the budget because the republicans had whined enough to make him take notice of their "concerns". The economy started to reverse so he went back the the original plan and it worked yet again.


The people are not going to just sit back and watch the republican party wordsmith and lie any more. You guys always have the WRONG plan and its purely for partisan reasons.

Your party is going to die and its will be the best thing to happen to America in many years.
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Good post.. well some of it. I agree completely that what we need is rehabilitation to the financial system. I do however think its much different today then it was back then and thus the focus of the rehabilitation should be different. New electronic era has made manipulation far to easy and the SEC just cant keep up.
 
Yurt said:
good lord....people were living off of money they didn't have, buy new cars, houses thinking it will always keep going up...just like the stock market bubble...oh wait, the market recessed and found more stable ground....

you really think the stock market bubble shoudl have just kept growing? the housing market...just keep growing? it was unfeasible and unrealistic growth that is now correcting itself....but enter in the government to throw money and keep those false values up...

not going to work

markets correct, or are you actually claiming markets NEVER need correction?
Click to expand...


And which party kept telling them everything is fine GO SHOPPING its the patriotic thing to do?
 
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