TBird41
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"Roy! I Love All 7'2" of you Roy!"
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Post by TBird41 on Dec 29, 2010 15:02:05 GMT -5
I'll find the stuff about the stimulus being wasteful and inefficient later. Don't worry, I won't hold my breath. But first, can you explain to me how people investing doesn't stimulate the economy? Not a bad question T-bird. Depends on the type of investment. Most of the money that rich people get in additional tax breaks goes into the stock market, bond market and such. That drives up the prices of those investment vehicles, but does not create any NEW investment - productive steps to stimulate the economy. There is an indirect "wealth effect" that provides minimal economic stimulation - when people FEEL weathier - due to asset price appreciation - they start to spend a little more. But to attempt to stimulate the economy through that method truly IS wasteful and inefficient. Banks already have tons of money on their books and access to much more from the Fed at ridiculously low prices, but they aren't making loans. Why? One reason is the Housing market ... people are afraid to buy houses because they are still afraid for their jobs and where the economy is going. Not as bad as a year or two ago, but nowhere near back to normal. And the decline in housing prices makes people feel poorer. Business investment? The extended tax cuts have little to do with business taxes. Businesses make investments when they see a good likelihood of return. Currently, manufacturing utilization in this country is down significantly - so no need to invest in new production capability. Where then to invest? In emerging markets where the growth is happening. There is a canard that the tax cuts will lead wealthy people who own companies to hire more workers. But think about that. If they are not hiring more workers now -- it is because they don't see the demand for their products and services increasing. If they DID, they would hire more workers. Saving money on the taxes they owe isn't going to persuade anyone to hire more workers. T-bird, and others. Most people who post on this board have a strong, partisan POV and like to add a little attitude or poke those who take the opposite POV. OK, that's to be expected. But, if we are really trying to share some views and understand other perspectives, we need to look at the evidence, think through the issues, and stay clear of the "talking points" that the spin doctors want to push. Some posters are always going to post their hate-filled diatribes against... whomever/whatever... regardless of facts. We know this. But I believe there are quite a few posters who would LIKE to have a better understanding of what is going on and how we can make things better. Before that can happen, one needs to jetison their partisan views... in favor of neutral, fact-based analyses. Can that actually happen here? I have a paper due at 5pm. That's why I'm not googling for all the waste of inefficiencies of the stimulus. (ok, yeah, I'm posting right now instead of writing, but hey, do expect me to be more efficient then the gov't? ;D ) I'll read whatever you want to provide as to economics and data. I already conceded Jersey's point about hiring. Of course, the problem with citing to economists is that they are just as fractured as politicians. For every Paul Krugman, there's a disciple of Milton Friedman. Also, I think the idea is on lower taxes leading to business growth is that companies determinations as to whether to take the risk of expanding/growing in order to reap a set reward will change because the risk of expanding / growing will change. If the potential reward for expanding stays the same, but the costs of expanding decreases, it lowers the risk and makes it more likely the business will choose to take that risk. Also, I think one of the most important things about the tax deal was the fact that one was reached. The uncertainty of whether taxes would stay the same or increase definitely affected businesses decisions.
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SirSaxa
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Post by SirSaxa on Dec 29, 2010 16:03:43 GMT -5
Courtesy of the National Review, but might most of the public sector job losses have been from the Census? Good example. When Obama took over, the US economy was losing 750,000 jobs/month... net. In recent months, we've had a net monthly increase in jobs of about 150,000.... or a swing of 900K (from loss of 750K to a gain of 150K) For the last 10-12 months, the private sector has been adding jobs.... not enough, but at least net positive. The Govt sector has continued to lose jobs - -mostly, State and Local. Over the last 4-5 months, the private sector gains have outpaced the public sector losses - but not by nearly enough. Thrown into this trend were the census workers. They were added last Spring and left in the Fall. Partisans of both sides willfully ignored the readily apparent evidence to claim: 1. The GOVT is GROWING!!! Adding more GOVT JOBS! Making GOVT BIGGER! (on one side) or 2. The ECONOMY is GROWING and jobs are returning! (on the other side). Then when the Census workers left, those roles were reversed. Just one little example of how people who know better willfully skew the data and mis-use it to suggest outcomes favorable to their pre-determined point of view.
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SirSaxa
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Post by SirSaxa on Dec 29, 2010 16:16:58 GMT -5
I have a paper due at 5pm. That's why I'm not googling for all the waste of inefficiencies of the stimulus. (ok, yeah, I'm posting right now instead of writing, but hey, do expect me to be more efficient then the gov't? ;D ) If you thought I was suggesting there was NO waste and inefficiency in the stimulus, I apologize. Of course there was. But the bulk of the spending/tax cuts was not wasteful and inefficient. The most inefficient way to stimulate the economy is tax cuts for the wealthy. They cost the government and enormous amount of revenue -- which leads to more borrowing from the Chinese and others -- for very little (but greater than Zero) -- stimulative effect. Also, I think one of the most important things about the tax deal was the fact that one was reached. The uncertainty of whether taxes would stay the same or increase definitely affected businesses decisions. Yes, but not directly. That is, the taxes were not going to have a direct effect on the companies, but would negatively impact the fragile economic recovery.... and THAT would make companies more worried about investing. Personally, I wish we really had undertaken a new effort to INVEST govt. money in infrastructure improvements - roads, airports, water supply, energy efficiency and alternative energy, etc. AND in new technology improvements - communications, highspeed, higher bandwidth internet, R&D, etc. Those kinds of projects would pay dividends to the national economy for decades. As would any efforts we make to significantly improve education - at all levels. The US needs to keep pace with the rest of the world, especially our fastest growing competitors -- e.g. China, India. Education is a critical factor. How to make that happen in light of our economic crisis? I don't know. Is it really as simple as the Teachers Unions are holding us back? That could be one factor. But I seriously doubt it is that simple. Good luck with your paper T-Bird....then enjoy our Game tonight!
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theexorcist
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Post by theexorcist on Dec 29, 2010 16:55:33 GMT -5
Can we just have one thread on this? The original focus was Obama's thoughts on Vick.
"The most inefficient way to stimulate the economy is tax cuts for the wealthy. They cost the government and enormous amount of revenue -- which leads to more borrowing from the Chinese and others -- for very little (but greater than Zero) -- stimulative effect."
Not sure I agree here. Lots of stimulus funds were never spent. At least the money Jay Clark Griswold IV received is being spent on the Connecticut real estate market, ivory backscratchers, and/or being given to various hedge fund investors.
It's also worth noting that the rich are remarkably fungible - if they feel that they're getting a raw deal, they are the best-equipped to pack their things up and move to the South of France. They'd contribute markedly less to the economy.
I'd actually argue that the least efficient way is government hiring. Given how hard it is to fire people, that money becomes a massive yoke on the economy that's almost impossible to eliminate.
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Post by jerseyhoya34 on Dec 29, 2010 22:29:15 GMT -5
I think we've salvaged the thread nicely from the usual laundry lists of complaints that are leveled against Obama.
Right now, 92% of the ARRA money has been made available, excluding the tax cuts. None of the items mentioned above - the ivory backscratchers etc. - create jobs, and, if they do, we're about 5 steps removed to get to that point. If they pack up their bags, fine. Despite popular belief, their country owes them nothing.
I'm on board with Saxa. Good companies invest in R&D/infrastructure - ironically tax cuts do the same for private companies or are intended to help with that, but when we talk about it in the public sector, we hear a slur storm about how it is socialism. With all the well traveled folks on here, I'm sure some have gained an appreciation for the trains in Europe and parts of Asia. You put that kind of system in parts of this country, and it makes the economy that much more mobile and gives more options to folks in terms of housing. There might actually be cost efficiencies for American-made products as against those from China and elsewhere.
Their are some talented folks right now in the Administration on the education side, but it does not amount to a hill of beans unless states are willing to invest/reform. The states that aren't and won't in that department are the usual suspects, and some of their schools are atrocities where the valedictorian is the one who shows up on the last day of school.
The Griswold/Connecticut selection...was that deliberate?
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EasyEd
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Post by EasyEd on Jan 4, 2011 19:44:08 GMT -5
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SSHoya
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"Forget it Jake, it's Chinatown."
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Post by SSHoya on Jan 5, 2011 7:28:01 GMT -5
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Boz
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Post by Boz on Jan 7, 2011 9:44:55 GMT -5
I believe what EasyEd and SSHoya are trying to say can be best expressed thusly:
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SSHoya
Blue & Gray (over 10,000 posts)
"Forget it Jake, it's Chinatown."
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Post by SSHoya on Jan 7, 2011 10:09:13 GMT -5
Yup, we are talking about politicians, aren't we???
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Elvado
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Post by Elvado on Jan 7, 2011 14:25:26 GMT -5
Let's all give a shout out to Barry O and his 9.4% unemployment rate. Good work.
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SirSaxa
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Post by SirSaxa on Jan 7, 2011 14:46:15 GMT -5
Let's all give a shout out to Barry O and his 9.4% unemployment rate. Good work. Yes, and while you're at it, let's not forget to thank W for the 8.4 million jobs lost due to his his brilliant stewardship of the US Economy as he drove it right off the cliff.
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Elvado
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Post by Elvado on Jan 7, 2011 14:56:20 GMT -5
Last time I checked, W was no longer President. Barry O ran and told us he could do everything including lowering the seas. He has not quite measured up. Stop blaming, start fixing. As an aside, Vinegar and Water Nancy just blamed Dem House losses on, are you ready, GW Bush. You guys are priceless.
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Post by jerseyhoya34 on Jan 7, 2011 18:39:27 GMT -5
If Obama is bad on jobs, I'd hate to know what "good" is. 103,000 more jobs and upward revisions to prior numbers... That's 103,000 jobs that make a dent in the jobs lost as a result of the pre-Obama collapse and the inevitable course of the market for several months into the Obama presidency. Obama has taken responsibility for it, and House Republicans, judging from their lack of any action on jobs to date or plans to act, wisely want to stay the course.
I always found it funny and ironic that some of these creatures wanted to "show" Obama how it is done. The market has said for months now that such a lesson is not needed.
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