GIGAFAN99
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Post by GIGAFAN99 on Jul 7, 2009 18:09:47 GMT -5
It turns out the stimulus package that any sensible person never thought would stimulate the economy and slow unemployment is actually not stimulating the economy nor slowing unemployment. Lots of reasons for this but one major one is to inject capital into the economy, you might want to think about actually spending it this year. Other, more cynical reasons are implied below. To their credit, the administration took full accountability for the matter, stating that the budget economic assumptions they provided were deliberately manipulated to forecast phantom tax revenue and pretty up a massive impending shortfall. Kidding. Instead, Obama made it clear they were merely acting on "incomplete information." firstread.msnbc.msn.com/archive/2009/07/07/1988457.aspxOh but it gets better. Given the complete picture what do you think the administration would have done differently? If you said "nothing" that's correct! abcnews.go.com/Politics/Story?id=8021156&page=2So it seems the American public was talked into supporting something it was told was in its best interest. When it turned out it's actually not working out and will take a much longer time and much more money, the administration deflects responsibility by blaming faulty intel-- I mean information. But when asked if they regret their response they still hold firm it was the right thing to do even in the face of the complete information. Does this bother anyone like it bothers me or is it fine because BO plays for the blue team and will weatherize six houses by 2014?
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TC
Platinum Hoya (over 5000 posts)
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Post by TC on Jul 7, 2009 20:09:10 GMT -5
Just for context, here's where we left off at the end of January with this debate : hoyatalk2.proboards.com/index.cgi?board=offtopic&action=display&thread=18550&page=2In January, the problem was frozen credit markets. Now it seems like the problem isn't really frozen credit, but unemployment - which is still increasing. I don't think your ideas of government takeover of the banks and business grants would have solved that problem. Deflation has to play out. So, while I think the Larry Summers "green shoots" stuff was total BS (and judging by Obama's responses in the Chuck Todd interview I'd argue that he even thinks that), I don't buy your argument that the administration has been misleading as to what the stimulus bill was. OBAMA 2/06/09 : "So then you get the argument, well, this is not a stimulus bill, this is a spending bill. What do you think a stimulus is? That's the whole point. No, seriously. That's the point."
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nychoya3
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Post by nychoya3 on Jul 7, 2009 22:38:23 GMT -5
A couple non-rhetorical questions:
Do you think there was a set of policy options available to the Administration that could have lowered the unemployment rate from when they entered office to the present day? If so, what would it have looked like?
Do you think that the unemployment rate would be higher or lower today had the stimulus not been passed?
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GIGAFAN99
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Post by GIGAFAN99 on Jul 8, 2009 1:31:17 GMT -5
Just for context, here's where we left off at the end of January with this debate : hoyatalk2.proboards.com/index.cgi?board=offtopic&action=display&thread=18550&page=2In January, the problem was frozen credit markets. Now it seems like the problem isn't really frozen credit, but unemployment - which is still increasing. I don't think your ideas of government takeover of the banks and business grants would have solved that problem. Deflation has to play out. So, while I think the Larry Summers "green shoots" stuff was total BS (and judging by Obama's responses in the Chuck Todd interview I'd argue that he even thinks that), I don't buy your argument that the administration has been misleading as to what the stimulus bill was. OBAMA 2/06/09 : "So then you get the argument, well, this is not a stimulus bill, this is a spending bill. What do you think a stimulus is? That's the whole point. No, seriously. That's the point." Yeah except for OOPS! www.reuters.com/article/reutersINCOnlineReport/idUSTRE51P5PM20090226I could also link the actual budget table (S-8) but it's at the end of a large file. So here's the summary there are three forecasts in that table. One is the CBO, one is the Blue Chip, and one is the administration's. Two of the three have the year average unemployment increasing 2009-2010. One does not. One was asked about it. That one said "the CBO did not take into account the effects of the stimulus." Guess which one that was? Reject all you want. They claimed no greater than 8% because of the stimulus.
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GIGAFAN99
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Post by GIGAFAN99 on Jul 8, 2009 1:37:37 GMT -5
A couple non-rhetorical questions: Do you think there was a set of policy options available to the Administration that could have lowered the unemployment rate from when they entered office to the present day? If so, what would it have looked like? Do you think that the unemployment rate would be higher or lower today had the stimulus not been passed? Uh moot and moot? Unemployment was going up. But the administration claimed 8.1% year average for 2009 and 7.9% for 2010 (due to the stimulus). That's what they said. Stimulus = jobs. Why? Oh it might be to balance that mythical budget. I'm just saying they said the year average would be 8.1% three days before unemployment hit 8.1%. So unless money was already being released by the billions, I'm trying to figure out how they could come up with that number. It's either stupid, incompetent, or lie? Well, I guess it might also be hope. Edit: And for the second question: same. It was not entering the economy fast enough to matter and the hokey, still not clear bank bailout has also kept matters on the same track.
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GIGAFAN99
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Post by GIGAFAN99 on Jul 8, 2009 1:43:47 GMT -5
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TC
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Post by TC on Jul 8, 2009 7:49:58 GMT -5
Why is it moot? If there's no sane or realistic thing he could have done to prevent unemployment and getting the economy back to level (and there was nothing he could have done) then you are tilting at windmills. As for your unemployment argument - you're really holding up Blue Chip and CBO as more credible and Obama's as totally pie-in-the-sky? All of the forecasts are pretty much shredded now. CBO said unemployment would top 9% in early 2010. What are we at, 9.7% now? None of those January forecasts are anywhere in the ballpark. The figure you're most contesting - the Obama administration's assertion that unemployment might bottom out in 2009 - that still could happen. As for spending the money now, you've got a choice : - spend it quickly - spend it on something worthwhile They picked the second option.
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GIGAFAN99
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Post by GIGAFAN99 on Jul 8, 2009 8:56:31 GMT -5
Why is it moot? If there's no sane or realistic thing he could have done to prevent unemployment and getting the economy back to level (and there was nothing he could have done) then you are tilting at windmills. As for your unemployment argument - you're really holding up Blue Chip and CBO as more credible and Obama's as totally pie-in-the-sky? All of the forecasts are pretty much shredded now. CBO said unemployment would top 9% in early 2010. What are we at, 9.7% now? None of those January forecasts are anywhere in the ballpark. The figure you're most contesting - the Obama administration's assertion that unemployment might bottom out in 2009 - that still could happen. As for spending the money now, you've got a choice : - spend it quickly - spend it on something worthwhile They picked the second option. It's moot because the question was about preventing unemployment from rising in total. That's NOT what anyone said would happen. It's one of those "I'll give you $10,000 and you $1, neither of you have $1,000,000 so your even" arguments. Nobody was going to prevent unemployment from rising altogether. The second point is another non-argument. The Obama administration went out of their way to project much lower unemployment numbers than forecasted by the consensus. When questioned, they defended those projections as not being rosey scenarios. When you do that, you damn well better have a good reason and it better happen because it's all on you. These are projections. Close does count. It's not "wrong is wrong." And they did have a reason. It was called the stimulus package which they told us nobody had taken into account except for the administration. Now with faced the fact that their numbers are even more wrong than previously thoguht because even the consensus numbers are too low, they tell us they dropped a pamphlet entitled "How f'd up the economy is" behind the file cabinet and didn't have that information. Note: Everyone else had enough information to make better (more pessimistic) projections. Note 2: The idea that the stimulus was the reason their projections were lower than consensus but can't be deemed as not working when they're far too optimistic assumptions don't come true is "Heads the stimulus worked, tails it still worked but you just can't see how." I'll give them credit, this is consistent with the "saved or created" line which I think everyone can agree is total BS. As for the possibility of it being directionally correct, who cares? People don't get a directional correctness check. They get a paycheck. And that's what you tax for purposes of a budget. So even if it bottoms out this year, that's nice that it did but that 7.9% in 2010 number still is worse for the task at hand compared to the 8.7% and 9% numbers which--stop me if you heard this--were the consensus. Wrong or not, everyone had better numbers for budget estimation than the administration. But they chose to go it alone. Their rationale was the CBO didn't include the effects of the stimulus. And as a final note, I missed when we were being told the Worthwhile Package would worthwhile the economy and save or create 4 million whiles. I remember this being called a stimulus package that would save jobs. Was I mistaken? Like I said, there's nice stuff in this bill but it was called a stimulus package. And it never was going to do that structured as it was. So maybe it was another "misspeak" when it was sold that way. I think some people might not see it that way though.
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derhoya
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Post by derhoya on Jul 8, 2009 9:22:09 GMT -5
I think the fact that unemployment is a lagged measurement is being lost by many. Edited was hitting the fan last year and some this year, so of course the rate and other economic factors/indicators will continue to get worse and probably remain bad as long as consumer/investor confidence blows. There isn't a cure-all or band-aid to stop such bleeding. Also when most major economists were predicting unemployment to surpass 10%, did people really put that much credibility behind BO's optimistic 8.1% cap? FWIW, I know a couple of analysts at the Bureau of Labor Statistics (BLS) who produce these 'umemployment' figures. They've admitted to me several times that the projections you see are crap shoot guesses at best with error around +/- .2-.4%. Due to the lagged nature of unemployment, the actual figures aren't actually known until several quarters or maybe a year after the fact. I don't know their exact methodology in calculating the rate but the current projected rate at 9.5 (7/2/09 press release - www.bls.gov/cps/ ) will probably be amended at some point.
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TC
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Post by TC on Jul 8, 2009 9:29:17 GMT -5
The second point is another non-argument. The Obama administration went out of their way to project much lower unemployment numbers than forecasted by the consensus. When questioned, they defended those projections as not being rosey scenarios. When you do that, you damn well better have a good reason and it better happen because it's all on you. These are projections. Close does count. It's not "wrong is wrong." I agree, close does count. Who was close? Nouriel Roubini and his >11%-in-2010? CBO sure wasn't close. Your argument is basically that the Obama number were more wrong than CBO - which was completely in-the-wrong-ballpark-wrong as well.
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bubbrubbhoya
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Post by bubbrubbhoya on Jul 8, 2009 9:46:16 GMT -5
Why are people defending this tragedy still? The stimulus was a fraud; it was sold as a way to put shovels in people's hands, but instead it was idiotic tax cuts (300B-and shows that the right side of the aisle shares at least a little in this) and pork projects (450B) (and oh yeah...50B of shovels...yayyy!!!). Phantom magical economic multipliers or not, the least they could have done was actually put people to work (which was the campaign promise). The whole thing was a lie and the press went along with it (as did TC, apparently).
When you're talking about $1 TRILLION, here's what you do if you are (apparently) uncertain of what will happen if you spend it: DON'T SPEND IT!
Yes, that's right...I'm saying that NOTHING would have been better than this travesty. Maybe unemployment would be a slight bit higher (I wouldn't bet on it, though), but at the very least, we wouldn't have saddled ourselves with trillions of future debt and a giant economic anchor all for NO benefit. Just ridiculous. And to say that this outcome couldn't have been predicted is naive and a lie--there were plenty of sensible Cassandras screaming bloody murder during the stimulus "debate;" they were summarily ignored by the administration phelating media.
Sorry...this issue really gets me steamed. It was such an obvious waste of the people's money, and it will continue to wreak havoc on the nation's finances and output for generations to come. What a crime.
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theexorcist
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Post by theexorcist on Jul 8, 2009 10:15:28 GMT -5
Just for the record, I loathe the stimulus, too, but it wasn't a tragedy.
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bubbrubbhoya
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Post by bubbrubbhoya on Jul 8, 2009 10:51:41 GMT -5
Just for the record, I loathe the stimulus, too, but it wasn't a tragedy. One might be forgiven for using some hyperbole on the board. Still, it will be when we're paying the extra trillion to our creditors.
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rosslynhoya
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Post by rosslynhoya on Jul 9, 2009 9:28:34 GMT -5
Why is it moot? If there's no sane or realistic thing he could have done to prevent unemployment and getting the economy back to level (and there was nothing he could have done) then you are tilting at windmills. As for your unemployment argument - you're really holding up Blue Chip and CBO as more credible and Obama's as totally pie-in-the-sky? All of the forecasts are pretty much shredded now. CBO said unemployment would top 9% in early 2010. What are we at, 9.7% now? None of those January forecasts are anywhere in the ballpark. The figure you're most contesting - the Obama administration's assertion that unemployment might bottom out in 2009 - that still could happen. As for spending the money now, you've got a choice : - spend it quickly - spend it on something worthwhile They picked the second option. I listened to a great segment, I think it was on NPR's Marketplace, a few weeks back that was comparing and contrasting the Obama stimulus and the one passed by China in March, which apparently had an incredible effect on tamping down rising unemployment in their country. The difference, according to the newsreader, was that the PRC officials implementing their stimulus threw almost all of it into the construction, transportation and energy sectors, while something upwards of 80% of the American stimulus was distributed to education and health care -- sectors then at <4% unemployment. I think they pulled a number of soundbites from Robert Reich who was howling mad that our stimulus dollars were going into the sectors of the American economy that needed it least. Essentially the argument boiled down to the notion that PRC universities weren't getting million-dollar grants to study homoerotic subtexts in Uighur folk music; they were paying thousands of semi-skilled young men to build the country some new coal plants, and thus further stimulating other parts of the economy that use energy to make things. Obama/Geithner/Congress could have made better choices, if they didn't have important constituencies they were obliged to pay off first.
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Bando
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Post by Bando on Jul 9, 2009 12:05:06 GMT -5
Why is it moot? If there's no sane or realistic thing he could have done to prevent unemployment and getting the economy back to level (and there was nothing he could have done) then you are tilting at windmills. As for your unemployment argument - you're really holding up Blue Chip and CBO as more credible and Obama's as totally pie-in-the-sky? All of the forecasts are pretty much shredded now. CBO said unemployment would top 9% in early 2010. What are we at, 9.7% now? None of those January forecasts are anywhere in the ballpark. The figure you're most contesting - the Obama administration's assertion that unemployment might bottom out in 2009 - that still could happen. As for spending the money now, you've got a choice : - spend it quickly - spend it on something worthwhile They picked the second option. I listened to a great segment, I think it was on NPR's Marketplace, a few weeks back that was comparing and contrasting the Obama stimulus and the one passed by China in March, which apparently had an incredible effect on tamping down rising unemployment in their country. The difference, according to the newsreader, was that the PRC officials implementing their stimulus threw almost all of it into the construction, transportation and energy sectors, while something upwards of 80% of the American stimulus was distributed to education and health care -- sectors then at <4% unemployment. I think they pulled a number of soundbites from Robert Reich who was howling mad that our stimulus dollars were going into the sectors of the American economy that needed it least. Essentially the argument boiled down to the notion that PRC universities weren't getting million-dollar grants to study homoerotic subtexts in Uighur folk music; they were paying thousands of semi-skilled young men to build the country some new coal plants, and thus further stimulating other parts of the economy that use energy to make things. Obama/Geithner/Congress could have made better choices, if they didn't have important constituencies they were obliged to pay off first. Doesn't this also highlight the difference between dictatorships and democracies? I mean, our stimulus had pass through Congress and required what amounted to buy-offs to get people on board. The CCP can just order a dictat for what's most efficient. This also explains why transportation dollars for each state are being spread out in each state rather than targeting metropolitan areas where they're most needed and can do the most good. Dictatorship are more efficient that democracies in some cases.
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Boz
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Post by Boz on Jul 9, 2009 12:27:37 GMT -5
You know what they always say about Mussolini....the man got the trains to run on time.
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TC
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Post by TC on Jul 9, 2009 13:05:26 GMT -5
I think they pulled a number of soundbites from Robert Reich who was howling mad that our stimulus dollars were going into the sectors of the American economy that needed it least. Essentially the argument boiled down to the notion that PRC universities weren't getting million-dollar grants to study homoerotic subtexts in Uighur folk music; they were paying thousands of semi-skilled young men to build the country some new coal plants, and thus further stimulating other parts of the economy that use energy to make things. Do you have a link? I'd love to listen to it. The idea that the education sector needs stimulus money *least* is sort of a crazy statement given the decline in tax revenues - education is not all homoerotic subtext in obscure cultural works - it is also engineering and R&D and eggheads who drive growth. If we could have spent 100% of the stimulus on energy products, I'd be a happy panda, but we ended up making the biggest investment in energy we have in a generation in the stimulus. I didn't hear much about new coal plants in the Chinese stimulus - but I did hear about electrification of Chinese Rail (to get coal to coal plants), wind power, and a protectionist stipulation to Buy Chinese.
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Post by badgerhoya on Jul 9, 2009 13:15:06 GMT -5
I think they pulled a number of soundbites from Robert Reich who was howling mad that our stimulus dollars were going into the sectors of the American economy that needed it least. Essentially the argument boiled down to the notion that PRC universities weren't getting million-dollar grants to study homoerotic subtexts in Uighur folk music; they were paying thousands of semi-skilled young men to build the country some new coal plants, and thus further stimulating other parts of the economy that use energy to make things. Do you have a link? I'd love to listen to it. The idea that the education sector needs stimulus money *least* is sort of a crazy statement given the decline in tax revenues - education is not all homoerotic subtext in obscure cultural works - it is also engineering and R&D and eggheads who drive growth. If we could have spent 100% of the stimulus on energy products, I'd be a happy panda, but we ended up making the biggest investment in energy we have in a generation in the stimulus. I didn't hear much about new coal plants in the Chinese stimulus - but I did hear about electrification of Chinese Rail (to get coal to coal plants), wind power, and a protectionist stipulation to Buy Chinese. Following that, keep in mind that a decent chunk of the stimulus package was given to states to fill holes in Medicaid funding (required by the Federal Gov't), as well as other federal mandates (ie, No Child Left Behind). If this cash hadn't been given to states, then we'd be hearing about a lot more California situations than we do right now. In addition, I might add that derhoya's point above is really the salient one of it all. Unemployment is, and always has been, a lagging economic indicator. That's why I think the issue is that it was sold as a jobs package, when it really should've been sold as a stem the bleeding package.
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Boz
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Post by Boz on Jul 9, 2009 13:59:09 GMT -5
Of course, they're also trying to sell cap and trade as a "jobs" bill. Now, raise your hand if you believe that one.... Actually, raise both hands, so I can tell you to take a bow for being so gullible.
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Post by jerseyhoya34 on Aug 7, 2009 13:22:41 GMT -5
Unemployment is down to 9.4%, surprising the administration and accomplished economists alike. This is the first drop in unemployment in 15 months, i.e. long before the collapse in fall 2008. Perhaps this will buy Obama some goodwill as we enter the summer recess.
I'm not much of an economist, but it seems to me that we're still a few months away from significant job creation and the numbers this summer are more indicative of a slowing of the rate of decline to an even level. Nonetheless, this week's housing numbers along with the unemployment report seem to indicate that we are better off than we thought we were or would be at this time.
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