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(Huffington Post)   Cutbacks in government spending unleash power of private sector. GDP growth slows to 2.2%   (huffingtonpost.com) divider line 269
    More: Fail, government spending, cutbacks, private sector  
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2187 clicks; posted to Politics » on 27 Apr 2012 at 7:38 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-04-27 11:56:12 PM

DrPainMD: cameroncrazy1984: TheDumbBlonde: Government spending = Growth in Gross National Product? That's a great model.

Austerity certainly caused the GNP of all those European economies to grow drastically, right?

Oh, I mean fall, sorry. Fall.

You really think that European economies are crashing because their governments are spending less? Really? That's the cause? It has nothing to do with their insane debt levels and retire-at-35-with-full-pay-and-benefits programs?


Spain, Ireland and Portugal all were running budget surpluses before the mortgage crisis exploded. in other words, generally healthy economies but vulnerable to "trade" deficits they were running.

I think you actually meant FAIL
 
2012-04-27 11:57:31 PM
I was going to chime in again but this was playing on Fark:

Talondel vs. X-boxershort:
Battle of the Econ Majors
 
2012-04-27 11:59:39 PM

Corporate Self: I was going to chime in again but this was playing on Fark:

Talondel vs. X-boxershort:
Battle of the Econ Majors


One is a Chicago School follower. It is like Mike Tyson vs. Glass Joe.
 
2012-04-28 12:01:25 AM

Talondel: X-boxershorts: And had little impact in the real economy.

But QE was exactly that "writing ourselves a check" method of deficit finance you were praising earlier. It's almost like you're admitting that allowing the government to simply miracle money into existence doesn't actually help anything.

Serious Black: Do you think that all government spending is identical? That seems to be your argument, and I want to make sure I'm not misinterpreting you before I respond.

No. Not all government spending is identical, and that's not the point I was trying to make. Sorry if I was unclear. The point I am making is that there isn't any reason to think that US Government borrowing and spending is more effective at stimulating the economy than that which is crowded out. If the US hadn't borrowed $1.3 Trillion last year, that money still would have been invested somewhere. Just not by the US government. So unless you believe the US Government is more effective at stimulating the economy than the alternatives, there's no reason to think that borrowing actually accomplishes anything. But GDP calculations assume that it is in fact more effective.

As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.


It's where that money would go that makes it different from QE. Direct investment in infrastructure and the resultant jobs. Not propping up zombie banks. And real infrastructure investment would have a real and lasting effect on the economy for decades to come.

That's a huge difference.

Also, 2 trillion or so in QE thus far has had zero impact on private credit. Private credit is till not moving, but it's not because no credit is available, it's because demand is way off and the housing market issues remain a ticking time bomb.
 
2012-04-28 12:05:35 AM

FlashHarry: • ~2009: GOP doesn't give a shiat about deficits.
• after jan 20, 2009, suddenly the GOP talks up deficits, the media complies
• the shift in media tone means slashing govt. spending becomes a major theme of even the democrats
• slashing govt. spending means slashing govt. jobs
• in concurrence with opposing any and all stimulus, the GOP's govt. constriction scheme causes a major drag on the economy
• the recovery is anemic, but it is still a recovery, picking up steam in spring 2011, so...
• summer 2011, the GOP threatens to shut down the govt., causing the US bond rating to be downgraded, this causes the economy to falter
• spring 2012, the recovery once again threatens to pick up steam, so...
• the GOP threatens to shut down the govt. again in summer 2012, reneging on their deal, hoping for a similar drag on the economy
• fall 2012, the GOP hopes to ride a lacklustre economy to victories in november

this is pretty much how their cunning plan is playing out.

literally from the night of the inauguration, the GOP has been planning to oppose obama at every turn to hurt the economy and destroy american lives in order to regain power.


And if the Dems were the least bit interested in the fate of our fine peoples, they would be shouting about this all day. Hmm. Seems kinda quiet.

The aim is status quo. Anything that maintains the massive redistribution of wealth upward. Obama has been fantastic in this regard, and so will 'win' re-election. Yay!
 
2012-04-28 12:06:55 AM

Evil High Priest: FlashHarry: • ~2009: GOP doesn't give a shiat about deficits.
• after jan 20, 2009, suddenly the GOP talks up deficits, the media complies
• the shift in media tone means slashing govt. spending becomes a major theme of even the democrats
• slashing govt. spending means slashing govt. jobs
• in concurrence with opposing any and all stimulus, the GOP's govt. constriction scheme causes a major drag on the economy
• the recovery is anemic, but it is still a recovery, picking up steam in spring 2011, so...
• summer 2011, the GOP threatens to shut down the govt., causing the US bond rating to be downgraded, this causes the economy to falter
• spring 2012, the recovery once again threatens to pick up steam, so...
• the GOP threatens to shut down the govt. again in summer 2012, reneging on their deal, hoping for a similar drag on the economy
• fall 2012, the GOP hopes to ride a lacklustre economy to victories in november

this is pretty much how their cunning plan is playing out.

literally from the night of the inauguration, the GOP has been planning to oppose obama at every turn to hurt the economy and destroy american lives in order to regain power.

And if the Dems were the least bit interested in the fate of our fine peoples, they would be shouting about this all day. Hmm. Seems kinda quiet.

The aim is status quo. Anything that maintains the massive redistribution of wealth upward. Obama has been fantastic in this regard, and so will 'win' re-election. Yay!


What an excellent argument for both sides being the same. I have a sudden urge to vote Republican.
 
2012-04-28 12:07:31 AM

X-boxershorts: No, I did not identify Quantitative easing at the method by which we are currently financing our deficits. Nor did I identify QE as the method to finance an infrastructure bank.

My only reference ever in this thread to QE was that it was done to prop up zombie banks. Go ahead...read what I wrote.

There is no straw man, you're just a jerk who needs to place words in others context to make yourself seem like the smartest asshole in the thread.

You're not the smartest (not claiming that I am either, just to keep you from injecting that into my meaning either).

But you are being a jerk.


Your Weeners to me was to argue that government borrowing has no opportunity cost, because we have a sovereign currency and we can just 'write ourselves a check' rather than having to borrow it. "Writing ourselves a check" is what we do when we engage in quantitative easing. It's not how we actually finance most of our debt. Most of our debt is financed by selling bonds. Selling bonds only works when people *buy* bonds. Every dollar investors spend buying US bonds is a dollar they don't spend buying someone else bonds. That's the definition of "opportunity cost" or "crowding out".

One more time, just to make this clear: You Weeners to me was clearly incorrect. You implied that there was no crowding out effect or opportunity cost effect because we have a sovereign currency, which would be true if we were financing the deficit solely through QE, but we're not. You next claimed that QE1 and 2 were being used to purchase toxic assets, which is also largely untrue. I see you've been gracious enough to admit this mistake. You next claimed that deficits have been declining since 2010. Which is also incorrect. I don't mind that mistake as much, because it's also irrelevant. The only relevance it has was to your attempt to bring up the "deficits don't matter" crap. You brought it up in order to assign to me an argument I was not making. That's the definition of a 'straw man', assigning to your opponent a position he has not taken, and then attacking it. That's why you did.

So I'll add your denial of the fact that you made a straw man to the list of things you've been wrong about. :)

I will concede that it is possible, even likely, that I'm both a jerk and the smartest asshole in the thread.

/gnight
 
2012-04-28 12:09:18 AM

X-boxershorts: It's where that money would go that makes it different from QE. Direct investment in infrastructure and the resultant jobs. Not propping up zombie banks. And real infrastructure investment would have a real and lasting effect on the economy for decades to come.

That's a huge difference.

Also, 2 trillion or so in QE thus far has had zero impact on private credit. Private credit is till not moving, but it's not because no credit is available, it's because demand is way off and the housing market issues remain a ticking time bomb.


I am pleased that we found something we agree on (besides the fact that I'm the biggest jerk in the thread).

/g'night again
 
2012-04-28 12:12:27 AM

Talondel: I will concede that it is possible, even likely, that I'm both a jerk and the smartest asshole in the thread.


You certainly ARE an asshole. Considering you will have to prove that the things that were "crowded out" have a higher ROI than what was spent upon you are going to have a very tough time of it. Entitlements have spectacularly high ROI's.
 
2012-04-28 12:13:54 AM

Talondel: X-boxershorts: No, I did not identify Quantitative easing at the method by which we are currently financing our deficits. Nor did I identify QE as the method to finance an infrastructure bank.

My only reference ever in this thread to QE was that it was done to prop up zombie banks. Go ahead...read what I wrote.

There is no straw man, you're just a jerk who needs to place words in others context to make yourself seem like the smartest asshole in the thread.

You're not the smartest (not claiming that I am either, just to keep you from injecting that into my meaning either).

But you are being a jerk.

Your Weeners to me was to argue that government borrowing has no opportunity cost, because we have a sovereign currency and we can just 'write ourselves a check' rather than having to borrow it. "Writing ourselves a check" is what we do when we engage in quantitative easing. It's not how we actually finance most of our debt. Most of our debt is financed by selling bonds. Selling bonds only works when people *buy* bonds. Every dollar investors spend buying US bonds is a dollar they don't spend buying someone else bonds. That's the definition of "opportunity cost" or "crowding out".

One more time, just to make this clear: You Weeners to me was clearly incorrect. You implied that there was no crowding out effect or opportunity cost effect because we have a sovereign currency, which would be true if we were financing the deficit solely through QE, but we're not. You next claimed that QE1 and 2 were being used to purchase toxic assets, which is also largely untrue. I see you've been gracious enough to admit this mistake. You next claimed that deficits have been declining since 2010. Which is also incorrect. I don't mind that mistake as much, because it's also irrelevant. The only relevance it has was to your attempt to bring up the "deficits don't matter" crap. You brought it up in order to assign to me an argument I was not making. That's the definition of ...


Not all deficit financing is equal. You equate the 2 quantitative easing programs operated by the fed as if they were intended to be stimulative.

QE1 was clearly intended to prop up the banks through the purchase of mortgage backed securities at book value. QE2 was never clearly defined by the fed as anything other than injecting cash into the "system" without any mandate on it's use, although it was loosely defined as targeting credit markets.

These are clearly NOT in the same category as deficit spending designed as infrastructure investment.

You're creating a False equivalency to claim STRAWMAN.

The only one buying your product, is you. You must work for the FED
 
2012-04-28 12:15:16 AM

Talondel: X-boxershorts: And had little impact in the real economy.

But QE was exactly that "writing ourselves a check" method of deficit finance you were praising earlier. It's almost like you're admitting that allowing the government to simply miracle money into existence doesn't actually help anything.

Serious Black: Do you think that all government spending is identical? That seems to be your argument, and I want to make sure I'm not misinterpreting you before I respond.

No. Not all government spending is identical, and that's not the point I was trying to make. Sorry if I was unclear. The point I am making is that there isn't any reason to think that US Government borrowing and spending is more effective at stimulating the economy than that which is crowded out. If the US hadn't borrowed $1.3 Trillion last year, that money still would have been invested somewhere. Just not by the US government. So unless you believe the US Government is more effective at stimulating the economy than the alternatives, there's no reason to think that borrowing actually accomplishes anything. But GDP calculations assume that it is in fact more effective.

As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.


Seriously?

That trillion, spend on the laborers, would be spent almost as soon as they got it. Middle and lower income people don't sit on their money. They spend it. Circulation of money is what fuels the economy. If there's lots of money in the system, but everyone is hoarding things stagnate. If people spend, moeny circulates, and the economy grows.
 
2012-04-28 12:17:29 AM

rustypouch: Talondel: X-boxershorts: And had little impact in the real economy.

But QE was exactly that "writing ourselves a check" method of deficit finance you were praising earlier. It's almost like you're admitting that allowing the government to simply miracle money into existence doesn't actually help anything.

Serious Black: Do you think that all government spending is identical? That seems to be your argument, and I want to make sure I'm not misinterpreting you before I respond.

No. Not all government spending is identical, and that's not the point I was trying to make. Sorry if I was unclear. The point I am making is that there isn't any reason to think that US Government borrowing and spending is more effective at stimulating the economy than that which is crowded out. If the US hadn't borrowed $1.3 Trillion last year, that money still would have been invested somewhere. Just not by the US government. So unless you believe the US Government is more effective at stimulating the economy than the alternatives, there's no reason to think that borrowing actually accomplishes anything. But GDP calculations assume that it is in fact more effective.

As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

Seriously?

That trillion, spend on the laborers, would be spent almost as soon as they got it. Middle and lower income people don't sit on their money. They spend it. Circulation of money is what fuels the economy. If there's lots of money in the system, but everyone is hoarding things stagnate. If people spend, ...


Indeed...this is a concept known as the velocity of money.

Money has a much higher velocity at the base of the economic pyramid.
 
2012-04-28 12:18:08 AM
Yeah, government spending money it doesn't have. At what point does it get its' ass bit?
 
2012-04-28 12:18:26 AM

rustypouch: Talondel: X-boxershorts: And had little impact in the real economy.

But QE was exactly that "writing ourselves a check" method of deficit finance you were praising earlier. It's almost like you're admitting that allowing the government to simply miracle money into existence doesn't actually help anything.

Serious Black: Do you think that all government spending is identical? That seems to be your argument, and I want to make sure I'm not misinterpreting you before I respond.

No. Not all government spending is identical, and that's not the point I was trying to make. Sorry if I was unclear. The point I am making is that there isn't any reason to think that US Government borrowing and spending is more effective at stimulating the economy than that which is crowded out. If the US hadn't borrowed $1.3 Trillion last year, that money still would have been invested somewhere. Just not by the US government. So unless you believe the US Government is more effective at stimulating the economy than the alternatives, there's no reason to think that borrowing actually accomplishes anything. But GDP calculations assume that it is in fact more effective.

As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

Seriously?

That trillion, spend on the laborers, would be spent almost as soon as they got it. Middle and lower income people don't sit on their money. They spend it. Circulation of money is what fuels the economy. If there's lots of money in the system, but everyone is hoarding things stagnate. If people spend, ...


Well, he talks about digging ditches and filling them in. We did that in the 30's (but actually improved infrastructure) and it did a dandy job of helping the economy. If they wanted to really spur growth they would find out the optimal level of money a poor person will immediately spend and give them money up to that amount.
 
2012-04-28 12:19:11 AM

Tumunga: Yeah, government spending money it doesn't have. At what point does it get its' ass bit?


The worst recession since the Great Depression isn't the time to worry about it.
 
2012-04-28 12:23:12 AM

Tumunga: Yeah, government spending money it doesn't have. At what point does it get its' ass bit?


We're currently at about 89% debt to GDP ratio.

During WWII, we ran that up to 113% or thereabouts.

We have quite a ways to go until we actually hit an irreversible crisis point. The fact that the numbers start with a "T" is likely what has everybody in a tizzy. But really, the scale of the American/world economy is so much larger today than it was in 1946.

When the Fed and treasury report a failed bond auction, that's when it's time to really worry. But as long as real interest rates hover near zero%, it's counterproductive to NOT put that cheap purchasing power to work where it's truly needed.
 
2012-04-28 12:29:49 AM

Sabyen91: Well, he talks about digging ditches and filling them in. We did that in the 30's (but actually improved infrastructure) and it did a dandy job of helping the economy. If they wanted to really spur growth they would find out the optimal level of money a poor person will immediately spend and give them money up to that amount.


True.

But if lower income people are employed, they have some money to spend, which increases the demand for many goods and services, which requires companies hire more people to meet this demand, which gives medium income people more money to spend, which increases the demand... you see where this is going.

If rich people get the money, they don't spend it. they sit on it or invest in proven stocks, which does next to nothing for the GDP.
 
2012-04-28 12:34:43 AM

rustypouch: Sabyen91: Well, he talks about digging ditches and filling them in. We did that in the 30's (but actually improved infrastructure) and it did a dandy job of helping the economy. If they wanted to really spur growth they would find out the optimal level of money a poor person will immediately spend and give them money up to that amount.

True.

But if lower income people are employed, they have some money to spend, which increases the demand for many goods and services, which requires companies hire more people to meet this demand, which gives medium income people more money to spend, which increases the demand... you see where this is going.

If rich people get the money, they don't spend it. they sit on it or invest in proven stocks, which does next to nothing for the GDP.


Giving it directly to the poor (considering you can't create demand when people don't have the money to spend) would have the same effect but I know that strikes people as unfair, somehow, so I would love an Alphabet Soup project that pays a living wage. Our infrastructure sure could use the improvements.
 
2012-04-28 12:39:35 AM

Sabyen91: rustypouch: Sabyen91: Well, he talks about digging ditches and filling them in. We did that in the 30's (but actually improved infrastructure) and it did a dandy job of helping the economy. If they wanted to really spur growth they would find out the optimal level of money a poor person will immediately spend and give them money up to that amount.

True.

But if lower income people are employed, they have some money to spend, which increases the demand for many goods and services, which requires companies hire more people to meet this demand, which gives medium income people more money to spend, which increases the demand... you see where this is going.

If rich people get the money, they don't spend it. they sit on it or invest in proven stocks, which does next to nothing for the GDP.

Giving it directly to the poor (considering you can't create demand when people don't have the money to spend) would have the same effect but I know that strikes people as unfair, somehow, so I would love an Alphabet Soup project that pays a living wage. Our infrastructure sure could use the improvements.


And there exists absolutely no proof of the crowding out phenomenon being in effect with interest rates at the zero bound.
 
2012-04-28 12:45:04 AM

X-boxershorts: Sabyen91: rustypouch: Sabyen91: Well, he talks about digging ditches and filling them in. We did that in the 30's (but actually improved infrastructure) and it did a dandy job of helping the economy. If they wanted to really spur growth they would find out the optimal level of money a poor person will immediately spend and give them money up to that amount.

True.

But if lower income people are employed, they have some money to spend, which increases the demand for many goods and services, which requires companies hire more people to meet this demand, which gives medium income people more money to spend, which increases the demand... you see where this is going.

If rich people get the money, they don't spend it. they sit on it or invest in proven stocks, which does next to nothing for the GDP.

Giving it directly to the poor (considering you can't create demand when people don't have the money to spend) would have the same effect but I know that strikes people as unfair, somehow, so I would love an Alphabet Soup project that pays a living wage. Our infrastructure sure could use the improvements.

And there exists absolutely no proof of the crowding out phenomenon being in effect with interest rates at the zero bound.


His point was asinine. Again, he would have to prove the "crowded out" part was more positive to the economy than the ROI of stimulus. Also, "crowded out"? Wouldn't that only be an issue if there was some sort of balanced budget amendment?
 
2012-04-28 12:48:10 AM
Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.
 
2012-04-28 12:49:56 AM
encrypted-tbn0.google.com

/hotter than a treasury auction!
 
2012-04-28 12:51:58 AM

X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.


My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.
 
2012-04-28 12:58:57 AM

Sabyen91: X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.

My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.


That's a side i was ignoring.

Private industry has yet to invest in rebuilding our infrastructure. Gov't bonds fund roads, bridges, schools and even private infrastructure like gas pipeline and electrical grid, which, mind you, private industry has been operating at a profit for many decades now without reinvesting in their own infrastructure....

Murray Rothbard was not an idiot. But he sure unleashed an entire army of idiots.
 
2012-04-28 12:59:35 AM

X-boxershorts: Sabyen91: X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.

My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.

That's a side i was ignoring.

Private industry has yet to invest in rebuilding our infrastructure. Gov't bonds fund roads, bridges, schools and even private infrastructure like gas pipeline and electrical grid, which, mind you, private industry has been operating at a profit for many decades now without reinvesting in their own infrastructure....

Murray Rothbard was not an idiot. But he sure unleashed an entire army of idiots.


You could say the same for Adam Smith.
 
2012-04-28 01:00:36 AM
I hear that Vegas is really hurting now that the GSA doesn't have conferences there anymore.
 
2012-04-28 01:01:40 AM

jigger: I hear that Vegas is really hurting now that the GSA doesn't have conferences there anymore.


I hear Lola Meth-Mouth is hurting now that jigger is broke.
 
2012-04-28 01:02:14 AM
Adam Smith supported the concept of a regulated economy AND a lender of last resort. The bank of England set that standard back in the 1600's.

He loved free markets but was also pragmatic.
 
2012-04-28 01:03:16 AM

jigger: I hear that Vegas is really hurting now that the GSA doesn't have conferences there anymore.


I'd rather go to Cartegena...more bang for the buck
 
2012-04-28 01:03:36 AM

X-boxershorts: Adam Smith supported the concept of a regulated economy AND a lender of last resort. The bank of England set that standard back in the 1600's.

He loved free markets but was also pragmatic.


I realize that but all most people get out of it was "Invisible Hand". He was also pro-progressive taxation but the Libertarians don't quote him on that part.
 
2012-04-28 01:04:52 AM

Sabyen91: X-boxershorts: Adam Smith supported the concept of a regulated economy AND a lender of last resort. The bank of England set that standard back in the 1600's.

He loved free markets but was also pragmatic.

I realize that but all most people get out of it was "Invisible Hand". He was also pro-progressive taxation but the Libertarians don't quote him on that part.


Yeah, selective memories and creative editing.

Was Adam Smith Breatbarted?
 
2012-04-28 01:08:37 AM

Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.


World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.
 
2012-04-28 01:09:50 AM

X-boxershorts: Sabyen91: X-boxershorts: Adam Smith supported the concept of a regulated economy AND a lender of last resort. The bank of England set that standard back in the 1600's.

He loved free markets but was also pragmatic.

I realize that but all most people get out of it was "Invisible Hand". He was also pro-progressive taxation but the Libertarians don't quote him on that part.

Yeah, selective memories and creative editing.

Was Adam Smith Breatbarted?


The Cato Institute certainly tries their best to Breitbart him.
 
2012-04-28 01:11:55 AM

Sum Dum Gai: Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.


It is so simple that I can't believe people don't get it. Economics is pretty complex for the most part but what part of "When there is no demand there is not growth" do people not get? Only a farking moron would think trickle-down bullshiat actually works if they have taken Econ 101.
 
2012-04-28 01:14:48 AM

Sabyen91: X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.

My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.


There was a Mises audio on that recently.

Link
 
2012-04-28 01:16:06 AM

jigger: Sabyen91: X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.

My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.

There was a Mises audio on that recently.

Link


You are farking with me, right?
 
2012-04-28 01:19:11 AM

jigger: Sabyen91: X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.

My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.

There was a Mises audio on that recently.

Link


I gave up on Murry and the Mises folks years ago. Care to summarize? Do they finally admit their models have no answer for when US interest rates are at the zero bound and that crowding out doesn't occur in a depressed economy?
 
2012-04-28 01:22:36 AM

X-boxershorts: I gave up on Murry and the Mises folks years ago. Care to summarize? Do they finally admit their models have no answer for when US interest rates are at the zero bound and that crowding out doesn't occur in a depressed economy?


I guess I linked it to the wrong person.

It was just FYI, thought it was worth listening to.

I don't think this little talk even addresses interest rates. It's short and non-technical. Give it a listen. I'm interested in your take on it.
 
2012-04-28 01:23:58 AM

X-boxershorts: jigger: Sabyen91: X-boxershorts: Interest rates at the zero bound is the key there.

Crowding out occurs, in a healthy economy.

We are still far from that.

My reading of what he said was that government spending was crowding out is the same as opportunity cost. He is claiming high government spending is somehow taking away from private spending. That is only possible if the government actually raises taxes to pay for the government spending. That isn't happening. Deficit spending totally ruins his point. Ohhhh, I now see where interest rates come in.

There was a Mises audio on that recently.

Link

I gave up on Murry and the Mises folks years ago. Care to summarize? Do they finally admit their models have no answer for when US interest rates are at the zero bound and that crowding out doesn't occur in a depressed economy?


The title is "Does Government Regulation Crowd Out Private Responsibility? An Economic, Philosophic, and Theological Investigation". They eschew the actual economics and worry about how it is BAAAAAD.
 
2012-04-28 01:24:03 AM

Sabyen91: Sum Dum Gai: Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.

It is so simple that I can't believe people don't get it. Economics is pretty complex for the most part but what part of "When there is no demand there is not growth" do people not get? Only a farking moron would think trickle-down bullshiat actually works if they have taken Econ 101.


So when's it supposed to kick in? I'm not trying to be argumentative, I'm honestly curious. We're currently spending 3x per capita in real dollars as we were during the 50s and we were hardly hurting then. We're spending 24x per capita in real dollars as we were when the spending supposedly brought us out of the depression.

Maybe I'm just dense, but if spending 24x as much as the last "success" isn't working, maybe it's not the spending that does it?
 
2012-04-28 01:25:27 AM

Sabyen91: The title is "Does Government Regulation Crowd Out Private Responsibility? An Economic, Philosophic, and Theological Investigation". They eschew the actual economics and worry about how it is BAAAAAD.


It's just a short talk at a conference and it's about charity, not investment.
 
2012-04-28 01:25:36 AM

jigger: X-boxershorts: I gave up on Murry and the Mises folks years ago. Care to summarize? Do they finally admit their models have no answer for when US interest rates are at the zero bound and that crowding out doesn't occur in a depressed economy?

I guess I linked it to the wrong person.

It was just FYI, thought it was worth listening to.

I don't think this little talk even addresses interest rates. It's short and non-technical. Give it a listen. I'm interested in your take on it.


I'm tired and almost drunk.

I'd rather listen to this: Steve Kimock and theCAUSE with Sugaree
 
2012-04-28 01:25:46 AM

rohar: Sabyen91: Sum Dum Gai: Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.

It is so simple that I can't believe people don't get it. Economics is pretty complex for the most part but what part of "When there is no demand there is not growth" do people not get? Only a farking moron would think trickle-down bullshiat actually works if they have taken Econ 101.

So when's it supposed to kick in? I'm not trying to be argumentative, I'm honestly curious. We're currently spending 3x per capita in real dollars as we were during the 50s and we were hardly hurting then. We're spending 24x per capita in real dollars as we were when the spending supposedly brought us out of the depression.

Maybe I'm just dense, but if spending 24x as much as the last "success" isn't working, maybe it's not the spending that does it?


Why do you think it hasn't kicked in? To be doing as well as we are with the complete lack of participation of corporations is a miracle in itself. Also, your question assumes we aren't half-assing it. We are.
 
2012-04-28 01:26:46 AM

jigger: Sabyen91: The title is "Does Government Regulation Crowd Out Private Responsibility? An Economic, Philosophic, and Theological Investigation". They eschew the actual economics and worry about how it is BAAAAAD.

It's just a short talk at a conference and it's about charity, not investment.


Ahh, just for info. Not part of an argument? Ok, I am good with that.
 
2012-04-28 01:28:02 AM

X-boxershorts: jigger: X-boxershorts: I gave up on Murry and the Mises folks years ago. Care to summarize? Do they finally admit their models have no answer for when US interest rates are at the zero bound and that crowding out doesn't occur in a depressed economy?

I guess I linked it to the wrong person.

It was just FYI, thought it was worth listening to.

I don't think this little talk even addresses interest rates. It's short and non-technical. Give it a listen. I'm interested in your take on it.

I'm tired and almost drunk.

I'd rather listen to this: Steve Kimock and theCAUSE with Sugaree


Damn, I think that's even more boring than the Mises talk.
 
2012-04-28 01:28:10 AM

rohar: Sabyen91: Sum Dum Gai: Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.

It is so simple that I can't believe people don't get it. Economics is pretty complex for the most part but what part of "When there is no demand there is not growth" do people not get? Only a farking moron would think trickle-down bullshiat actually works if they have taken Econ 101.

So when's it supposed to kick in? I'm not trying to be argumentative, I'm honestly curious. We're currently spending 3x per capita in real dollars as we were during the 50s and we were hardly hurting then. We're spending 24x per capita in real dollars as we were when the spending supposedly brought us out of the depression.

Maybe I'm just dense, but if spending 24x as much as the last "success" isn't working, maybe it's not the spending that does it?


By the way, I am not arguing for blind government spending. There are certain things that help. There are things that don't.
 
2012-04-28 01:29:49 AM

Sabyen91: Ok, I am good with that.


As long as you're good with it. That's all that matters.

Good night, honey.
 
2012-04-28 01:30:19 AM

rohar: Sabyen91: Sum Dum Gai: Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.

It is so simple that I can't believe people don't get it. Economics is pretty complex for the most part but what part of "When there is no demand there is not growth" do people not get? Only a farking moron would think trickle-down bullshiat actually works if they have taken Econ 101.

So when's it supposed to kick in? I'm not trying to be argumentative, I'm honestly curious. We're currently spending 3x per capita in real dollars as we were during the 50s and we were hardly hurting then. We're spending 24x per capita in real dollars as we were when the spending supposedly brought us out of the depression.

Maybe I'm just dense, but if spending 24x as much as the last "success" isn't working, maybe it's not the spending that does it?


The social safety net won't make ANYONE a productive consumer. It honestly only provides bare minimum to prevent starving in the streets. And THAT is the majority of the excess spending we have. Food Stamps, TANF (Temp welfare), SCHIP, Medicaid, Medicare...that's where the extra money's going since 2007.

We should also be spending jobs. Infrastructure jobs. Something America needs done but private industry doesn't do. If these people had jobs, they wouldn't need foodstamps or unemployment. Even long term temporary jobs. It's better than foodstamps.
 
2012-04-28 01:31:23 AM

jigger: Sabyen91: Ok, I am good with that.

As long as you're good with it. That's all that matters.

Good night, honey.


Damn, you are desperate now that you have lost your Lola.
 
2012-04-28 01:32:16 AM

Sabyen91: rohar: Sabyen91: Sum Dum Gai: Talondel: As I pointed out, government could borrow $1 Trillion and spend $500 Billion digging ditches, and another $500 Billion filling them in. That would raise GDP by $1 Trillion, but would do nothing to improve the real economy. It would have the effect of moving $1 Trillion from investors to laborers. So maybe if you believe that laborers are better at building the economy than investors that would be a valid strategy. I don't know any economists who actually believe that. But hey, it's better than nothing.

World War II basically kickstarted our economy by paying one person to make a bomb and another to blow it up, and it was a very successful economic stimulus.

Laborers are far, far better at stimulating the economy compared to investors, especially in a time of low consumer demand. When demand is low, investment does next to nothing in terms of economic growth. Companies don't need people to buy their stock, they need people to buy their products. When demand is growing, investment helps companies grow to meet demand. When demand is falling, and interest rates are rock bottom, it's not a shortage of investments that is keeping companies from growing.

It is so simple that I can't believe people don't get it. Economics is pretty complex for the most part but what part of "When there is no demand there is not growth" do people not get? Only a farking moron would think trickle-down bullshiat actually works if they have taken Econ 101.

So when's it supposed to kick in? I'm not trying to be argumentative, I'm honestly curious. We're currently spending 3x per capita in real dollars as we were during the 50s and we were hardly hurting then. We're spending 24x per capita in real dollars as we were when the spending supposedly brought us out of the depression.

Maybe I'm just dense, but if spending 24x as much as the last "success" isn't working, maybe it's not the spending that does it?

By the way, I am not arguing for blind ...


I think I understand the concept quite well. Put money in the hands of those that will spend it. Sure, we're spending money in some odd places, but our current social spending alone (putting money in the hands that will spend it) is about 6x the entire federal budget at the end of the great depression. (again, per capita real dollars).
 
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