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(NPR)   New Jobs report: 96,000 jobs added and Unemployment down to 8.1%. November's Jobs report: Mitt Romney still unemployed   ( npr.org) divider line
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    More: Spiffy, Mitt Romney, Alan Krueger, a.m. ET, Bureau of Labor Statistics, unemployment  
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1215 clicks; posted to Politics » on 07 Sep 2012 at 11:10 AM (5 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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Kurohone
2012-09-07 11:08:43 PM  

MattStafford: Alright, I need to leave this thread for a little bit, but I do want to leave everyone of the following.

Going into debt to pay people to dig ditches and fill them back up creates long term growth.

Just think about all the parts of that statement. What exactly going into debt means. What happens when you are forced to pay off debt. What benefits you get from people digging ditches. How their economic actions relate to the rest of the economy. Let it all sink in.


I know he's not going to come back, but let's see here, using his model.

Government creates DitchCo, and hires 10 people at 10K each. Government is now out 100K.

DitchCo digs ditches, fills in ditches, repeat. Boring work, but these 10 people now each have 10K to spend. Gov't takes its share in takes. Increased demand in Ditchville attracts Ditch-Mart, DitchTel, etc. to meet the needs and wants od DitchCo's workers. As a result of DitchCo's success, let's say 5 new spinoff jobs are created. There are now 15 employed, tax-paying people when previous were zero.

Now, according to MattStafford, when the initial 100K that has been invested is recouped, the government will immediately shut down DitchCo, and the whole structure will come down with it. HOWEVER...why? The revenues from DitchCo's existance have now proven to have an ROI which is greater than the initial investment. Why on earth would it be terminated upon recoup of the loan? Am I missing something important here?
 
Lee Jackson Beauregard
2012-09-07 11:08:57 PM  

tony41454: If things are so rosy, WHERE ARE THE JOBS?????


They'll be trickling down any time now, if we'll just give more tax cuts to the Job Creators®.
 
Debeo Summa Credo
2012-09-07 11:29:45 PM  

Gaseous Anomaly: Debeo Summa Credo: most Keynesians of fark seem to think its a free lunch. That you can just borrow to finance govt spending and get free demand.

As a duly self-appointed representative of Fark Keynesianism, I agree, you are correct.

That is, putting unemployed people/resources to work is, in fact, more or less a macroeconomic free lunch. If you could target the spending 100% to putting unemployed people to work, it would be a no-brainer. (In the real world nothing can be targeted that precisely).


Sigh. You just don't understand. The money you use to hire all those unemployed people comes from somewhere.

If you issue debt to raise funds to hire those unemployed people, someone has to buy that debt. They buy the debt using funds that would have been used elsewhere, in some alternative use, had it not been directed to buy the debt that funds the hiring of those unemployed people.

If that alternative use was an investment in a start up company, the economy will lose all the direct and indirect employment that would have resulted from that start up. If the alternative was a bank deposit, the economy loses the employment benefit of whatever the bank would have lent the funds for. And so on and so on.

You gain the jobs from the govt spending but you lose the jobs due to foregoing the alternative use. This isn't hard to understand.
 
DamnYankees
2012-09-07 11:36:48 PM  

Debeo Summa Credo: You gain the jobs from the govt spending but you lose the jobs due to foregoing the alternative use. This isn't hard to understand.


What you don't understand is this is literally true for EVERYTHING. Every single way you choose to use your money is in the alternative to using it some other way. It's completely meaningless.
 
Debeo Summa Credo
2012-09-07 11:37:31 PM  

Kurohone: MattStafford: Alright, I need to leave this thread for a little bit, but I do want to leave everyone of the following.

Going into debt to pay people to dig ditches and fill them back up creates long term growth.

Just think about all the parts of that statement. What exactly going into debt means. What happens when you are forced to pay off debt. What benefits you get from people digging ditches. How their economic actions relate to the rest of the economy. Let it all sink in.

I know he's not going to come back, but let's see here, using his model.

Government creates DitchCo, and hires 10 people at 10K each. Government is now out 100K.

DitchCo digs ditches, fills in ditches, repeat. Boring work, but these 10 people now each have 10K to spend. Gov't takes its share in takes. Increased demand in Ditchville attracts Ditch-Mart, DitchTel, etc. to meet the needs and wants od DitchCo's workers. As a result of DitchCo's success, let's say 5 new spinoff jobs are created. There are now 15 employed, tax-paying people when previous were zero.

Now, according to MattStafford, when the initial 100K that has been invested is recouped, the government will immediately shut down DitchCo, and the whole structure will come down with it. HOWEVER...why? The revenues from DitchCo's existance have now proven to have an ROI which is greater than the initial investment. Why on earth would it be terminated upon recoup of the loan? Am I missing something important here?


Yes, you're missing the impact of taking the original $100k out of an alternative use. Let's say that $100k would otherwise have been used to expand a plant that would have employed 10 tax paying workers who would have created a product that the economy wants (instead of useless ditches) and 7 spinoff jobs. The economu is now 2 jobs worse off thanks to the stimulus.

Obviously that's not always the case, the relative benefit of deficit financed govt spending depends on what is purchased relative to investment/consumption crowded out, but that's what you're missing.
 
BojanglesPaladin
2012-09-08 12:12:27 AM  

DamnYankees: Debeo Summa Credo: You gain the jobs from the govt spending but you lose the jobs due to foregoing the alternative use. This isn't hard to understand.

What you don't understand is this is literally true for EVERYTHING. Every single way you choose to use your money is in the alternative to using it some other way. It's completely meaningless.


Not exactly. For example, spending 100K to expand a 1 million dollar a year 10 man business to a 20 man 5 million dollar a year business is preferable to spending $100K to keep 2 people on the payroll for one year at $50k a year. Spending 100K to plant seed and grow enough food for 5000 meals and employ 3 additional workers is preferable to spending that same 100k to buy 50 school lunches for a year. Spending 100k on two teachers is preferable to spending it on nothing, but earning 3% interest for the year.

These are over-simplified examples, but i'm sure you can see the point. It is VERY meaningful when choosing to allocate funds in one direction or another. The alternatives are VERY important.
 
DamnYankees
2012-09-08 12:14:06 AM  

BojanglesPaladin: DamnYankees: Debeo Summa Credo: You gain the jobs from the govt spending but you lose the jobs due to foregoing the alternative use. This isn't hard to understand.

What you don't understand is this is literally true for EVERYTHING. Every single way you choose to use your money is in the alternative to using it some other way. It's completely meaningless.

Not exactly. For example, spending 100K to expand a 1 million dollar a year 10 man business to a 20 man 5 million dollar a year business is preferable to spending $100K to keep 2 people on the payroll for one year at $50k a year. Spending 100K to plant seed and grow enough food for 5000 meals and employ 3 additional workers is preferable to spending that same 100k to buy 50 school lunches for a year. Spending 100k on two teachers is preferable to spending it on nothing, but earning 3% interest for the year.

These are over-simplified examples, but i'm sure you can see the point. It is VERY meaningful when choosing to allocate funds in one direction or another. The alternatives are VERY important.


No one is arguing this.
 
BojanglesPaladin
2012-09-08 12:24:15 AM  

DamnYankees: BojanglesPaladin: DamnYankees: Debeo Summa Credo: You gain the jobs from the govt spending but you lose the jobs due to foregoing the alternative use. This isn't hard to understand.

What you don't understand is this is literally true for EVERYTHING. Every single way you choose to use your money is in the alternative to using it some other way. It's completely meaningless.

Not exactly. For example, spending 100K to expand a 1 million dollar a year 10 man business to a 20 man 5 million dollar a year business is preferable to spending $100K to keep 2 people on the payroll for one year at $50k a year. Spending 100K to plant seed and grow enough food for 5000 meals and employ 3 additional workers is preferable to spending that same 100k to buy 50 school lunches for a year. Spending 100k on two teachers is preferable to spending it on nothing, but earning 3% interest for the year.

These are over-simplified examples, but i'm sure you can see the point. It is VERY meaningful when choosing to allocate funds in one direction or another. The alternatives are VERY important.

No one is arguing this.


Just pointing out that choosing this option over that option when allocating funds is not 'meaningless' as you put it. Yes, all expenditures by their nature involve a decision NOT to spend money somewhere else, but the universality of that choice does not make the choosing meaningless, nor does it render the existence of that inevitable choice requirement moot.

Hence why he is asking where the money comes from, and what must be chosen to do without when that capital is used for this purpose.
 
DamnYankees
2012-09-08 12:26:06 AM  

BojanglesPaladin: Just pointing out that choosing this option over that option when allocating funds is not 'meaningless' as you put it.


That's not what I said. What was meaningless was pointing out that choosing to invest in government by definition means you are not using it for something else. The reality is that since this is true for EVERY use of money, claiming its some sort of reason to not issue government debt is meaningless.
 
BojanglesPaladin
2012-09-08 12:31:28 AM  

DamnYankees: BojanglesPaladin: Just pointing out that choosing this option over that option when allocating funds is not 'meaningless' as you put it.

That's not what I said. What was meaningless was pointing out that choosing to invest in government by definition means you are not using it for something else. The reality is that since this is true for EVERY use of money, claiming its some sort of reason to not issue government debt is meaningless.


I'll let you two carrion this incredibly fascinatin circular discussion, but I think he already answered that when he said "Obviously that's not always the case, the relative benefit of deficit financed govt spending depends on what is purchased relative to investment/consumption crowded out, but that's what you're missing."

You seem to be glossing past the whole 'buying debt may not be the best way to spend the money' part, but it's not my argument, so I'll leave you to it.
 
Bucky Katt [TotalFark]
2012-09-08 03:57:09 AM  
96,000 more people for Mitt to fire.
 
Gaseous Anomaly
2012-09-08 09:55:58 AM  

Debeo Summa Credo: Sigh. You just don't understand. The money you use to hire all those unemployed people comes from somewhere.


The crowding-out constraint you describe only applies at full employment.

The limiting factor is real resources, NOT (real or virtual) green pieces of paper. (The real wealth represented by the paper comes from the value produced by employed people).

If you hire people away from an existing job, or who were about to get another job, that production is being foregone. If the people you hire don't have short-term job prospects you're foregoing jack shiat.
 
lennavan
2012-09-08 02:53:02 PM  

BojanglesPaladin: lennavan: What metric do you use to base this assertion on?

The unemployment rate is still where it was and that's too high, Debt has skyrocketed, The Deficitis bigger than ever, foreclosures are still high, the percentage growth rate for the economy is still too low, Job growth has slowed, etc.


So you base it on all of the metrics that show negative trends while ignoring all of the metrics that show positive trends?

BojanglesPaladin: Again, Obama has produced some positive outcomes


Sure but you ignored those in your conclusion.

BojanglesPaladin: YMMV. Reasonable people can arrive at different assesments.


Sure but reasonable people do not ignore data that is inconvenient.

Here's my assessment:
1) If you look positive data such as stock market and corporate profits you can see a clear positive trend. These show the economy has turned around for corporations.
2) If you look at all the negative trends (except debt), unemployment is still high and income lowered. Point 1) clearly demonstrated the economy has turned around for corporations. They did not trickle that recovery down to the people. However the job creation trend is positive. Unemployment is high but jobs are being created not lost.
3) The debt is high. Yup. The debt is not a readout of how well the economy is performing. It is a readout of income versus expenses. Debt could be zero and our economy could be shiat and debt could be in the 100s of trillions of dollars yet our economy could be just fine.

I have accounted for all variables. No reasonable person could conclude the economy has not turned around since Obama took office. You picked and chose your variables to drive a narrative. Convenient you ignored the positive data, right?
 
lennavan
2012-09-08 02:54:57 PM  

ExperianScaresCthulhu: lennavan: ferretman: Spiffy? It's a total failure. only +96,000 jobs

Remember 3 and a half years ago when we we lost 818,000 jobs in a single month? Of course you don't. For the rest of us, suddenly that "only" +96,000 doesn't seem so bad.

That's great, if 'the rest of us' are currently employed. If you're one of the lost jobs, it means a hell of a lot. If you're one of the ones still searching, it also means a hell of a lot. The hemorrhaging is still there.


You are without a job. We went from a situation where every month you would have 818,000 new people competing with you for any new job that opens up to a situation where 96,000 new jobs open up for you to compete for. This is your definition of "hemorrhaging."

Whatever dude.
 
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