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$50,000,000,000 "Jobs" Bill. Motto: Third Time's The Charm!

cpwill

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So let me get this straight:

George W in 2008 pushed through a $150 Billion Stimulus package that he said was necessary to 'prime the pump' to avoid a recession

After he did this, we got hit with a recession. And major businesses who had over leveraged began to fail. we were told we needed to give $700 billion to the banks to keep them from failing or else we'd go into a liquidity crises and the economy would suffer. We also needed to bail out the auto industry and fannie mae / freddie mac, or else unemployment would shoot through the roof and mortgage foreclosures would skyrocket. outside of TARP since 2008 we've spent almost a trillion ($1,000,000,000,000) in bailouts of specific companies.

After they did that, unemployment began to climb and mortgage foreclosures began to skyrocket.

Then, Obama pushed through a $800 Billion Stimulus package that was needed to go to "shovel ready projects" in order to get us out of the recession and keep unemployment below 8%

After he did this, unemployment shot past 8%, and the recession - instead of turning around as predicted - at best limped along and at worst appears headed for a double-dip

NOW Obama tells us he needs another $50,000,000,000 in order to "prime the pump" through "shovel ready projects".



if this stupid crap works, then what the hell happened to the first $2,707,000,000,000 we gave you people!?!
 

CriticalThought

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I wonder if it is too late to start establishing citizenship in Australia.
 

phattonez

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GDP = private consumption + gross investment + government spending + (exports − imports)

So what's the easiest way to get GDP to rise? Have the government spend money and pay people for worthless work so that they will spend money too.

Why haven't people realized that GDP is a deeply flawed measure of national wealth?
 

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So let me get this straight:

George W in 2008 pushed through a $150 Billion Stimulus package that he said was necessary to 'prime the pump' to avoid a recession

After he did this, we got hit with a recession. And major businesses who had over leveraged began to fail. we were told we needed to give $700 billion to the banks to keep them from failing or else we'd go into a liquidity crises and the economy would suffer. We also needed to bail out the auto industry and fannie mae / freddie mac, or else unemployment would shoot through the roof and mortgage foreclosures would skyrocket. outside of TARP since 2008 we've spent almost a trillion ($1,000,000,000,000) in bailouts of specific companies.

After they did that, unemployment began to climb and mortgage foreclosures began to skyrocket.

Then, Obama pushed through a $800 Billion Stimulus package that was needed to go to "shovel ready projects" in order to get us out of the recession and keep unemployment below 8%

After he did this, unemployment shot past 8%, and the recession - instead of turning around as predicted - at best limped along and at worst appears headed for a double-dip

NOW Obama tells us he needs another $50,000,000,000 in order to "prime the pump" through "shovel ready projects".



if this stupid crap works, then what the hell happened to the first $2,707,000,000,000 we gave you people!?!
I know, it sounds crazy, it was terrible policy.

Not the fact that they spent a zillion dollars, but the way they spent it. But at this particular point in time with this particular set of economic situations, what would happen if a bunch of hard core ideolog conservitives took over our governement? What if they immediately slashed the heck out of government spending, what if they immediately slashed the top income tax rate and eleminated inheritance tax and eleminated capital gains tax and all the other things that radical conservitives preach (by the way, I am actually for doing a lot of that stuff)? Would our economy immediately be healed or would it take years of misery on the middle class before things would get better?

And what if things didn't get better in the next year or so (after being controled by the far right)? Would we all start bashing those far right policies and start blaiming the lack of government spending for extending the recession?
 

VanceMack

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What the hell...they have already spent 4 trillion MORE than their budget in 18 months...with...what to show for it again? So...whats another 50 billion here...200 billion there...its not like your great grandchildren will have to pay for it...

Democrats have controlled the budget and spending for 4 years.
 

Kushinator

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GDP = private consumption + gross investment + government spending + (exports − imports)

So what's the easiest way to get GDP to rise? Have the government spend money and pay people for worthless work so that they will spend money too.

Why haven't people realized that GDP is a deeply flawed measure of national wealth?
GDP is merely an accounting identity used to aggregate (observable) income. It is by no means a measure of national wealth.
 

Korimyr the Rat

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I'd say we were merely throwing good money after bad, but it isn't even good money any more.
 

phattonez

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I know, it sounds crazy, it was terrible policy.

Not the fact that they spent a zillion dollars, but the way they spent it. But at this particular point in time with this particular set of economic situations, what would happen if a bunch of hard core ideolog conservitives took over our governement? What if they immediately slashed the heck out of government spending, what if they immediately slashed the top income tax rate and eleminated inheritance tax and eleminated capital gains tax and all the other things that radical conservitives preach (by the way, I am actually for doing a lot of that stuff)? Would our economy immediately be healed or would it take years of misery on the middle class before things would get better?
Probably less than 2 years.
 

Wiseone

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Whether you agree or disagree with the stimulus plans, fact is that all that money hasn't been spent yet. Its spent on a progressive plan, so it comes year by year not all in one giant lump sum. So the vast majority hasnt been spent yet.

I don't think anyone here actually knows that.
 

phattonez

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Whether you agree or disagree with the stimulus plans, fact is that all that money hasn't been spent yet. Its spent on a progressive plan, so it comes year by year not all in one giant lump sum. So the vast majority hasnt been spent yet.

I don't think anyone here actually knows that.
We do. We just think that it hasn't been nor will it be effective.
 

Gipper

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phattonez said:
GDP = private consumption + gross investment + government spending + (exports − imports)

So what's the easiest way to get GDP to rise? Have the government spend money and pay people for worthless work so that they will spend money too.

Why haven't people realized that GDP is a deeply flawed measure of national wealth?
Easiest explanation? The average American isn't as smart as people who post in an economics forum.

It's essentially a political point. I mean, we're talking about highest numbers ever concerning per-capita American employment in public sector jobs - all of which are secure as all hell.

Give people time. I think between Greece and California, Joe Taxpayer is waking up on the blissful ignorance pandered by Democrats about the value, functionality, and overall efficiency of government work.

Nobody worth a damn in the economic/academic world views GDP as any static measure of wealth - at least not in an of itself. However, you could use it as a constant in a long algebraic chain.
 

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Whether you agree or disagree with the stimulus plans, fact is that all that money hasn't been spent yet. Its spent on a progressive plan, so it comes year by year not all in one giant lump sum. So the vast majority hasnt been spent yet.

I don't think anyone here actually knows that.
Acutally thats one of the many reasons that I say that the spendulous bill was flawed. What our economy likely needs(ed) is a "jump start" to start up the private sector job engine, not a slow transformation to dependancy on government spending. All that money entering our private sector economy at one time inorder to create a surge of economic activity would have been much better than the slow trickle of money to soften the effects of the recession.
 

phattonez

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It would have been no different if it was all at once. The problem is that you necessarily destroy economic activity with government activity and replace it with less efficient government spending.
 

Gipper

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Frankly I don't see why they're not trying to increase corporate confidence and offering corporate tax cuts. The underlying issue of the situation we're in is that Big Business is sitting on hordes of cash in the face of uncertainty within the administration. Freeing tax burden, encouragement for employment on the private sector, and assurance that the Bush tax cuts will remain in its entirety would open up the basement coffers in these skyscrapers and allow them to build, loan, invest, and hire.

Why doesn't this administration get it? It's as if they're too stubborn to believe that major global corporations have any realistic power at the national governance level.
 

Kushinator

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Whether you agree or disagree with the stimulus plans, fact is that all that money hasn't been spent yet. Its spent on a progressive plan, so it comes year by year not all in one giant lump sum. So the vast majority hasnt been spent yet.

I don't think anyone here actually knows that.
That's not the point. The rate of spending will continue to diminish and the global economy will feel the stress as stimulus dwindles down. What we can observe is the correlation between the rate of spending (at its max) and the rate of output growth during that period vs now.

Simply stated, $800 billion was inadequate.
 

Objective Voice

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Acutally thats one of the many reasons that I say that the spendulous bill was flawed. What our economy likely needs(ed) is a "jump start" to start up the private sector job engine, not a slow transformation to dependancy on government spending. All that money entering our private sector economy at one time inorder to create a surge of economic activity would have been much better than the slow trickle of money to soften the effects of the recession.
But the private sector (Corperate American) couldn't fix itself. Most major banks still had bad mortgage debt on their balance sheets. Moreover, they're still trying to get their "emergency funds" beefed up so that should they take more financial risks in the near future, they can handle the loses themselves and not rely on another government bailout. Banks and other financial institutions are also trying to figure out where these new financial rules apply to them. So, I understand why jobs haven't returned so quickly. It's alot for businesses within all U.S. industries to digest. Therefore, I admit the new policies are hampering job growth to a degree, but I don't see that as a long-term problem. The big issue is when will financial institutions start lending again?

I think the best thing the Obama Administration can do is exactly as they've suggested - make small business loans available, give tax breaks to small businesses, and allow the tax cuts to remain for the working/middle-class. Conservatives have successfully argued that small businesses are the greatest job creators. It makes sense to give them tax cuts. And since there are more working-class Americans than there are wealthy, it just makes sense to target tax cuts to the sector of people who can have the greatest impact on the economy by virtue of their collective purchasing power. Combine both and the economy can spring back quickly.

It just makes sense.
 
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It would have been no different if it was all at once. The problem is that you necessarily destroy economic activity with government activity and replace it with less efficient government spending.
Another one of my reasons that the spendulous was misdirected (and thus was not effective) was that only a fairly small percent went for infrastructure spending. Most of it should have gone to infrastructure spending (real infrastructure that has immediate value). Sooner or later our roads and bridged and whatever else qualifies as infrastrure have to be repaired, rebuilt, and expanded. Spending 800 billion doing it during economic downturns just speeds up the gov spending cycle during a time when we need more spending. Once the infrasture is upgraded then the need for future expenditures (when the economy has recovered) on infrasture is significantly reduced and most of the spending can be recouped as it was already on a schedule to be done sometime in the future. By being able to reduce government expenditures during good times we also reduce the effect of the government expenditures choking out our private sector (particularly private sector construction industires).

The reason that I suggest that infrasture spending should have been faster and expanded is that our construction companies could have easily kept close to full employment, taking up the slack from the private sector constuction decline. Those people who would have kept their livelyhood would have continued spending, purchasing homes, purchasing cars, and paying their debts instead of defaulting. With that more or less "normal" level of spending due to the construction sector not shutting down, banks would not have been damaged as bad, nor would our manufacturing and service sector. Also, businesses that depend on good infrastucture would have been positively effected (although possibly temporarally inconvienanced) by the improved infrastructure and would have had better long term industry projections, thus increasing their economic confidence level - and would have been less likely to lay off people and hord cash. At this point, many of those businesses may be terrified of the uncertain future, whether or not bridges and roads are going to be safe and passable in the future because they really don't know if the government is going to be able to fund much infrasturcture spending in the future (because the gov blew all our money on stupid crap).
 

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That's not the point. The rate of spending will continue to diminish and the global economy will feel the stress as stimulus dwindles down. What we can observe is the correlation between the rate of spending (at its max) and the rate of output growth during that period vs now.

Simply stated, $800 billion was inadequate.
I tend to agree. It was inadequate, but more importantly is was not effective because much of it was wasted and/or not spend immediately. The reason that I agree that the $800 billion was inadequate is because Obama himself has admitted that he didn't understand the scale of our economic issues. It may have been enough to solve a more moderate downturn if it had been used wisely and if it had been intended as a true stimulous, but with the huge problems that our economy had/has it likely should have been several times that much. Now we are at this point where it has been more or less proven to have not been effective and people are drawing conclusions that it was not effective because government spending simply doesn't help, I suspect that is not the corect conclusion (although I am sure that phatz is gonna disagree), but at this point it is what people believe it to be.

It's entirely likely that the public is now so jaded against government stimulous that our gov will never have enough support to do what should have been done in the begining (of the recession), and because of that situation we are now likely to endur another 10+ year of depression. Thats basically what happened during the great depression, the first strategy (to do nothing and to keep a balanced budget) didn't work, then along came Roosevelt who changed that policy with the New Deal, the early stages of the New Deal didn't work because it wasn't large enough, the gov kept chugging along adding this and that new deal policy, still didn't work because it was too small, by the time Roosevelt realized that what he was doing was too small to work it was too late for him to do anything significant - the public was sick and tired of spending that wasn't working. Finally, due to no credit of his own (or was it???) WW2 came along and our politicians on both sides of the isle open the checkbook, and the public supported them doing so, so that we could win the war. At that point, gov spending grew vastly and finally reached the threshold where it made a difference. If only WW2 had started in 1930 instead of '41.

Now I know that phatz and other far right wingers arn't going to agree with a bit of that because it doesn't fit into their ideological adgenda. But for the rest of us, we need to stop ignoring historical fact so that we can finally stop making the same mistakes over and over again.
 
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Well the actual problem with California is largely their political system of voter referenda, especially as it relates to taxation. For example, voters consistently reject tax increasses, while simultaneously supporting spending. Voters want goods and services, but they don't want to pay for any of it. The obvious problem is deep debt caused by the "Taxcut Chorus" and the inability to pass a sound budget.

Democrats and Republicans have a habit of wanting to cut taxes while simultaneously increasing spending. THis was a Reagan favourite, and he's a Republican elevated to divinity status.

Greece has many problems, but not all are accurately portrayed in the media. In some cases, deregulation in the wrong sectors helped facilitate the problem, just as it hurt in the American financial sector. According to The Economist, after all, the worst problems with sub-prime and "structured financial products" actually manifested in the least regulated sector of the financial economy.


What the American Stimulous should have had was spending on public infrastructure that has long-term value, such as nuclear power plants, grid updates, rail, etc.
 

phattonez

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That's not the point. The rate of spending will continue to diminish and the global economy will feel the stress as stimulus dwindles down. What we can observe is the correlation between the rate of spending (at its max) and the rate of output growth during that period vs now.

Simply stated, $800 billion was inadequate.
When did fiscal responsibility get shoved out the door?
 

phattonez

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Another one of my reasons that the spendulous was misdirected (and thus was not effective) was that only a fairly small percent went for infrastructure spending. Most of it should have gone to infrastructure spending (real infrastructure that has immediate value). Sooner or later our roads and bridged and whatever else qualifies as infrastrure have to be repaired, rebuilt, and expanded. Spending 800 billion doing it during economic downturns just speeds up the gov spending cycle during a time when we need more spending. Once the infrasture is upgraded then the need for future expenditures (when the economy has recovered) on infrasture is significantly reduced and most of the spending can be recouped as it was already on a schedule to be done sometime in the future. By being able to reduce government expenditures during good times we also reduce the effect of the government expenditures choking out our private sector (particularly private sector construction industires).

The reason that I suggest that infrasture spending should have been faster and expanded is that our construction companies could have easily kept close to full employment, taking up the slack from the private sector constuction decline. Those people who would have kept their livelyhood would have continued spending, purchasing homes, purchasing cars, and paying their debts instead of defaulting. With that more or less "normal" level of spending due to the construction sector not shutting down, banks would not have been damaged as bad, nor would our manufacturing and service sector. Also, businesses that depend on good infrastucture would have been positively effected (although possibly temporarally inconvienanced) by the improved infrastructure and would have had better long term industry projections, thus increasing their economic confidence level - and would have been less likely to lay off people and hord cash. At this point, many of those businesses may be terrified of the uncertain future, whether or not bridges and roads are going to be safe and passable in the future because they really don't know if the government is going to be able to fund much infrasturcture spending in the future (because the gov blew all our money on stupid crap).
I doubt that businesses are putting off hiring because they're worried about infrastructure. They're worried about onerous regulation and new taxes.

And the part about government spending being inefficient is true no matter how the government spends the money. They don't know our demands as well as we do so they won't earn a return on investment that is as large as that which we could have gotten spending our own money.
 

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I doubt that businesses are putting off hiring because they're worried about infrastructure. They're worried about onerous regulation and new taxes.

And the part about government spending being inefficient is true no matter how the government spends the money. They don't know our demands as well as we do so they won't earn a return on investment that is as large as that which we could have gotten spending our own money.
On my level, all the small business (really micro-business - most of them have less than 50 employees) people that I deal with every day are holding of on expanding due to the lack of customers. There are only so many hours in a day that we can work, we would all love to hire more employees, I cant tell you how tired I am of 16 hr days, but until we have more customers I will continue to work 16 hrs a day just to meet the bills and debts that I obligated myself and my business to during better times. If I was to see a 1/3rd increase in sales today, I would have to increase my staff by 1/3rd, because I can't work any more hours, regardless of future tax rate expectations.

Personally, I am MUCH more concerned with the volume of business that we have (we have lost 40% of our business during the past two years) than the potential of future tax rates. Without an increase in sales I will not start replentishing my staff regardless of whether tax rates go up or down or neither.

It would be interesting to see a poll of business owners that asks them:
1) At your current level of sales would you choose to increase your staffing level if tax rates were reduced.
2) At your current level of sales would you reduce your staffing level if tax rates were increased.
3) If your sales significantly increased for several consecutive months leading you to the expectation of operating at a higher sales level during the next year, would you increase your staffing level?
 

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When did fiscal responsibility get shoved out the door?
When did fiscal responsibility ever exist? During the Reagan administration? During the Bush Administration? Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha hoe he ha ha ha ha ha.
 

phattonez

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On my level, all the small business (really micro-business - most of them have less than 50 employees) people that I deal with every day are holding of on expanding due to the lack of customers. There are only so many hours in a day that we can work, we would all love to hire more employees, I cant tell you how tired I am of 16 hr days, but until we have more customers I will continue to work 16 hrs a day just to meet the bills and debts that I obligated myself and my business to during better times. If I was to see a 1/3rd increase in sales today, I would have to increase my staff by 1/3rd, because I can't work any more hours, regardless of future tax rate expectations.

Personally, I am MUCH more concerned with the volume of business that we have (we have lost 40% of our business during the past two years) than the potential of future tax rates. Without an increase in sales I will not start replentishing my staff regardless of whether tax rates go up or down or neither.

It would be interesting to see a poll of business owners that asks them:
1) At your current level of sales would you choose to increase your staffing level if tax rates were reduced.
2) At your current level of sales would you reduce your staffing level if tax rates were increased.
3) If your sales significantly increased for several consecutive months leading you to the expectation of operating at a higher sales level during the next year, would you increase your staffing level?
So maybe we need to shift production to where business is actually growing, not shrinking.
 
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