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Why is spending more money that we don't have the way out of a recession?

Lord Tammerlain

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Depends on the type of recession


An inventory reduction type recession government spending can keep the economy at a level rate untill private enterprise picks back up, reducing the level of decline in the economy

A balance sheet correction type recession where individuals and corporations have taken on too much debt, and now are in the process of reducing debts, government spending will have a far harder time of making up for the reduction in private spending. It may be futile, but it will prevent the worst of the possible economic slowdown from occuring provided private demand picks up before the government has a problem in borrowing money
 

Aunt Spiker

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I agree with that.
Which brings us to our current situation: we're amid both of those issues. . . and more

Many consumers, because of the gas-cost crunch (among almost everything else becoming more expensive) have reset their spending habits and reigned in wastefulness and slowed, stopped or paid off incurring debt.

Which means that our economy is not going to return to it's previous levels - at least not for quite some time.

Add to that the job-loss issues, many people just don't have money at all to spread around.

So long as we're in these situations we won't be seeing any reversals of our current trend. . . the recession issues don't lay with "the government not spending enough money" or "the government not bailing out enough failing businesses" - the problem lies with the core of the spending and money flow - people who have it aren't spending. People who might spend don't have it.

Unless the government gives a substantial amount *to* individuals in order for them to relieve their selves from basic costs of living and/or debt that won't be changing.

I, for example, have no intention of using my credit cards ever again. . . my focus is to pay them off.
As I pay them off I put that extra amount of $$ into savings so - when the **** hits the fan again - I'll be ready and able to cope instead of having to charge utilities to my credit cards again.
 
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Grim17

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In my opinion, the only reason the middle and lower income people would need a tax break, was if we had run away inflation. That isn't the case now. What the middle and lower income folks need are jobs. The only way to create jobs is to cut the business owners some slack. Of course, you won't ever hear a politician say that, because that would be political suicide.
 

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Depends on the type of recession


An inventory reduction type recession government spending can keep the economy at a level rate untill private enterprise picks back up, reducing the level of decline in the economy

A balance sheet correction type recession where individuals and corporations have taken on too much debt, and now are in the process of reducing debts, government spending will have a far harder time of making up for the reduction in private spending. It may be futile, but it will prevent the worst of the possible economic slowdown from occuring provided private demand picks up before the government has a problem in borrowing money
But the government doesn't create any wealth at all. It simply moves it around (thereby forcibly taking it from one person to give to another). How is spending trillions of taxpayer dollars in order to bail out failing businesses and finance frivilous "stimulus" spending going to help the economy? Especially when you consider the stimulus bill, which paid something like $142,000 for every job created.
 

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In my opinion, the only reason the middle and lower income people would need a tax break, was if we had run away inflation. That isn't the case now. What the middle and lower income folks need are jobs. The only way to create jobs is to cut the business owners some slack. Of course, you won't ever hear a politician say that, because that would be political suicide.
lib politicians get power by redistributing income. Cutting businesses a break is cutting off the dem politicians' ability to buy votes
 

The Uncola

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The title speaks for itself.
How does cutting $Trillon$ of tax obligation on the very richest of the rich, without paying for it and getting us ass deep in TWO unnecessary wars put on a Chinese Credit Card equal responsible govening? You answer first.
 

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How are businesses not moving weath around? Consumers are transfering their wealth to the producer in exchange for an item. That producer now has that wealth and invests it, and then transfers wealth to another producer by acting as a consumer. Government can take your money, just as you give it to a producer, and use it to invest or purchase.
 

Deuce

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But the government doesn't create any wealth at all. It simply moves it around (thereby forcibly taking it from one person to give to another). How is spending trillions of taxpayer dollars in order to bail out failing businesses and finance frivilous "stimulus" spending going to help the economy? Especially when you consider the stimulus bill, which paid something like $142,000 for every job created.
Private industry doesn't "create" "wealth" either. Money, when you get down to it, is really more of a representation of time and work put into some sort of task. I hammer things into other things for 8 hours, my boss makes a profit off that work and in turn he gives me a wad of cash. I hand that cash to other people to exchange for some of their time and work: food, movie tickets, a car, whatever.

Government employees and projects are also work. Often that work is actually accomplished by private industry, we contract a lot of things out. Building roads is work. Sitting in a control tower directing aircraft to and from the runways is work. Policing our roads and our streets is work. Work creates wealth, it's not inherently important that the paycheck says Sam's Club instead of Uncle Sam. The USSR had everything done by "the government." Saying that the USSR had "zero wealth" would be absurd. They didn't fail because they had zero wealth, they failed because their system was set up with little-to-no incentive for the average citizen to really work hard at anything. (something pretty much unavoidable in a communist sytem)

Saying "the government doesn't create any wealth at all" is missing the point. And since when is $142,000 "per job" something outrageous? There's more than just salary that goes into that. If I pay a guy $42,000 and he uses $100,000 worth of materials in his work, his job "cost" $142,000. The $42,000 is easy to track, it goes into the worker's pocket and he spends it on things like cars and beer. The $100,000 worth of materials? Well, we bought those materials from someone. Now they have an extra $100,000 to buy cars and beer.

.... Speaking of beer, I'm gonna go stimulate my local liquor store. I'm out of beer.
 
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IT doesn't just miss the point, it is false. He's confusing "doesn't create wealth" with "doesn't create as much wealth in all circumstances" with each other. This is a very Objectivist sort of bizarre reasoning, where private entities and their spending, investment are unique and fundamentally different.
 
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TurtleDude

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How does cutting $Trillon$ of tax obligation on the very richest of the rich, without paying for it and getting us ass deep in TWO unnecessary wars put on a Chinese Credit Card equal responsible govening? You answer first.
you think people making 200K a year are the very richest of the rich?

tax cuts don't need to be paid for

when you learn that fact you might be better able to argue economic points.
 

Deuce

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IT doesn't just miss the point, it is false. He's confusing "doesn't create wealth" with "doesn't create as much wealth in all circumstances" with each other. This is a very Objectivist sort of bizarre reasoning, where private entities and their spending, investment are unique and fundamentally different.
Yes, this is one of the key points that libertarians miss. They behave as though tax dollars are put into some giant pile and set on fire, while posting on the internet which was developed with government funding, using electrical infrastructure subsidized with government funding, and they got to their home on roads built with government funding.

The other key point is actually the same point that communism misses: human nature. The free market is great, but left unchecked it will literally kill you to make a buck.
 

OscarB63

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How does cutting $Trillon$ of tax obligation on the very richest of the rich, without paying for it and getting us ass deep in TWO unnecessary wars put on a Chinese Credit Card equal responsible govening? You answer first.
non-sequitor. meaningless hyperbole
 

TurtleDude

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Yes, this is one of the key points that libertarians miss. They behave as though tax dollars are put into some giant pile and set on fire, while posting on the internet which was developed with government funding, using electrical infrastructure subsidized with government funding, and they got to their home on roads built with government funding.

The other key point is actually the same point that communism misses: human nature. The free market is great, but left unchecked it will literally kill you to make a buck.
its worse than burning the dollars. the money is used to buy the votes of those who empower lib politicians and the money is used to create more dem bots addicted to government spending
 

Deuce

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its worse than burning the dollars. the money is used to buy the votes of those who empower lib politicians and the money is used to create more dem bots addicted to government spending
I suppose you have some research links to show how spending more money on roads and schools converts people to Team Blue?
 

TurtleDude

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I suppose you have some research links to show how spending more money on roads and schools converts people to Team Blue?
you assume that is what all the tax money is being used for

most of the money for roads and schools comes from 1) gasoline taxes and 2) property taxes
 

OscarB63

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I suppose you have some research links to show how spending more money on roads and schools converts people to Team Blue?
I suppose you have research to show that the more money is all spent on roads and schools instead of on more entitlement programs that have historically kept people on team blue?
 

Deuce

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you assume that is what all the tax money is being used for

most of the money for roads and schools comes from 1) gasoline taxes and 2) property taxes
Why would you think that I assumed that? Now you're just being ridiculous.
Ok then. Show me how buying a fighter jet, tank, or paying a soldier's salary creates EVIL DIRTY LIBERALS.

I suppose you have research to show that the more money is all spent on roads and schools instead of on more entitlement programs that have historically kept people on team blue?
No, you see, you don't understand at all. This is the part I'm saying doesn't actually happen. Just because more poor people vote democrat doesn't mean that those social programs made them become democrats. Correlation =/= causation.
 
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TurtleDude

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Why would you think that I assumed that? Now you're just being ridiculous.
Ok then. Show me how buying a fighter jet, tank, or paying a soldier's salary creates EVIL DIRTY LIBERALS.



No, you see, you don't understand at all. This is the part I'm saying doesn't actually happen. Just because more poor people vote democrat doesn't mean that those social programs made them become democrats. Correlation =/= causation.
if liberal spending schemes were limited to roads, jets, tanks or military salaries we wouldn't be in the world of hurt we are now and our taxes would be about one tenth of what they are now and dems would never win any elections because not only would they not be buying the votes of the dependent class, there wouldn't be much of a dependent class that was created as a permanent part of America by the New Deal
 

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No, you see, you don't understand at all. This is the part I'm saying doesn't actually happen. Just because more poor people vote democrat doesn't mean that those social programs made them become democrats. Correlation =/= causation.
Oh gawd. I can see from that comment that there is absolutely no point in talking to you.

why not man up and change your "lean" to ultra liberal? you are not fooling anyone with your undisclosed label. :lol:
 

Deuce

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Oh gawd. I can see from that comment that there is absolutely no point in talking to you.

why not man up and change your "lean" to ultra liberal? you are not fooling anyone with your undisclosed label. :lol:
Every new conservative to these boards does this. AHA! A LIBERAL! I'VE DISCOVERED YOU! MUAHAHA I AM SO CLEVER.

It's not something I hide, dude. So, are you going to provide any evidence that receiving a welfare check magically converts a staunch conservative into a socialist or are you going to stick with dodging questions and ad hominem?
 

OscarB63

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Every new conservative to these boards does this. AHA! A LIBERAL! I'VE DISCOVERED YOU! MUAHAHA I AM SO CLEVER.

It's not something I hide, dude. So, are you going to provide any evidence that receiving a welfare check magically converts a staunch conservative into a socialist or are you going to stick with dodging questions and ad hominem?
I would if I had ever said such a thing.
 

Aunt Spiker

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But the government doesn't create any wealth at all. It simply moves it around (thereby forcibly taking it from one person to give to another). How is spending trillions of taxpayer dollars in order to bail out failing businesses and finance frivilous "stimulus" spending going to help the economy? Especially when you consider the stimulus bill, which paid something like $142,000 for every job created.
The % of people who received most or all of their income and benefits purely form government aid is very small. . . taxes aren't income redistribution (as someone very gracefully explained in another thread) - it's a way for the government to fund all of it's programs, expenses, wants and needs.

Only a very small portion of what they take from me goes to my neighbor down the street in the form of welfare, etc.
 

TurtleDude

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The % of people who received most or all of their income and benefits purely form government aid is very small. . . taxes aren't income redistribution (as someone very gracefully explained in another thread) - it's a way for the government to fund all of it's programs, expenses, wants and needs.

Only a very small portion of what they take from me goes to my neighbor down the street in the form of welfare, etc.
taxes are the source of income redistribution. If someone is taxed more than they use and someone else uses more than they pay then taxes are the vehicle by which income redistribution is accomplished
 

Aunt Spiker

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taxes are the source of income redistribution. If someone is taxed more than they use and someone else uses more than they pay then taxes are the vehicle by which income redistribution is accomplished
Yes - but that's not the main or sole purpose of taxes.
 
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