Another stimulus package: the only solution, my friend says?

[BurnItDwn]

Inflation might actually help things out ....
Right now, prices of houses are falling ... the value of the dollar in relationship to buying power is increasing, but, the vast majority of the population are in debt, thus ... the "value" of their debt is increasing.

If you can devalue the dollar, while increasing incomes to account for the devaluation, then the debtors will be better off. The amount of $ collected by the Debtees may be less valuable than the current situation, but ... less people would be buried by their debt, so, it's possible that less would then default on their debt.

so, I would think that devaluing the dollar would actually make for a stronger economy....

 

[Gonad the Barbarian]

DING DING DING. We have a winner! Why is Apple sitting on BILLIONS of dollars of cash? They are scared of what government is going to do.

Like what, inject more money into the economy so consumers will buy their products? The fact is these companies are sitting on cash because the demand isn't there to use it for production. And the demand isn't there because consumers are unemployed and/or already up to their eyeballs in debt.

 

[drebo]

Like what, inject more money into the economy so consumers will buy their products? The fact is these companies are sitting on cash because the demand isn't there to use it for production. And the demand isn't there because consumers are unemployed and/or already up to their eyeballs in debt.

The problem with government stimulus in its current form is that it doesn't make its way down to the consumer. It ends up in the coffers of the same mega-companies that are still scared to spend money.

If the government were smart, they would use that $500B still left in TARP to give low interest loans and tax breaks to small businesses. Small businesses employ the largest portion of the population and cause the most circulation of wealth. It's small businesses that need to be stimulated, not mega-corps.

 

[Moonbeam]

From what I gather the majority of economists think government stimulus is a must and the morons who post on Anandtech and known nothing about economics disagree. This is a testament to the easy with which sucked up by sheep, and the difficulty of acquiring a real knowledge data base. We have here a situation analogous to folks who won't vaccinate their kids.

 

[bamacre]

Someone is going to have to spend money to get us out of this rut. The companies aren't doing it. The consumers aren't doing it. Only one other option.

http://www.europac.net/commentaries/why_not_another_world_war

 

[Gonad the Barbarian]

http://www.europac.net/commentaries/why_not_another_world_war

I love how he ends that:

What we need is more savings, more free enterprise, more production, and a return of American competitiveness in the global economy. Yes, we need Rosie the Riveter - but this time she has to work in the private sector making things that don't explode.

Really? Is that all we need? You mean our economy wouldn't be broken if it was working properly? We just have to increase employment, competition, innovation, and production and everything will be OK? Thanks for that profoundly deep insight Mr. Schiff.

 

[bamacre]

I love how he ends that:



Really? Is that all we need? You mean our economy wouldn't be broken if it was working properly? We just have to increase employment, competition, innovation, and production and everything will be OK? Thanks for that profoundly deep insight Mr. Schiff.

Perhaps you should read the rest of it. :\

 

[zephyrprime]

Economic stimulus will no doubt improve the economy within the short term. However, there is a price to be paid for using stimulus. Eventually, debt becomes too high and the entire system collapses because no one is willing to finance the rolling over of existing debt any more. On the other hand, the austerity measures being advocated by the Europeans and some members of ATPN have been shown by history to simply not work. Austerity reduces liquidity precisely at a time when liquidity is already contracting thus reducing GDP and making existing debt service more burdensome while at the same time increasing unemployment.

You are damned if you do and damned if you don't.

Ultimately, the Great Depression was only resolved in the aftermath of WW2 when the US created out of thin air a 200% increase in m1 money supply relative to 1929 levels (plus another 100% that had already been created during the 1920's) - private debt had been erased due to losing homes, farms, and business bankruptcies - and the European powers had defaulted on their old debt. The US dollar then became the reserve currency of the world. (Thus creating Triffin's Dilemma which caused GDP growth of the world to be partially dependent upon the US increasing it's debt load.) The various advances in technology that had been made were then turned to domestic uses which greatly increased GDP.

 

[CPA]

Vs the alternative conservative plan to slash all the unemployment insurance...

Easy to stop reading your post as you obviously have no clue.

 

[Fern]

OP: sorry, but your friend is a retard. He's a good example of the kind of moronic "thinking" that's driving the country into the ground and gotten us to this point in a mess. The country is due for a correction, for wasteful fat to be trimmed. These spending measures just prolong the inevitable and further damage our country by putting us into an even deeper hole.

Government does not create anything. Additional "stimulus" is just code for "more funding for unsustainable wasteful spending". It would go towards saving all the government jobs at state/city and local levels, further increasing long term government spending and decreasing the efficiency of the country.

No matter how much spenders try to twist the reality, spending money you don't have does not make sense unless you spend it in such a way as to increase future earnings by more than what it cost to finance the spending. That hasn't happened in the past, and until I see a solid plan for actual investments in long term growth (rather than the usual waste), I'm against any kind of additional stimulus.

^This

Fern

 

[StageLeft]

From what I gather the majority of economists think government stimulus is a must and the morons who post on Anandtech and known nothing about economics disagree. This is a testament to the easy with which sucked up by sheep, and the difficulty of acquiring a real knowledge data base. We have here a situation analogous to folks who won't vaccinate their kids.

Perhaps it's hard to talk when everybody else is bleating and so in the end the only way you can contribute is to join in.

 

[Gonad the Barbarian]

Perhaps you should read the rest of it. :\

I read the whole thing. I don't think his war example is all that ridiculous. Except that it's a pretend war. Another space race, a green revolution, or some other government-sparked movement in innovation would raise living standards and achieve all the things he says need to happen to get the economy working again.

To fix the spot we are in right now (no spending, no hiring), beyond the other problems our economy has (and he does hit on these), we have a choice of using an imperfect solution (government spending) or not using any solution at all and just crossing our fingers.

 

[Fern]

-snip-
Altho much of the 1st stimulus was tax cuts.....

Very little of the 1st stimulous were actual "tax cuts".

Just because you call something a tax cut doesn't make it so. And our government has a very bad and pronounced tendency to (mis)name things as they want for political advantage.

Much of the so-called tax cuts in the 1st stimulous were nothing more than welfare type payments labled "tax cuts" and administered through the IRS/taxation system for administrative ease as well as political benefit. ("Look, the Repubs got the tax cuts they wanted" and it was anything but that.)

The biggest single so-called tax cut was probably the change to AMT (the exemption was again adjusted for inflation, as it has always been). I.e., the AMT stayed the way it was in prior years. Only in Washington can keeping something the same be labled a 'change' and called a "tax cut". BTW: that AMT adjustment was gonna happen anyway. It was merely convenient to throw it into the stimulous so they didn't have to struggle with PAYGO. Those who would have been hit by the increase in AMT are primarliy Democratic voters - high earners in high tax urban areass. Basically state/local income taxes are what cause AMT for the vast majority of people. No way the Dems in Congress were gona hammer their own upper middle class voters.

Fern

 

[Fern]

From what I gather the majority of economists think government stimulus is a must and the morons who post on Anandtech and known nothing about economics disagree. This is a testament to the easy with which sucked up by sheep, and the difficulty of acquiring a real knowledge data base. We have here a situation analogous to folks who won't vaccinate their kids.

But do those economist agree about HOW the stimulous should be designed/effected?

People just throw around the term "stimulous" as if it's somehow a magic word. IMO, the question isn't "stimulous", but rather what TYPE of stimulous. More of the same? No thanks; it doesn't work but is very expensive.

Fern

 

[theeedude]

Most economists who don't work for rightwing think tanks agree that direct govt spending is most effective, while trickle down not so much.

 

[yllus]

Have to agree with the above. Hypothetically speaking, a stimulus would be a good idea, but I wonder at its efficacy. I've read in a couple of places that the people who need the stimulus the most, the middle and lower class, aren't really getting jack. I'd like to see a better targeted plan before signing off on round two.

 

[Fern]

Most economists who don't work for rightwing think tanks agree that direct govt spending is most effective, while trickle down not so much.

But here again, what type of government spending?

More aid to the states, more extended unemployment benefits or serious infrastructure investment etc?

"Gov spending" is way too vague IMO.

Fern

 

[Fear No Evil]

Most economists who don't work for rightwing think tanks agree that direct govt spending is most effective, while trickle down not so much.

Isn't government spending trickle down? Or do you think the 1 trillion dollar stimulus bill actually hires people to walk around and buy food at restaurants, rent hotel rooms, and buy satellite TV?

 

[theeedude]

But here again, what type of government spending?

More aid to the states, more extended unemployment benefits or serious infrastructure investment etc?

"Gov spending" is way too vague IMO.

Fern

All of the above: unemployment checks, and govt projects. What we are seeing instead is state governments cutting projects and laying people off. Federal government needs to give more money to the states to avert that, and start its own projects.

 

[Cogman]

Most economists who don't work for rightwing think tanks agree that direct govt spending is most effective, while trickle down not so much.

Translation: Economists that hold my view point agree with what I think is right. Economists that don't hold my viewpoint are automatically Republican think tank members.

The last government stimulus package STILL hasn't been handed out. Seriously, it is 2010, companies have had to submit, resubmit, and resubmit only to be told "Ok, we are going to do another round." What makes you think that a new stimulus package will do any better?

The most unpopular and needed route we need to take is
1. Cut back on Medicare/Medicaid payments, move the mandatory signup age back further.
2. Cut back on social security payments and increase the collection age.
3. Reduce military spending. Surge less in Afghanistan and Iraq.
4. Increase taxes, Sucks, yeah, but I honestly don't see how we will get out of this without doing it.
5. Quit making new programs! We don't need to be spending money on government exercise programs, nor does every home need broadband internet.
6. Kill off and reduce programs where-ever possible.
7. Kill of the damn government unions. Government employees are the last set of people on earth that need to be unionized. After thats done, reduce redundant employees. We don't need 3 teachers aids for every 10 students in school nor do we need as many postal employees as we now have.

These are ranked, IMO, from most important to least.

 

[piasabird]

Well we could suspend the tax penalty when people who have been layed off have to spend some of their retirement plan money. Instead of kicking layed off and displaced workers give them a break on spending their own hard earned money. Let the people that are still working pay the taxes.

The current administration has to slow down this giant expansion of the government into a giant police state and cut some of the spending down to size. Quit giving companies tax abatements. Pass a federal Tax abatement income tax. If a company gets a tax abatement make them include it as Income as Payment-in-kind on their federal taxes. Every time a company gets a tax abatement the home owners have to pay more tax to make up the difference. Enough is enough.

 

[Zebo]

Your friend is a fool. It does not take a rocket scientist to understsand one day intrest alone will consume 100% of tax recipts leaving you with no services, no nothing, no room for stimulus but social Darwinism.

Stimulus would be buying iPhones and ceiling fans made from Compton workers instead of Chinese. Funny they never talk about that. We pay our people not to work instead. fail fail fail.

30 years of fail. 30 years of extend and pretend while top 1% skimmed the margins and left you holding bag. Which is why America is tapped, locally, personally, intellectually with no wherewithall to compete. Sorry Charlie time to produce what you consume (at least)

 

[Slew Foot]

loliberals

 

[sandorski]

Friend is possibly correct.

 

[JS80]

loliberals

woo it's catching on finally