Many Now predicting Double-Dip Recession

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KlokWyze

KlokWyze

Diamond Member
Sep 7, 2006
4,451
9
81
www.dogsonacid.com
Throckmorton said:
So does extending unemployment benefits
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Unemployment benefits don't really give the receiver spending money, but rather provide just enough for the very basics. So the mortgage lenders, land lords, cable company, electric company and local grocer will lose revenue if unemployment benefits do stop. More foreclosures will hit the market. Real estate will fall further. Don't think it would be drastic though.
 
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daishi5

Golden Member
Feb 17, 2005
1,196
0
76
Throckmorton said:
So does extending unemployment benefits
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So, if you accept the argument that unemployment is important because it gives money to private citizens who spend it and thus stimulate the economy, do you also accept that giving money to private citizens through tax cuts would stimulate the economy?
 
Fern

Fern

Elite Member
Sep 30, 2003
26,907
174
106
First said:
Except tax breaks all never immediate unless they're tax credits, and consumer behavior doesn't actually change immediately when said break is given, which defeats the entire purpose of thwarting a recession from becoming overly severe. Meanwhile unemployment dollars are a direct injection of demand into an economy that is 68-70% driven by consumption. If you had your choice between tax breaks and unemployment extension it'd be unarguable statistically to favor tax breaks, yet somehow I get the felling you're more, um, "prone" to want a tax break instead of unemployment extension despite what we know of the actual measured impact of both.
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Firstly, you're confusing some principals of taxation.

Tax credits are claimed on the following year's tax return. So, depending upon passage of any tax credit law it would be 3 to 15 months before they were realized by the taxpayer (who could then spend it).

Income tax rates reductions, OTOH, would be immediate. For employees their tax withholdings would decrease leaving more money in their hands immediately. For business their estimated tax payments would drop immediately leaving more money in their hands now etc.

I do not view it as choice between only unemployment and tax breaks. As I've explained above unemployment benefits are not stimulous, or at least a very poor form of one no better than driving by throwing money out the car window. Also, as I've explained above I favor increased use of the SBA to provide funding for new and existing small businesses, a choice you don't mention in your post above.

Fern
 
KlokWyze

KlokWyze

Diamond Member
Sep 7, 2006
4,451
9
81
www.dogsonacid.com
Fern said:
But a very poor one.

Under the theory that borrowing (which the fed gov must do to finance unemployment) for give-aways like unemployment is the kind of stimulous necessary we might as well just borrow even more and hand it out.

But isn't that got us into trouble in the first place?

Look, would you rather take out a loan to pay for a $100K vacation, or for a $100K investment (gold, stocks, real estate etc)?

All things being even, which loan is more likely to get paid back? Of course the answer is obvious.

Creating private sector jobs creates more GDP. The private sector job must make enough money to pay for itself plus some profit. Once the gov money is expend initially the private sector job keeps going on it's own. It's like an economic 'energizer bunny'. It must only be funded once and will generate GDP/profit which returns revenue to gov via taxes.

Unemployment and money for government jobs is completely different. they generate no GDP/profit. Once the initial money runs out it must be funded again. That's the big problem with stimulous and these proposals for additional funding. They do not address the core problem - we need increased GDP to pull ourselves out of the recession.

IMO, unemployment is better viewed as welfare/humanitarian assistance to help cushion the blow for those harmed by the recession. But it is not the answer to lift us out of depression. If the current model of viewing unemployment/gov job funding as stimulous is continued (without an in GDP) the inevitable result is bankruptcy.

Fern
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I agree with this completely, but I think some sort of unemployment is necessary and beneficial. Not sure if you're anti-unemployment or not. You're just saying it isn't a tool to be used to bring the economy back online..... i guess. :D
 
Throckmorton

Throckmorton

Lifer
Aug 23, 2007
16,829
3
0
daishi5 said:
So, if you accept the argument that unemployment is important because it gives money to private citizens who spend it and thus stimulate the economy, do you also accept that giving money to private citizens through tax cuts would stimulate the economy?
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Yes. Just as long as you give the money to middle class people like me who will actually spend it.
 
IHateMyJob2004

IHateMyJob2004

Lifer
Sep 29, 2004
18,656
68
91
senseamp said:
The market is finally starting to price in the real risk of a party using the filibuster to willfully sabotage economic recovery for its own political interest. That is why we have seen a major retreat in stock valuations. The damage has already been done, but the longer this continues, the more risk will be discounted in the stock prices, and even worse, company forecasts for consumer confidence and spending. This is going to result in companies bracing for a major economic contraction and cutting employment. So Republicans either already have or are very close to undermining the chances of this country's economic recovery.
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I love speculators. And that explains today how?

Bottom line. We are going to see inflation (hyper?) It's when, not if.

And since you are uninformed, the unemployment problem right now is due to no one hiring because they don't want to lay off later. Alot of people in this country are geting overtime pay right now. That is the hedge many companies are making right now.

Republicans are to stupid to fix things. If they try to breakthem, there is a 50/50 chance that things will get better.
 
Fern

Fern

Elite Member
Sep 30, 2003
26,907
174
106
KlokWyze said:
I agree with this completely, but I think some sort of unemployment is necessary and beneficial. Not sure if you're anti-unemployment or not. You're just saying it isn't a tool to be used to bring the economy back online..... i guess. :D
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Correct, and as I've said elsewhere (perhaps even in this thread) I understood the need for extended unemployment and support for the states. Even so, there is a limit. Unfortunately, it can't go on indefinately.

The problem is the ineffectiveness of our (first) stimulous. We've blown our money. At some point we have to choose between the humanitarian type funding and actual stimulous money (maybe a combination) or go broke. I don't think we can do both (and we certainly can't continue with primarly state and individual welfare payments).

Fern
 
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dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Quote:
Originally Posted by dmcowen674
Wild to see you guys posting things I said in the middle of the Bush Regime would happen and you guys said it would never happen.

Of course with Bush out you guys blame Obama for Bush's disaster.

Must kill you guys that I was right for so many years ahead

BlahBlahYouToo said:
Actually, Pete Schiff believes it started with Clinton and really picked up with Greenspan's policies.
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Well then that is where Schiff and I differ.

Clinton had faults but nothing compared to the Bush Regime
 
D

daishi5

Golden Member
Feb 17, 2005
1,196
0
76
Throckmorton said:
Yes. Just as long as you give the money to middle class people like me who will actually spend it.
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Yeah, cutting taxes on those with the higher marginal savings rate (the rich) is not going to be very efficient at getting more money spent.

Throckmorton said:
We haven't blown our money. Only half the stimulus has been spent. That's the problem
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This is why I think tax cuts are a better form of stimulus. It may not be as efficient per dollar, but it has a lot less overhead and it can be done very quickly.
 
werepossum

werepossum

Elite Member
Jul 10, 2006
29,873
463
126
Acanthus said:
Show me statistics that back up this theory.

This is a very long winded version of Regeanomics.
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Yeah, I'll get right on that sport. Perhaps as an addendum to your book of Marx, so you'll have something new to read while you wait for the next big government program to fix things.

Congrats though, you got me. I actually thought you didn't understand the theory. Now I know it's just rejection of the ideology. Enjoy your new government-directed economy.
 
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Fern

Fern

Elite Member
Sep 30, 2003
26,907
174
106
Throckmorton said:
We haven't blown our money. Only half the stimulus has been spent. That's the problem
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Do you know what's left?

I don't mean the amount of money, I mean what projects etc are awaiting funding. I.e., how will the remainder be spent? More funds to support states' Medicare/Medicaid, or education? Or are there some real infrastructure projects in the pipeline?

Fern
 
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L

Ldir

Platinum Member
Jul 23, 2003
2,184
0
0
The latest is Wells Fargo closing their credit card operation, up to 14,000 US jobs affected. We keep losing jobs like that it's no wonder we're headed back into recession.
 
StageLeft

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
dmcowen674 said:
Quote:
Originally Posted by dmcowen674
Wild to see you guys posting things I said in the middle of the Bush Regime would happen and you guys said it would never happen.

Of course with Bush out you guys blame Obama for Bush's disaster.

Must kill you guys that I was right for so many years ahead



Well then that is where Schiff and I differ.

Clinton had faults but nothing compared to the Bush Regime
Click to expand...
Dave, I was reviewing the dissertation you wrote in support of your second doctorate--Global Currency Hedging in the Nascent Economies of Western Africa--and wanted to discuss further; you raised fascinating questions about the symbiosis of agriculture between Sierra Leone and Guinea and I have some ideas I'd like to share.
 
StageLeft

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
Acanthus said:
Why republicans getting control of congress could be a problem.

http://finance.yahoo.com/tech-ticker/careful-what-you-wish-for-why-republican-control-may-be-bad-for-wall-street-517361.html;_ylt=AhMd5FjmRRsu4hRRemxIJkG7YWsA;_ylu=X3oDMTEydGluaXU3BHBvcwMyBHNlYwN0ZWNoVGlja2VyBHNsawNwbGF5dmlkZW8-?tickers=^dji,^gspc,stt,spy,^bkx,xlf
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bad link...
 
IndyColtsFan

IndyColtsFan

Lifer
Sep 22, 2007
33,655
688
126
Skoorb said:
Dave, I was reviewing the dissertation you wrote in support of your second doctorate--Global Currency Hedging in the Nascent Economies of Western Africa--and wanted to discuss further; you raised fascinating questions about the symbiosis of agriculture between Sierra Leone and Guinea and I have some ideas I'd like to share.
Click to expand...

He must have done his field work on the way to and from his vacation home --- errrr, I mean, hut -- in Somalia.
 
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