Obama to propose $3.99 trillion budget

[glenn1]

If you want Debt/GDP...here you go. Here's another "misleading" graph with an "agenda".

Wasting your time. His new argument will be "well if we hadn't stimulated, then GDP would have been even less, thus stimulus should have been even higher!" His economic "theories" aren't falsifiable and can only be rejected outright by voters as they have every single time they've been implemented. Every single time after a year or so voters catch on and kick his brand of nonsense to the curb but it keeps coming back like a bad case of herpes.

 

[fskimospy]

Wasting your time. His new argument will be "well if we hadn't stimulated, then GDP would have been even less, thus stimulus should have been even higher!" His economic "theories" aren't falsifiable and can only be rejected outright by voters as they have every single time they've been implemented. Every single time after a year or so voters catch on and kick his brand of nonsense to the curb but it keeps coming back like a bad case of herpes.

Not only are they falsifiable, they've been shown to be correct. You just don't like the conclusions so you try and pretend they don't exist.

 

[ElFenix]

Wasting your time. His new argument will be "well if we hadn't stimulated, then GDP would have been even less, thus stimulus should have been even higher!" His economic "theories" aren't falsifiable and can only be rejected outright by voters as they have every single time they've been implemented. Every single time after a year or so voters catch on and kick his brand of nonsense to the curb but it keeps coming back like a bad case of herpes.

bullshit. we have centuries of predictions by debt chickenhawks that are false, and proof positive that deficit spending works when you're below full employment, but that doesn't stop each generation's debt chickenhawks from coming out of the woodwork every time they're not in power to claim that deficit spending is inherently bad and is going to bankrupt the nation.

literal centuries. 200 years of the same tired 'classical economics' bullshit which looks real good on paper but doesn't work in the real world.

 

[Matt1970]

bullshit. we have centuries of predictions by debt chickenhawks that are false, and proof positive that deficit spending works when you're below full employment, but that doesn't stop each generation's debt chickenhawks from coming out of the woodwork every time they're not in power to claim that deficit spending is inherently bad and is going to bankrupt the nation.

literal centuries. 300 years of the same tired 'classical economics' bullshit which looks real good on paper but doesn't work in the real world.

Just like those "economists" that predicted the stimulus would keep unemployment below 8%. Claiming your side makes better predictions than the other is like trying to pick up a turd by the clean end.

 

[ElFenix]

Just like those "economists" that predicted the stimulus would keep unemployment below 8%. Claiming your side makes better predictions than the other is like trying to pick up a turd by the clean end.

yeah, that was probably undone by the extended unemployment benefits causing the market clearing wages to stay higher than they might otherwise have been. it's an inexact science and picking bright lines is dumb.

but being wrong once on a specific thing doesn't outweigh being wrong for centuries on your general theory.

 

[fskimospy]

Just like those "economists" that predicted the stimulus would keep unemployment below 8%. Claiming your side makes better predictions than the other is like trying to pick up a turd by the clean end.

Why does someone being wrong accidentally before excuse you being wrong purposefully now?

 

[Matt1970]

Why does someone being wrong accidentally before excuse you being wrong purposefully now?

It's not just once, and it's not just a small error.

 

[ivwshane]

Just like those "economists" that predicted the stimulus would keep unemployment below 8%. Claiming your side makes better predictions than the other is like trying to pick up a turd by the clean end.

What's funny is that those same economist also called for a larger stimulus, you of course have shitty memory and don't remember that but you remember their prediction being wrong, you just don't know why.

 

[Spungo]

His economic "theories" aren't falsifiable

They never seem to be tested either.

How do you stimulate a consumer economy? Get money into the hands of consumers. Duh. How can this be done? Cut everyone a check and tell them to spend it on cheap crap imported from China. That seems like a very simple idea that should be easy to test. The fed's balance sheet has grown by about 3 trillion dollars since the crisis began, so that's about $9,500 for every man, woman, and child in the United States. This program would be hugely popular. Can you imagine a family of 4 getting a one time check from the government for $38,000? Obama's approval rating would sky high, it would give everyone a chance to pay down debts or buy stuff. The economy is fixed, everybody is happy, high fives for everyone.

What did Bush and Obama actually do? They gave that money to Wall Street. If you're not a banker, the government doesn't care about you. You didn't bankroll Bush or Obama to get elected, so you get nothing.

 

[Matt1970]

What's funny is that those same economist also called for a larger stimulus, you of course have shitty memory and don't remember that but you remember their prediction being wrong, you just don't know why.

Most of them were after the fact. Predicting history is pretty easy.

 

[Doc Savage Fan]

What's funny is that those same economist also called for a larger stimulus, you of course have shitty memory and don't remember that but you remember their prediction being wrong, you just don't know why.

Please don't rewrite history here. Romer wanted a larger stimulus ($1.8T initially and then later lobbied for $1.2T) but Larry Summers didn't support either in his written recommendation to Obama. He recommended two choices....roughly $600B vs $850B. Obama got $787B.

 

[Matt1970]

They never seem to be tested either.

How do you stimulate a consumer economy? Get money into the hands of consumers. Duh. How can this be done? Cut everyone a check and tell them to spend it on cheap crap imported from China. That seems like a very simple idea that should be easy to test. The fed's balance sheet has grown by about 3 trillion dollars since the crisis began, so that's about $9,500 for every man, woman, and child in the United States. This program would be hugely popular. Can you imagine a family of 4 getting a one time check from the government for $38,000? Obama's approval rating would sky high, it would give everyone a chance to pay down debts or buy stuff. The economy is fixed, everybody is happy, high fives for everyone.

What did Bush and Obama actually do? They gave that money to Wall Street. If you're not a banker, the government doesn't care about you. You didn't bankroll Bush or Obama to get elected, so you get nothing.

Many households received income tax rebates in 2001 of $300 or $600. It was from Bush so it was bad.

 

[fskimospy]

Please don't rewrite history here. Romer wanted a larger stimulus ($1.8T initially and then later lobbied for $1.2T) but Larry Summers didn't support either in his written recommendation to Obama. He recommended two choices....roughly $600B vs $850B. Obama got $787B.

There are lots of other economists other than Larry Summers. Guess what? They thought the stimulus was woefully inadequate at the time too. (Brad Delong and Paul Krugman to name two)

History shows they were right yet again.

 

[Doc Savage Fan]

There are lots of other economists other than Larry Summers. Guess what? They thought the stimulus was woefully inadequate at the time too. (Brad Delong and Paul Krugman to name two)

History shows they were right yet again.

How did history show they were right?

 

[fskimospy]

Just how did history show they were right?

They wanted a larger stimulus. The stimulus at the time proved insufficient and later research showed that fiscal multipliers during that time period were considerably above one, exactly as they were advocating.

That's pretty much the game right there. Can't be much more right than that.

 

[Subyman]

I agree that stimulus is not needed to return to growth, but I'm not sure that I agree that growth would be the same with or without it. (from what I have read there is evidence for a permanent reduction that comes from extended underutilization)

Another interesting fact is that if you look at US growth over such a long period you'll see that average growth in the last 40 years or so has been markedly slower than in previous years. I haven't read much on why this might be, but it's certainly an interesting and potentially dangerous problem.

I've studied that issue. A country's GDP follows a logistic function. If you look at China's GDP or other countries that are underutilized you will see they are at a point along a logistic function that is further behind us. They are still in the meat of their growth. America follows the same type of logistic function, but we are further along our path. The logistic function tapers as you reach its maximum, which is why the US GDP is beginning to not grow as much. Major changes such as technological breakthroughs or political issues may readjust that "maximum" to a higher value in which the GDP begins to march toward along another logistical path.

Coincidentally, populations also follow the logistic function. If you plot world population data, we are in the middle of the logistic function, which shows heavy growth worldwide. Current models show population beginning to taper off around 2100 unless there is some world changing event or technological breakthrough.

Everything I saw shows China easily having a higher maximum potential than the US. The only way we stay ahead is through political action or tech secrets.

 

[Doc Savage Fan]

They wanted a larger stimulus. The stimulus at the time proved insufficient and later research showed that fiscal multipliers during that time period were considerably above one, exactly as they were advocating.

That's pretty much the game right there. Can't be much more right than that.

This topic has been studied in great detail and there are many interesting conclusions and disagreements found among mainstream economists regarding the effectiveness of stimulus spending and accuracy of fiscal multipliers especially when stimulus debt is evaluated on a long term basis. I believe you're really stretching on this one by saying history shows Delong and Krugman were right...speculation and theory are just that...nothing but speculation and theory. I know that you have a lot of faith in these guys but nothing was proven in history to show their theories were correct.

 

[glenn1]

They wanted a larger stimulus. The stimulus at the time proved insufficient and later research showed that fiscal multipliers during that time period were considerably above one, exactly as they were advocating.

That's pretty much the game right there. Can't be much more right than that.

 

[fskimospy]

This topic has been studied in great detail and there are many interesting conclusions and disagreements found among mainstream economists regarding the effectiveness of stimulus spending and accuracy of fiscal multipliers especially when stimulus debt is evaluated on a long term basis. I believe you're really stretching on this one by saying history shows Delong and Krugman were right...speculation and theory are just that...nothing but speculation and theory. I know that you have a lot of faith in these guys but nothing was proven in history to show their theories were correct.

Don't take it up with me, take it up with the IMF.

 

[Doc Savage Fan]

Don't take it up with me, take it up with the IMF.

You're the one who said it. Please provide a link where history shows Delong and Krugman were proven right.

 

[fskimospy]

You're the one who said it. Please provide a link where history shows Delong and Krugman were proven right.

I've already linked this paper to you a number of times.
http://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf

We conclude in Section V with a discussion of what our results do and do not imply for
actual multipliers. We conclude that multipliers were substantially above 1 in the early years
of the crisis.

 

[Spungo]

How did history show they were right?

Japan's been doing QE for the past 20 years and..... oh
:awe:

 

[Doc Savage Fan]

I've already linked this paper to you a number of times.
http://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf

We seem to be talking past each other...I'm not talking about stimulus vs austerity. I'm talking about the amount of stimulus and how much is needed to be effective. Delong and Krugman argued that we didn't provide enough stimulus spending and I'm looking for proof where history has shown them to be correct on this point as you've asserted.

 

[fskimospy]

We seem to be talking past each other...I'm not talking about stimulus vs austerity. I'm talking about the amount of stimulus and how much is needed to be effective. Delong and Krugman argued that we didn't provide enough stimulus spending and I'm looking for proof where history has shown them to be correct on this point as you've asserted.

Fiscal multipliers were well above one. Whatever diminishing returns were possible, clearly we were nowhere close to hitting them, as shown by the fiscal multiplier.

 

[Doc Savage Fan]

Fiscal multipliers were well above one. Whatever diminishing returns were possible, clearly we were nowhere close to hitting them, as shown by the fiscal multiplier.

How can you say that we were nowhere close to hitting diminishing returns? How do you know that tripling stimulus spending wouldn't have given us significant diminishing returns? This appears to be all theory and speculation with no real basis in fact (or historical fact as you indicated). I see no compelling support that Delong and Krugman were indeed correct.