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POLL: Your feelings on massive deficit spending to ward off economic pains.

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No Lifer
I frankly don't have a clue what the numbers are now, they are extremely big being thrown around, though, well over a trillion now as potential spending to soften and/or reverse this recession. So, what are your feelings about how effective it will be in the relatively near term (i.e. removing the recession; let's forget about long term effects of deficit spending, for now).
 
We're not fixing anything by this, just delaying the inevitable by placing an unsupportable onus on the future.
 
i think what we may see is a slight improvement due to demand picking up. Unfortunately it is just artificial due to govt intervention. Once the costs of the program hit us and the stimulus package runs its course. We are left with a big bill for nothing.

Why cant we just accept the fact our economy runs in cycles? When it bottoms out the weak are thinned from the corporate herd. Instead we plow billions and now trillions in a vain attempt to stop the inevitable.
 
I think it will be helpful, but if we're going to do it I want tangible long term benefits from it. I want bridges repaired/replaced/built, highways upgraded, etc.

We're still benefiting from stuff done during New Deal 1.0, this can be the same.

Viper GTS
 
Originally posted by: bamacre
It won't fix much at all in the short-term, and will prolong the recession in the long-term.
Click to expand...

Pretty much SOP from an economist's standpoint. And since you can't back up your contention that the recession will be prolonged don't feel bad with the understanding that we are laughing at you.

It's the amount, yes, that is frightful but quickly off the top of my head in the first year 50% is effectively covered (tax cuts and around $300 billion SS surplus) and I would guess that total expenditures would be spread out over 18-24 months (so you can toss in another $300+ billion offset from SS)

Two things. Makes you wonder how bad it will get in 2009 with continued job losses and housing declines, and how will the US ever pay back the $3.5 trillion or so owed to SS ...
 
postponing the inevitable

better option would be severely cut spending, reduce taxes to put money back in consumers pockets and let them save or spend it - either is beneficial

even without cutting spending, giving money to the PEOPLE instead of directly to areas of govt choosing would be better. allows the economy participants to grow and expand the economy optimally, as opposed to the govt spending on things that may or may not EVER have any return. (or more likely funneling $ to the biggest lobbies, which wastes money on both sides)
 
This was expected and was discussed during the election. There's nothing new here except the amount which keeps changing on a daily basis in the upward direction. It started off with $300B, $800B, $1T and now $1.2T. Don't be surprise this could go as high as $3T before the year's end. A Dem Congress and a Dem OPUS = SSS (Special Spending Spree).
 
This is like being three months behind on your mortgage payment then deciding to throw a party by maxing out your credit cards. It might lift your spirits in the short run, but the pain will be MUCH worse when you finally face the music.

We don't need to print and spend more paper...We need to let the economy correct. As Peter Schiff says, The Recession IS the Cure.
 
Originally posted by: Capitalizt
This is like being three months behind on your mortgage payment then deciding to throw a party by maxing out your credit cards. It might lift your spirits in the short run, but the pain will be MUCH worse when you finally face the music.

We don't need to print and spend more paper...We need to let the economy correct. As Peter Schiff says, The Recession IS the Cure.
Click to expand...

Nobody ever said that it was supposed to prevent a recession. It's just supposed to prevent a collapse.
 
Originally posted by: Skoorb
I'm kind of middle of the road leaning toward mild benefit.
Click to expand...

Hence the problem with your question - there's no differentiation between short- and long-term. Almost certainly, we'll get at least a mild benefit in the short-term from this wild spending spree, but long-term, it's going to be a heck of a hangover.
 
In the long run its greatly expanding govt power, putting a band-aid on a broken system, and adding to an massive deficit. In the Short term it may keep some institutions from collapsing, and causing a deeper recessions, or possibly depression.
 
Just look at Japan. They spent huge to try to fix their deflated economy but it didn't fix anything. Also, infrastructure spending is not a good idea during recessions since the usage level of infrastructure declines during recessions. The time to do infrastructure investment is actually during boom times.

Stimulus spending has never been shown to be very effective. Look at all the new deal spending. It didn't do squat to stop the great depression. If anything, spending like this might prolong recessions (look at the great depression and the japan in the 90s). On the other hand, economies that collapse (like russia in the 90s) actually recover pretty darn fast. It's surprising.
 
It is ok to have Deficits in tough times. What makes this situation much worse is the previous 8 years of Deficits that were allowed to be much higher than they should have been. The Bush Admin could have had Balanced and/or Surplus Budgets for most of its' years, but chose not to. So Obama's Deficits now have to be piled ontop of that, he has no choice.
 
From this point on all you will hear is worse economic news. Things like "unemployment worse than expected" and "bankruptcies worse than expected" etc.

The long tbill is trading at 15%, what does that tell you? Germany crica 1925.

The interest rate will be 40% by years end.

Not bad if you have all your debt fixed of course.

 
out of all the news that's come out the last year, there was one article that showed
the effect of a dollar of government spending on GNP, versus time.

taking into account the "velocity" of money, what is referred to as the "multiplier
effect" in some economics classes.

starting from over a $, it was down to about 25 cents ($1 of government spending
increases GNP 25 cents). it was part of a technical article, but the direction of the
curve was clear - on its way to $1 of government spending has no effect on GNP.

Diminishing Returns.
 
Originally posted by: Zebo
From this point on all you will hear is worse economic news. Things like "unemployment worse than expected" and "bankruptcies worse than expected" etc.

The long tbill is trading at 15%, what does that tell you? Germany crica 1925.

The interest rate will be 40% by years end.

Not bad if you have all your debt fixed of course.
Click to expand...

Where are t-bills trading at 15%?

http://www.bloomberg.com/markets/rates/index.html

The interest rate won't be 40%. What silly predictions.
 
Reduce taxes across the board and institute a government wide spending freeze for 1 quarter ...... then lets see where we stand.
The government should not be pouring out money like this. States have financial problems ...... let the states deal with them.
 

Since it completely fails to address our nation's primary economic problem -- Global Labor Arbitrage -- it won't make much of a difference. Much of the "stimulus" money will just end up going to China and India.
 
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