Do most people believe it failed or succeeded? If you think it was a failed policy, what do you think would have been the right approach to get the country out of the recession it was in when he took over?
This is a serious forum. No jokes in the subject line, please.
looking for serious answers please
It failed to bring the economy back to the roaring Bush years. It succeeded in keeping the economy from falling into a complete death spiral. Now we’re in limbo.
what would you have done if you were president to get us out of the recession? what would you do now? spending cuts?
you have to keep spending. the reason we entered the 1937 recession was because the repubs forced major cutbacks. we basically have to force superhigh inflation in order to break the natural deflationary force that is upon us. who knows how long the 1937 recession would have lasted without WWII pushing capacity utilization to max and killing 50+ million working men. but i do think that money should be spent on infrastructure and not used to prop up financial instruments.
^ True, history repeats. The stimulus plan was not large enough to be fully effective, as evidenced by continued high personal savings rates and unemployment/under-utilization. It was at least definitely better than nothing. Larger fiscal deficits and sensible trade regulations to bring down the current account deficit would be nice right now.
“failed” or “succeeded” are somewhat arbitrary definitions, but there’s little doubt it made the economy significantly better than it would have been without it: http://www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA.pdf
Dwight Wrote: ------------------------------------------------------- > ^ True, history repeats. > > The stimulus plan was not large enough to be fully > effective, as evidenced by continued high personal > savings rates and unemployment/under-utilization. > It was at least definitely better than nothing. > > Larger fiscal deficits and sensible trade > regulations to bring down the current account > deficit would be nice right now. Haha, you have been reading too much Krugman. The stimulus was the single most effective piece of legislation ever designed to destroy scarce capital. Dog parks and bridges to nowhere, along with intricate studies of farting monkeys and blue winged olive dragonflies are not projects that spur long-term real economic growth. The stimulus plan was a bad joke wrapped in a tragicomedy taco and anyone that thinks it was “better than nothing” needs to immiediatley leave the field of finance and take a job as a moonbat ballwasher. To put forth a non-falsifiable argument that the stimulus just needed to be bigger is weak. Spending to create jobs may make you feel good in the short-term, but long-term sustainable economic growth must come from real investment from private market particiapnts willing to deploy their scarce capital, not monkeys in suits in DC. Go here for a taste of what the stimulus bought us: http://www.businessinsider.com/mccain-100-wasteful-stimulus-projects-2010-8#the-us-forest-service-replaces-the-windows-in-a-visitor-center-that-was-closed-in-2007-amboy-wa-for-554763-1 Anyone that thinks we need MORE money to put toward this BS, needs a visit to the cuckoo house. An example: The University of North Carolina at Charlotte received more than $750,000 in stimulus funds to help develop a computerized choreography program that its creators believe could lead to a YouTube-like 'Dance Tube” online application. The grant says UNC-Charlotte will “define an evolving system that assists in the design and production of interactive dance performances with real-time audience interaction.” Haha, yeah, thats it more DanceTube, that is how we will bring prosperity back to this country. Hahah, make me puke on my shoes!!!
the big problem is uncertainty. the banks are still waiting to hear what their new regulations are going to be so they can make their 5/10/50 year plans and start spending and lending. healthcare is also uncertain as no one knows if what’s been proposed is even legal (to force citizens to buy-in) additionally, it was the Bush stimulus. Obama hasn’t even closed Guantanamo yet. perhaps that’s on his to-do list for the 2012 election.
@equity_analyst How is capital scarce right now? Corporations have $2T of cash, 185% of CAPEX compared to a 40 year avg of 98%, the personal savings rate is 7% and the debt service ratio is down where it was in the late 90’s. Banks have massive reserves sitting idle on their balance sheets earning 0.25%. Capital and capacity is in abundance right now. We have underutilized machinery and skills and 16,000,000 people unemployed. How are those scarce resources? I am not a strong advocate for larger government spending, though I would not complain about a bit more discretionary investment in some specific areas (transportation infrastructure/education). However I am a strong advocate for higher deficits and tax cuts without pulling back gov’t spending. US citizens have already decided to save come hell or high water. In order to accommodate that without the economy contracting the government needs to pick up the slack by running larger deficits. Your examples - while interesting, are anecdotal and do not address the underlying problem of a lack of aggregate demand. Your argument that the stimulus should not have happened or should have been smaller is also non-falsifiable and a counter-factual. What makes yours better than mine?
equity_analyst, i dont think youre wrong. im just curious what you think would have been a better / the best option. if you were in favor of no spending stimulus, what is the alternative? the only real alternative is to lower taxes even more and let the free market sort itself out with no government intervention at all–is that what you’re thinking?
Dwight Wrote: ------------------------------------------------------- > @equity_analyst > > How is capital scarce right now? Corporations > have $2T of cash, 185% of CAPEX compared to a 40 > year avg of 98%, the personal savings rate is 7% > and the debt service ratio is down where it was in > the late 90’s. Banks have massive reserves > sitting idle on their balance sheets earning > 0.25%. > > Capital and capacity is in abundance right now. > We have underutilized machinery and skills and > 16,000,000 people unemployed. How are those > scarce resources? > > I am not a strong advocate for larger government > spending, though I would not complain about a bit > more discretionary investment in some specific > areas (transportation infrastructure/education). > However I am a strong advocate for higher deficits > and tax cuts without pulling back gov’t spending. > > US citizens have already decided to save come hell > or high water. In order to accommodate that > without the economy contracting the government > needs to pick up the slack by running larger > deficits. > > Your examples - while interesting, are anecdotal > and do not address the underlying problem of a > lack of aggregate demand. > > Your argument that the stimulus should not have > happened or should have been smaller is also > non-falsifiable and a counter-factual. What makes > yours better than mine? I’m talking generally about capital, which in economic terms is characterized as a scarce resource–the level of interest rates is irrelevent in the context in which I used the phrase. And I’m simply arguing that what we did spend money on was a waste, which can be looked at empirically in terms of jobs created per stimulus dollar, which if i recollect correctly was over $100K–in other words a failure, since creating jobs was the primary objective of spending all that taxpayer money. So my argument can be diseected empirically, while yours cannot, which makes it non-falsifiable and bogus.
As far as Obama’s Stimulus Plan, IF he hadn’t spent all that money propping up the banks and the stock market, ALL of the 401K accounts and portfolios would have been rendered completely worthless. Your savings and livelihood would have just disappeared overnight throwing the U.S. and the rest of the world into a depression that would have paled the one in the 1930’s. The reason is because room temperature I.Q. George W. Bush through his deregulation illegal wars and cutting the taxes for the very rich crashed our economy. ON PURPOSE! This wasn’t some misguided mistake it was all planned out. As the Judas goats got fed, the SHEEPLE went down the chute to slaughter. Anyone that votes republican that isn’t already a millionaire is a fool tool. The Republicans have always been against Social Security, medicare, minimum wage, unemployment benefits, unions, etc. Look it up! It is the same today, the gutting of the unions, the whittling away of social security etc., but republicans are more than happy to take advantage of these social welfare programs. You idiots even notice that your home values dropped at least one third in value? Your 401ks dropped at least one third in value? Now they are attacking school children gutting the funding? And their propaganda machines spout that they are worried about the children’s futures. Talk about doublespeak double talk newspeak the BIG LIE.
This is a incomplete argument going on behind the econo-wonks on this board. Any conversation that relates to economics but fails to take into account behavior and psychology is lacking. The additional question we need to be asking is this: 1. What could have been done to fundamentally change the psychological perceptions of consumers and businesses such that consumers would start spending again and businesses would believe that future growth is eminent? This is where I think Chinese propaganda really comes in handy, lol.
equity_analyst Wrote: ------------------------------------------------------- > I’m talking generally about capital, which in > economic terms is characterized as a scarce > resource–the level of interest rates is > irrelevent in the context in which I used the > phrase. I spoke generally about capital too. Are 16 million unemployed “scarce” real resources? My argument is that they are wasted resources and we will never get back the output lost from the employment gap. > And I’m simply arguing that what we did spend > money on was a waste, which can be looked at > empirically in terms of jobs created per stimulus > dollar, which if i recollect correctly was over > $100K–in other words a failure, since creating > jobs was the primary objective of spending all > that taxpayer money. This is false accounting. Check out these analyses: http://www.econbrowser.com/archives/2011/07/assessing_the_s_1.html http://www.econbrowser.com/archives/2009/07/casey_mulligan_1.html “To further highlight the stupidity of the Weekly Standard calculation, suppose in 2015, when almost all funds are expended, only one job was still being supported. Then, using their preferred methodology would indicate each job cost $787 billion…” > So my argument can be diseected empirically, while > yours cannot, which makes it non-falsifiable and > bogus. This is simply not true. You are incorrect in stating that your argument that “no stimulus would have been better” is rock solid and that my argument “the stimulus was not enough” is bogus. Both are counter-factuals and require careful examination of the facts in order to form views about the possible alternative outcomes which did not in fact occur.
Arial10 Wrote: ------------------------------------------------------- > As far as Obama’s Stimulus Plan, IF he hadn’t > spent all that money propping up the banks and the > stock market, ALL of the 401K accounts and > portfolios would have been rendered completely > worthless. Your savings and livelihood would have > just disappeared overnight throwing the U.S. and > the rest of the world into a depression that would > have paled the one in the 1930’s. hey idiot - you’re forgetting that Bush actually did that. Obama hasn’t done sh!t. regards
The bottom line is that the stimulus was a liberal wet dream blank check that went toward every pet project one could imagine. It was a stupid allocation of ‘scarce capital’ that did jack to create long-term economic growth or prevent a depression, which is what we are in now.
lets assume, for humour, that under the stimulus program, each new or “saved” job actually did cost $100,000, even though it is stupid because it, and the other stimulus measures, probably saved 10s of millions of jobs due to boosting confidence when everyone in the world, including most of the people on this board, were scared ish-less. if we had continued at that pace, what would be the cost to society for an extra 2.4 million (low case) or 10+ million (high case) people being out of work forever? look at how slow job growth has been thus far. do you really think that job growth would have skyrocketed in a no-stimulus world, to make up for the extra millions of unemployed? think of the loss of skills. think of the loss of experience. think of the increase in crime and the affect of said crime on asset prices. you think foreclosure raiding was bad, imagine all houses were raided. you have to do something. you have to prevent a catastrophic event. most of what the govies and fed did was necessary. if bernanke didn’t say that he was going to buy up bank common shares in March '09, the banking system probably would’ve croaked. if millions of jobs were not saved, the housing market may be down another 20% already, and if that was the case, would the fed have been able to backstop housing?
Zesty Wrote: ------------------------------------------------------- > 1. What could have been done to fundamentally > change the psychological perceptions of consumers > and businesses such that consumers would start > spending again and businesses would believe that > future growth is eminent? tell D&F to go F themselves and get the d@mn legislation out there so businesses and the economy can move forward. there are a lot of good people out there who are eager and ready to work who are simply waiting for the govt to get out of the way.