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I saw David Brooks on Face The Nation and he pointed out that so far the stimulus dollars were mainly preventing people from being laid off and weren't producing the "multiplier effect" that is supposed to come with stimulus spending leading to new job creation. Is he right? Or does it take time for the multiplier effect to happen?
He's both right and wrong. A good chunk of stimulus spending so far has gone toward preventing people from being laid off. That's where "jobs saved" comes into the picture, thereby befuddling many right-wingers. Things like tax cuts, benefit increases, and direct aid to states go toward assuring that already existing streams of demand do not dry up.
Work on roads and bridges, retrofitting government buildings, and expanding muncipal water treatment facilities represents new work. These are projects that would not have existed without stimulus funding, and those working on them would be in "jobs created".
Where he is wrong is in the multiplier analysis. Each of us is a little stimulus program. When we spend, we leave a wake of economic activity behind us. We buy groceries. But the grocer uses the money to pay the cashier who uses it to get her car fixed and the mechanic buys some tools and the salesman uses his commission to go to the movies and so on and so on. When any of us is laid off, our spending falls and our ability to generate a strong wake declines. When we are hired, the reverse happens. We are able to spend more and generate a larger wake. Those wakes are the multiplier that Brooks is talking about, but there is no reason to suspect that the wake from a worker whose job is saved is materially different from the wake of a worker whose job is created.
The multiplier effect isnt happening I'm surprised. We didnt need a stimulus, we needed stability, and until we get stability no one is going to spend..
Your concept of "stability" seems to refer to the idea of restraining federal spending so as to achieve a balanced budget. Of course, in a downturn, federal revenues decline rapidly, so spending will have to be cut dramatically in order to achieve any such balance, and the resulting decrease in economic activity will cause even further declines in revenue which will have to be matched by even further cuts in spending and so on and so on. Your idea of "stability' is simply a recipe for disaster.
He's both right and wrong. A good chunk of stimulus spending so far has gone toward preventing people from being laid off. That's where "jobs saved" comes into the picture, thereby befuddling many right-wingers. Things like tax cuts, benefit increases, and direct aid to states go toward assuring that already existing streams of demand do not dry up.
Work on roads and bridges, retrofitting government buildings, and expanding muncipal water treatment facilities represents new work. These are projects that would not have existed without stimulus funding, and those working on them would be in "jobs created".
Where he is wrong is in the multiplier analysis. Each of us is a little stimulus program. When we spend, we leave a wake of economic activity behind us. We buy groceries. But the grocer uses the money to pay the cashier who uses it to get her car fixed and the mechanic buys some tools and the salesman uses his commission to go to the movies and so on and so on. When any of us is laid off, our spending falls and our ability to generate a strong wake declines. When we are hired, the reverse happens. We are able to spend more and generate a larger wake. Those wakes are the multiplier that Brooks is talking about, but there is no reason to suspect that the wake from a worker whose job is saved is materially different from the wake of a worker whose job is created.
There is that "saved jobs" concept again.
I ate Rice Crispies this morning. It "saved" 2,000,000 jobs. As the stimulus failed in creating ANY jobs, the libs are really becoming creative with new, false measures of "success".
Saggy, can you tell us exactly how "saved jobs" is measured? I kept my job. Did that count as one of Bammer's "saved" jobs? Liberalism is entertaining, if nothing else.
"Stimulus" has failed in the US Great Depression as well as 1980s-1990s Japan. It did not work then and has not worked now.
More supply-side drivel. Was it WWII that ended the Depression? Nothing but a stimulus program involving massive goverment debt and deficit spending. We are already doing what Japan didn't do for years -- restructuring the auto companies, unwinding and reorganizing troubled banks, pumping liquidity into credit markets.
Quote:
Originally Posted by hawkeye2009
Reagan and Kennedy pulled us out of recessions with TAX CUTS. The people and buisness knows how to spend money more appropriately than the feds.
LOL. Kennedy promised we would put a man on the moon by the end of the decade. At the time, we hadn't managed to get one into as much as suborbital flight. Giant government stimulus program. I can only imagine how right-wingers would have reacted to JFK. Reagan's tax cuts were abandoned as the economy sank into depression. Recovery followed a significant tax increase in 1982 that was followed by tax increases each year through 1986.
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Originally Posted by hawkeye2009
It comes down to a very simple question. Who knows how to spend money more wisely? A. The feds B. Private citizens and buisness. If you checked "B", you are for tax cuts. If you checked "A", you are for more federal spending (from increased taxes) for more "stimulus".
Private citizens and businesses have no capacity to produce public goods and services. If you vote B, you only get to pick from the goods and services that are in Column-B. There are some pretty nice things that people might really like over in Column-A. In most developed countries, Column-A is a lot more popular than what you seem to think it should be.
Even if they were saved, that would only be a temporary measure.
Will these folks then get layed off once the spending is done or does the government propose to indefinitely fund these jobs ?
What a hoot. None of these government jobs that got saved or created are permanent except for the jobs IN the government.
The government doesn't "create" jobs except for itself folks.
If the government's borrowing money there is less money available for the private sector to borrow. government borrowing crowds out private sector borrowing.
How much crowding out do you think is going on with the 10-year Treaury yield at 3.57%?
Umm... health care accounts for 16% of the economy. To try and do a recovery without addressing it would be pretty shortsighted.
Anyway, stimulus is never meant to be long-term. It's meant to stimulate to help people through until the economy can recover. Plus, he's enacted good policy to prevent this from happening again (at least until the next run of long-term conservative control - I don't mean that in a negative, way, but they will loosen the markets and then the greed will push them over again).
The health care industry is one of the only sectors still employing people. I suppose that makes it a problem.
Obama said campaigning in Ohio that he was going to have another look at NAFTA, but he seems to have completely given up on creating jobs for Americans. Even with the 650,000 jobs supposedly created by the stimulus, immigration is well over that amount, we're not even keeping our heads above water.
The way obama's team structured the bill was not stimulative at all, which has shown to be true. Many people said so at the time, the administration vehemently argued the point, said it would provide an immediate jolt to the economy, 600,000 jobs by summer's end, 3-4 million by end of 2010...
GDP in the first quarter of 2009 declined by 6.4%. In the third quarter, it grew by 3.5%. That'a net 10-point gain in six months. Pretty decent jolt. In the stimulus package, cash is front-loaded and longer-term programs are back-loaded. What arrangement would have been more stimulative in your world?
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Originally Posted by sanrene
...keep UE under 8%.
Nobody ever said that who wasn't a right-wing revisionist.
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Originally Posted by sanrene
He lied, jobs died.
You're just unwilling to confront the plain facts of how badly the Bush adminsitration that you all touted so loudly over all those years just completely messed things up.
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