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CBO: Stimulus hurts economy in the long run

Goldenboy219 said:
Not really, no. The single greatest price determinant for oil is emerging market demand.
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While I don't disagree that the increased energy consumptions of China and India have impacted our cost for oil, but please don't discount our country's energy decisions as a factor of the cost of oil/oil based products for Americans. It has a direct impact.
 
j-mac said:
I answered with the informed opinion of not one but two people that should be able to offer an informed opinion, that you in turn totally ignore, and tell me then to rattle off a litany of stats, and numbers that I have made clear I am over my head in that arena.
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You responded with a post that was loaded with political rhetoric and absolutely no quantification or analysis. So you actually provided nothing that is relevant to my request.
 
Blue_State said:
While I don't disagree that the increased energy consumptions of China and India have impacted our cost for oil, but please don't discount our country's energy decisions as a factor of the cost of oil/oil based products for Americans. It has a direct impact.
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A minor factor.
 
Conservative said:
Price to earnings ratio? Never ran a business did you? My statement is accurate and based upon actual P&L's. Ever look at one? Expenses a dollar hit to profit and revenue is a percentage less than 100% to profit. That is the way it works, sorry.
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Are you financially illiterate? Companies are more profitable than they have been during any period of time in the past 25 years.
 
j-mac said:
So now you are going to delve into the chicken or the egg theory eh? Good workers are essential to the health of a successful business, yes. But, without a place for these workers to put their skills to use, and earn a paycheck, then you have nothing.
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Nope. I have said repeatedly that both are needed. However, policies ahve largely favored only one side of the equation. This is where our debate lies. You support having owners as a protectred class, but want workers to just deal with it. I suggest we consider the worker as well.

You forget that employment is a mutual agreement to trade work skill for pay. If that pay is too low, you don't have to work there.
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Another one of those good in theory things. Fact is during different times in history, one or the other has held the advantage, making there being nothing mutual about it. When owners hold the advantage, such as they do currently, workers have to accept less or not work. This is far more common than the few times when workers ahve held the advantage. But, in the long wrun, this hurts business overall, as there are less dollars to spend, and thus less need for a business to grow.

Too many seem to miss the connection between dollars available to spend and business growth. It means much more than taxes.

You are falsely making the worker the reason for employment, rather than the market need. We don't live in that type of society.
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Now that's a wild leap with no connection to anything I've said. In fact, people haivng money to spend helps create the market need. What I need means nothing if I can't afford it. So, if I am not making enough to ahve extra to spend, I will only buy to my needs, food, shelter. I'll like skip insurance or any kind, and I certainly am less likely to buy anything don't need (credit not withstanding, something that has worked well all around). So, no, I'm speaking specifically about the need for demand in the market.


Glad you KNOW so.


j-mac
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Yep. I do. :coffeepap
 
Goldenboy219 said:
Are you financially illiterate? Companies are more profitable than they have been during any period of time in the past 25 years.
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They sure are, why? Expenses are at record lows due to doing more with less. Nothing you have posted refutes what I have stated, expense cuts add a dollar to the bottomline whereas sales increases add the GP margin to the bottomline and you call that financial illiteracy? You obviously never ran anything and have never seen a real P&L statement so keep up with the condescending comments.
 
Conservative said:
They sure are, why? Expenses are at record lows due to doing more with less.
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Hence companies are more productive. Which gets back to my point that non-financial businesses are doing just fine. It's kind of hard to argue that the White House is laying the foundation for inefficiency through its policies when American companies are the most efficient they have been (on a per hour basis).
 
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Goldenboy219 said:
Hence companies are more productive. Which gets back to my point that non-financial businesses are doing just fine. It's kind of hard to argue that the White House is laying the foundation for inefficiency through its policies when American companies are the most efficient they have been (on a per hour basis).
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the largest monthly operating expense is payroll and payrolls are at record lows. Nothing you have posted refutes what I stated and you know it. One dollar in payroll reduction is a dollar to the bottomline line whether you accept it or not
 
Conservative said:
the largest monthly operating expense is payroll and payrolls are at record lows. Nothing you have posted refutes what I stated and you know it. One dollar in payroll reduction is a dollar to the bottomline line whether you accept it or not
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Hence, the problem is demand driven and only demand side remedies will efficiently lead to recovery.
 
Goldenboy219 said:
Hence, the problem is demand driven and only demand side remedies will efficiently lead to recovery.
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Nonsense if you give a rich person more money he will hire more people even when it's not profitable to do so! They'll just make extra widgets and throw them in the trash or something just so they can hire more people out of the goodness of their hearts.
 
Deuce said:
Nonsense if you give a rich person more money he will hire more people even when it's not profitable to do so! They'll just make extra widgets and throw them in the trash or something just so they can hire more people out of the goodness of their hearts.
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Supply creates its own demand when widgets and wervices (widget services) are used as currency! :2razz:
 
Goldenboy219 said:
Hence, the problem is demand driven and only demand side remedies will efficiently lead to recovery.
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And the proper way to create demand is to raise the taxes on the rich and to promote class warfare? Think redistribution of wealth creates demand? Sounds like another Reaganomics convert
 
Conservative said:
And the proper way to create demand is to raise the taxes on the rich and to promote class warfare?
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Strawman. I never said anything of the sort! The most efficient way to boost demand is to lower private saving. As a fiscal policy tool, government can lower private saving by lowering public saving.

Think redistribution of wealth creates demand? Sounds like another Reaganomics convert
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Creating new jobs via declines in public saving instantaneously creates demand!
 
Goldenboy219 said:
Strawman. I never said anything of the sort! The most efficient way to boost demand is to lower private saving. As a fiscal policy tool, government can lower private saving by lowering public saving.



Creating new jobs via declines in public saving instantaneously creates demand!
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There are many here that believe that raising taxes on the rich are the way to benefit the economy which is short term thinking and completely wrong. Govt. can only do so much in our basically private sector economy. Govt. spending is 20% of our GDP and the fact remains if you are going grow the economy you don't do it by demonizing it and promoting class warfare like Obama has done. Right now there are more than 25 million unemployed/under employed Americans with millions more not even counted because they don't qualify for unemployment compensation so until there is enough demand to get these people back to work in the private sector the economy is going to remain stagnant
 
Conservative said:
There are many here that believe that raising taxes on the rich are the way to benefit the economy which is short term thinking and completely wrong.
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Agreed. But that is not a reason to make the false claim that i have argued anything of the sort. Raising taxes is how you increase public savings, which is something that is negative for growth at this stage of the recovery. You have stated yourself that firms are unwilling to hire because there is a general glut in sales, and therefore the only way to remain profitable is to "do more with less". How do we increase the amount of money people are willing to spend on goods when the cost of these goods (because costs are way off their 2008 levels on nearly all accounts) is not the primary driver in weak sales?
 
Goldenboy219 said:
Agreed. But that is not a reason to make the false claim that i have argued anything of the sort. Raising taxes is how you increase public savings, which is something that is negative for growth at this stage of the recovery. You have stated yourself that firms are unwilling to hire because there is a general glut in sales, and therefore the only way to remain profitable is to "do more with less". How do we increase the amount of money people are willing to spend on goods when the cost of these goods (because costs are way off their 2008 levels on nearly all accounts) is not the primary driver in weak sales?
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Certainly the most efficient way to increase demand is to increase spending without raising additional revnue, but that is a political impossibility. Class war rhetoric aside, however, you can also boost demand by raising taxes on the rich and cutting taxes on the poor and middle class, for the simple reason that the poor and middle class tend to spend all or most of their income while the rich do not. That's why it makes sense, from an economic perspective, to finance payroll tax cuts with a tax hike on millionaires.
 
AdamT said:
Certainly the most efficient way to increase demand is to increase spending without raising additional revnue, but that is a political impossibility. Class war rhetoric aside, however, you can also boost demand by raising taxes on the rich and cutting taxes on the poor and middle class, for the simple reason that the poor and middle class tend to spend all or most of their income while the rich do not. That's why it makes sense, from an economic perspective, to finance payroll tax cuts with a tax hike on millionaires.
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So let me see if I have this right, you support cutting the funding for SS and Medicare and then for rich to pick up that funding thus paying for the SS benefits of others? How is that not class warfare? How typically liberal of you?
 
Conservative said:
So let me see if I have this right, you support cutting the funding for SS and Medicare and then for rich to pick up that funding thus paying for the SS benefits of others? How is that not class warfare? How typically liberal of you?
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It is simply the best, (possibly) politically feasible way available to boost demand. Of course the wealthy ultimately benefit from the strategy, as stronger demand trickles up and lands in corporate coffers.
 
AdamT said:
...for the simple reason that the poor and middle class tend to spend all or most of their income while the rich do not.
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One could argue the poor and middle class tend to spend all or most of their income on outsourced products (Walmart) as they are all they can afford which questions the affect it has on domestic demand. And in turn argue that the rich are the only ones who can afford to purchase domestic products.
 
AdamT said:
It is simply the best, (possibly) politically feasible way available to boost demand. Of course the wealthy ultimately benefit from the strategy, as stronger demand trickles up and lands in corporate coffers.
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The potential problem with this policy is that the tax cuts cuts could be used to pay down consumer debt which ultimately does not affect demand in the short term. The wealthy (banks) will benefit immediately on debt repayment. Bill Clinton stated at the GDI that the economy for the last decade was based on housing, public and private debt all three of which is not sustainable (obviously now). IMHO the economy will not gain much steam until the private debt is reduced to a level that the majority of low/middle income people have ENOUGH disposable income to stimulate demand. The PR tax cut is not sufficient enough to promote this condition quickly.
 
Dickieboy said:
One could argue the poor and middle class tend to spend all or most of their income on outsourced products (Walmart) as they are all they can afford which questions the affect it has on domestic demand. And in turn argue that the rich are the only ones who can afford to purchase domestic products.
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You could argue that, but it would be a pretty lame argument without something resembling fact to back it up. Last time I checked, Porsche and Lamborghini didn't have any U.S. manufacturing plants.
 
Dickieboy said:
The potential problem with this policy is that the tax cuts cuts could be used to pay down consumer debt which ultimately does not affect demand in the short term. The wealthy (banks) will benefit immediately on debt repayment. Bill Clinton stated at the GDI that the economy for the last decade was based on housing, public and private debt all three of which is not sustainable (obviously now). IMHO the economy will not gain much steam until the private debt is reduced to a level that the majority of low/middle income people have ENOUGH disposable income to stimulate demand. The PR tax cut is not sufficient enough to promote this condition quickly.
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It's true that demand has been dampened due to deleveraging, but the recent uptick in demand has been accompanied by an increased use of credit.
 
AdamT said:
You could argue that, but it would be a pretty lame argument without something resembling fact to back it up.
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Sorry but I missed the links to the facts backing up your arguments made in post #391 (or #397 for that matter). Would I be amiss in describing it 'lame' as you did mine?
 
AdamT said:
It's true that demand has been dampened due to deleveraging, but the recent uptick in demand has been accompanied by an increased use of credit.
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Here is something you and all other liberals need to think about. What is it about liberalism that creates such loyalty?

East Lake Blister
 
Dickieboy said:
Sorry but I missed the links to the facts backing up your arguments made in post #391 (or #397 for that matter). Would I be amiss in describing it 'lame' as you did mine?
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#391 is standard economic theory with respect to tax cuts and stimulus. I'm sure this isn't the first time you've heard it. For #397:

Consumer use of debit and credit cards to pay for purchases on Black Friday increased significantly on a year-over-year, according to data from First Data's SpendTrend analysis of Black Friday sales figures. In all, the number of transactions using these accounts jumped 7.3 percent over last year's totals, and the value of those purchases rose 6.3 percent.
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Black Friday card transactions increased significantly

Not saying you're wrong about your theory, but I've never seen any evidence that low income people spend a proportionately higher amount of their money on imported goods.
 
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