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Thread: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

  1. #171
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    Re: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

    Quote Originally Posted by OpportunityCost View Post
    The problem is the arena of deficit spending. We have been using it for so long its beginning to reach a no return point.
    Not quite yet. The problem with our deficit spending is we had a President and Congress who saw no need to stop deficit spending during the good years. Kenyes argued that deficit must end during good years to recoup the red ink. Bush and the GOP (and later Democrat) Congress saw no need for that. True, deficit spending boosted growth but it also boosted our deficit and debt. We've basically taken the bad parts of Kenysian economics and merged them with the bad parts of Supply Side.

    I would argue every dollar the government taxes is a dollar that the provate sector can use more effectively and with better multipliers than the Fed. Using deficit spending to get around that economic reality is finally becoming untenable.
    I'd argue you're completely off your rocker. You are arguing that money spent on pet rocks, chia pets and nail salons are more effective then money spent on NASA, drug breakthroughs and applied materials research. Can the private sector use money better than the government on average? Yes. But can the private sector waste money on effectively useless **** that could better be used spent on research projects? Absolutely. Honestly, anyone who says that idiotic line to me has no understanding or history at all of what governments have produced in terms of wealth and commercially tangible products.

    We have artificial demand propped up by government wages, programs because neither side of the aisle pays the least bit of attention to the Keynesian idea of cutting during boom and spending during bust, its spend no matter what the cycle is doing. That means we need to come up with another government spending model or just quit trying the one that is not working.
    That's probably true.

    Are you suggesting that we should have been engaging in the Krugman school of thought that the stimulus should have been some monstrous 3 trillion dollar program? Because I dont think that would have passed politically on either side.
    No. As much as I dislike this notion, I think we should have actually enacted McCain's mortgage plan or something like it. Until we deal with the massive debt consumers have on their houses, we're going to see slow growth as consumers slowly deleverage. Virtually any amount of stimulus or tax cuts would have never worked when the issue is largely debt and reliable financing. It doesn't matter if the government spends $2 trillion on a stimulus program when companies cannot even get their lines of credit renewed for 30 days and when people cannot refinance their mortgages to reduce their debt. The ugly fact of modern capitalism is that it requires constant, reliable, predictable financing. Take that away and our economy is a falling house of cards. $2 trillion in spending won't fix that problem. This is why I mentioned the issue of direct lending as a "solution." That alleviates the issue of financing but in puts in place a far, far, far, far, far worse outcome down the road. The state essentially gets stuck with huge amounts of NPLs and the private sector gets addicted to cheap loans. That cannot keep going indefinitely as we're seeing in China and when it crashes, it will destroy your economy.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

  2. #172
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    Re: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

    Quote Originally Posted by Blue_State View Post
    If Liberals are lucky, Romney can win, and when the house of cards fall, they can blame it on him.
    So basically what the GOP did in 2008 then?
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

  3. #173
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    Re: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

    What I find interesting is that the ones that were complaining about extending federal unemployment insurance extensions are now the ones complaining that what they wished for is making the other guy look better now. Also find it funny that many conservatives believed the dip from the holidays was a short term thing, and the slide wouldn't continue.

    Even if Obama were to somehow get unemployment down to 4%, real unemployment would hover to at least around 7%. A meaningful recovery is not a bubble that you can just let burst 8 years down the road. There are several other factors as well that play into this that no matter whom the president was and what they were doing the recovery would be slower than many had hoped for.
    "We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy." -Reagan

  4. #174
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    Re: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

    Quote Originally Posted by obvious Child View Post
    So basically what the GOP did in 2008 then?
    Not dissimilar.

  5. #175
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    Re: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

    Quote Originally Posted by obvious Child View Post
    It should be obvious why it didn't create jobs. 1/3 was tax cuts which were relatively small. They failed to create jobs for the same reason Bush's 2008~2009 tax cuts didn't work: too small. Secondly, and more importantly, the rest of the money went as block grants to states to use for certain projects to which the states largely ignored. What states did was take federal money to fund their existing levels of spending which they couldn't do with their actual tax revenues. State spending for the most part stayed roughly flat. That alone saved millions of jobs. But it did not create jobs. States were largely able to escape the kind of layoffs the private sector saw because of stimulus money. We're seeing increases in layoffs in the public sector now primarily because stimulus money is drying up. The way the stimulus was structured makes sense why very few new jobs were created. But it makes sense why we didn't see massive job losses on top of what was already happening in 2009 and 2010. The stimulus essentially prevented a massive drop in demand. It didn't increase demand on top of baseline projections. It merely held it there. You don't create new jobs by keeping demand flat. But you do save a lot by keeping demand flat. What stimulus opponents fail (intentionally or simply due to being economically illiterate) is that without a stimulus, states would have resorted to massive cuts in 2009 at the same time the private sector was shedding jobs. The multiplier impact of that many direct job losses upon indirect spending would have been huge. Demand would literally go off the cliff. I've asked numerous people how they think demand going off a cliff is good for jobs and the economy and I have yet to get an answer. Heck I don't even get insults tossed at me. They just run.
    More than 90 percent of the jobs created by this plan will be in the private sector. They're not going to be make-work jobs, but jobs doing the work that America desperately needs done: jobs rebuilding our crumbling roads and bridges, repairing our dangerously deficient dams and levees so that we don't face another Katrina.

    Transcript: Obama takes questions on economy - CNN.com
    So did Obama lie, make a mis-statement or a false statement? Had he told the folks getting laid off in the private sector that they would be paying to keep government workers employed, what do you think was going to happen? Lose 63 seats in the House and 6 in the Senate? They figured it out. Government workers unemployment has remained 5% or less through the whole crash, in April 2011 it was 3.4% and in April 2012 it's 3.7%. It's why, along with Obamacare, the Democrats got hammered so bad in 2010. Private sector workers were losing their homes after getting laid off while our government spent our money keeping government workers employed. The opposite of what Obama promise while stumping for the spending bill. Republicans need 19 seats in the House and 13 in the Senate to have a 60% majority in both houses, enough to make a Capon out of Obama with the ability to override any veto should Obama get re-elected. Myself, I think it's going to happen. I live in So Cal where unemployment is still tipping the scales at 11.8% and over 11% statewide.

    If we laid off enough government workers to match the private sector our tax burden would be greatly reduced allowing the economy to grow. Generally, you get about 1/3rd of what you were making on unemployment, that means for every government worker we lay off we can sustain 2 more on unemployment. Use the link above to see where we need jobs improvement.

    China's economic growth eases

    By Annalyn Censky July 13, 2011: 10:15 AM ET

    NEW YORK (CNNMoney) -- While China's economic growth remains far faster than that of Western nations, it eased slightly for the second quarter in a row.

    China's economy grew at an annual pace of 9.5% between April and June, the National Bureau of Statistics said Wednesday. That marks a slight slowdown from the first quarter, when GDP grew 9.7% year-over-year.

    Overall, China's economy has cooled significantly since the first quarter of 2010 when it was barreling along at an 11.9% pace.


    China GDP: Economy cools to 9.5% annual growth rate - Jul. 12, 2011
    The stimulus created demand for goods alright........in China! Look at the dates. I'm sure they appreciate it, but it didn't do much for us.
    "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence." - John Adams

  6. #176
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    Re: Only 115,000 jobs added in April; unemployment rate dips to 8.1 percent

    Quote Originally Posted by Prof. Peabody View Post
    If we laid off enough government workers to match the private sector our tax burden would be greatly reduced allowing the economy to grow. Generally, you get about 1/3rd of what you were making on unemployment, that means for every government worker we lay off we can sustain 2 more on unemployment. Use the link above to see where we need jobs improvement.
    Without delving into the sheer hilarity of the claim that removing individuals from the workforce will kickstart growth, you seem to be under the impression that the public sector escaped the recession unscaved, and the private sector consequentially bore the brunt of the burden. Contrary to popular talking points, Federal employment temporarily hit an all time high in 2010, only to drop quickly shortly thereafter, while the private sector has had slow but steady gains since the end of the recession.

    All Employees: Total Private Industries (USPRIV) - FRED - St. Louis Fed

    All Employees: Government: Federal (CES9091000001) - FRED - St. Louis Fed
    Last edited by a351; 05-18-12 at 10:18 PM.

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