Page 11 of 13 FirstFirst ... 910111213 LastLast
Results 101 to 110 of 127

Thread: Obama Releases $3.4 Trillion Budget Plan

  1. #101
    Educator nerv14's Avatar
    Join Date
    Apr 2009
    Last Seen
    02-07-11 @ 07:24 PM
    Gender
    Lean
    Independent
    Posts
    601

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    Tax cuts can be generally stimulative. Deficit spending has no lasting stimulative effect. Government spending merely takes dollars out of the private sector, and draws investment away from the private sector. When that government spending evaporates, so does the putative "stimulus", leaving the economy right back where it started. (See the mini-depression of 1937 for a glaring example of this)
    No, if the government BORROWS the money that it spends with then it doesn't harm the private sector. That point is crucial to the idea.

    And you need to remember that large portion of Obama's defecit are from tax cuts. Defecit tax cuts to stimulate the economy are Keynesian. Ballanced budget its Austrian. Austrian methods work better when the economy is good, but not in a recession or depression.


    and in 1937, FDR raised taxes and cut spending, so he would odviously experience economic troubles with that during a depression.

  2. #102
    Sage
    Join Date
    Jan 2009
    Last Seen
    08-27-09 @ 08:41 PM
    Lean
    Undisclosed
    Posts
    6,344

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    No, if the government BORROWS the money that it spends with then it doesn't harm the private sector. That point is crucial to the idea.

    And you need to remember that large portion of Obama's defecit are from tax cuts. Defecit tax cuts to stimulate the economy are Keynesian. Ballanced budget its Austrian. Austrian methods work better when the economy is good, but not in a recession or depression.


    and in 1937, FDR raised taxes and cut spending, so he would odviously experience economic troubles with that during a depression.
    Government borrowing is inherently harmful to the private sector, by soaking up capital that would otherwise be invested in the private sector.

    Moreover, Dear Leader is raising taxes, not cutting them.

    Keynes was an ass. Deficit spending hurts economies, period. Spending money you don't have is dumb, whether you are an individual, a business, or a government.

    If FDR's stimulus spending in 1933-1936 had any staying power, 1937 would have been the right time to trim spending and raise taxes to bring the budget back into alignment. That the economy immediately tanked a second time shows that the stimulus had zero staying power, and the stimulative effect lasted only as long as the government was pumping out the deficit spending. Pull the spending plug and the economy so inflated by stimulus collapses again.

  3. #103
    Enemy Combatant
    Kandahar's Avatar
    Join Date
    Jul 2005
    Location
    Washington, DC
    Last Seen
    10-15-13 @ 08:47 PM
    Gender
    Lean
    Liberal
    Posts
    20,688

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    If FDR's stimulus spending in 1933-1936 had any staying power, 1937 would have been the right time to trim spending and raise taxes to bring the budget back into alignment. That the economy immediately tanked a second time shows that the stimulus had zero staying power, and the stimulative effect lasted only as long as the government was pumping out the deficit spending.
    Well of course it only lasts as long as the spending lasts. No one is suggesting we continue economic stimulus indefinitely. FDR's mistake was just that he pulled the spending plug too soon.

    Quote Originally Posted by celticlord
    Pull the spending plug and the economy so inflated by stimulus collapses again.
    Then how do you explain the post-WWII boom when the government pulled the spending plug on all those military toys? Why didn't we immediately revert back to the Great Depression?

    Economic stimulus is designed to make recessions less nasty until the recession ends and/or the systemic problems that caused it are fixed. This was done during the Great Depression (with some success), even though the underlying problems weren't really resolved until after WWII.
    Last edited by Kandahar; 05-10-09 at 03:58 AM.
    Are you coming to bed?
    I can't. This is important.
    What?
    Someone is WRONG on the internet! -XKCD

  4. #104
    Sage
    Join Date
    Jan 2009
    Last Seen
    08-27-09 @ 08:41 PM
    Lean
    Undisclosed
    Posts
    6,344

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    Then how do you explain the post-WWII boom when the government pulled the spending plug on all those military toys? Why didn't we immediately revert back to the Great Depression?
    Simple enough. WWII did FDR two huge favors. First, it pulled several million people out of the bread lines and put them on the front lines--by the war's end some 16,000,000 Americans served; the surplus labor was effectively withdrawn from the labor market. Second, instead of government make work, the war effort put people to work in companies like Ford, and GM, and Boeing, producing all that war materiel. War turned the government into a legitimate consumer of American industrial output, which it could not have been in peacetime.

    It is also crucial to point out that, as the sole functioning industrial economy after WWII, between rebuilding Japan and rebuilding Europe, there was considerable demand for US output in the years immediately following WWII, demand produced by the devastation of WWII.

    Quote Originally Posted by Kandahar View Post
    Economic stimulus is designed to make recessions less nasty until the recession ends and/or the systemic problems that caused it are fixed. This was done during the Great Depression (with some success), even though the underlying problems weren't really resolved until after WWII.
    It was done during the Great Depression, and was a total failure. FDR's own Treasury Secretary acknowledged as much in 1938.

    While making recessions "less nasty" may be the goal of stimulus, all it accomplishes is spreading the "nastiness" out over time--rather like pulling a band-aid off slowly vs. pulling it off all at once. It tends to obscure rather than fix any systemic imbalances in the economy, because it props up the economy as it exists when a recession begins--just as Dear Leader's Wall Street bailouts and mortgage rewrites are propping up the housing industry today.

    This delays the true recovery by postponing the necessary bottoming-out every recovery requires; people have to come to a juncture where widespread dramatic change is eagerly sought after and desired. FDR's "New Deal" was about as "new" as Dear Leader's promise of "change"--not at all. Just as Dear Leader is picking up with TARP where the Bush Administration left off, FDR picked up with his efforts where Hoover left off.

    If FDR had just left matters alone, the economy likely would have been booming by 1936.

  5. #105
    Sage
    Harry Guerrilla's Avatar
    Join Date
    Dec 2008
    Location
    Not affiliated with other libertarians.
    Last Seen
    09-01-17 @ 02:38 PM
    Gender
    Lean
    Libertarian
    Posts
    28,955

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    You still aren't answering my responce about shifting the aggregate demand curve by government spending when it slips below the potential Real GDP. I thought you had a degree in finance?
    I wish I had a degree in finance I wouldn't have to continue with school.

    It does shift the curve but it is an artificial shift. It is unsustainable and gives a false impression of market fundamentals.

    I have a different theory of economics which requires balance to exist.
    You can use basic algebra and physics to understand it but it is in no way complete. Just something I'm hypothesizing at the moment.

    My personal studying has, at least to me, revealed that its probably correct.

    Quote Originally Posted by nerv14 View Post
    I agree that sometimes the economy must shrink because of a bubble. (That is when the Real GDP is above potential GDP.)
    [B]However, it is understood that at this point the potential of the US economy is not being used to its advantage. [/B/(when GDP is below potential) and therefore, shifting the GDP closere to the potential GDP by government defecit spending is a good idea.

    If anyone believes that there is still an unpopped bubble in this economy, I would like to hear that. Only then would defecit spending in general be a bad idea during a recession. However, most people seem to agree that the economy is actually functioning worse then it should.
    The economy has to go through this process.
    It is a reorganization of priorities and principles.

    Quote Originally Posted by nerv14 View Post
    We do have to look at all of the effects of action to help the economy. But I got the impression that you were against all defecit spending to try and help the economy.
    I am completely against deficit spending. When government spends it does so creating false, unsustainable demand.

    Thats part of what caused the recession in the first place. A great over supply of houses based on government intervention.

    Quote Originally Posted by nerv14 View Post
    But no, government defecit spending is not propping up weak industries that is giving money to a failing company. Normal defecit spending effects the whole economy as a whole, and doesn't benefit one industry much more then another. (for instance, defecit spending for infrasture will benefit engineering firms, but it won't only benefit the ones that are failing)
    It propped up the housing industry beyond its necessary function by creating demand for houses no one needed or wanted. It gave a false perception of market fundamentals.
    I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
    —Adam Shepard

  6. #106
    Enemy Combatant
    Kandahar's Avatar
    Join Date
    Jul 2005
    Location
    Washington, DC
    Last Seen
    10-15-13 @ 08:47 PM
    Gender
    Lean
    Liberal
    Posts
    20,688

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    Simple enough. WWII did FDR two huge favors. First, it pulled several million people out of the bread lines and put them on the front lines--by the war's end some 16,000,000 Americans served; the surplus labor was effectively withdrawn from the labor market.
    And when the war ended that "surplus labor" was back out on the labor market again...another word for that is unemployment BTW. Yet we didn't return to the Depression.

    Quote Originally Posted by celticlord
    Second, instead of government make work, the war effort put people to work in companies like Ford, and GM, and Boeing, producing all that war materiel. War turned the government into a legitimate consumer of American industrial output, which it could not have been in peacetime.
    What you consider "legitimate" is irrelevant. The economic result of the stimulus spending would have been the same whether the government bought things from Ford/GM/Boeing for the war effort, or whether they bought things from Ford/GM/Boeing and then set it all on fire.

    And this does not answer the question of why we didn't return to the Great Depression when all that government stimulus collapsed following the end of the war. Instead, we had only a minor and short-lived recession.

    Quote Originally Posted by celticlord
    It is also crucial to point out that, as the sole functioning industrial economy after WWII, between rebuilding Japan and rebuilding Europe, there was considerable demand for US output in the years immediately following WWII, demand produced by the devastation of WWII.
    The vast majority of the US economy was still domestic in 1945. And other nations (that WERE devastated by the war) also experienced a post-war boom, despite the collapse of their governments' economic stimulus for THEIR war efforts.

    While you are correct that economic stimulus - whether it's related to a war, an economic crisis, whatever - is in some respects a short-term fix, the example of WWII is a good example that it can be more than that as well. And at any rate, the WWII stimulus lasted long enough to fix the economic problems associated with the Great Depression.

    Quote Originally Posted by celticlord
    It was done during the Great Depression, and was a total failure.
    The economy bottomed out in 1933 (when the New Deal began), and grew every year until 1937. When FDR reversed some of the New Deal policies, it contracted again.

    Quote Originally Posted by celticlord
    FDR's own Treasury Secretary acknowledged as much in 1938.
    Well then he was incorrect. What's your point?

    Quote Originally Posted by celticlord
    While making recessions "less nasty" may be the goal of stimulus, all it accomplishes is spreading the "nastiness" out over time
    That's a good thing.

    Quote Originally Posted by celticlord
    rather like pulling a band-aid off slowly vs. pulling it off all at once. It tends to obscure rather than fix any systemic imbalances in the economy, because it props up the economy as it exists when a recession begins--just as Dear Leader's Wall Street bailouts and mortgage rewrites are propping up the housing industry today.
    The systemic problems can still be fixed. There's no reason we need to wait for an economic crisis to do it.

    Quote Originally Posted by celticlord
    This delays the true recovery by postponing the necessary bottoming-out every recovery requires; people have to come to a juncture where widespread dramatic change is eagerly sought after and desired. FDR's "New Deal" was about as "new" as Dear Leader's promise of "change"--not at all. Just as Dear Leader is picking up with TARP where the Bush Administration left off, FDR picked up with his efforts where Hoover left off.
    Right. FDR and Hoover had exactly the same approach to government. Are you kidding me?

    Quote Originally Posted by celticlord
    If FDR had just left matters alone, the economy likely would have been booming by 1936.
    Instead we got the New Deal, and the economy actually WAS booming by 1936. In fact, it was booming by 1934...less than a year after the New Deal began.
    Last edited by Kandahar; 05-10-09 at 05:08 AM.
    Are you coming to bed?
    I can't. This is important.
    What?
    Someone is WRONG on the internet! -XKCD

  7. #107
    Sage
    Harry Guerrilla's Avatar
    Join Date
    Dec 2008
    Location
    Not affiliated with other libertarians.
    Last Seen
    09-01-17 @ 02:38 PM
    Gender
    Lean
    Libertarian
    Posts
    28,955

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    Instead we got the New Deal, and the economy actually WAS booming by 1936. In fact, it was booming by 1934...less than a year after the New Deal began.
    If thats the case, the New Deal did absolutely nothing.

    Implementation of those projects would have been much slower than today.
    I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
    —Adam Shepard

  8. #108
    Enemy Combatant
    Kandahar's Avatar
    Join Date
    Jul 2005
    Location
    Washington, DC
    Last Seen
    10-15-13 @ 08:47 PM
    Gender
    Lean
    Liberal
    Posts
    20,688

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Harry Guerrilla View Post
    If thats the case, the New Deal did absolutely nothing.

    Implementation of those projects would have been much slower than today.
    A) What makes you think it would have been slower?
    B) The mere knowledge that federal dollars are coming encourages development even before the federal dollars actually get there.
    Are you coming to bed?
    I can't. This is important.
    What?
    Someone is WRONG on the internet! -XKCD

  9. #109
    Sage
    Harry Guerrilla's Avatar
    Join Date
    Dec 2008
    Location
    Not affiliated with other libertarians.
    Last Seen
    09-01-17 @ 02:38 PM
    Gender
    Lean
    Libertarian
    Posts
    28,955

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    A) What makes you think it would have been slower?
    B) The mere knowledge that federal dollars are coming encourages development even before the federal dollars actually get there.
    As it is now the stimulus money are not expected to have any effect till the end of this year from what Obama has said. Given that during the 30's all forms of communication, transportation etc operated on obsolete and inferior equipment (compared to us) there is no other answer than it would have been slower to pass.

    Who's knowledge? The TVA projected were mostly done in very poor rural areas that wouldn't have the funds anyway. Things like that lead me to believe that it did nothing.
    I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
    —Adam Shepard

  10. #110
    Enemy Combatant
    Kandahar's Avatar
    Join Date
    Jul 2005
    Location
    Washington, DC
    Last Seen
    10-15-13 @ 08:47 PM
    Gender
    Lean
    Liberal
    Posts
    20,688

    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Harry Guerrilla View Post
    As it is now the stimulus money are not expected to have any effect till the end of this year from what Obama has said. Given that during the 30's all forms of communication, transportation etc operated on obsolete and inferior equipment (compared to us) there is no other answer than it would have been slower to pass.
    Uhh I'm not sure what you are referring to. They may not have had Twitter and YouTube, but they had radio and newspapers that conveyed news from Washington within a few hours of it happening, and telephones that FDR could use to call any state governor. And they may not have had semi-trailers and interstate highways, but they had freight trains that could move stuff from Point A to Point B within a few days.

    I'm not sure exactly why you think this would dramatically slow down the allocation of stimulus funds?

    Quote Originally Posted by Harry Guerrilla
    Who's knowledge?
    The people/companies who benefited. For example, if I own a small business and I know I'm getting a $100K stimulus check from the government in six months, I don't necessarily have to actually wait for the check before I start growing my business. If I have the cash on hand, I might go ahead and make the down payment on some necessary equipment now.

    Quote Originally Posted by Harry Guerrilla
    The TVA projected were mostly done in very poor rural areas that wouldn't have the funds anyway. Things like that lead me to believe that it did nothing.
    The New Deal was far broader than the TVA.
    Last edited by Kandahar; 05-10-09 at 05:38 AM.
    Are you coming to bed?
    I can't. This is important.
    What?
    Someone is WRONG on the internet! -XKCD

Page 11 of 13 FirstFirst ... 910111213 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •