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Thread: Obama Releases $3.4 Trillion Budget Plan

  1. #111
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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    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?
    The infrastructure wasn't there like it exists today.

    If I'm not mistaken that was a huge part of The New Deal.
    All the vehicles, trains etc did not have the same efficiency as they do now.


    Quote Originally Posted by Kandahar View Post
    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.
    (Off topic: To the bold part, not to ever be used against you in any way by me, ever. I like to hear what motivated people to start their own businesses and how they came up with their idea. Would it be intrusive of me to ask what the nature of your business is? I, to would like to start my own business one day. If you want to keep it private no biggie, just curious.)

    On topic, I understand but a lot of the projects were geared toward already depressed areas lacking businesses to create that kind of stimulus.

    Quote Originally Posted by Kandahar View Post
    The New Deal was far broader than the TVA.
    It was just an example. A lot of those New Deal projects were focused on poor parts of the country that wouldn't have those kind of funds in good times.
    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.
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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    Right. FDR and Hoover had exactly the same approach to government. Are you kidding me?
    You need to read your history more. FDR campaigned on a balanced budget and constrained federal spending, chastised Hoover for the interventions that he did attempt, and then constructed 90% of his early New Deal programs from things already in the works by President Hoover. As President, Hoover was FDR-lite, FDR was Hoover on steroids.

    Hoover, not FDR, started the Reconstruction Finance Corporation, which FDR's Emergency Banking Act expanded.

    Hoover, not FDR, created the Federal Home Loan Bank Board via the Federal Home Loan Bank Act, to spur housing construction and lower the cost of home ownership.

    Hoover, not FDR, urged Congress to pass the [ame="http://en.wikipedia.org/wiki/Emergency_Relief_and_Construction_Act"]Emergency Relief and Construction Act[/ame], which FDR expanded into the New Deal.

    Like FDR, Hoover experimented a lot, and made a few mistakes--Smoot-Hawley being the biggest one.

    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.
    Unemployment before 1929 was at 3.2%

    Before WWII, the lowest unemployment figure under FDR was 11% in 1936.

    Strange definition of "booming".

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    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.
    Be glad you don't own a small business. You'd lose your shirt, your ass, and every dollar in between.

    You don't grow business in response to a promise of a handout of cash, you grow in response to promise of new sales and revenues.

    I do run a business, and if I knew the government was going to pay me $100K in six months, I would not increase my expenditures now at all. Why? Because I'm getting the $100K anyway, without doing anything. In fact, that promise is a decided disincentive to that sort of spending, because if I don't spend now I get to keep more of the $100K.

    If, on the other hand, I get a contract to deliver goods worth $100K in six months, and I can obtain a letter of credit based on that contract to finance the expansion of business necessary to meet that contract, I'm all over it like white on rice as of this instant.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Harry Guerrilla View Post
    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.



    The economy has to go through this process.
    It is a reorganization of priorities and principles.



    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.



    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.
    What you are saying about false economic growth is not what we are having now.

    Now, our problem is pessimism, which means that the government assisting our economy would actually put us more on track.


    You are correct that the mechanisms I am talking about is what got us into this crissis, but we need that to get out of the recession.

    Before this recession

    Real, Potential GDP < GDP that we can see (that is a bubble)

    but now

    GDP that we can see < Real, Potential GDP (opposite of market bubble)

    So we need government help to increase the visible GDP to make it eqaul to the potential, real GDP.

    Do you understand what I am saying? I am not sure if I am explaining it well.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    Hoover was a complete idiot to increase the top bracket income taxs to 90% to try and ballance the budget, and FDR was also really stupid to not change that, even if his more spending increases helped.
    There is little support for the farcical fabrication that FDR's public work projects did ANYTHING to improve the economy or lower the unemployment rate. Many economists today believe that they may have exacerbated the issues with the economy.

    World War II was what ended the downturn and led to a huge global expansion after the war rebuilding Europe and Asia.

    The notion that Governments can BORROW and PRINT the economy out of a recession is absurd beyond belief because in the end, Governments produce NOTHING; they can only take away money from those who DO produce and re-distribute it. It's called taxation.

    Someone, or in this case EVERYONE, will have to pay the tab for all this Government largess and when the dust settles, you will see capital flight, higher unemployment and inflation. There is NO such thing as a Keynesian FREE lunch.

    When Government borrows to the excessive extent that this one has, it is now seriously competing with the Capital markets for that scarce capital and as such, lowers what is available for capital markets in order to expand and hire. Money supply is limited to GNP, Governments do not add to GNP; they can only tax and then spend and the multiplier effect on that capital is far lower than if the market took those same dollars and invested them in new production and labor.

    These simplistic Obamanomic notions about economics can only be expressed by those who are economically ignorant, willfully suspend common sense and logic, or are naive about how the REAL economy/world works.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Kandahar View Post
    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.
    First, what small businesses are getting "checks?" Particularly checks of $100K?

    Secondly, if you believe that $100K is going to cause a small business who is probably already up to their ears in debt due to a lack of business will make them go out and borrow money, you are living in a fantasy world.

    Thirdly, those small businesses are going to find it extremely difficult to just borrow any amount of money to expand a business in this economy and the assumption that there will be stimulus money coming in is not the kind of security banks, who are now being forced to be harder on their loan criteria by the government, are going to lend money on.

    If you don't already have a secured line of credit to a bank you have been doing business for a long time and maintain cash balances sufficient to show you can pay for it, chances are you will NOT be getting a new one or getting your limits raised anytime soon.

    I am curious, have you ever borrowed money to start a business or run a small business, or are you parroting the same naive talking points we hear from Obama?

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    Now, our problem is pessimism, which means that the government assisting our economy would actually put us more on track.
    "The only thing we have to fear is fear itself"?

    Great inspirational rhetoric but lousy economics.

    The "problem" is a litany of insane market assumptions--such as the notion that houses could be used to finance consumer spending, that taking on debt to purchase an asset for a longer term than one plans to hold the asset is clever financing, that mortgages can be bundled and redistributed (securitization) efficiently. The "problem" is an addiction to debt and easy credit that leads people to foolishly and recklessly mortgage future earnings for present pleasure.

    This isn't "pessimism", it's sobering reality hitting folks square in the face--at last.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    What you are saying about false economic growth is not what we are having now.

    Now, our problem is pessimism, which means that the government assisting our economy would actually put us more on track.


    You are correct that the mechanisms I am talking about is what got us into this crissis, but we need that to get out of the recession.

    Before this recession

    Real, Potential GDP < GDP that we can see (that is a bubble)

    but now

    GDP that we can see < Real, Potential GDP (opposite of market bubble)

    So we need government help to increase the visible GDP to make it eqaul to the potential, real GDP.

    Do you understand what I am saying? I am not sure if I am explaining it well.
    I do, but overall government spending does nasty things.

    The are increasing debt without making a dedicated effort to pay it back.
    You can't trust other people with your money if you know what I'm saying.
    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

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    Educator nerv14's Avatar
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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Truth Detector View Post
    There is little support for the farcical fabrication that FDR's public work projects did ANYTHING to improve the economy or lower the unemployment rate. Many economists today believe that they may have exacerbated the issues with the economy.

    World War II was what ended the downturn and led to a huge global expansion after the war rebuilding Europe and Asia.

    The notion that Governments can BORROW and PRINT the economy out of a recession is absurd beyond belief because in the end, Governments produce NOTHING; they can only take away money from those who DO produce and re-distribute it. It's called taxation.

    Someone, or in this case EVERYONE, will have to pay the tab for all this Government largess and when the dust settles, you will see capital flight, higher unemployment and inflation. There is NO such thing as a Keynesian FREE lunch.

    When Government borrows to the excessive extent that this one has, it is now seriously competing with the Capital markets for that scarce capital and as such, lowers what is available for capital markets in order to expand and hire. Money supply is limited to GNP, Governments do not add to GNP; they can only tax and then spend and the multiplier effect on that capital is far lower than if the market took those same dollars and invested them in new production and labor.

    These simplistic Obamanomic notions about economics can only be expressed by those who are economically ignorant, willfully suspend common sense and logic, or are naive about how the REAL economy/world works.
    You are missing my point.

    The government is not suppose to produce anything with defecit spending. It just gives revenue to companies to help them.

    Ok, ask yourself how WWII got us out of the Depression. That was government spending at its most concentrated form.

    You are missing that defecit spending BORROWS it doesn't take away immediet wealth from working companies.

    You are correct that there is no "free lunch." Defecit spending to leave a recession is good in the long run though, because even if the debt increases in a recession, the economy will be at its potential for longer, which can be used to decrease the debt.



    For the sake of arguement, my point is simply that cutting taxes in a recession will help the economy recover by giving people more money. That is better then raising taxes in a recession to ballance the budget (because tax reciepts fall in a recession)

    Does anyone seriously think that we should have raised taxes to get rid of our defecit? Because that is the theory that most people seem to be supporting.


    Government spending is simillar to tax cuts that way, but if you guys won't accept that, then I still don't want that misconception to weaken the economic theory that I am talking about.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by Harry Guerrilla View Post
    I do, but overall government spending does nasty things.

    The are increasing debt without making a dedicated effort to pay it back.
    You can't trust other people with your money if you know what I'm saying.
    Agreed, most of the time the economy is doing well and that is when government spending is normally very, very bad (see Bush). However, that changes in a recession and I can admit that even though I consider myself fairly economically conservative. During a recession when GDP is below potential, the government should do something different then when the economy is good.


    What do you mean there is no dedicated effort to pay it back? We pay interest on the debt, and that is what China knows will happen. It is their investment, if we paid them back then they wouldn't get interest on their money.

    So I am not completely sure I understand what you are saying :P

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