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Thread: Obama Releases $3.4 Trillion Budget Plan

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    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.

    1. Revenue is for goods produced and/or services rendered. You cannot "give" companies revenue.
    2. Money which is just "given" in this fashion does not help business--what helps business is sustainable customer activity: buying, consumption, et cetera. If the government is just buying haphazardly with deficits, that is not sustainable, and the economy tanks when the haphazard "giving" ends.


    Quote Originally Posted by nerv14 View Post
    Ok, ask yourself how WWII got us out of the Depression. That was government spending at its most concentrated form.
    Because that was government buying the things government is supposed to buy: guns, bombs, planes, and other fun war toys. Goes back to that whole "sustainable customer activity" thing.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    1. Revenue is for goods produced and/or services rendered. You cannot "give" companies revenue.
    2. Money which is just "given" in this fashion does not help business--what helps business is sustainable customer activity: buying, consumption, et cetera. If the government is just buying haphazardly with deficits, that is not sustainable, and the economy tanks when the haphazard "giving" ends.



    Because that was government buying the things government is supposed to buy: guns, bombs, planes, and other fun war toys. Goes back to that whole "sustainable customer activity" thing.
    Companies can be given revenue by the government buying their services.

    For instance, infrastructure gives construction companies business and welfare gives health and food companies business.


    What do you mean by the government buys things that it is "suppose to buy?"

    Buying a tank has the same effect as the government buying a bridge to be built. Except that a bridge makes an economy more efficent.

    I think you are combining what a limited government (one that only exists to protect property rights) should purchase, and what a government should purchase to bring itself out of a recession.

    I am talking about about economics, not what is Constitutional or anything.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    Companies can be given revenue by the government buying their services.

    For instance, infrastructure gives construction companies business and welfare gives health and food companies business.


    What do you mean by the government buys things that it is "suppose to buy?"

    Buying a tank has the same effect as the government buying a bridge to be built. Except that a bridge makes an economy more efficent.
    You need to study the economy of Japan. Lots of bridges to nowhere built in the 90's. Didn't do a damn thing for their economy. Some bridges are boons and some bridges are boondoggles.

    Additionally, there is not a large amount of real infrastructure spending contained in Dear Leader's stimulus plans. In fact, the entire price tag of the porkulus bill amounted to less than half of the estimated cost of the remedial work needed on America's roads and bridges, and the amount actually dedicated in that bill to such infrastructure amounts to little more than a maintenance budget. If Dear Leader and his Democrat masters in Congress were actually spending on infrastructure, you'd find far fewer conservatives taking issue with his spending.

    Quote Originally Posted by nerv14 View Post
    I think you are combining what a limited government (one that only exists to protect property rights) should purchase, and what a government should purchase to bring itself out of a recession.

    I am talking about about economics, not what is Constitutional or anything.
    I'm talking about practical economics--i.e., what works, not what Dear Leader's revisionist views of FDR and the New Deal preach to the masses.

    Governments don't suffer recessions, economies do. The only power that governments have to alleviate the misery of a recession is to climb down off the back of private enterprise to give it time to recuperate--i.e., tax cuts, sane spending, not slurping up credit like an alcoholic on a three-week bender, and similar measures of fiscal sobriety.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    You need to study the economy of Japan. Lots of bridges to nowhere built in the 90's. Didn't do a damn thing for their economy. Some bridges are boons and some bridges are boondoggles.
    I have looked at the housing bubble in Japan. Their housing bubble was actually much larger then the one right now.

    As I said before, if an economy still has a ways to decline to equal its potential, real value, then defecit spending is bad. Thats about when you apply defecit spending or defecit tax cuts, not if they work.

    Additionally, there is not a large amount of real infrastructure spending contained in Dear Leader's stimulus plans. In fact, the entire price tag of the porkulus bill amounted to less than half of the estimated cost of the remedial work needed on America's roads and bridges, and the amount actually dedicated in that bill to such infrastructure amounts to little more than a maintenance budget. If Dear Leader and his Democrat masters in Congress were actually spending on infrastructure, you'd find far fewer conservatives taking issue with his spending.
    Since when did I praise the stimulus pact?

    You are correct to a degree because the stimulus pact will have a limited effect on the economy per dollar. I heard economists speach about how the "money multiplier" of the stimulus was low.

    The money multiplier is how many times government spending is added to the GDP. For instance, welfare to give people medicine will help the economy to a degree by giving pharmacutical companies business. However, infrastructure can have more of an effect by not just paying for the work, but also having easier transportation.

    I'm talking about practical economics--i.e., what works, not what Dear Leader's revisionist views of FDR and the New Deal preach to the masses.

    Governments don't suffer recessions, economies do. The only power that governments have to alleviate the misery of a recession is to climb down off the back of private enterprise to give it time to recuperate--i.e., tax cuts, sane spending, not slurping up credit like an alcoholic on a three-week bender, and similar measures of fiscal sobriety.
    Defecit tax cuts are the same as government spending! But I agree that most tax cuts are more efficent. I did support McCain's economic plan more then Obama's.

    But your construction company gets a tax cut, or they get business from the government it can have the same effect.


    You can call interpretations of the New Deal revisionist, but what about your idea that WWII helped get us out of the Depression?

    Spending money on tanks is even more worthless then a bridge to nowhere because even that bridge will have some business on it. But how did WWII bring us out of a depression?

    Because it gave jobs to people which allowed them to consume more.


    Rigth now I think I am repeating myself overall though...
    Last edited by nerv14; 05-11-09 at 12:17 PM.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    Governments don't suffer recessions, economies do. The only power that governments have to alleviate the misery of a recession is to climb down off the back of private enterprise to give it time to recuperate--i.e., tax cuts, sane spending, not slurping up credit like an alcoholic on a three-week bender, and similar measures of fiscal sobriety.
    I'm truly curious how government was supposed to do that in the case of this current recession. What do you suppose would've happened if our government would've sworn a hands-off approach at the outset? No bailout money, no financial stimulus, let Wall Street and the automakers take their medicine, and inevitably crumble. How I wish this would've happened instead.

    I'm curious, though, what folks think would've been the reaction from big business and the public. I think I have an idea... (political suicide, or public admiration?)
    Last edited by Analyst; 05-11-09 at 12:48 PM.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by nerv14 View Post
    Spending money on tanks is even more worthless then a bridge to nowhere because even that bridge will have some business on it. But how did WWII bring us out of a depression?

    Because it gave jobs to people which allowed them to consume more.
    Incorrect. Because it gave jobs to people while requiring them to consume less.

    WWII did two things immediately:

    1. Removed a significant quantity of surplus labor from the labor pool
    2. Made the government a huge consumer of industrial output.

    WWII also accomplished something else--it pushed civilian consumption into the background. Assembly lines producing tanks are not producing cars. Assembly lines producing fighter aircraft are not producing civilian aircraft. Thus while the government was buying huge amounts of war materiel, and thus employing everyone imaginable (and unimaginable, a la "Rosie the Riveter"), it was not giving them the full capacity to satisfy their own economic wants.

    Add to the pent up civilian demand the huge demands of Europe and Japan given the total destruction of their economies and you have a level of demand that can sustain economic growth for quite some time--which is exactly what happened.

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    Re: Obama Releases $3.4 Trillion Budget Plan

    Quote Originally Posted by celticlord View Post
    Incorrect. Because it gave jobs to people while requiring them to consume less.

    WWII did two things immediately:

    1. Removed a significant quantity of surplus labor from the labor pool
    2. Made the government a huge consumer of industrial output.

    WWII also accomplished something else--it pushed civilian consumption into the background. Assembly lines producing tanks are not producing cars. Assembly lines producing fighter aircraft are not producing civilian aircraft. Thus while the government was buying huge amounts of war materiel, and thus employing everyone imaginable (and unimaginable, a la "Rosie the Riveter"), it was not giving them the full capacity to satisfy their own economic wants.

    Add to the pent up civilian demand the huge demands of Europe and Japan given the total destruction of their economies and you have a level of demand that can sustain economic growth for quite some time--which is exactly what happened.
    Thats an important point about WWII, but I don't see how that makes any difference to how it was government, defecit spending that got us out of the depression.

    During WWII, the government was able to give people large amounts of income that they wouldn't normally have. And simply, that is what government spending for many projects supplies.

    And I don't see how "pent up demand" means anything to this debate. What you are infering is like saying that if people were working as hard as they did during WWII to make tanks, and instead they built cars that people could buy, then the economy wouldn't have improved.

    Work for the economy that is un war related is not lost, so I would suspect that the economy would have improved faster.


    We also have to remember one interesting economic benefit of weapons of war that is normally overlooked from WWII... the US's weapons that it built destroyed large parts of infrastructure around the world. This made it so those people HAD to buy our products after WWII. and trade surpluses are good for economies.

    So the miraculous recover after WWII can not be completely attributed to government spending, but the world enviornment at that time.

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