I’ve read Meltdown, but prove to me these policies actually will make the recession longer than without them.
Yes, it will have to be paid back, but to whom? 75% of the debt is held by the American public. So, technically we will also get the money back with interest.Originally Posted by Phoenixt's
Also, just as someone earlier said, we are becoming more efficient. It has also been shown supply drives the economy in the long run. If we become more efficient, shouldn't our supply eventually increase? Therefore, the economy should continue to grow in the long run.
If the economy will grow in the long run, won't the government’s tax revenue increase over the long run without raising taxes? To me, this would mean we could eventually pay off the debt without raising taxes.
However, this would also mean we cannot lower taxes when the economy is good, as this is when we should take advantage of the increased revenues to pay off the debt. This shows one error in the previous admin.
Why were they in surplus? Could it be because the demand was too small? If we used stimulus to increase demand in theory the surplus would go down. It seems to have worked in this case, since you said, "Now that the CfC is over everywhere I see a car dealership they are at maybe 20-25% of their pre 2008 levels." This seems like it supports the fact that demand affects the economy in the short term.Originally Posted by Phoenix
Why are the car makers not replenishing the stock? Just as someone has said earlier, the supply of the market affects the long run. This illustrates perfectly this fact, as supply (which seems to follow employment) is one of the slowest things to increase after a recession.
When employment increases, the supply will increase. How can we expect the car dealers to maintain the same output with less of a work force? This may be the reason GM and Chrysler were chosen to be "bailed out." It was an attempt to avoid the effects of a decreased workforce and supply after the demand had been increased to compensate for the surplus.
Surplus sell off will not increase employment, but it will avoid the effects of maintaining the surplus, which would be further layoffs, downsizing, and reduced prices. The whole point of the stimulus and bailouts were to reduce these effects.
And what do you know; the stimulus and “bailouts” seem to be taking effect. I just hope employment will begin to follow suit.The economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes.