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We find some common ground..... :applaud Unfortunately people like Disneydude find the truth discomforting.
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The recession may be over at last — so what now? [edited]
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We find some common ground..... :applaud Unfortunately people like Disneydude find the truth discomforting.
Phoenix
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It's a temporary increase in demand. This increase in demand will be offset at some point in the future by the people whose money is used to pay back the government.
I don't believe your analysis of the growth rate vs jobs lost is correct either.
Homes and automobiles are in surplus. How many dealerships have been shutdown? The cars from those had to go to other dealerships, these had a surplus of autos. Now that the CfC is over everywhere I see a car dealership they are at maybe 20-25% of their pre 2008 levels. The car makers are simply not replenishing stock. Surplus sell off doesn't increase employment.
and looking at the chart, what happens to price? it goes up..way up.
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disneydude
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I'll be glad to match my education, experience and credentials with yours any day of the week. But alas, you would never wish to deal in reality and facts would you?
I was simply commenting on your ability to spell or was it a poor attempt at satire?
The Prof
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1. i would think that most talented 6th grader economists might agree that real, genuine economic stimulus targeted towards solving our collective depressed condition could most effectively come in the form of PAYROLL TAX CUTS
a 2 year halving of payroll taxes would almost certainly succeed in exploding jobs growth
yet, plan pelosi, pure politics at its most repellent, contemplated a comprehensively different approach
2. deficits at 13% of gdp are economically unsustainable, keynesian suicide
even that dean of deficits warned against proportions so, well, unsustainable
3. health care, to me, is a lot like the stimulus
that is, the party's approach is so perturbingly political
anytime leadership wanted pre-existing conditions, portability, tort reform, freeing consumers up to purchase across state lines, it could have swept almost universal support (except for trial lawyers and their well lubricated lackeys)
but, no, obama, pelosi, et al, had far more awesome ambitions in mind
health care reform, to me, as it's played out, is not about reforming health care, not at its hugely hungry heart
just as the "stimulus" was not really anything more than traditional porcine, earmarky, business as usual politics at its worst
i think most chatroom supporters of obama had their dreams punctured by plan pelosi, the so called stimulus
their tone has never been the same
they really did expect change they could believe in
just one man's observation
a 2 year halving of payroll taxes would almost certainly succeed in exploding jobs growth
yet, plan pelosi, pure politics at its most repellent, contemplated a comprehensively different approach
2. deficits at 13% of gdp are economically unsustainable, keynesian suicide
even that dean of deficits warned against proportions so, well, unsustainable
3. health care, to me, is a lot like the stimulus
that is, the party's approach is so perturbingly political
anytime leadership wanted pre-existing conditions, portability, tort reform, freeing consumers up to purchase across state lines, it could have swept almost universal support (except for trial lawyers and their well lubricated lackeys)
but, no, obama, pelosi, et al, had far more awesome ambitions in mind
health care reform, to me, as it's played out, is not about reforming health care, not at its hugely hungry heart
just as the "stimulus" was not really anything more than traditional porcine, earmarky, business as usual politics at its worst
i think most chatroom supporters of obama had their dreams punctured by plan pelosi, the so called stimulus
their tone has never been the same
they really did expect change they could believe in
just one man's observation
Councilman
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Yea the recession is over. That's why the stock market is down 200 points today, and why the number of jobs created by the phony stimulus plan are meaningless because over 3 million were lost and until that many are created you did nothing. The few jobs that did come are said to have cost $160,000 each by ABC and they are and Obamedia source. The cash for clunkers mess caused a short term bump but cost $24.000 per car to give people $4,500. Now that's Typical Gov. Project to be proud of. If the recovery is so great why is unemployment in El Centro CA. over 30 % and many, many around 15 to 20 %. The cause is unimportant when the boat is sinking the goal has to be to plug the hole. But not the Dims (no spell error) they want to make it worse with higher taxes on everything from health care cost increases to the Cap and Trade idiocy based on phony science and a hoax. They want to tax the rich even though Ronald Reagan proved that lowering tax rates caused tax revenues to more than double in two years. Obama and his fellow Socialist/Communists want to take money from people who work for it and give it to people who won't work, and this will lead to complete collapse of the Nation. But them that is Obama's stated goal; "Mar 15, 2008 ... "My friends, we live in the greatest nation in the history of the world. I hope you'll join with me as we try to change it". He's trying to change it into a third world Country, just look at who he has around him before it's too late.
Once again I ask that you wake up America look around at what he is doing and remember these words form the 50s; "We can't expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism". Nikita Khrushchev
Keep this in mind, it's a new truism.
Recession is when your neighbor loses their job.
Depression is when you lose your Job.
Recovery is when Obama loses his job.
Once again I ask that you wake up America look around at what he is doing and remember these words form the 50s; "We can't expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism". Nikita Khrushchev
Keep this in mind, it's a new truism.
Recession is when your neighbor loses their job.
Depression is when you lose your Job.
Recovery is when Obama loses his job.
drz-400
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This is a false dichotomy. You are ignoring the government can tax, spend, and borrow money. The government is running a deficit, therefore the government is borrowing.
How do explain the numbers showing an increase in GDP? Are you saying they are wrong? To me an increase in GDP would signify the economy has grown, and therefore the policies are "moving the curves."
I’ve read Meltdown, but prove to me these policies actually will make the recession longer than without them.
Phoenixt's said:
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.
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.
Phoenix said:
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.
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.
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I'll wait till next quarters numbers to come out to get excited. Seeing as much of this last quarter was purely pushed by government spending not actual economic activity...
Cash for Clunkers inflated the numbers for 3rd quarter. And wait till all these idiotic monetary changes they are pushing (Like printing money and borrowing heavily) kick off inflation, we'll be lucky to have 20% interest rates in 2 years.
Cash for Clunkers inflated the numbers for 3rd quarter. And wait till all these idiotic monetary changes they are pushing (Like printing money and borrowing heavily) kick off inflation, we'll be lucky to have 20% interest rates in 2 years.
drz-400
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If the obvious effects of these monetary policies to increase demand are taking effect, wouldn't that signal that the money is already circulating in the market?
If this is true, then shouldn't inflation have already followed suit?
I may be wrong. Perhaps these are the 'sticky' prices some have been talking about.
Edit:
I may be ignorant on this subject; someone may have to correct me, but I will say this anyways:
I think it is important to also realize a large amount of money has been lost during the recession. This would actually create deflation, which can be seen with other similar recessions we have seen in the past. So I think we should ask, will the government spending and actions by the fed actually offset the effects of this deflation enough to cause inflation?
If this is true, then shouldn't inflation have already followed suit?
I may be wrong. Perhaps these are the 'sticky' prices some have been talking about.
Edit:
I may be ignorant on this subject; someone may have to correct me, but I will say this anyways:
I think it is important to also realize a large amount of money has been lost during the recession. This would actually create deflation, which can be seen with other similar recessions we have seen in the past. So I think we should ask, will the government spending and actions by the fed actually offset the effects of this deflation enough to cause inflation?
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Here is a list of Truth Detector's errors, fallacies, misunderstandings, and misrepresentations of others. Does anyone here feel it would be worth it to go through and correct all of them?
When losing a debate, the first TD does is attack the oppositions credibility, character. The second thing he does is flood the debate with so much bull****, nobody in their right mind has the desire to correct such a hefty amount.
If you want me to, once again, show TD's errors, pick one of the above quotes for analysis. Otherwise, there really is no point (on my behalf to go through all of the posts where the flawed reasoning overlaps continuously).
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This coming from someone who believes a price demand curve is a model of the economy.
You are a laughable caricature of what happens when the uninformed grabs information they are poorly equipped to interpret.
You couldn't make a coherent argument any more than Obama can make a decision.
So once more it begs the question; where did you get your degree in Economics? Did you even go to college?
:2wave:
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I am going to use a simple analogy to describe what should be painfully obvious to all but the most uninformed or staunchest Obama supporters:
What the Government is currently doing is this;
Imagine that the entire US economy is this BIG lake. What the Democrats are doing is dipping their water buckets into one side of the lake, walking to the other side and holding a press conference and pouring the water back into the lake claiming that they are adding MORE water to the lake.
Now taking this analogy further people like me, and perhaps Fox News, are saying wait a minute, didn't you just take water from one side of the lake and are simply pouring it back in this side which really isn't adding any new water to the lake. Then people like Golden Boy are saying basically; what a stupid argument, of course what you don't see is that while they were walking from the other side of the lake they actually divined more water to fill their buckets further and therefore they actually really are adding to the lake!
And there you have it; Obamanomics made simple for those who find complex ways of avoiding the obvious.
Carry on; it is obvious this debate will only end up in the circle of futility with people like Goldenboy who think price demand curves describe and entire economy and its outputs.
What the Government is currently doing is this;
Imagine that the entire US economy is this BIG lake. What the Democrats are doing is dipping their water buckets into one side of the lake, walking to the other side and holding a press conference and pouring the water back into the lake claiming that they are adding MORE water to the lake.
Now taking this analogy further people like me, and perhaps Fox News, are saying wait a minute, didn't you just take water from one side of the lake and are simply pouring it back in this side which really isn't adding any new water to the lake. Then people like Golden Boy are saying basically; what a stupid argument, of course what you don't see is that while they were walking from the other side of the lake they actually divined more water to fill their buckets further and therefore they actually really are adding to the lake!
And there you have it; Obamanomics made simple for those who find complex ways of avoiding the obvious.
Carry on; it is obvious this debate will only end up in the circle of futility with people like Goldenboy who think price demand curves describe and entire economy and its outputs.
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A price demand curve model? This is why you have issues in debating such topics. A demand curve is not a model per say, it simply states the quantity demanded at different price levels.
I did not show you a "price demand curve". Instead, what was presented was a long run aggregate supply curve, which clearly states that in the long run, output is solely determined by supply. When combined with a long run aggregate demand curve, we get the equilibrium price level along with the total output. Therefore, in the long run, price is solely determined by aggregate demand.
Your opinion on the matter does nothing to strengthen your position. What you are going to have to prove is that the slope of the aggregate supply-- in the long run-- is not undefined(vertical line). Good luck in proving that!
On the contrary, all of your responses have shown you do not have the slight idea about what we are discussing.
Is this your obsession? I'll tell you what, answer me these simple questions, and ill tell you where i went to school. Sound good?
Were you wrong in this statement?
Does the Fed dole out us treasury certificates?
Where you wrong in this statement?
Are the biggest holders of US treasuries foreign entities? If so, show a link or some sort of proof.
We are going to start with the two major failures of which basic economic knowledge is needed to come to a truthful conclusion. Before we move on to the more pressing issues, lets start small TD.
So?
Phoenix
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To whom the debt is owed doesn't matter. The debt service on it still has to be paid.
As far as paying it back and getting interest, a better question would be when and how since the US Government hasn't reduced their debt in over 70 years or more. So it should be stated as "In theory we will get......"
Only if someone will buy whatever it is that is being produced. Supply for the sake of supply is useless. Unless a demand exists why would a person make something?
That would only work if we reduced spending to a break even point.
Right now we are spending more than we make.
Taxes aren't the problem with the debt. SPENDING is. As I mentioned before GOVCO spends more than it makes.
Exactly.
They aren't replenishing because the demand isn't there. No need to build cars to sit in lots and get old. Employment is a lagging indicator because demand must exist first then the supply chain will begin to ramp up to produce the items that are in demand.
GM and Chrysler were bailed out because they employ lots of union employees. Unions pay money to the party in charge.
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That is because you don't know what the hell you are talking about; trust me, it was a price demand chart showing how price is affected by supply and demand.
Yes I mistakenly stated that the Fed doles out Treasury notes. But most knew what my point was without clinging to it in a desperate attempt to hide their own uninformed notions about the economy as you have.
So now that I admit I meant something other than I had posted, where did you get your college degree in economics?
Here's the breakdown for you, is there a point?
U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 26 Mar 2009 at 12:01:28 PM GMT is:$11,052,878,402,387.89
The estimated population of the United States is 305,885,140
so each citizen's share of this debt is $36,134.08.
The National Debt has continued to increase an average of
$3.76 billion per day since September 28, 2007!
Top 15 holders of U.S. debt:
(15) Luxembourg
A country slightly smaller than Rhode Island currently holds $87.2 in US government
(14) Depository Institutions
As of the fourth quarter of 2008, the Federal Reserve Board of Governors lists depository institutions as holding approximately $107.3 billion in US debt. This group includes commercial banks, savings banks and credit unions.
(13) Russia
Russia's investment in US debt has grown over 330 percent in the past 12 months, from $35.2 billion in January 2008 to $119.6 billion in January 2009
(12) United Kingdom
Britain currently holds $124.2 billion in US debt, but the number has fluctuated dramatically in the past year, ranging from $279 billion, but dropping to as little as $55 billion in the summer of 2008
(11) Insurance Companies
According to the Federal Reserve Board of Governors, insurance companies hold $126.4 billion in Treasury securities. This group includes property-casualty and life insurance firms.
(10) Brazil
The South American economic giant has $133.5 billion in holdings, according to the Treasury. Brazil’s holdings of US debt have been relatively stable over the past year, with a high of $158 billion in June, and a low of $127 billion in December.
(9) Caribbean Banking Centers
The US Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings recently hit $176.6 billion, up from $109.2 billion in January 2008.
(8) Oil Exporters
Big oil means big money... and big investment into US debt. Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. The group combines for a total of $186.3 billion, up from $140.8 billion one year earlier
(7) Other Investors
Although the most recent numbers for this category are from September 2008, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts and estates, corporate and non-corporate businesses for a total of $413.2 billion
(6) Pension Funds
Pension funds control large amounts of money and are obligated to make relatively safe investments. This group includes both private and local government pension funds, totaling $456.4 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan "G Fund."
(5) State and Local Governments
US state and local governments have over a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained very stable over the past three years, moving within the range between $516.9 billion and $550.3 billion from 2006 to 2009.
(4) Japan
Another major US trade partner, Japan holds a huge amount of the country’s debt, with a stunning $634.8 billion. As recently as January 2008, Japan held the more US debt than any other country
(3) China (Mainland)
The buzz word in the market for US debt has been China. The world’s most populous country is also the largest and most important buyer of US debt. From September 2008 to January 2009, China raised its stake by over $120 billion. Standing at $739.6 billion in January, China’s holdings have skyrocketed from $492.6 billion from a year earlier. Hong Kong, which is not included in China's total, holds an additional $71.7 billion.
(2) Mutual Funds
According to the Federal Reserve, mutual funds are the holds the second largest amount of US debt compared to other groups. Including money market funds, mutual funds and closed-end funds, this group of investments has bought up $769.1 billion of US Treasury securities
(1) Federal Reserve and US Intragovernmental Holdings
That’s right, the biggest holder of US government debt is the United States itself. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $4.806 trillion in US Treasury debt. And with recent announcments from the Fed, potentially another $1 trillion could be added... About a decade ago, this number was "only" $2.5 trillion.
Top 15 holders of U.S. Debt and other good stuff: TradeKing Trader Network
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My choice to use a simple graph should be no surprise, considering the topic. I do not trust you, sorry TD, but that is just how it goes at this point in the debate.
Price is one aspect of equilibrium in a 2D supply demand graph. We can also go to the nth degree and include other aspects such as unemployment, domestic spending, demographic makeup of spending, etc.... All of which, equilibrium will pertain to a correlation to each individual variable as well as how they impact each other (although they also require assumptions for validity).
Quick question and think carefully; is revenue dependent on output and/or price?
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Revenue has nothing to do with either. I have to laugh that you would even believe there would be a relationship; unless of course you are going to make up more stuff like a price demand chart to describe the economy.
So let me ask you something; how many more months of disastrous economic news and activity will it take for people like you who swoon over the false Obamanomics before you admit it was a vast lie and only made the recession worse?
12% unemployment? 15%? Businesses are going bankrupt all over the US at an alarming rate, consumer spending has all but disappeared, states have raised taxes to levels that are further eroding consumer confidence and let's not forget the other effect on Government; less tax revenue and ever burgeoning deficits.
I am just curious at what point people like you see how foolish your notions are about how the economy works and how Government never can BUY a recovery and that it only makes the recovery longer.
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TD; what i described and illustrated was your basic AD-AS model...... From Wiki, just to get the point across.AD-AS model - Wikipedia, the free encyclopedia
Ok, got it? Good.
I have not heard any disastrous economic news since the March lows.
If unemployment eclipses 12%, then they will have under shot the full employment gap. Keep in mind that unemployment is a lagging indicator. Personally, i like to keep a close eye on debt markets, either treasuries or corporate, as the flow of money is rather telling IMHO.
Were their issues with the stimulus project? I would say hell yes; it was far to small in the tune of infrastructure spending. You can check the archives for yourself, i was originally calling for a $1 trillion infrastructure stimulus, as tax cuts (in the short term) combined with a low FFR only magnify the ramifications of a liquidity trap.
Give me some recent examples TD. I am really hoping you will say something about Japan
.
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Revenue is simply output (sold) multiplied by price, as in your basic supply and demand graph. Go ahead, try it out for yourself!
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That's not what revene is. That's funny!
Revenue is any income that increases a company's equity, be it sales, interest, savings or assets exchange.
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Seriously? Come on APDST, how would one calculate revenue?
[ame=http://en.wikipedia.org/wiki/Total_revenue]Total revenue - Wikipedia, the free encyclopedia[/ame]
Holy ****, never in my life have i seen so many people dispute mathematics via a system of beliefs. If you are going to argue mathematics, you will need proof. Where are the proofs that state the mathematical applications to the field of economics are incorrect?
BTW, savings is not revenue, it is savings. The interest or return on savings can increase their assets, but for practical purposes (not considering financial service companies or banks), revenue is what has been described.
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Give me a great big DER; but what has this got to do with anything being discussed. We aren't talking about PRICES dude, we are talking about DEMAND and right now there is no demand in consumer goods due to a complete lack of consumer confidence, a complete lack in demand for houses, a complete lack of demand in credit and a complete lack of demand in commercial real estate.
We are talking about increasing foreclosures, increasing unemployment, higher taxes which will exacerbate the lack of consumer confidence and a complete lack of GDP.
No amount of "SUPPLY" or "REVENUE" curves will change those FACTS. The notion that you don't see any disastrous economic news/data out there suggests that you are not really in touch with reality.
I think we have beat this one into the ground and basically your points are completely lost on me as the FACTS and the REALITY do not seem to have any relevance with you.
I will close and give you the final word with this: NO government has ever BOUGHT/BORROWED a nation out of a recession or into prosperity EVER.
If there is one, I would love to see credible examples. The Government cannot CREATE anything; it TAKES from one person and GIVES it to another usually for purely partisan purposes. This is why the multiplier effect on money is so much lower with Government spending versus the private sector.
You cannot spend a nation into $12 trillion debt, $1.8 trillion deficits without a debate on how and who will be paying for it, we know it will be ALL of us, and think that this will boost consumer confidence and get Americans spending again. It requires a level of willful denial I just cannot comprehend.
Here is another little tidbit for you and then I will let you have the last word: Revenues to the Government are in a free fall with no end in sight that will make the projections of deficits far worse than they currently are. I recently looked at the budget forecasts and had to laugh at the assumptions being used to promote this disastrous economic agenda that is nothing more than a partisan political effort to ensure Democrat majorities and pander to ignorant Americans with populist divisive class envy rhetoric.
No one in their right mind, or with an education, can believe that such rhetoric and policies will be good.
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Phoenix
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Aggregate Supply... in the long run... has a slope that is undefined, hence the AD curve is vertical. This is not Keynesian economics, instead this is classical stance, of which is the basis of supply side economics. Hence, in the long run, supply (and not demand) determines output.
Hopefully you understand the demand curve is downward sloping. No matter where the demand curve intersects a vertical line (AS), it will still lead to a constant amount of output
I have been mulling over these graphs the past couple days. The only thing I can positively get from them is that as the total amount of production and resources (LRAS) over a specified period of time is used up, prices increase.
It kept bugging me that no matter what happens in the scenarios the point on the graph ALWAYS defaults back to the LRAS line, just higher or lower depending on the overall prices (left side of the graph).
When we define LRAS it makes sense. LRAS is a theoretical number that represents the overall complete amount that COULD be produced in a society. It doesn't represent what is ACTUALLY being produced. So for example we could build a factory and just it's presence would increase LRAS even if it's not being used.
So increasing LRAS doesn't really support your point since increasing theoretical output doesn't help the economy. Increasing ACTUAL output will.
Ill even help you out.
Now move the demand curve anywhere on the graph and explain to me in your logic how output is changed (in regards to long run AS).
You might want to further dislodge your foot from your mouth, as demand (in the long run) is what determines price, not output.
Now move the supply curve anywhere on the graph and explain to me in your logic how output is changed (in regards to long run AS).
The same is true with moving the supply curve, it doesn't change output (in regards to long run AS). LRAS is determined by theoretical factors of productivity actual supply and demand do not change it.
The same is true with moving the supply curve, it doesn't change output (in regards to long run AS). LRAS is determined by theoretical factors of productivity actual supply and demand do not change it.
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Then explain your ridiculous assertion that a supply and demand graph of any kind only determines price. How is output (horizontal axis) suddenly left out of the analysis?
And why is their a lack of demand? Market psychology TD, future income expectations are declining (although at a decreasing rate), and therefore people are beginning to save more. Since the economy is driven by consumption (70%), this will have a very real effect on output.
In the short run, shifting supply (lowering taxes, regulations) will have very little effect on output. Therefore this is a demand issue. Please show where i stated anywhere, anytime that we need a rightward shift in supply? Never stated it so good luck, although your misrepresentation of my position is another epic failure. Demand can be shifted by increasing income, or by "induced spending".
Ideally, infrastructure stimulus creates jobs and therefore spending.
Again, show me where i stated they did. I made a comment that in the short run, output is determined by demand; although in the long run, it is a aggregate supply determinant as the slope of a long run aggregate supply curve is undefined.
Lowering taxes, decreasing government spending, loosening regulation is a supply side solution, shifts the supply curve, not the demand curve buddy. The logic is that HOPEFULLY, demand will follow suit as prices will decrease (because business taxes and regulations are decreased).
You state we have unemployment issues and increasing deficits/debt. No ****. How does balancing the budget (decrease spending) deal with lower demand TD? The only thing you can possible state without sounding totally confused is something pertains to Say's Law, although that undermines your entire "this is a demand issue" rant. If it is a demand issue, induced spending, not savings, increases output in the short term.
What happened in the 1940's TD? Did massive government spending and massive government debt lead to great prosperity following WWII?
Your analysis does not have any time reference, and therefore is incorrect. Time is a critical component, and you have yet to consider it.
First and foremost, Obama did not spend us into $12 trillion of debt, the majority of that figure is held on the shoulders of Mr. Bush II. Second, where was all this disparity when the former president was sending out tax rebate checks in the hundred billions? Are we to believe that spending and increasing deficits is only ok under a republican, and when a democrat takes office, massive borrowing when we are in a severe recession is suddenly "off the table"? GTFO of here dude, you are blindly inconsistent in nearly everything you state in regards to the economy.
How did such a high amount of debt (in regards to GDP) get paid down TD, all while the standard of living, incomes, etc... all increased?
You are so full of ****, you have confused your supply side analysis with that of the Neo-classical prescription. Government can and will shift the demand curve TD, and we are seeing it already with positive GDP numbers. Will there be some bumps in the road? Of course, but you have to admit things are much better than they were one year ago.
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Again, the price is totally demand dependent. Assume that aggregate demand is perfectly elastic (horizontal line).
You are assuming that a factory would run idle, which is not only against reality, but is faulty logic. A factory would only run idle if its revenue = cost (fixed and/or variable) = 0, and because of the tremendous amount of capital required to build a factory, it is just not going to happen. LRAS assumes full employment.
Let us assume that increasing output corresponds with movement to the right, by moving AS to either the left or right, we will either be decreasing or increasing output.
Yes it does bro; if it is moving to the right, it is increasing, and if it is moving to the left it is decreasing. Assign nominal values and try it yourself
Regardless, my statement on LRAS was just to tie up any loose ends. TD said i was wrong, and i the graph states otherwise. We are right now concerned about the short run, as in right now, and this graphical representation does not analyze our current situation.