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Thread: LA Times: Obama stimulus spending: $246,436 per new job

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by Goldenboy219 View Post
    Another typical time frame error. Increased savings broadens long term credit availability. As dictated by reality... increased rates of savings during periods of decreasing income does not boost short run credit availability.
    How does it not? If I'm an individual, the more I have, the more I can lend, short-term and long-term. What changes with a corporation?

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by Goldenboy219 View Post
    The 1919 recession was an after effect of WWI. A bad comparison if you ask me; a much more quality comparable one would arise only 9 years later (and central bankers adhered to the bold). What was the end result?

    P.S.

    The Keynesian remedy to a liquidity trap is to boost demand, as monetary policy is rendered ineffective FWIW....
    Wait what? Central bankers at the onset of the Great Depression adhered to not increasing the monetary base? Why do you ignore what they were doing right before everything started going to hell?

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by Goldenboy219 View Post
    The bold signifies some pretty harsh language. Ignoring economic indicators is never a good idea regardless of whether or not they adhere to your particular liking.
    It's not about ignoring it and it's not about my liking. Sure, it's good to look at it, but you can't just only look at it. During a war GDP is probably growing, but it's still a crappy time to live in.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by phattonez View Post
    How does it not? If I'm an individual, the more I have, the more I can lend, short-term and long-term. What changes with a corporation?
    Savings has been increased as income has simultaneously decreased. We can make all sorts of arbitrary comments about having more, but it is helpful to refer back to Friedman's permanent income hypothesis; people will desire to buy more/take out credit if their future income expectations is favorable.

    You want lending to increase? It is absolutely essential that we boost demand!

    Besides, what has the reality of the current situation told us? Savings has increased quite a bit, while lending... not so much.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by phattonez View Post
    So then a liquidity trap is responsible for the recession, and we should increase liquidity to get out of it? Explain then the early 1920s recession and why we got out of it even though we did the opposite of what we're doing now.
    I don't think that recession can be classified as a liquidity trap.

    Quote Originally Posted by Goldenboy219
    The bold signifies some pretty harsh language. Ignoring economic indicators is never a good idea regardless of whether or not they adhere to your particular liking.
    For the big picture I would agree with you. However, since obvouisly the entire economy has never been completely dismantled by a deflationary spiral, I am guessing something must break the chain. Possibly it is because not literally everything sees a drop in demand, despite a drop in AD. When looking at the macro level you need to be wary of the fallicy of composition, but also the fallacy of division.

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by drz-400 View Post
    I don't think that recession can be classified as a liquidity trap.
    So everything before the Great Depression was not a liquidity trap? That's convenient.

    For the big picture I would agree with you. However, since obvouisly the entire economy has never been completely dismantled by a deflationary spiral, I am guessing something must break the chain. Possibly it is because not literally everything sees a drop in demand, despite a drop in AD. When looking at the macro level you need to be wary of the fallicy of composition, but also the fallacy of division.
    Exactly. An economy does not just collapse on its own.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by Goldenboy219 View Post
    Savings has been increased as income has simultaneously decreased. We can make all sorts of arbitrary comments about having more, but it is helpful to refer back to Friedman's permanent income hypothesis; people will desire to buy more/take out credit if their future income expectations is favorable.

    You want lending to increase? It is absolutely essential that we boost demand!
    There are still companies making money out there though. When credit is hard to come by, they will get the loans while the companies that aren't will have a much harder time of it. This speeds up the loss function, which is essential for an economy. The faster the losses the faster the correction.

    Besides, what has the reality of the current situation told us? Savings has increased quite a bit, while lending... not so much.
    I've gone over this with you. 17x some arbitrary level means nothing. If the reserve ratio gets to 100% and there's still no lending then there may be a problem with what I'm saying.

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by phattonez View Post
    So everything before the Great Depression was not a liquidity trap? That's convenient.
    No, just not that recession. Interest rates were never close to zero during that time, they were actually high. The 1919 recession is similar to the one in the early 1980's in my opinion.

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by phattonez View Post
    There are still companies making money out there though. When credit is hard to come by, they will get the loans while the companies that aren't will have a much harder time of it. This speeds up the loss function, which is essential for an economy. The faster the losses the faster the correction.
    I am not so sure. It would seem to me it would just make faster losses. Not necesarily a faster correction.

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    Re: LA Times: Obama stimulus spending: $246,436 per new job

    Quote Originally Posted by drz-400 View Post
    No, just not that recession. Interest rates were never close to zero during that time, they were actually high. The 1919 recession is similar to the one in the early 1980's in my opinion.
    Do you know what the plan of action was for the government during those recessions before the Great Depression?

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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