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

Not only that, but there's a massive incentive to "exaggerate". Like I said, would you ask for government money and tell them you're only going to "save" 1 or 2 jobs?

Gosh, you mean there are incentives to exaggerate in the world? You could say that about anything, from job skills to penis size. Doesn't mean you don't hire people or have sex.
 
Gosh, you mean there are incentives to exaggerate in the world? You could say that about anything, from job skills to penis size. Doesn't mean you don't hire people or have sex.

I didn't say it was surprising, I said it was true, and the president's job numbers are BS.
 
No it doesn't. It just means instead of hiring new people, you sign a contract with a firm before they lay off people. "Created or saved" simply means that some jobs will be new ones and some will be existing ones that would dissolve if it weren't for the stimulus.

I know what it means, I was just asking you how you were going to figure out such a number.

Ideally, the government looks at economic data showing which projects employ the most people, including indirect jobs. But there's no denying that politics is involved too.

You know what project would employ the most people? Digging a canal with shovels. Would it be worth it? Well according to your measure, it would create a lot of wealth, employ a ton of people, and it would lead to indirect jobs via that multiplier that you love. So what's the problem? ;)

Why ignore it? Why does it matter that the job was created with tax money or not? It's still a job that was created, at least until the private sector can get back to employing the occupant again.

If the stimulus were permanent, you might have a point. But it's not. It is designed to get the private sector running at full speed again, not permanently replace it with the government. It's a temporary, emergency measure.

You have ignored where the money has come from. It's not coming from savings because there is no savings!
 
I didn't say it was surprising, I said it was true, and the president's job numbers are BS.

You said there were incentives to exaggerate. You didn't say there was actual exaggeration. That would require, like, some evidence. Knowing how many jobs were "really" created instead of how many were reported - now there's some rocket science.
 
I know what it means, I was just asking you how you were going to figure out such a number.

I don't know. Are you saying it's not possible to figure out? Private businesses do it every day.

You know what project would employ the most people? Digging a canal with shovels. Would it be worth it? Well according to your measure, it would create a lot of wealth, employ a ton of people, and it would lead to indirect jobs via that multiplier that you love. So what's the problem? ;)

No problem. If people want to dig canals, fine. Building roads isn't that far up from digging canals. But better-paying jobs also have an even greater multiplier effect per job, for obvious reasons.

You have ignored where the money has come from. It's not coming from savings because there is no savings!

Why does it matter where the money comes from, in the short-term? This is about the short-term, unfortunately.

I am not saying this is the best way to run an economy. But the mistakes have been made (I'll leave it to you to figure out by whom) and now we're in a jam. A stimulus is our best option right now.
 
This colossal waste of taxpayer money is a classic example of the inefficiency of the federal government, and the number 1 reason why we need to keep the government out of the health care industry.

Yes, because how our private financing and banking system has kept up the economy is the number 1 reason why we need only a private sector health care industry.

...

Um, wait a minute...
 
And don't forget that jobs "created or saved" is an absolutely bogus measurement subject to manipulation. If you're asking for government money, are you going to say that your project will "create or save" 0 jobs or 100? How could they ever know?

And what about the current and future jobs that are being destroyed by taxes?

The government does not create jobs!

It creates Government jobs, but that's a tiny percentage...not to mention some of them are ****ty, like the DMV receptionist, while some of them are awesome like 140k+- to be a Senator/Representative and not even have to show up to work all the time.
 
Yes, because how our private financing and banking system has kept up the economy is the number 1 reason why we need only a private sector health care industry.

...

Um, wait a minute...

Yes, wait a minute, who was it that told the Financing industry to start giving out loans to higher risk people? Oh right, twas the Gub'ment.
 
Yes, wait a minute, who was it that told the Financing industry to start giving out loans to higher risk people? Oh right, twas the Gub'ment.

Sorta. But most of the subprime was done by private banks not under the CRA. This is a great case of when finance goes optimistically delirious. The ratings industries didn't help and essentially commuted fraud. When everyone things nothing can go wrong is when you should be thinking everything will go wrong.
 
It creates Government jobs, but that's a tiny percentage...not to mention some of them are ****ty, like the DMV receptionist, while some of them are awesome like 140k+- to be a Senator/Representative and not even have to show up to work all the time.

Sure, but in order to create those jobs, it has to get that money from somewhere else, and that means destroying jobs. And as the subject line points out, the government is not as efficient at creating jobs as it is at destroying them. So net-net, it is not a job creator, it is a job destroyer.
 
Sure, but in order to create those jobs, it has to get that money from somewhere else, and that means destroying jobs.

Correction: potentially destroy jobs. Arguing from the position of opportunity cost assumes that the alternative would be done. That's a big assumption and as borne out in the past year or so, not necessarily true. People sat on money, literally hiding it under their beds. That money would not have been used for other opportunities. Furthermore, government spending in terms of multipliers and money velocity should create more jobs indirectly. Many jobs in basic materials production are related to government spending on defense. Massive orders for heavy equipment prompts producers to buy more steel. Guess who sees their employee rolls increase? Steel producers even when they aren't directly related.
 
Correction: potentially destroy jobs. Arguing from the position of opportunity cost assumes that the alternative would be done. That's a big assumption and as borne out in the past year or so, not necessarily true. People sat on money, literally hiding it under their beds. That money would not have been used for other opportunities. Furthermore, government spending in terms of multipliers and money velocity should create more jobs indirectly. Many jobs in basic materials production are related to government spending on defense. Massive orders for heavy equipment prompts producers to buy more steel. Guess who sees their employee rolls increase? Steel producers even when they aren't directly related.

Actually the impact of savings is well known and I considered that. Even at the height of the recession the savings rate in the US was 10%. So even excluding that 10% from the calculation, if it costs $250k to create a stimulus job and $100k to create one privately, tax cuts are massively more effective.

And anyway you're saying it like saving is a bad thing. If 10% of the taxes returned to US consumers and businesses were either used to pay down debt or deposited in a bank, that would have been a major benefit to the financial system, which was driving the recession deeper and thereby destroying more jobs as you may recall. And of course we can't forget that savings (basically) = investment. And investment creates jobs. So no matter what the private sector did, it probably would have been better than the government.

Now that's not to say I'm 100% against some deficit spending. But this stimulus was just a disaster. Obama should be sent to jail for being so bad at his job.
 
Actually the impact of savings is well known and I considered that. Even at the height of the recession the savings rate in the US was 10%. So even excluding that 10% from the calculation, if it costs $250k to create a stimulus job and $100k to create one privately, tax cuts are massively more effective.

Sorta. The savings rate on new income sure, but what about all of the existing wealth that was being tucked away? If I store 10% of my paychecks into savings, that's not the same as me taking my portfolio of $250,000 and sticking it entirely into a savings account or under my bed.

And anyway you're saying it like saving is a bad thing. If 10% of the taxes returned to US consumers and businesses were either used to pay down debt or deposited in a bank, that would have been a major benefit to the financial system, which was driving the recession deeper and thereby destroying more jobs as you may recall. And of course we can't forget that savings (basically) = investment. And investment creates jobs. So no matter what the private sector did, it probably would have been better than the government.

I'm not saying savings is a bad thing, only that opportunity costs are largely theoretical. Granted, if everyone went to savings accounts that would have drastically boosted reserves and helped the banks, but many people went towards oil and gold. Neither of which actually produce more jobs other then the financial advisers and accountants needed to run those.

Now that's not to say I'm 100% against some deficit spending. But this stimulus was just a disaster. Obama should be sent to jail for being so bad at his job.

It's not really a stimulus. Looking at what's in it and the time frame, it's little more then an initial front loaded long term spending plan.
 
I don't know. Are you saying it's not possible to figure out? Private businesses do it every day.

Let's say that a company was going to fire someone, but now because of the stimulus he now doesn't have to be fired. How can you measure that?

No problem. If people want to dig canals, fine. Building roads isn't that far up from digging canals. But better-paying jobs also have an even greater multiplier effect per job, for obvious reasons.

Seriously? So you think that digging a canal WITH SHOVELS is a good way to spend money? Really?

Why does it matter where the money comes from, in the short-term? This is about the short-term, unfortunately.

I am not saying this is the best way to run an economy. But the mistakes have been made (I'll leave it to you to figure out by whom) and now we're in a jam. A stimulus is our best option right now.

Because if money comes from taxes then making money isn't about making a profit (satisfying consumers), it's about persuading politicians. That's a completely inefficient economic model.
 
Let's say that a company was going to fire someone, but now because of the stimulus he now doesn't have to be fired. How can you measure that?

Well, I think you just did. One job saved.

Seriously? So you think that digging a canal WITH SHOVELS is a good way to spend money? Really?

No, I'm saying it's good enough if there are no alternatives. You are the one who suggested it, so why are you asking me?

Because if money comes from taxes then making money isn't about making a profit (satisfying consumers), it's about persuading politicians. That's a completely inefficient economic model.

Consumers aren't satisfied when the government does it's job? Really? You aren't happy when you have a road to drive to work on and police to keep you safe?

But of course you're talking about an entirely different issue anyway, because this isn't about the government creating wealth like a business. Nobody said the stimulus would do that anyway. The stimulus is for employing people so they can create wealth, and then spend money so that others can create wealth, and so on until the private sector is back to using people's labor to create wealth at full speed. So the whole objection that the government can't create wealth is irrelevant anyway. It's an empty slogan.
 
Well, I think you just did. One job saved.

So you're going to go up to every person and ask them if the stimulus saved their job? Not very dependable. Admit it, there's no way to measure "jobs saved."

No, I'm saying it's good enough if there are no alternatives. You are the one who suggested it, so why are you asking me?

Because you said that the only measure of a good stimulus is based on the multiplier effect and number of jobs created. I'm telling you that you also have to look at the productivity that you're getting directly from that money.

Consumers aren't satisfied when the government does it's job? Really? You aren't happy when you have a road to drive to work on and police to keep you safe?

Sure I'm satisfied, but that's not the only thing that you have to look at. Don't forget about efficiency. Building a road that would otherwise cost $1,000,000 for $10,000,000 would be a tremendous waste of resources. Would we still be satisfied with the road? Probably, but then it would also deny us of other things that would satisfy us and prevent us from our highest amount of satisfaction.

But of course you're talking about an entirely different issue anyway, because this isn't about the government creating wealth like a business. Nobody said the stimulus would do that anyway. The stimulus is for employing people so they can create wealth, and then spend money so that others can create wealth, and so on until the private sector is back to using people's labor to create wealth at full speed. So the whole objection that the government can't create wealth is irrelevant anyway. It's an empty slogan.

So then according to your theory, the government has to get "unused" money. What money exactly is being unused? You would say saved money, but catwaba already showed that money is not being "loaned" because the government has all of it.
 
So you're going to go up to every person and ask them if the stimulus saved their job? Not very dependable. Admit it, there's no way to measure "jobs saved."

No, didn't say that. Nor did you. Read what YOU said again.

Because you said that the only measure of a good stimulus is based on the multiplier effect and number of jobs created. I'm telling you that you also have to look at the productivity that you're getting directly from that money.

Why?

Sure I'm satisfied, but that's not the only thing that you have to look at.

No, it's not, when you're answering the question. Which I did.

Don't forget about efficiency. Building a road that would otherwise cost $1,000,000 for $10,000,000 would be a tremendous waste of resources. Would we still be satisfied with the road? Probably, but then it would also deny us of other things that would satisfy us and prevent us from our highest amount of satisfaction.

Efficiency is good, but that's a different issue.

So then according to your theory, the government has to get "unused" money. What money exactly is being unused? You would say saved money, but catwaba already showed that money is not being "loaned" because the government has all of it.

No he hasn't.
 
No, didn't say that. Nor did you. Read what YOU said again.

I said that it's impossible to measure jobs saved. You disagreed.


Because you could get so much more wealth using mostly machines to dig the canal and using the manpower for other things. If you waste potential output then it's like you're just throwing money out the window. Have you ever heard of the Parable of the Broken Window? Look it up.

No, it's not, when you're answering the question. Which I did.

What?

Efficiency is good, but that's a different issue.

It's not a different issue. Government can never be as efficient as we would be with spending money because they don't know what we want as well as we do.

No he hasn't.

Sorry, I meant carlkay.

Another note - the point was made that the ratio for banks funds to reserve rate is currently 17:1. That means banks are holding onto 17 times the required funds by law. Do you know where those funds are held that are not out on loan? Federal Reserve Notes - i.e. loaned to the government, where they earn interest. So the money is currently on loan to the government rather than the private sector. Without this money on loan to the government, the government would not be able to raise the funds to spend on the stimulus. So the money is flowing from the private sector to the government sector because the banks are being actively encouraged by the rate on the Fed Notes over the risk of making loans.
 
I said that it's impossible to measure jobs saved. You disagreed.

You yourself described how one knows a job is saved. Someone is about to get laid off, then the government comes with a stimulus contract and they aren't. One job saved.

Sorry, the rest is too far off-topic for me.
 
Sorry, I meant carlkay.

Carlkay58 said:
Another note - the point was made that the ratio for banks funds to reserve rate is currently 17:1. That means banks are holding onto 17 times the required funds by law. Do you know where those funds are held that are not out on loan? Federal Reserve Notes - i.e. loaned to the government, where they earn interest. So the money is currently on loan to the government rather than the private sector. Without this money on loan to the government, the government would not be able to raise the funds to spend on the stimulus. So the money is flowing from the private sector to the government sector because the banks are being actively encouraged by the rate on the Fed Notes over the risk of making loans.

He is dead wrong in regards to government borrowing via the Fed on various aspects of m1/m2 in depository institutions. When a bank buys a bond.... it holds it as an asset. When a bank sells a bond... it holds it as a reserve. Carl was a bit confused. Sorry you fell for such a tale.;)
 
When a bank buys a bond.... it holds it as an asset.

So a bank holds a loan from the government and is going to use that as a backing for other loans? What happens when a bank buys all of the bonds that it can from the government? What happens to the savings of the people in that bank?
 
You yourself described how one knows a job is saved. Someone is about to get laid off, then the government comes with a stimulus contract and they aren't. One job saved.

Say you work for the government. How are you going to measure how many times this occurred in the country?

Sorry, the rest is too far off-topic for me.

:rofl, what I said about efficiency is EXACTLY what this topic is about! :doh
 
So a bank holds a loan from the government and is going to use that as a backing for other loans? What happens when a bank buys all of the bonds that it can from the government? What happens to the savings of the people in that bank?

You cannot loan assets, only reserves. Hence Carl is wrong.
 
Say you work for the government. How are you going to measure how many times this occurred in the country?

Ask.

The government does this all the time, btw. You cite government stats.

what I said about efficiency is EXACTLY what this topic is about! :doh

Yeah, I guess it was the OP.

Like I said, efficiency is good.
 
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