View Poll Results: You can't spend your way out of a recession

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  • Agree, you can't (generally)

    42 44.68%
  • Disagree, you can (generally)

    52 55.32%
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Thread: You can't spend your way out of a recession

  1. #181
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by misterman View Post
    Who said anything about ignoring production?
    If you artificially stimulate consumption then you necessary decrease production.

    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: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    If you artificially stimulate consumption then you necessary decrease production.
    No you don't.

    A stimulus bill employs people. These people engage in production, as well as consumption. It's not like the government is handing out free cash for people to spend.

  3. #183
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by misterman View Post
    No you don't.

    A stimulus bill employs people. These people engage in production, as well as consumption. It's not like the government is handing out free cash for people to spend.
    The money for that has to come from somewhere. From taxes it's obvious. If it's by lending then they are diverting capital away from productive opportunities. If it's by inflation then it's the same problem as taxation.

    So any government spending takes money away from those things that people want to spend money on and spends it on things that are politically favorable.

    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

  4. #184
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    The money for that has to come from somewhere. From taxes it's obvious. If it's by lending then they are diverting capital away from productive opportunities. If it's by inflation then it's the same problem as taxation.
    It's mostly from lending, as you know. And it's diverted from much less productive opportunities because the lenders are skittish about investing anywhere else. They want a safe investment, and the government gives them that. But the government can still take risks they can't.

    So any government spending takes money away from those things that people want to spend money on and spends it on things that are politically favorable.
    Bull. People aren't spending that money, they are parking it.

  5. #185
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by misterman View Post
    It's mostly from lending, as you know. And it's diverted from much less productive opportunities because the lenders are skittish about investing anywhere else. They want a safe investment, and the government gives them that. But the government can still take risks they can't.
    But government doesn't produce the things that we want like private companies. And it's a paradox that you pointed out. Companies only want to lend to government because they're so safe, but lending to government gives them less capital to lend to private companies. So government tries to stimulate production by lending but that action itself decreases production.

    Bull. People aren't spending that money, they are parking it.
    Saved money is used for capital. Think of an economy without money.

    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

  6. #186
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    But government doesn't produce the things that we want like private companies.
    Sure it does.

    It produces things like roads, for instance.

    Companies only want to lend to government because they're so safe, but lending to government gives them less capital to lend to private companies.
    Private companies aren't borrowing right now. There's a recession, remember?

    So government tries to stimulate production by lending but that action itself decreases production.
    Not if there's no production to decrease.

    Saved money is used for capital. Think of an economy without money.
    It can be used for capital, yes.

  7. #187
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    Re: You can't spend your way out of a recession

    The term the republicans should be focusing on is crowding out. The fact that people are trying to negate government spending is only naive.
    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

  8. #188
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Goldenboy219 View Post
    The term the republicans should be focusing on is crowding out. The fact that people are trying to negate government spending is only naive.
    Crowding out is only an issue when there's competition for the capital. The problem in a recession is capital isn't being used enough.

  9. #189
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by misterman View Post
    Sure it does.

    It produces things like roads, for instance.
    Roads aren't inherently good.

    Private companies aren't borrowing right now. There's a recession, remember?
    Because we're trying to discourage savings and because government is taking on a lot of debt. That leaves you less capital overall and government in control of a higher proportion of it. Now figure out why private companies can't get loans.

    Not if there's no production to decrease.
    There's no production right now?

    It can be used for capital, yes.
    Then what is the function of "parked money"?

    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

  10. #190
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    Roads aren't inherently good.
    You've strayed into ridiculous territory. I'll give you a pass and let you take that one back.

    Because we're trying to discourage savings and because government is taking on a lot of debt. That leaves you less capital overall and government in control of a higher proportion of it. Now figure out why private companies can't get loans.
    Private companies can get loans.

    There's no production right now?
    Do I have to be that precise with my words with you?

    There is a less than optimal level of production.

    Then what is the function of "parked money"?
    To sit there, nice and safe, until the recession is gone. Which is why the government needs to do something - private capital isn't going to take the first step. Same with consumers who won't spend because they have no job or fear future job loss, even if they have the cash. Someone who can take the risk needs to make the first move.

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