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

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  • Agree, you can't (generally)

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

  1. #21
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by obvious Child View Post
    Your point isn't valid. Whether or not they crash is irrelevant. China is showing you can stimulate your economy with government financing. Their failure to do it properly does not invalidate my argument. And China isn't a phony economy. Unstable yes, but not phony.

    And people who claim that government spending cannot build an economy should visit South Korea.
    It can get you out of a recession, but government spending will just lead to another bubble. In this sense, you're not really spending your way out of a recession. You're just delaying the inevitable.

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

    The government cannot spend the broader economy out of a recession. A recession ends when the broader economy starts to grow again. However, the government can spend the economy out of a deeper recession than it otherwise would have been. The problem though is that when the government spends money as economic stimulus it:

    1. Is usually slow to get stimulus out into the broader economy.

    2. Is usually inefficient in how it tries to stimulate the economy because of all the political considerations that go into how the money is allocated and spent.
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  3. #23
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by apdst View Post
    If that were the answer, then we would already be out of this recession,
    Huh? From an economic perspective, we ARE already out of the recession. The economy grew at its fastest pace in several years in the second half of 2009.

    Quote Originally Posted by apdst
    rather than looking at another big decline in the second half of 2010.
    I see. And what crystal ball did you use to predict the state of the economy in the second half of 2010? Not even the best investors in the world can do that. If they could, there would be some trillionaires.
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  4. #24
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    It can get you out of a recession, but government spending will just lead to another bubble. In this sense, you're not really spending your way out of a recession. You're just delaying the inevitable.
    I think that's a negative way of looking at it; it presumes that the bust, rather than the boom, is the natural state of affairs. I think it's more accurate to say that by spending more and taxing less during a recession, you're smoothing out the economic cycle.
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  5. #25
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    Re: You can't spend your way out of a recession

    Spending what one has to get out a recession is one thing. but spending what you don't have, is another matter all together. Just printing more money solves nothing.
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  6. #26
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Kandahar View Post
    Huh? From an economic perspective, we ARE already out of the recession. The economy grew at its fastest pace in several years in the second half of 2009.
    No, from a political perspective, we're out of a recession. We won't be completely recovered until we no longer have a 10% unemployment rate.



    I see. And what crystal ball did you use to predict the state of the economy in the second half of 2010? Not even the best investors in the world can do that. If they could, there would be some trillionaires.
    Hey, just wait and see, man.
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  7. #27
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by Kandahar View Post
    I think that's a negative way of looking at it; it presumes that the bust, rather than the boom, is the natural state of affairs. I think it's more accurate to say that by spending more and taxing less during a recession, you're smoothing out the economic cycle.
    When you have a bubble then you're going to have a bust. I'd rather have a gradual rate of growth that won't lead to busts.

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  8. #28
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by apdst View Post
    No, from a political perspective, we're out of a recession. We won't be completely recovered until we no longer have a 10% unemployment rate.
    I agree, which is why I don't think we should shut off the spending quite yet. While we're technically out of a recession, it's important to fight unemployment as well. But it's important to remember that unemployment is a lagging indicator, and the economy is growing at its fastest pace. So your contention that government spending doesn't help because the economy is still in a recession is factually incorrect. We are, in fact, not in a recession.

    Quote Originally Posted by apdst
    Hey, just wait and see, man.

    Now why would I trust your judgment (i.e. some random guy on an internet message board) when even the best stock-pickers in the world can't accurately predict the short-term future of the economy?
    Last edited by Kandahar; 02-14-10 at 11:44 PM.
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  9. #29
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by phattonez View Post
    When you have a bubble then you're going to have a bust. I'd rather have a gradual rate of growth that won't lead to busts.
    That's exactly what government spending during a recession does. It smooths out the economic cycle (i.e. a gradual rate of growth that won't lead to busts). I'd much rather have high spending / low taxes during a recession, and low spending / high taxes during a boom...instead of government policies that are completely divorced from economic conditions.
    Last edited by Kandahar; 02-14-10 at 11:46 PM.
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  10. #30
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    Re: You can't spend your way out of a recession

    Quote Originally Posted by obvious Child View Post
    Agree or disagree?
    The problem is that the expenditure and inflation creates another crisis, and the expenditure stimulous creates inflation, and debt, which is a double bad "nono", or in real terms, economical decline, even though GDP numbers are distorted to look positive.

    But then again, anyone with a real sense for economics would understand that and not only base his views on GDP and stock market growth. To bad most economicst dont have real sense and no fu**ing clue about real economics.
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