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You can't spend your way out of a recession

You can't spend your way out of a recession

  • Total voters
    70
Kandahar said:
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.
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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.
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Hey, just wait and see, man.
 
Kandahar said:
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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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.
 
apdst said:
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.
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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.

apdst said:
Hey, just wait and see, man.
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:roll:
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?
 
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phattonez said:
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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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.
 
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obvious Child said:
Agree or disagree?
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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.
 
Depends on who "you" is. If you're talking about direct consumers, then absolutely, that's the only way out of a recession. If you're talking about the government blindly throwing money at people, that's a complete waste of time (and money).
 
Of course the government can't spend it's way out of recession. Never has, never will.

Can a family spend it's way out of debt?

Nope.

Why not?

Because it costs money to borrow money.

Duh.
 
Kandahar said:
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.
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You'd believe that government can smooth out business cycles only if you ignore that government creates business cycles.
 
Kandahar said:
Even when the market figures it out on its own, it does so by spending more money. Government spending can end the recession faster. It's absolute madness for the government to tighten its belt during a recession, as that deprives the economy of public spending when private spending has already ground to a halt. The government needs to spend MORE during a recession.
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And then the argument is that, in prosperous times, the government is cruel if it doesn't spend more to help the "unfortunate".

Precisely when is cutting government spending allowed under socialist/progressive economic theory?
 
Dav said:
Even welfare spending? Paying people to be less productive will help the economy?
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Especially welfare spending!
 
kaya'08 said:
Somebody change my vote to Disagree, my bad.

Look, recessions are the result of a lack of money. If consumers dont spend, somebody has to fill the gap until the market equilibrium of demand/supply comes back.
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Why?

Who is this someone, and why should they be taking people's money to spend when the people have every freedom of their own to spend their money?

If it is the people's money it's their choice to spend or not, isn't it?

kaya'08 said:
This can be a controversial question for many reasons. Some people would disagree with me, and in some respects i agree with there oppositions, but when it falls down to it a government needs to draw a line on where spending and borrowing starts and where it finishes in a recession. Governments, especially big ones, tend to forget to draw the line where it ends, but never forget to draw the line where it starts.
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Governments are the cause of recessions, or at least the reasons they expand nation-wide and globally, and why they last so long.

Getting government out of the business of tinkering with the economy will be a good thing.
 
Scarecrow Akhbar said:
Why?

Who is this someone, and why should they be taking people's money to spend when the people have every freedom of their own to spend their money?

If it is the people's money it's their choice to spend or not, isn't it?

Governments are the cause of recessions, or at least the reasons they expand nation-wide and globally, and why they last so long.

Getting government out of the business of tinkering with the economy will be a good thing.
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Why the constant desire to make it a moral argument? I see zero positive analysis to back up your normative rant.
 
obvious Child said:
Both. But primarily government. Some users here think that government spending cannot end a recession.

I present China right now as evidence they are wrong.
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China's nice.

In the United States, government spending does not end recessions.

The Messiah's monumental deficits won't end this recession.

Recessions end when people renew their confidence in their economy, their banks, and government. The Messiah's outlandish socialist plans that just don't work aren't going to instill confidence in the consumers.

That's all there is to that.

What ends recessions in the United States is the government getting the flock out of the way and letting freedom work. Unfortunately, the Messiah is opposed to freedom, too.
 
Goldenboy219 said:
Why the constant desire to make it a moral argument? I see zero positive analysis to back up your normative rant.
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Stealing money from people is an immoral act. Ergo, discussions about government stealing billions and trillions of dollars from the people and their great grand children is an immoral act that must be discussed in the context of the immorality of the act as well as the historical failure of the act to produce the results the promoters of the immoral act falsely attribute to it.

ONLY in times of true national emergency, when the survival of the nation itself it at risk, (and that means "war" and only "war", people) should deficit spending ever be contemplated. Period. A simple recession? They fix themselves, and the government should be focused on doing one job, and only one job, that of protecting the freedom of the people.

The government can't be protecting the people's freedom when it's stealing the people's money, which is precisely what it does when it embarks on "projects" of spending someone else's money merely to manipulate economic trends.

This current recession could not have happened but for long term government interference in the market, beginning with FDR's FHA. To presume that the incompetent government that had too much power and got us into this mess is the only institution that can get us out of it...if it had more power, is most convenient for some groups, but not wise if the people wish to retain what little freedom they have left.

By all means, the morality of government interference in the marketplace, all aspects of government interference, must be examined carefully.
 
Scarecrow Akhbar said:
Stealing money from people is an immoral act. Ergo, discussions about government stealing billions and trillions of dollars from the people and their great grand children is an immoral act that must be discussed in the context of the immorality of the act as well as the historical failure of the act to produce the results the promoters of the immoral act falsely attribute to it.

ONLY in times of true national emergency, when the survival of the nation itself it at risk, (and that means "war" and only "war", people) should deficit spending ever be contemplated. Period. A simple recession? They fix themselves, and the government should be focused on doing one job, and only one job, that of protecting the freedom of the people.

The government can't be protecting the people's freedom when it's stealing the people's money, which is precisely what it does when it embarks on "projects" of spending someone else's money merely to manipulate economic trends.

This current recession could not have happened but for long term government interference in the market, beginning with FDR's FHA. To presume that the incompetent government that had too much power and got us into this mess is the only institution that can get us out of it...if it had more power, is most convenient for some groups, but not wise if the people wish to retain what little freedom they have left.

By all means, the morality of government interference in the marketplace, all aspects of government interference, must be examined carefully.
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You can rant to your hearts desire. However, i never see any instances of positive analysis in which your opinion is validated.
 
phattonez said:
You'd believe that government can smooth out business cycles only if you ignore that government creates business cycles.
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And you can back this up? Using a theory from an economic school of thought that cannot even explain how businesses emerge/function within the economy?

Good luck! You are going to need it! If you can achieve this, they will call it the mises/toney institute....
 
phattonez said:
You'd believe that government can smooth out business cycles only if you ignore that government creates business cycles.
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No it doesn't. PEOPLE create booms and busts through irrational exuberance and irrational panic. Government can definitely egg them on and/or hit the brakes, but government doesn't create the economic cycle. Every country in the world has booms and busts regardless of what kind of government they have.
 
Scarecrow Akhbar said:
And then the argument is that, in prosperous times, the government is cruel if it doesn't spend more to help the "unfortunate".
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There are a lot more "unfortunates" during recessions than there are during booms.

Scarecrow Akhbar said:
Precisely when is cutting government spending allowed under socialist/progressive economic theory?
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We can probably cut spending in 2011, assuming the economic recovery continues. We won't have to spend as much on unemployment insurance, medicaid, economic stimulus, or bailouts...and we'll have a larger tax base upon which to get revenue.
 
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Kandahar said:
There are a lot more "unfortunates" during recessions than there are during booms.
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Which can only be a deliberate evasion from the point made.

Kandahar said:
We can probably cut spending in 2011, assuming the economic recovery continues. We won't have to spend as much on unemployment insurance, medicaid, economic stimulus, or bailouts...and we'll have a larger tax base upon which to get revenue.
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We can cut spending now.

But we won't.

We can certainly cut spending in 2011.

But it won't happen.

Not until we start lining Progressive legislators up against the wall and giving them lots of extra holes.
 
Scarecrow Akhbar said:
Which can only be a deliberate evasion from the point made.
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Your point was that some people think that it's cruel not to help the poor, no? Even if that's true, it costs a lot less to help 10 million poor people than it does to help 25 million poor people.

Scarecrow Akhbar said:
We can cut spending now.

But we won't.

We can certainly cut spending in 2011.

But it won't happen.
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I already explained where we can save money: Unemployment insurance, medicaid, economic stimulus, and bailouts. This, of course, assumes that the economy continues to recover.

Scarecrow Akhbar said:
Not until we start lining Progressive legislators up against the wall and giving them lots of extra holes.
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:shock:
Yeahhhhhhh.....probably not a good idea to make death threats against congressmen on the internet, dude.
 
Kandahar said:
No it doesn't. PEOPLE create booms and busts through irrational exuberance and irrational panic. Government can definitely egg them on and/or hit the brakes, but government doesn't create the economic cycle. Every country in the world has booms and busts regardless of what kind of government they have.
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Come on now, you have to admit that the government had a large hand in creating the housing boom/bust.
 
Scarecrow Akhbar said:
We can cut spending now.

But we won't.

We can certainly cut spending in 2011.

But it won't happen.

Not until we start lining Progressive legislators up against the wall and giving them lots of extra holes.
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Republican legislators are no better, that's the problem. Maybe we just need to shoot 'em all and try again?
 
Goldenboy219 said:
And you can back this up? Using a theory from an economic school of thought that cannot even explain how businesses emerge/function within the economy?

Good luck! You are going to need it! If you can achieve this, they will call it the mises/toney institute....
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Wow. Have you ever read anything from that school? Seriously, anything?
 
Kandahar said:
No it doesn't. PEOPLE create booms and busts through irrational exuberance and irrational panic. Government can definitely egg them on and/or hit the brakes, but government doesn't create the economic cycle. Every country in the world has booms and busts regardless of what kind of government they have.
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Everyone fails at the same time? How is that even possible? What is the cause of systemic failures in the marketplace?
 
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