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CBO: Stimulus hurts economy in the long run

finebead said:
We let businesses fail, like MF Global just failed. What we cannot do is allow THE WHOLE SYSTEM to fail, or to let a failure in one sector, like housing, bring down a whole string of sectors, like morgage operations, banking, auto sector, and on, and on...

See 1930's. That's bad.
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The 1930's were bad. But let's bring it back to our current time frame, other than a time when the dollar was backed by gold. At the end of the 90's, the tech bubble popped, but we didn't run out there to save every small tech firm that was dying out. The weak died, the strong survived, and the parts of the weak that were good, went off to the ones who could pay for it. The same should have happened to the auto industry and the banking industry. Sure, there would be some turbulence for a few years while things shake out...but that has to be better than our current situation. A free market should be free of government intervention. Lately it seems like the government wants to be more in business than politics.
 
Blue_State said:
The 1930's were bad. But let's bring it back to our current time frame, other than a time when the dollar was backed by gold. At the end of the 90's, the tech bubble popped, but we didn't run out there to save every small tech firm that was dying out. The weak died, the strong survived, and the parts of the weak that were good, went off to the ones who could pay for it. The same should have happened to the auto industry and the banking industry. Sure, there would be some turbulence for a few years while things shake out...but that has to be better than our current situation. A free market should be free of government intervention. Lately it seems like the government wants to be more in business than politics.
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Apples and oranges. If MyBlueState.com goes under it doesn't take the nation's entire financial structure down with it, which is exactly what would have happened if we let the big banks fail.
 
AdamT said:
Apples and oranges. If MyBlueState.com goes under it doesn't take the nation's entire financial structure down with it, which is exactly what would have happened if we let the big banks fail.
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**** gets real bad for a bit, then rebounds as markets are wont to do. OR you can "Save" the system, making a much longer, worse recovery, but score political points from the chicken littles who want to be saved "hardship"
 
AdamT said:
So their estimate is now that the stimulus created between 600,000 and 3.6 million jobs? That's a pretty good range.

And of course stimulus hurts in the long run if you never pay pay it back. Is that supposed to be a revelation? :lol:
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...OR...

If you don't have a long-term economic growth plan. But hey, let's ignore the true purpose of the ARRA, shall we, which was to:

1) slow the negative economic impact on the country.

2) provide a short-term capital infusion to the States;

3) put money back into the hands of qualified citizens and provide tax cuts to business to spur job growth.

As I've said time and again, objectives #1 and #2 were met. It's option #3 that missed the mark, but it did so because most of the tax benefits weren't targetted enough toward the private sector. Based on these factors, I'm not surprise the CBO would readjust its estimates downward on the long-term cost effectiveness of the Stimulus. Nothing new or earth-shattering here, folks.
 
AdamT said:
... is the understatement of the century.
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A fast hard fall, and a natural recovery is far more preferable then the never ending malaise we are in now, where natural market forces are chained down "government" help.
 
Blue_State said:
The 1930's were bad. But let's bring it back to our current time frame, other than a time when the dollar was backed by gold. At the end of the 90's, the tech bubble popped, but we didn't run out there to save every small tech firm that was dying out. The weak died, the strong survived, and the parts of the weak that were good, went off to the ones who could pay for it. The same should have happened to the auto industry and the banking industry. Sure, there would be some turbulence for a few years while things shake out...but that has to be better than our current situation. A free market should be free of government intervention. Lately it seems like the government wants to be more in business than politics.
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Tech bubble burst - That's because most of those Internet start-ups were financed by venture capitalist, not the fed! BIG difference!!

Now, I agree that if a company goes bankrupt, if it is determined that bankruptcy restructering won't allow it to survive it should be allowed to fail. However, as finehead points out in post #22, what was happening with these "too big to fail" banks was effectively a house of financial cards facing a severe domino effect. If one failed its collapse threatened to take the rest of them down with it. As such, our entire financial system was threatened. This is the cingular issue most folks completely ignore.

Under ordinary circumstances, I would have no problem letting each one of those poorly run investment banks and AIG fail. I'd even have let GM and Chrysler go away (especially Chrysler since this is the 3rd time the fed has come to its rescue since 1979). But, in the wake of what was already happening in our nation's economy, I believe the actions former President Bush took in conjunction with the continued support and restructering President Obama setforth helped keep this country from going into a deep depression. Like it or not, their actions were the right thing to do.
 
MrVicchio said:
A fast hard fall, and a natural recovery is far more preferable then the never ending malaise we are in now, where natural market forces are chained down "government" help.
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I don't think there would be anything fast about it. I think it would have taken much longer to recover. I think it would have been very much like the Great Depression.
 
cpwill said:
and in the short run... but hey, movement in the right direction, and (politically) a welcome realization of reality by the CBO.
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I guess this means conservatives like the CBO now.
 
AdamT said:
I don't think there would be anything fast about it. I think it would have taken much longer to recover. I think it would have been very much like the Great Depression.
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If you understood economic's, and history you'd know the reason the great depression lasted so damned long is precisely because of the sort of "Government Help" tried this time. It failed miserably for FDR, and it's failed miserably this time. Yet people like you, with blinders on, don't GET IT.
 
MrVicchio said:
If you understood economic's, and history you'd know the reason the great depression lasted so damned long is precisely because of the sort of "Government Help" tried this time. It failed miserably for FDR, and it's failed miserably this time. Yet people like you, with blinders on, don't GET IT.
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I guess you could reach that conclusion if you think Glenn Beck is a historian. If, OTOH, you read actual historians, you will hear a different story.
 
finebead said:
We let businesses fail, like MF Global just failed. What we cannot do is allow THE WHOLE SYSTEM to fail, or to let a failure in one sector, like housing, bring down a whole string of sectors, like morgage operations, banking, auto sector, and on, and on...

See 1930's. That's bad.

I don't see anyone who has proposed a comprehensive plan to deal with the situation we faced in 08-09, who describes all the major expected outcomes, and it happens without significant short term pain, and discusses the expected long term results also. Until someone does, you're all just bitchin.
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Which is what happened when our government dismantled the Glass-Steagal Act. Glass-Steagal needs to be reimposed. That would be the best fix, as it would prevent one sector from taking down others.
 
AdamT said:
I guess you could reach that conclusion if you think Glenn Beck is a historian. If, OTOH, you read actual historians, you will hear a different story.
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Actual historians? You don't seem to know much about history but you sure have an appetite for a huge central govt. operating as a nanny state.
 
Conservative said:
Actual historians? You don't seem to know much about history but you sure have an appetite for a huge central govt. operating as a nanny state.
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Like I said, don't listen to Glenn Beck. It will numb out what's left of your mind.
 
AdamT said:
Like I said, don't listen to Glenn Beck. It will numb out what's left of your mind.
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One can only assume you must if you know his position on things.
 
AdamT said:
I guess you could reach that conclusion if you think Glenn Beck is a historian. If, OTOH, you read actual historians, you will hear a different story.
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No, you won't.

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.
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FDR's policies prolonged Depression by 7 years, UCLA economists calculate / UCLA Newsroom

Only blind hacks still believe FDR helped anyone during the GD, he was instrumental in making it drag out, and hurt so much. Had it NOT been for WWII, who knows when the pain would have ended.
 
MrVicchio said:
No, you won't.


FDR's policies prolonged Depression by 7 years, UCLA economists calculate / UCLA Newsroom

Only blind hacks still believe FDR helped anyone during the GD, he was instrumental in making it drag out, and hurt so much. Had it NOT been for WWII, who knows when the pain would have ended.
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Notice how quick Adam is to respond to comments but how slow he is to respond to links that prove him wrong. Liberals always try and re-write history or ignore it just like they are doing with the Obama record.
 
MrVicchio said:
No, you won't.


FDR's policies prolonged Depression by 7 years, UCLA economists calculate / UCLA Newsroom

Only blind hacks still believe FDR helped anyone during the GD, he was instrumental in making it drag out, and hurt so much. Had it NOT been for WWII, who knows when the pain would have ended.
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Right, Herbert Hoover had the right idea. That's why he's so admired by economists and historians. :lol:

Roosevelts' policies were working exceptionally well until he allowed some dimwitted conservatives to convince him that it was time to cut spending and lower taxes. That sent the economy back into the tank. It did not recover until the massive stimulus program that was WWII put an end to that insanity.
 
Conservative said:
Notice how quick Adam is to respond to comments but how slow he is to respond to links that prove him wrong. Liberals always try and re-write history or ignore it just like they are doing with the Obama record.
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Anyone can find an outlier paper to support a given position. The vast majority of economists would disagree wtih the UCLA paper.

Did FDR’s New Deal policies really prolong the Great Depression? Will Obama’s policies have a similar effect? « Rebel
 
AdamT said:
Anyone can find an outlier paper to support a given position. The vast majority of economists would disagree wtih the UCLA paper.

Did FDR’s New Deal policies really prolong the Great Depression? Will Obama’s policies have a similar effect? « Rebel
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So since economists can disagree why is it you cannot accept that many economists disgree today on the success of the Obama stimulus plan and claim that we are worse off today than when Obama took office? Can you explain to me how any economist can claim that Obama economic policies have been a success? You point to saved jobs but there is no source that counts saved jobs, only projections. You point to saving the economy but there is no data that supports that contention nor any non partisan site that makes that claim. You point ot things could have been worse and I point to things should be better with 4.4 trillion added to the debt.

Can anyone explain to me why Obama still has the support he has today in the face of actual verifiable non partisan economic results?
 
AdamT said:
Anyone can find an outlier paper to support a given position. The vast majority of economists would disagree wtih the UCLA paper.

Did FDR’s New Deal policies really prolong the Great Depression? Will Obama’s policies have a similar effect? « Rebel
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Did you even read your link?

So basically, what the 2004 UCLA study concluded was that inflated prices and wages were the cause of the slowed recovery, and the NIRA which FDR signed into law was the cause of that inflation, resulting in a 60% weaker recovery.

Continued.

However, because NIRA was deemed unconstitutional by the Supreme Court two years after it was enacted, a repeat of this particular economic policy mistake by the Obama administration would be impossible.

The QE programs are basically the same thing so yes, Obama can and did make the same mistake. Continued again.

While NIRA may have been somewhat of a blunder in terms of New Deal solutions, it was but one of many policies instituted by FDR, and although Cole and Ohanian present a good case, the general consensus remains that New Deal policies by and large were successful.

Wow, so a program where it created a huge drag on the recovery can still be considered a success? LOL
 
1Perry said:
Did you even read your link?

So basically, what the 2004 UCLA study concluded was that inflated prices and wages were the cause of the slowed recovery, and the NIRA which FDR signed into law was the cause of that inflation, resulting in a 60% weaker recovery.

Continued.

However, because NIRA was deemed unconstitutional by the Supreme Court two years after it was enacted, a repeat of this particular economic policy mistake by the Obama administration would be impossible.

The QE programs are basically the same thing so yes, Obama can and did make the same mistake. Continued again.

While NIRA may have been somewhat of a blunder in terms of New Deal solutions, it was but one of many policies instituted by FDR, and although Cole and Ohanian present a good case, the general consensus remains that New Deal policies by and large were successful.

Wow, so a program where it created a huge drag on the recovery can still be considered a success? LOL
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Umm, you do realize that you completely contradicted yourself? Obama's programs are not the same as NIRA. As you just stated, that's not even possible under SC jurisprudence.
 
AdamT said:
Umm, you do realize that you completely contradicted yourself? Obama's programs are not the same as NIRA. As you just stated, that's not even possible under SC jurisprudence.
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1. Your link said that FDR's programs created a huge drag on the recovery.
2. Like your link, you must not have actually read what I wrote.

NIRA was deemed a failure because it created inflation which was a drag on the economy. QE created inflation which has been a drag on the economy.
 
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