U.S. threatens to rescind stimulus money over wage cuts

Lightdemon said:

And the construction of highways, improvement of infrastructure, ALSO have auxiliary benefits as well. And because of these improvements, the costs of products reduce, and again consumer spending power increases. Using NASA as an example again, increase in technology makes for more efficient ways of producing, therefore cost of products go down, which in turn increasing spending power of consumers. Benefiting the bottom.

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A nice summation of trickle-down economics. Thank you for agreeing that NASA was not "bottom up". Neither is infrastructure spending, unless government agencies hire the road crews directly (e.g., FDR's Civilian Conservation Corps).

Lightdemon said:

I'm not going to disagree here.

As soon as the stimulus money is taken away, or not renewed in next years budget, the companies that depend on this income will shut down. If the government decides to keep renewing this stimulus, then it'll become too alike with socialism. Which I do not wish my country to become. However, in the circumstance we are in, it is vital that companies where millions of Americans are employed be kept up. At least for the time being.

But to say that Keynesian economics has had no success in history is just false. Whether Keynesian theory will be the solution for our economic problem is debatable, but you cannot claim that Keynesian economics has never been successful.

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Alas, I can't return the favor; I am going to disagree with you.

If the economy contracts again because the stimulus has been withdrawn, the stimulus HAS failed. The objective of stimulus is to "restart" the economic engine, to re-invigorate demand, but, as you point out, if it persists it becomes socialism; unfortunately, since the objective cannot be met without sustained stimulus--and thus socialism--the stimulus fails every time.

Keynes' model has never succeeded anywhere. The contractions that occur when stimulus is withdrawn is the damning evidence that proves that.

celticlord said:

Keynes' model has never succeeded anywhere. The contractions that occur when stimulus is withdrawn is the damning evidence that proves that.

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But you cannot objectively put the blame on the government withdrawing the stimulus. To do so is to oversimplify ignorantly.

Fiscal and Monetary policy is not so linear, and many factors ranging from micro to macro economies, as well as international trade, will affect these policies. These confounding factors make it impossible for you to draw such a narrow conclusion.

But I don't think there's much else to say except we disagree.

Lightdemon said:

But you cannot objectively put the blame on the government withdrawing the stimulus. To do so is to oversimplify ignorantly.

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Your logic also invalidates the claim that Keynesian models are a success.

Lightdemon said:

Fiscal and Monetary policy is not so linear, and many factors ranging from micro to macro economies, as well as international trade, will affect these policies. These confounding factors make it impossible for you to draw such a narrow conclusion.

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Only if those same factors make it impossible for you to draw such a narrow conclusion about the success of Keynesian models. Those same factors are applicable when stimulus is applied as well as when it is withdrawn.

Lightdemon said:

But to say that Keynesian economics has had no success in history is just false. Whether Keynesian theory will be the solution for our economic problem is debatable, but you cannot claim that Keynesian economics has never been successful.

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Your logic invalidates your own position, for it denies you the basis for claiming that Keynesian economics was ever successful. By your own reasoning, making that claim is to "oversimplify ignorantly."

celticlord said:

Your logic also invalidates the claim that Keynesian models are a success.


Only if those same factors make it impossible for you to draw such a narrow conclusion about the success of Keynesian models. Those same factors are applicable when stimulus is applied as well as when it is withdrawn.


Your logic invalidates your own position, for it denies you the basis for claiming that Keynesian economics was ever successful. By your own reasoning, making that claim is to "oversimplify ignorantly."

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Well, yea. Like I said, there isn't much else to say except we disagree.

Lightdemon said:

Well, yea. Like I said, there isn't much else to say except we disagree.

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Indeed. You want to argue Keynesian apologetics and I prefer to argue historical fact.

On that we definitely disagree.

celticlord said:

Indeed. You want to argue Keynesian apologetics and I prefer to argue historical fact.

On that we definitely disagree.

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You can have the last word if it really means that much to you.

celticlord said:

Here's a radical idea:

Kill all federal income taxes, and replace it with a levy against the state governments instead. Let the states work out for themselves how best to apportion the taxation among the taxpayers.

Basically, instead of having the states as clients of the federal government, return the federal government to its proper position as the client of the states.

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I kinda like this on first view; interesting theory that may have a LOT of application. I'll have to think more on it; perhaps you can provide more detail on how the Fed's would apply this tax....based on population.....Gross State Product......etc.

chevydriver1123 said:

Considering my father a Vietnam Vet is a union worker Im going to say no. Obama panders to the scumbag leadership of unions not the actual workers themselves.

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I somewhat agree with you; the concept of "collective bargaining" is a good idea and the only way to ensure workers can get a fair shake when an employer possibly holds ALL the cards, but the Union leadership, which is chosen by the members by the way, is so out of touch with REALITY and more resembles Marxist type ideas than it does free market ideas.

When collective bargaining requires the workers to work against their best interests for the pure purpose of protecting workers from any kind of discpline or firings, that is when it is NOT a good thing. Companies should have the right to fire for good reasons and productivity being one of the primary concerns.

Truth Detector said:

I somewhat agree with you; the concept of "collective bargaining" is a good idea and the only way to ensure workers can get a fair shake when an employer possibly holds ALL the cards, but the Union leadership, which is chosen by the members by the way, is so out of touch with REALITY and more resembles Marxist type ideas than it does free market ideas.

When collective bargaining requires the workers to work against their best interests for the pure purpose of protecting workers from any kind of discpline or firings, that is when it is NOT a good thing. Companies should have the right to fire for good reasons and productivity being one of the primary concerns.

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I do not entirely disagree with this, though I think part of the problem is that too often, when people get in union leadership positions, they end up thinking more in terms of what is good for the union, instead of what is good for the workers they are supposed to represent.

Lightdemon said:

I think it depends on what you think is the solution is to the economic problem.

Obama has been pushing the idea of money coming from the bottom up, and it shouldn't surprise anyone that this decision is to give money to the workers. For this stimulus plan to follow his logic, it must be the way it is.

I'm not saying it's right or wrong, but at least it's consistent with Keynesian Economics. Raising aggregate demand, while we're in a recession/depression is what it calls for (if we're going to go with a Stimulus Package, which is already underway).

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Keynesian theories had already been discredited bay many even back in the 80's when I studied economics.

The notion that Government can borrow or print $1.7 trillion to be re-distributed by Government politicians as being ANY kind of solution requires willful denial or the willful suspension of disbelief.

It is particularly idiotic when the Government politicians, for purely partican political purposes, refuse to have an HONEST debate about WHO is going to pay for all this spending.

Alas, since last September we have watched as the Government has taken hundreds of billions of dollars from the market and spent it trying to prop up "favored" industries only to see ZERO in results.

I don't know about you, but when a feckless Liberal politicians stands before the public and states that we need to throw $45 billion at the auto industry because we CANNOT allow it to fail, then watch it fail, it is hard to swallow that this "Keynesian" notion is working.

The FACT is that when the American people are forced to pay for all this BORROWING and PRINTING, the economy will sink even further. It is farcical that creating BIGGER Government and MORE Government jobs is going to artificially create any sustaining demand. It is equally farcical that the free markets are going to risk capital while Liberals in Government blame all our economic problems on capitalists and they know that THEY will probably be the ones getting the BIGGEST tax bill.

The sad part is that by the time the American people wake up to the farce being foisted on them by the Liberal Democrats, it will be too late to repair and only lead to deeper suffering and more economic harm while we pay an even higher cost to pay back all the borrowing over time.

NOTHING good ever came from the Government deciding who the winners and losers of the economy would be and BORROWING and printing money in the incredible amounts we see with the current deficit. The only thing MORE farcical than this Liberal "plan" to expand the Federal budget and control over vast areas of our economy is the notion that we can CUT programs to achieve the needed savings.

Let me see if I understand Obamanomics; we're going to spend $1.7 trillion expanding the role of Government, but we're going to find equal savings by cutting Government waste; REALLY?

Lunatics in asylums cannot fabricate a more asinine idea; the only frightening part is how many actually think any of this makes any sense at all. It is particularly ironic that the same Liberal Democrats that got elected by attacking the Bush deficits which were paltry in comparison now suddenly want to convince us that MASSIVE Government deficits and Government borrowing and printing of money are the ONLY way to get an economy going. You have to be retarded to believe this massive pile of Liberal bile.

Redress said:

I do not entirely disagree with this, though I think part of the problem is that too often, when people get in union leadership positions, they end up thinking more in terms of what is good for the union, instead of what is good for the workers they are supposed to represent.

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There is not a union anywhere that has created a job or given a worker a raise. That alone is enough to recommend their destruction.

Redress said:

I do not entirely disagree with this, though I think part of the problem is that too often, when people get in union leadership positions, they end up thinking more in terms of what is good for the union, instead of what is good for the workers they are supposed to represent.

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I would re-word this a bit; I would say they forget that what is also good for the company, is good for the workers and BOTH need to be taken into account when negotiating if the unions want to survive and create HEALTHY long term growth in their industries. Good negotiations are not the result of one side winning, but when BOTH sides walk away feeling good about the deal.

So many industries have died in this country because the cost in a global market to manufacture in this country is even greater than the costs to ship the crapola across vast expanses of oceans.

American manufacturing were able to push back the inevitable as they innovated and automated; but even these gains in productivity eventually were outstripped by the cost to keep building here with Union demands and Government regulations.

celticlord said:

There is not a union anywhere that has created a job or given a worker a raise. That alone is enough to recommend their destruction.

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While both those are true, I do not necessarily see where that leads to the conclusion that they should be destroyed. A union that works to help improve work conditions and wages within the framework of what the business can afford to do is a good thing, albeit probably rare.

Redress said:

While both those are true, I do not necessarily see where that leads to the conclusion that they should be destroyed. A union that works to help improve work conditions and wages within the framework of what the business can afford to do is a good thing, albeit probably rare.

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Not only are they rare, even then they are not a good thing.

Unions can impact wages only by collective power. They are a monopolistic/oligopolistic entity by definition. As monopolies, they can only work to distort labor prices, to unilaterally shift labor prices in favor of the worker.

Distorting market prices is economic inefficiency by definition, and is always a bad idea.

celticlord said:

Not only are they rare, even then they are not a good thing.

Unions can impact wages only by collective power. They are a monopolistic/oligopolistic entity by definition. As monopolies, they can only work to distort labor prices, to unilaterally shift labor prices in favor of the worker.

Distorting market prices is economic inefficiency by definition, and is always a bad idea.

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I disagree again(I know you are surprised by that), though I am finding it really hard to defend labor unions, which I generally do not like, and voted twice against joining.

Labor unions do not have a monopoly on workers. There is 12 + % of the population in this part of the state of Michigan dying for work. Unions also have to work within a framework of what an employer can provide in terms of compensation. if McDonalds workers unionized and demanded 20 $ an hour wages, it would hurt themselves, since there is no way McDonalds could pay that. If both employers and unions are reasonable, they can lead to a better work environment. The realities are frequently otherwise, but I don't think we can force people to be reasonable. The UAW is an extreme example of a union gone wrong, and should not be held against all unions.