• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Does governnent spending produce economic growth?

Does governnent spending produce economic growth?

  • Total voters
    46
MildSteel said:
That apple is so juicy, I'm going to take another bite. I'll let Dick Cheney himself do the talking

So there you have it folks, even Dick Cheney says that deficits don't matter and that Ronald Reagan proved it.

So the government needs to start spending money to create jobs for people who want to work.

Bush Sought 'Way' To Invade Iraq? - CBS News
Click to expand...
Click to expand...

Let's say Republicans do not believe the debt is a problem... which is a bunch of horse manure... what we have seen in the past is Demokrats screaming about the debt. Obama said Bush was unpartiotic because of it. Since coming to office, Obama has nearly doubled our debt!

Where are the Demokrats on the issue of the debt???????????????????????
These folks and their idiotic ideas and schemes have cost the most of 17 TRILLION in debt and 60TRILLION in unfunded liabilities.

The Tea Party... created by Republicans and some Democrats who are concerned about fiscal irresponsibility.
Then we have the propagandists in the press who defend Obama, and the socialist state.

 
Last edited:
joG said:
As I said, it is more complicated. The government is buying a lot of private goods and distorting away from the efficient production. The money is going into the financial system and reducing interest rates via the FED, which is buying bonds and squirting money into the banks and general financial sector. The consequences are widely visible in the price of bonds through shares. We are paying via a sub-optimal allocation in the economy. What is nice for politicians is that the harm being wrought and the loses being made are hard to attribute directly. It is similar with a little other slant as with Clinton. The harm is hard to attribute and quantify even when the bubble pops. That is why there is so much finger pointing. The public just cannot tell, how it all hangs together.
Click to expand...

Before I comment let me clarify something. What exactly do you mean by the price of bonds through shares?
 
zimmer said:
Let's say Republicans do not believe the debt is a problem... which is a bunch of horse manure... what we have seen in the past is Demokrats screaming about the debt. Obama said Bush was unpartiotic because of it. Since coming to office, Obama has nearly doubled out debt!

Where are the Demokrats on the issue of the debt???????????????????????
These folks and their idiotic ideas and schemes have cost the most of 17 TRILLION in debt and 60TRILLION in unfunded liabilities.
Click to expand...

So when you say "these folks" you are talking about Democrats and Republicans?

zimmer said:
The Tea Party... created by Republicans and some Democrats who are concerned about fiscal irresponsibility.
Click to expand...

Since government debt is such a problem, how do you explain the fact that the U.S. has such massive debt, yet the world keeps buying that debt and accepting dollars?
 
MildSteel said:
Before I comment let me clarify something. What exactly do you mean by the price of bonds through shares?
Click to expand...

"the price of Bonds though shares" was supposed to mean "the prices for many or even most financial assets" have gone up because the FED has been pumping money into the markets leading to vast miss-allocation of resources.
 
MildSteel said:
So when you say "these folks" you are talking about Democrats and Republicans?
Click to expand...
No... the paragraph was aimed directly at Demokrats.


Since government debt is such a problem, how do you explain the fact that the U.S. has such massive debt, yet the world keeps buying that debt and accepting dollars?
Click to expand...

The dollar’s role as the world’s primary reserve currency helps all of us Americans by keeping interest rates low. Foreign countries buy United States Treasury debt not just as an investment, but because dollar-denominated assets are the best way to hold foreign exchange reserves.
Future Of The Dollar As World Reserve Currency - Forbes
Click to expand...
 
MildSteel said:
In addition to my regular job, I have been trying to develop a business. I have noticed two years in a row now that I experience a great boost in sales after people get income tax refunds. Now I realize that in that case, mostly people are simply getting back their own money. But it makes me wonder, does government spending produce economic growth? If I understand them correctly, some say that this is never true. What do you think?
Click to expand...
Sometimes.

Many talk of tax returns. Yes, in most cases that is giving money back, but also factor in the government employees who administer that stuff. Now, would they have another job if the government didn't provide this job? Probably, but it's anybody's guess whether it would be a better job or not.

Think also of things like infrastructure improvements, i.e. road/bridge building. Not only does that provide economic growth with the project itself, but the benefit lives beyond the initial building and helps foster private enterprise by making their work easier and more efficient. So, in that sense, it's indirect but still helps foster economic growth.
 
joG said:
"the price of Bonds though shares" was supposed to mean "the prices for many or even most financial assets" have gone up because the FED has been pumping money into the markets leading to vast miss-allocation of resources.
Click to expand...

OK, I see what you mean. The so called point of that exercise was to put money into the economy. At least that's what they say. The rationale given was that by buying the toxic securities banks would start lending again. Although it did raise asset prices, the banks sat on the money and fattened their balance sheets, and although the increase in asset prices may have had an effect on jobs, it mostly increased the wealth of the upper class. In other words the banks and corporations mostly took the money and enriched themselves while passing on little in the benefit of wages. Therefore we see that although corporate profits rose and bank balance sheets increased, wages have declined.

http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-grow-ever-larger-as-slice-of-economy-as-wages-slide.html?_r=0

CORPORATE profits are at their highest level in at least 85 years. Employee compensation is at the lowest level in 65 years.

The Commerce Department last week estimated that corporations earned $2.1 trillion during 2013, and paid $419 billion in corporate taxes. The after-tax profit of $1.7 trillion amounted to 10 percent of gross domestic product during the year, the first full year it has been that high. In 2012, it was 9.7 percent, itself a record.
...
The Commerce Department also said total wages and salaries last year amounted to $7.1 trillion, or 42.5 percent of the entire economy. That was down from 42.6 percent in 2012 and was lower than in any year previously measured.
Click to expand...

That said, the real reason MAY have been more dubious. That is, it was simply a scheme to rescue the financial institutions, because although the Fed saw this happening, they continued to do it.

The thing is this, that although asset prices did increase as you have indicated as a result of such purchases, those toxic purchases still sit on the Feds balance sheet. As that is the case, the money came from no where. No one is paying for it. Rather the wealthy are enriching themselves from it. And because no one is paying for it, that is why people still buy U.S. debt and dollars are still accepted.
 
zimmer said:
No... the paragraph was aimed directly at Demokrats.
Click to expand...

You say that but you also said that Republicans don't believe debt is a problem.

Not only that but you have put forward Ronald Reagan as a model for fiscal responsibility. But that is contradictory because Reagan doubled and tripled deficit spending and INCREASED THE DEBT BY TRILLIONS OF DOLLARS.

Don't forget Dick Cheney

Reagan proved that deficits don't matter.
Click to expand...

Yep, Ronald Reagan proved deficits don't matter. Not a Democrat, but a Republican.
 
MildSteel said:
In addition to my regular job, I have been trying to develop a business. I have noticed two years in a row now that I experience a great boost in sales after people get income tax refunds. Now I realize that in that case, mostly people are simply getting back their own money. But it makes me wonder, does government spending produce economic growth? If I understand them correctly, some say that this is never true. What do you think?
Click to expand...

The US Gov't spent $7 trillion bailing out Big Banks and Wall Street. Did that work. Well it made Wall Street and Banks richer and fewer jobs and a poor economy. The targeting of gov't spending is the important part. Most goes to banks and the MIC. It should go to infrastructure. I'm a Green, ergo Renewabel/Alternative Energies come to mind.
 
DaveFagan said:
The US Gov't spent $7 trillion bailing out Big Banks and Wall Street. Did that work. Well it made Wall Street and Banks richer and fewer jobs and a poor economy. The targeting of gov't spending is the important part. Most goes to banks and the MIC. It should go to infrastructure. I'm a Green, ergo Renewabel/Alternative Energies come to mind.
Click to expand...

Agreed. I really think that we should greatly increase our solar energy infrastructure. Infrastructure and education would be very good places to put the printing presses to work.
 
radcen said:
Sometimes.

Many talk of tax returns. Yes, in most cases that is giving money back, but also factor in the government employees who administer that stuff. Now, would they have another job if the government didn't provide this job? Probably, but it's anybody's guess whether it would be a better job or not.

Think also of things like infrastructure improvements, i.e. road/bridge building. Not only does that provide economic growth with the project itself, but the benefit lives beyond the initial building and helps foster private enterprise by making their work easier and more efficient. So, in that sense, it's indirect but still helps foster economic growth.
Click to expand...

Yep infrastructure as you have pointed out AND education should be the way to do it.
 
MildSteel said:
Why does it have to come from somewhere?
Click to expand...


There's a difference between real wealth and " Stimulus " which is either borrowed or printed.

Look, the " Keynesians Fiscal stimulus to increase aggregate demand " narrative has been exposed as a failure.
 
Fenton said:
There's a difference between real wealth and " Stimulus " which is either borrowed or printed.

Look, the " Keynesians Fiscal stimulus to increase aggregate demand " narrative has been exposed as a failure.
Click to expand...

OK, let's hear it in your own words. You have got the mic, SHOWTIME!!!!
 
MildSteel said:
Yep infrastructure as you have pointed out AND education should be the way to do it.
Click to expand...

Nonsense.

Japan blew through 10 different Stimulus packages in the 90s spending over 10 Trillion Yen and spent loads of it on infrastructure.

All it did was create massive amounts of debt and since then they've entered into 4 more Stimulus iniatives.

IT DOESN'T WORK. Japan stuck by the Keynesian playplaybook to the letter and now the only one buying Japanese debt is the Bank of Japan as their debt service exceeds 40 percent of theit total budget outlays.
 
Fenton said:
Nonsense.

Japan blew through 10 different Stimulus packages in the 90s spending over 10 Trillion Yen and spent loads of it on infrastructure.

All it did was create massive amounts of debt and since then they've entered into 4 more Stimulus iniatives.

IT DOESN'T WORK. Japan stuck by the Keynesian playplaybook to the letter and now the only one buying Japanese debt is the Bank of Japan as their debt service exceeds 40 percent of theit total budget outlays.
Click to expand...

Same as the US. The Fed is the only one buying US Treasuries.
 
Fenton said:
Nonsense.

Japan blew through 10 different Stimulus packages in the 90s spending over 10 Trillion Yen and spent loads of it on infrastructure.

All it did was create massive amounts of debt and since then they've entered into 4 more Stimulus iniatives.

IT DOESN'T WORK. Japan stuck by the Keynesian playplaybook to the letter and now the only one buying Japanese debt is the Bank of Japan as their debt service exceeds 40 percent of theit total budget outlays.
Click to expand...

Wrong, it does work. Unemployment in Japan fell every year from 5 percent in 2010 to 3.6 percent in 2014. Not only that but the interest rate on Japan's debt is below %1.

No what happened to Japan is listening at the debt hawks. As a result they raised their national sales tax. That has caused their economy to shrink.
 
DaveFagan said:
Same as the US. The Fed is the only one buying US Treasuries.
Click to expand...

True enough, but we haven't reached the debt to GDP ratio that Japan's reached just yet.

I have all the faith in the world that the Democrats if given enough " rope " could and would run up unsustainable levels of debt and they would justify it by saying we needed it to " increase aggregate demand ".

Silly Liberals. Demand doesn't need to be manipulated directly.
 
Fenton said:
Nonsense.

Japan blew through 10 different Stimulus packages in the 90s spending over 10 Trillion Yen and spent loads of it on infrastructure.

All it did was create massive amounts of debt and since then they've entered into 4 more Stimulus iniatives.

IT DOESN'T WORK. Japan stuck by the Keynesian playplaybook to the letter and now the only one buying Japanese debt is the Bank of Japan as their debt service exceeds 40 percent of theit total budget outlays.
Click to expand...

How does this jive with the US Interstate Highway System, which was probably the biggest boon to our economy ever?
 
MildSteel said:
Wrong, it does work. Unemployment in Japan fell every year from 5 percent in 2010 to 3.6 percent in 2014. Not only that but the interest rate on Japan's debt is below %1.

No what happened to Japan is listening at the debt hawks. As a result they raised their national sales tax. That has caused their economy to shrink.
Click to expand...


LOL !!! Wth is wrong with you people ? Oh I know. You're Progressives who value your ideology over reality.

Japan has spent its way into a tailspin of unsustainable debt.

Its debt service payments now exceed 40 percent of its total budget outlays and thats with the BOJ devalueuating their currency and driving downn interest rates next to nothing.

.
All Japans done is wipe out the savings and the discretionary income of its OWN CITIZENS.

Greece had really low unemployment rates just a few years ago. Now no one in their right minds will lend them a penny.
 
Last edited:
radcen said:
How does this jive with the US Interstate Highway System, which was probably the biggest boon to our economy ever?
Click to expand...

Huh ? So we should build more highways ?

Just arbitrarily start building roads to no where ?
 
Government spending, along with a progressive tax system that taxes capital more than wages leads to economic prosperity.
 
Fenton said:
LOL !!! Wth is wrong with you people ? Oh I know. You're Progressives who value your ideology over reality.

Japan has spent its way into a tailspin of unsustainable debt.

Its debt service payments now exceed 40 percent of its total budget outlays and thats with the BOJ devalueuating their currency and driving downn interest rates next to nothing.

All Japans done is wipe out the savings and the discretionary income of its OWN CITIZENS.
Click to expand...

The unemployment figures do not lie. Japan's unemployment rate is less than the U.S. If the debt is so bad, then why are the interests rates remaining so low? If it's so bad they should be rising despite central bank efforts.

The thing that Japan did wrong was raising the national sales tax, to placate people like you. The result is the contraction.

Fenton said:
Greece had really low unemployment rates just a few years ago. Now no one in their right minds will lend them a penny.
Click to expand...

Greece is different because they don't have their own currency. Instead they have fallen victim to the euro, something that they have no control over. Not only that, but because of people like you forcing austerity on the people of Greece, there unemployment rate has remained high.
 
Fenton said:
Huh ? So we should build more highways ?

Just arbitrarily start building roads to no where ?
Click to expand...
*facepalm*

Never mind.


akrunner88 said:
Roads have to be maintained.
Click to expand...
Yes, they absolutely do need to be maintained, but I was referring to the initial outlay of money to build them.

Going by the Japan example, one would think we screwed ourselves by building the highway system, but not so. It has actually been a huge boon to our society's economic success. Hence, maybe it's not so simple and answer.
 
You must log in or register to reply here.
Back
Top Bottom