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You can't spend your way out of a recession

You can't spend your way out of a recession


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It is easy to take chances and to gamble on positive future outcomes, --when it is somebody elses' money.
 
The government. So he get's back to work, and his spending gets other people back to work, and so on, and the economy is rolling again, and they all pay more taxes and pay back the money that was spent in the first place.

The government is only taking money out of the economy to regurgitate it somewhere else, probably where it's not needed. It's like trying to lift yourself by pulling up on your shoelaces.
 
Why just today, I bought a few more items that I could not afford, nor had any way of paying for in the future. I should be in great financial shape in no time flat. Maybe a new Big Screen tomorrow will do the trick.
 
It is easy to take chances and to gamble on positive future outcomes, --when it is somebody elses' money.

Yes. We could just wait and do nothing too, and hope things recover eventually - that's also a gamble.
 
Why just today, I bought a few more items that I could not afford, nor had any way of paying for in the future. I should be in great financial shape in no time flat. Maybe a new Big Screen tomorrow will do the trick.

You are making the very common mistake of comparing an average household to the government of the U.S. They aren't the same thing.
 
Yes. We could just wait and do nothing too, and hope things recover eventually - that's also a gamble.
As bad as it sounds, sometimes it is best to do nothing, than to do the wrong thing in haste.
 
The government is only taking money out of the economy to regurgitate it somewhere else, probably where it's not needed. It's like trying to lift yourself by pulling up on your shoelaces.

Wrong. The money coming out of the economy isn't doing anything to create jobs anyway, it's sitting in very safe investments. Government can afford to take the risks necessary now, the risks that others are afraid to take.
 
Wrong. The money coming out of the economy isn't doing anything to create jobs anyway, it's sitting in very safe investments. Government can afford to take the risks necessary now, the risks that others are afraid to take.
I would counter, that others are risking their own money. the Gubment is risking our money. Big difference---and the stimulus package was sold as a plan to create jobs, not pay our big bonuses to the very people that helped get us in this mess.
 
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I would counter, that others are risking their own money. the Gubment is risking our money.

Well, yes - and it can afford to take that risk. It's a risk that needs taking, for everyone's benefit.

Big difference---and the stimulus package was sold as a plan to create jobs, not pay our big bonuses to the very people that helped get us in this mess.

I don't think the stimulus is paying any bonuses to anyone. You're thinking of the bailout.
 
Well, yes - and it can afford to take that risk. It's a risk that needs taking, for everyone's benefit.

Yep, I absolutely agree. We're all in this together, everyone will benefit, it is an investment in the common good. Doing it through the Government ensures that the risk is spread accross all of us. If we do nothing, everyone remains afraid of risk and waits for the next guy to step out there.
 
Well, yes - and it can afford to take that risk. It's a risk that needs taking, for everyone's benefit.



I don't think the stimulus is paying any bonuses to anyone. You're thinking of the bailout.
Risk that needs taking---Lets look at that a moment. the Gubment produces nothing, but debt. None of the big dogs in office have any experience in the private sector, so have zero experience making a profit anywhere. So with that information alone, are these the guys we want coming up with plans to save our economy? Seems like a positive outcome, is unlikely at best.
 
Risk that needs taking---Lets look at that a moment. the Gubment produces nothing, but debt.

The government produced plenty with the stimulus bill. You didn't notice?

None of the big dogs in office have any experience in the private sector, so have zero experience making a profit anywhere. So with that information alone, are these the guys we want coming up with plans to save our economy? Seems like a positive outcome, is unlikely at best.

Well, yes, they do have experience in the private sector, but they aren't running businesses, they are running a government that has a strong influence on an economy. They need to understand government, and economics, something alot of people on this thread don't seem to understand much.
 
If it was the wrong thing.
Not being an expert on the matter, I can't say for sure. but it just seems --"misplaced" Like, good intentions, but a poor way of going about it. Jobs, and Production of goods, to me, should be job one. all the rest can come once people can keep their homes, their lights on, and food on the table. People think clearer, with a full stomach. But as I say, I have to think about these issues in the simplest of terms. I'm no economist.
 
Wrong. The money coming out of the economy isn't doing anything to create jobs anyway, it's sitting in very safe investments. Government can afford to take the risks necessary now, the risks that others are afraid to take.

And this is often what is needed. You also crowd out investors who start making bigger risks again. Like I said, the government is probably just vomitting it everywhere. Corrections have their use. They get rid of economic dead weight.
 
The government produced plenty with the stimulus bill. You didn't notice?

Well seeing as we don't have an alternate universe to test out your theory the honest answer is, "We don't really know for sure"

Well, yes, they do have experience in the private sector, but they aren't running businesses, they are running a government that has a strong influence on an economy. They need to understand government, and economics, something alot of people on this thread don't seem to understand much.

The economy is something far too complex for even the most brilliant person or group of the most brilliant people in the world to manage effectively.
 
Well seeing as we don't have an alternate universe to test out your theory the honest answer is, "We don't really know for sure"

Sure we do. We can point to the bridges and roads and stuff.

The economy is something far too complex for even the most brilliant person or group of the most brilliant people in the world to manage effectively.

Maybe. But we have no choice but to try. No matter what the government does, or doesn't do, it affects the economy greatly.
 
Sure we do. We can point to the bridges and roads and stuff.


This is again the Broken Window Fallacy. Spending money somewhere doesn't necessarily help the economy because that dollar could be better spent at another place or time

Maybe. But we have no choice but to try. No matter what the government does, or doesn't do, it affects the economy greatly.

No we don't. Economies have extrordinary ability to repair themselves if people are left alone. Usually the government just makes the problem bigger or pushes the problem down the road (i.e. Post-WWII Keynsianism and Stagflation).

The amount of good that the government can do for the economy is reletively small, and the amount of harm that it can generate is almost limitless

Milton Friedman
 
Something to point out: Most savings these days are kept in banks. After the banking industry's near-collapse, most banks were just sitting on their money, refusing to spend it on anything. If the bank is taking money and lending it, it's being put to good use. If the bank is just sitting on it for security, it's not doing jack for the economy.
 
This is again the Broken Window Fallacy. Spending money somewhere doesn't necessarily help the economy because that dollar could be better spent at another place or time

But it's NOT being spent, at all. That's why there is a recession.

No we don't. Economies have extrordinary ability to repair themselves if people are left alone. Usually the government just makes the problem bigger or pushes the problem down the road (i.e. Post-WWII Keynsianism and Stagflation).

Got evidence? (numbers?)
 
Something to point out: Most savings these days are kept in banks. After the banking industry's near-collapse, most banks were just sitting on their money, refusing to spend it on anything. If the bank is taking money and lending it, it's being put to good use. If the bank is just sitting on it for security, it's not doing jack for the economy.

yes and no
after the meltdown, the banks were required to hold larger amounts of cash so that their balance sheets were not excessively leveraged
so, part of the reason for the absence of domestic lending is legitimate and understandable

however, the bailout reinfused the banks with (freshly printed) capital because the crisis was precipitated by lack of liquidity
that reinfusion now allows the banks to make loans. however, they are able to make loans in china, or dubai, or israel, or south korea, places where the economic prospects are presently stronger than here at home, and where the returns on investment are higher
so, the small and large businesses in those other nations are benefitting from the loans that are now made possible thru the taxes of the American wage earner

makes you proud to be an American, doesn't it
 
That's true. The financial industry was responsible for this crash in a lot of ways.

I'm not saying they weren't partially responsible, but absent several government policies their irrational and excessive speculation would've been impossible.
 
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