US Creates 69,000 New Jobs, Unemployment Rate 8.2%

AdamT · Jun 2, 2012

John Tucker said:
Well, let's see. Obama's stimulus package and the Fed's constant race to the bottom in relation to interest rates, and what's the resulting growth rate of the United States? 2%?

That, in and of itself, is meaningless, because it doesn't account for what would have happened WITHOUT the stimulus spending. For example, and hypothetically speaking, if the growth rate would have been -10% without the stimulus, and it turned out to be 2% with the stimulus, then you would have to say that the stimulus was a ringing success.

The difficuly, of course, is that we can only make an educated guess where we would be without it.

John Tucker · Jun 2, 2012

AdamT

That, in and of itself, is meaningless, because it doesn't account for what would have happened WITHOUT the stimulus spending. For example, and hypothetically speaking, if the growth rate would have been -10% without the stimulus, and it turned out to be 2% with the stimulus, then you would have to say that the stimulus was a ringing success.

The difficuly, of course, is that we can only make an educated guess where we would be without it.

Oh really? Well, here's the full breakdown of what specifically was IN the stimulus package:

What Are the Details of the American Recovery and Reinvestment Act (ARRA)

So let's see, we have $260 billion in tiny tax cuts, unemployment extension, $250 check to Social Security folks, the $2,500 college tax credit and the $8k first time homebuyer's credit for 2009 - early 2010. Then we have $260 billion going to education and healthcare, basically for pet projects of liberals. Then we have about $50 billion worth of incentives to small businesses which aren't nearly enough to stimulate anything.

For infrastructure spending, the thing that is the most valuable and what we were SOLD on with the stimulus as far as helping boost demand through rebuilding our "country," of that $800 billion of the stimulus we only have $83 billion worth of spending in this area, then only another $22 billion for investments in alternative energy production and only $18 billion to invest in science and technology.

Liberals had a strong case for rebuilding our roads, bridges, etc., but only $100 billion of the $800 billion stimulus was in relation to "rebuilding America," the other $700 billion was just worthless liberal pet project spending.

So if you can't seem to comprehend if the stimulus has had any real influence on the recovery, all you have to do is look at the actual content of the package to know that it was total bull wash. I would have totally supported spending $800 billion SOLELY on infrastructure, energy production investments and science/technology investments because we would have gained a RETURN on the monies while putting people to work for the short term. The stimulus package didn't do anything CLOSELY or REMOTELY to that.

AdamT · Jun 2, 2012

John Tucker said:
Oh really? Well, here's the full breakdown of what specifically was IN the stimulus package:

What Are the Details of the American Recovery and Reinvestment Act (ARRA)

So let's see, we have $260 billion in tiny tax cuts, unemployment extension, $250 check to Social Security folks, the $2,500 college tax credit and the $8k first time homebuyer's credit for 2009 - early 2010. Then we have $260 billion going to education and healthcare, basically for pet projects of liberals. Then we have about $50 billion worth of incentives to small businesses which aren't nearly enough to stimulate anything.

For infrastructure spending, the thing that is the most valuable and what we were SOLD on with the stimulus as far as helping boost demand through rebuilding our "country," of that $800 billion of the stimulus we only have $83 billion worth of spending in this area, then only another $22 billion for investments in alternative energy production and only $18 billion to invest in science and technology.

Liberals had a strong case for rebuilding our roads, bridges, etc., but only $100 billion of the $800 billion stimulus was in relation to "rebuilding America," the other $700 billion was just worthless liberal pet project spending.

So if you can't seem to comprehend if the stimulus has had any real influence on the recovery, all you have to do is look at the actual content of the package to know that it was total bull wash. I would have totally supported spending $800 billion SOLELY on infrastructure, energy production investments and science/technology investments because we would have gained a RETURN on the monies while putting people to work for the short term. The stimulus package didn't do anything CLOSELY or REMOTELY to that.

Economics -- not your strong suit I see. $260 billion tax cut was "tiny"?

Anyway, the point of stimulus is to make up for lack of aggregate demand in the private sector. In that respect it doesn't matter a whole lot how the money is spent -- as long as it IS spent in the larger economy. Obviously it's better if the money is spent for some useful purpose, like improving infrastructure, education, etc.

IOW, if you think that pumping $800 billion into the economy had no effect, then you simply don't understand basic economics.

Aberration · Jun 2, 2012

Oh it had an effect alright. A worse outcome than doing nothing!

AdamT · Jun 2, 2012

Aberration said:
Oh it had an effect alright. A worse outcome than doing nothing!

The effect, according to most economists I've read, was to boost GDP by about 4.5%, and to lower unemployment by about by about 2%. How do you figure that's worse than nothing?

Aberration · Jun 2, 2012

View attachment 67128647
http://www.ampo.org/assets/library/184_obama.pdf

AdamT · Jun 2, 2012

Aberration said:
View attachment 67128647
http://www.ampo.org/assets/library/184_obama.pdf

And...?

They underestimated the severity of the recession. That doesn't mean that the stimulus didn't lower unemployment by the percentage they envisioned. It just means you have to slide all those numbers up the scale.

John Tucker · Jun 2, 2012

AdamT

Economics -- not your strong suit I see. $260 billion tax cut was "tiny"?

Ha! I love how liberals who promote these Keynesian economic principles like to claim you don't understand "economics" when you show how off base they are. Yes, the $260 billion - $300 billion in tax credits were tiny and inefficient, so tiny they meant nothing. The only portion of the $800 billion that stimulated anything was the $100 billion that went towards buildings, science and energy research. The other $700 billion was a total waste, numbers don't lie. If you want tax policy to stimulate the economy, you cut them across the board BIG TIME, I don't recommend doing that at this point, I recommend doing total tax reform btw. But these tax cuts/credits were useless, similar to the Payroll tax cut, just a stupid tax cut that stimulates nothing.

Anyway, the point of stimulus is to make up for lack of aggregate demand in the private sector. In that respect it doesn't matter a whole lot how the money is spent -- as long as it IS spent in the larger economy....
IOW, if you think that pumping $800 billion into the economy had no effect, then you simply don't understand basic economics....

I think NOW it's clear to all reading who doesn't understand economics. If the package was so great we wouldn't still be at 8.2% unemployment and 1.9% growth. If we would have done NOTHING, we would be a lot further along than where we are now. All the stimulus did was add to the national debt, all Obamacare and the other host of regulations are doing is making it harder for businesses to hire and expand, and all unemployment extensions have done was keep people milking the system longer instead of finding employment.

IF you understood basic economics, you would understand that austerity is the only option for the United States at this point with a $16 trillion national debt. We can't afford large stimulus packages and ESPECIALLY ones that was passed in 2009 with nothing but JUNK.

And...?

They underestimated the severity of the recession. That doesn't mean that the stimulus didn't lower unemployment by the percentage they envisioned. It just means you have to slide all those numbers up the scale.

No, they didn't underestimate the severity of the recession, THEIR POLICIES JUST DON'T WORK. Period. They have never worked, won't work and DON'T work.

Aberration · Jun 2, 2012

AdamT said:
And...?

They underestimated the severity of the recession. That doesn't mean that the stimulus didn't lower unemployment by the percentage they envisioned. It just means you have to slide all those numbers up the scale.

Or they overestimated the effect stimulus would have.

a351 · Jun 2, 2012

John Tucker said:
Well, let's see. Obama's stimulus package and the Fed's constant race to the bottom in relation to interest rates, and what's the resulting growth rate of the United States? 2%?

View attachment 67128652

If these are pro-growth policies they obviously aren't working, correct? Plus look at the current situation of the country, we are $16 trillion in debt and liberals are STILL pushing for more Keynesian style spending for BIGGER stimulus packages. Pretty soon we will be at $20 trillion or $25 trillion in debt with STILL an 2% growth rate and 8% unemployment! Get it through your heads liberals, Keynesian approaches do not work.

What does work is pro-growth policies on the supply side, such as tax reform. I have mentioned what we need to do, we need to reform taxes, reform spending, get our dollar stronger, get our credit rating back to AAA, get manufacturing jobs back in this country, get an all of the above energy policy going and fix the skills gap. Doing this will get the growth rate A HELL OF A LOT higher and get unemployment down to 5% - 5.5% which is full employment. Plus with a balanced budget now we can start seeing surpluses again to go towards paying down our debt. Plus with spending reforms, we can actually KEEP Social Security and Medicare going forward because the current structure is totally unsustainable.

By all accounts the stimulus did spur a reasonable amount of growth, that's not to say it was efficiently allocated, mostly due to the large amount of tax incentives and breaks in lieu of more direct measures. To claim otherwise would be practicing willful ignorance in addition outright dismissal of many respected sources.

Problem with this entire paragraph is that virtually all of the problematic elements with the exception of a few you listed would be nearly impossible to remedy in the short term, long term ailments such as these are hardly easy fixes, nor are they guaranteed fixes for our short term economic woes.

Dickieboy · Jun 2, 2012

AdamT said:
They underestimated the severity of the recession.

Isn't this just a polite way to say 'they were WRONG'?

That doesn't mean that the stimulus didn't lower unemployment by the percentage they envisioned. It just means you have to slide all those numbers up the scale.

This too? I mean if the UI rate was supposed to be 6 and now it is 8 didn't they miss the mark by 30%? And this error is typically acceptable to which economists?

DA60 · Jun 3, 2012

My solution:

- balance budget immediately.
- change taxes so EVERYONE pays the same tax rate; rich/poor, capital gains/income PLUS no deductions except charitable contributions.
- end corporate taxes.
- end Social Security...when the last American over 30 today dies, SS dies with him/her.
- cut military by 50%...stop butting in other countries affairs.
- end the Fed - let the markets set interest rates.
- no more bailouts.
- end Fannie/Freddie.
- leave the economy alone.

cpwill · Jun 3, 2012

Aberration said:
Or they overestimated the effect stimulus would have.

according to the CBO: In contrast to its positive near-term macroeconomic effects, ARRA will reduce output slightly in the long run, CBO estimates—by between zero and 0.2 percent after 2016. But CBO expects that the legislation will have no long-term effects on employment because the U.S. economy will have a high rate of use of its labor resources in the long run. ARRA’s long-run impact on the economy will stem primarily from the resulting increase in government debt.

errr..... woops?

OpportunityCost · Jun 3, 2012

Economics -- not your strong suit I see. $260 billion tax cut was "tiny"?

Yes $100.00 a person (roughly) is tiny.

cpwill · Jun 3, 2012

Most of it, as I recall, went to deleveraging - in which case all it did was shift debt from private to public books.

Given who actually pays taxes, you can see why Democrats would be in favor of it... but that doesn't justify claiming that it had some kind of major stimulative effect.

AdamT · Jun 3, 2012

John Tucker said:
Ha! I love how liberals who promote these Keynesian economic principles like to claim you don't understand "economics" when you show how off base they are. Yes, the $260 billion - $300 billion in tax credits were tiny and inefficient, so tiny they meant nothing.

You don't have to be an economic genius to understand how idiotic your statement is. First, this was one of the biggest tax cuts in US history, on an annual basis. It delivers a significant amount of cash to every working man and woman in the country on a weekly or biweekly basis. Most of that money was pumped back into the economy and that is what stimus is all about.

The only portion of the $800 billion that stimulated anything was the $100 billion that went towards buildings, science and energy research. The other $700 billion was a total waste, numbers don't lie.

It's pretty clear that you don't understand what stimulus is. Stimulus is simply government spending to boost economic activity.

I think NOW it's clear to all reading who doesn't understand economics. If the package was so great we wouldn't still be at 8.2% unemployment and 1.9% growth. If we would have done NOTHING, we would be a lot further along than where we are now

.

Again, pure nonsense. I don't think there's an economist in the world who would argue that the stimulus didn't raise GDP and lower unemployment, though some would certainly claim less benefit than others.

IF you understood basic economics, you would understand that austerity is the only option for the United States at this point with a $16 trillion national debt. We can't afford large stimulus packages and ESPECIALLY ones that was passed in 2009 with nothing but JUNK.

Implementing significant austerity measures now would almost certainly send the economy back into recession, as has happened in many Europen countries that went to austerity too soon. The end result would be higher -- not lower -- debt. The CBO has made this quite clear. CBO warns of 2013 recession - Seung Min Kim - POLITICO.com

No, they didn't underestimate the severity of the recession, THEIR POLICIES JUST DON'T WORK. Period. They have never worked, won't work and DON'T work.

They obviously did underestimate the recession as unemployment went higher with the stimulus than they thought it would go with no stimulus. This is pre-economics 101 stuff.

Phys251 · Jun 3, 2012

One of these things is not like the other one.

Math: When you take two positive numbers and add them, the result is a larger number. (Example: 4+2=6)

Democratic math: When you take two positive numbers and add them, the result is a larger number. (Example: 4+2=6)

Republican math: When you take two positive numbers and add them, the result is smaller than at least one of the numbers. (Example: 4+2 is probably 5, but since that's bigger than 4, it's probably 3, but it could go all the way down to 1.)

At least, this is what I infer from how the two parties discuss how spending works.

OpportunityCost · Jun 3, 2012

Re: One of these things is not like the other one.

So AdamT where is the job growth and why is labor participation down so much?

AdamT · Jun 3, 2012