Democrats & Liberals Archives

Define Stimulus

What makes something a stimulus? Sure, Jobs are good. But isn’t it one dimensional to think this way?

Our problem is one of demand. How we fill in the shortfall in demand caused by the sudden disappearance of trillions of dollars of wealth, and the consequent loss of jobs and businesses is the issue at hand.

This is not, as some might claim, a phantom problem, solvable by cheerleading. Some people get the idea that the economy works solely on convincing people to feel good about it. However, people make decisions in the market that bind other people's ability to arbitrarily make certain decisions themselves. The man who lays off an employee has just restricted the economic options of the person they just fired. The people whose pensions and 401Ks just declined sharply in value have seen their decision-making abilities sharply reduced as well. Their ability to retire or remain retired has changed.

The Republicans, in general, have refused to intervene on behalf of many affected by the cost cutting measures of companies, who do away with pensions. They have refused to intervene on behalf of those whose healthcare costs send them spiralling into debt.

Tort Reform is often mentioned in the same breath with their solutions, but for most costs, tort reform is effectively kicking open the barn doors after they've been shut, after the cows have gotten out. In other words, it does absolutely nothing to solve the problems that started the lawsuits in the first place.

One way to stop malpractice suits is to stop malpractice. It's certainly better than trying to prevent people from seeing a doctor when they need to see one, or using bean-counterish logic to deny people needed, but expensive treatments. Another way, though, is described in the linked article above.

Namely, encouraging the digitization of patient records. The study sited in the article indicates that this cuts costs considerably. It reduces medical errors, which may cost people more in medical costs, or lost wages (or wage earners in the worst case). That freed-up money will get spent elsewhere. It reduces problems with drug interactions. It reduces duplication of tests and procedures that might be expensive.

What are we seeing here? Technology and techniques saving money, making the system more efficient. Whatever makes America more efficient, frees up resources that can be used elsewhere, and makes the resources used of stronger benefit.

But the Republicans may not look at it that way. They may be stuck in one-dimensionial measures of what is and is not stimulative.

Surely, high energy physics sounds like a waste. Until you realize that our entire economic infrastructure nowadays relies on quantum physical effects, nowadays more advanced than ever. If you visit this site on a regular basis, you'll find any number of potential, incredible advancements, many of them depending on such small details as how carbon molecules are arranged in a molecule. Somebody learned how to make a radio signal whistle, and it opened up the way to more powerful TV and radio signals. That, of course, let us make much better use of a valuable public resource.

Medical research, too, deserves consideration. Every man, woman or child who can live life more fully, more healthily, is a person who can contribute better to the economy. If somebody figures out how to repair severed spinal cords, treat learning and prevent learning disabilities, catch cancers more quickly, treat cancers more successfully, all these things can contribute to the health of our economy.

I don't even want to try to figure out why this guy or any Republican thinks the government buying 600 million dollars worth of fuel efficient vehicles wouldn't be an economic stimulus. I mean, people do have to manufacture those cars, now don't they?

We cannot expect the policies that have worked recently to work now. There's no great big tax cuts to be had, no interest rate cuts left that can be done. We cannot count on corporate finance to bail us out of this. It's rather problematic that folks are worried about keeping the stimulus package low, when the point of the stimulus is to spend money into the economy to push it forward, where all other measures have failed.

Part of that push will be brute force spending, but another part of it should be investment in science and technology, for as Paul Krugman points out in the video, an important part of what raised productivity in the 1990's was an advance in technology.

The stimulus package justifiably needs to be jobs oriented. But more than that, it needs to be oriented towards changing the calculus of our economics, changing the factors in our economy that define what is possible. The government spending to create a distributed network for the defense establishment to maintain communication of data during a time war eventually became, well, the medium by which you're seeing this today. Can you imagine a world where this investment was not made? Or rather, do you want to imagine it?

Part of any good stimulus will involve making up for demand that was lost to the economic collapse of assets and credit-lending on Wall Street. But another part of it should be giving the world something new to want from the United State of America. Whether that's new medical technology, advances in physics, advances in material technology, advances in computing, or advances in green technology, we have the opportunity to use America's current rude awakening as motivation to remake the American economy once again, to not only do better business but better, more advance kinds of business, whose competitive advantages will be our competitive advantages.

The biggest sin of the Republicans in dealing with this stimulus package is not their ostensive insistence on fiscal restraint. It's their failure of imagination. They literally can't seem to imagine any way out of our economic straits besides handing more borrowed Chinese money to the folks they've been handing it to for the last several years. They still see it this way: stimulate the investor class, who in turn stimulate jobs and growth.

But that stimulation did little to help Americans, even before the collapse, and the Bush Administration's other policies, fully supported by the Republicans picked a disastrous method of keeping the economy growing as a substitute: building a housing market bubble, enabling speculation and predatory lending.

Senator John McCain, when he was running, suggested more deregulation, more tax cuts. We've heard similar talk from Republicans as the stimulus bill ran through Congress. He was rejected, and so were many of his fellow Republicans in Congress. But still, they won't admit: they lost. Not just an election, but a basic argument about how to run the economy. Yet these Republicans in Washington, aided and abetted by the usual squad of entertainers that the GOP calls pundits, have come together to insist that everybody does things their way, or else they will stonewall and obstruct.

The Republicans seem intent on living in the past, intent on recapturing their glory days of economic and political dominance. Will the price of their nostalgia be America's economic prosperity?

Posted by Stephen Daugherty at February 6, 2009 10:51 AM
Comments
Comment #275139

Stephen, I presume that you’ve actually read this “stimulus bill” that your cheerleading for, along with all of its hundreds of billions of dollars of spending provisions. You haven’t? But you love it anyway, eh, and condemn those who don’t? Now why is that?

When you talk about a Republican “failure of imagination,” what do you mean by “imagination?” A faith in things unseen, apparently. Such is the blindness of partisanship.

You can hardly be blamed for not having read the thing, however, since almost none of the people voting on it will have read it either. Cheerleading for something you clearly know almost nothing about just because it was sent up by your party makes for an unseemly spectacle, however.

Posted by: Loyal Opposition at February 6, 2009 9:02 PM
Comment #275140

So, Loyal Opposition, does this mean you have read it? Or your Republican representatives?

Posted by: womanmarine at February 6, 2009 9:15 PM
Comment #275141

Stephen,
Problem 1: The Bill in Congress is named Americs’ Recovery and Reinvestment Plan not a stimulus! For Americans do not need a check for a few hundred bucks, but an overhual of the Economy built over the last 30 years. So why is the Democrats and Republicans crying over spending and tax cuts.

Loyal Opposition,
I hope you wrote your words with sugar. For maybe if the Republicans would have read the bills they passed for President Bush the Democrats would not have this mess on their hands today.

No America can become Energy Independent and build a strong economy over the next 5-10 years; however, until both sides of the political specturm get past their Ideology and start thinking like Americans I would say that it is safe to believe that not even another $67 Trillion will help get the 20th Century Market off life support.

Posted by: Henry Schlatman at February 6, 2009 9:35 PM
Comment #275145

Womanmarine, no I have not read it, but I agree 100% with you if you’re suggesting that my Republican representatives (well, my representatives are actually Democrats, but let’s not get distracted by that) SHOULD read it before voting on it. If you haven’t read something, you shouldn’t be supporting it.

Do you agree that your representatives should read it before voting on it too? So why is it, pray tell, that the Democrats are insisting that the latest version of the bill cobbled together just a couple hours ago be voted on and passed TONIGHT before anybody is even allowed to peruse it?

What the hell? The cost of this bill will be at LEAST twice the cost of the Iraq war. The interest alone will exceed the cost of the Louisiana Purachase (and yes, that is AFTER adjustment for inflation).

Even if—and I do say IF—any of this a good idea—why does an expenditure of this magnitude have to be rammed through before the ink on it is even dry and before anybody has had a chance to look at it with even a modicum of care?

This is absolutely INSANE. For over six years, I’ve listened to Democrats complain about how much we spent in Iraq. Frankly, I didn’t like it either and the cost was a large concern, and something I could agree with Democrats about.

But that gigantic price tag was something that was incurred during two terms and 8 years of George Bush. And now, just TWO WEEKS into the Obama administration, and we’re going to outlay TWICE that amount? What the hell? Honestly, people need to put aside the partisanship and put the brakes on this insanity. At the very least, allow for a couple weeks, or even days, of deliberation. Let our elected representatives READ the stupid thing first at the bare minimum.

It’s also very disturbing that those driving this are insisting that it be done right away before either congress or the public has had a chance to look it. Why is that?

It’s kind of like a used car salesman telling you that some car is such a fantastic deal that if you take time to look under the hood instead of signing on the dotted line immediately it’ll be bought right out from under you.

Would you buy a car under such conditions? Then why would you mortgage not only your only future but those of your children and grandchildren under such conditions? Oh right, I forgot. This is all about “hope” and “change”—the catch phrases, I’m beginning to fear, of our collective doom.

Posted by: Loyal Opposition at February 6, 2009 10:11 PM
Comment #275154

LO-
Do me a favor: if I am so ignorant, then point out to me the major parts of this bill which are wrong.

By imagination, I mean research. By imagination, I mean much-needed programs to modernize infrastructure, medical records keeping, environmentally friendly technology.

By imagination, I mean treating the economy as more than numbers and confidence game.

By imagination, I mean, doing more than just suggesting tax-cuts and additional liberties for the people who just ran our economy into the ground.

One question: why do you think the Senators up there are even letting that bill be trimmed? By all rights, they should stand their ground, given the importance of it. I’ll tell you why they’re nervous: because we’re staking a lot on this. Do you think we want to screw up?

This thing has been through committee, has been under discussion for quite some time. I highly doubt these people don’t know what’s in there, or didn’t have time to go through it, if they failed to. Your people seem to be well versed enough to complain about the minutia.

You talk about our complaints about the spending in Iraq. You know, part of the complaint there is just how much of the money your people lost to corruption, how much simply vanished into thin air. Another part of it was the off the books math that allowed your people to avoid mentioning the sheer size of the deficit you were running.

But one of the most important reasons to hate that spending was just how little benefit we saw for the money. In a time when the economy was strained, billions of dollars were going to do what, save face?

The Republicans seem good at trying to save face. That’s what all this s*** is about: proving you’re still relevant.

Iraq is a perfect example of why you don’t spend time dicking around trying to force your favorite policy to work for years on end. If we had started doing early what Gates started after our first electoral victory in 2006, we may not have gotten all we wanted out of Iraq, but perhaps the mess we were going to leave behind would have been tidier.

But you guys had to prove you were right. You had to keep the ball away from your opponents, and prevent them from making any gains. So that meant when armor was short, you distracted people with questions about the media coverage. When the war drug on, and progress lagged, you folks insisted that victory was around the corner. When people called for more troops you said it couldn’t be done, or shouldn’t be done. You would give excuses like “it would make it seem like an occupation (what was it then, exactly), or just say it wasn’t necessary, or pretend like it was all just a ruse to focus attention on the deficient troop rotation, and thereby end the war.

You folks let things get more and more out of hand, and blamed the media and your critics for your policy’s poor perception. And then you got beat in an election, and then got religion on troop numbers.

G******it. Everything has got to be snarled up in this political BS, entangled in your folks need to come out on top of every partisan battle you perceive.

We don’t have time for this crap. You folks seem intent on forcing the bill to conform to your party’s ideology, despite the fact that all the measures you submit are essentially the Bush policies continued. Somebody even had the stupidity to suggest an amendment that would have made it easier to ship jobs out of the US. You folks pick tax cuts, which lag more than fifty cents behind the per-dollar benefit of infrastructure, as your main stimulant to the economy. You try and deep six funding for food stamps, despite them having the most potent per dollar return.

You talk about the falseness behind our slogans, but how abou the falseness behind your policy prescriptions? How about eight years of immense tax cuts and regulatory shenanigans, and their effect? The Republicans want a second, third, fifth ad infinitum chance to vindicate themselves, or at least get back up on the horse again, but they won’t admit failures.

Unfortunately, people see plenty of them.

The Republican failure to cooperate with the rest of America in ending the pointless escalations of political rivalry is one of them. They see either willfully or temperamentally unable to deal with the rest of America in a mature, non-partisan manner. They dictate terms to an impatient majority, and then blame people for getting frustrated with them.

Why don’t you people get it after two catastrophic losses in a row?

Posted by: Stephen Daugherty at February 7, 2009 12:07 AM
Comment #275155

SD
Good job as usual. Your patience is amazing. Speaking of reading, those who refuse to even attempt to get a grasp of Keynesian economics are flat out unqualified to make valid comments on responses to the current economic problem.We should ignore them and get on with what we have to do.

Posted by: bills at February 7, 2009 12:57 AM
Comment #275156

Stephen, just as I thought. Your justifications for the “stimulus” (along with about about 90% of your posts, I might add) consist of little more than an obsession with the political gamesmanship of the whole thing—especially this constant preoccupation with real and imagined sins placed at the feet of Republican boogymen. The pork bill can’t be defended on it’s own terms, of course, but you’re always good for a little cracker-barrel psychoanalysis of Republicans. “Projection” is the word for it, I believe.

This attitude is one that embraces burning down the entire building with all of us inside just because some of those burnt will be Republicans. It’s an incredibly petty and destructively partisan point of view. The Republicans spent too much money, so now the Democrats will get their revenge by spending five times as much

Honestly, there’s a whole lot more to life than just hating Republicans and pontificating about the moral rectitude of Democrats.

And on’t make the mistake of believing that Americans are on your side forever simply because Democrats won a couple of elections (by running conservatives, more often that not, I might add). The status quo is very easy to attack when your side isn’t the one responsible for it. When your side IS responsible for it, you’re fighting entirely different head winds. This is something Democrats have forgotten but are about to be given a crash course on. And ouch! It’s gonna leave a mark.

Posted by: Loyal Opposition at February 7, 2009 1:25 AM
Comment #275159

LO-
You complain about our spending, talk about it as if it’s intended to be wasteful, to be a big political show. That narrowness of focus, that assumption of corrupt motives is part and parcel of why your party blundered into the kind of policies that got us into this mess.

For the record, let me state: this stimulus package is about making up part of the 2 trillion dollars in demand shortfall that your party’s policies lead to.

This isn’t about hating Republicans, but I can’t tell you that my opinion of them is much improved by their current behavior. We don’t have time to let that shortfall play itself out in our economy. The urgency, and the risk that urgency entails, is all too great. We understand the stakes. But the risk of standing by and doing nothing is greater than that of doing something.

I brought up Iraq, because Iraq typifies the stubborn unwillingness of the Bush era Republican party, regarding policy, regarding admission of error, regarding the waste of billions, even trillions in resources, to admit error, and the cost in complication and failure that comes of such prideful inaction and dogmatism.

And here you folks are going again? I was shocked when the Republicans voted en masse against the stimulus package, but I can’t say I was surprised. You have a party of lemmings, so used to engaging in these kinds of organized stunts, so used to rationalizing those stunts afterwards, that there is just about no way to talk you folks down from a boneheaded mistake.

Let’s be clear: the point of a stimulus bill IS spending, and deficit spending at that. This is not normal economics, where it’s not a good idea to jack up the deficit, this is Depression economics, where you’re trying to scramble back up the slippery slope of a deflationary spiral, before that disastrous trend has a chance to assert itself. Yes, we’re going to have to pay for it, and it will be ugly. But we will have a choice between paying for that later with the consequences of deficit spending, or paying for that later with the long term consequences of a further evaporation in American economic strength.

If I had my druthers, we wouldn’t be doing this. If I didn’t think it was necessary, I would be calling for efforts to help balance the budget. But unfortunately, the mess the Bush Administration left behind isn’t giving us that choice.

Posted by: Stephen Daugherty at February 7, 2009 7:39 AM
Comment #275171

LO writes: “It’s also very disturbing that those driving this are insisting that it be done right away before either congress or the public has had a chance to look it. Why is that?

Obviously, the longer this “spending” bill sits in congress the more it gets whittled down by those who still care about our future. Liberals can’t allow American’s to think…that’s too dangerous to their future. Polls are showing support for the bill is dropping rapidly and, if not passed soon, will fall below the percentage that still think congress is doing a good job.

Among some of my liberal friends I am hearing grumbling about why they haven’t yet received their promised government check in their mailbox.

PO and his liberal friends have made many campaign promises and now must keep them or else face the wrath of the “entitleitis” crowd that helped elect them.

My wife and I were sitting on our house deck this morning drinking coffee, chain smoking cigarettes (helping to pay for SCHIP’S) and having our usual great time discussing political mischief which usually gives us a good laugh after the sadness over America’s future passes.

Since we are so deeply in debt, and congress is too weak to actually propose increasing taxes to pay for this spending we concluded that before long our tax returns will be mailed to Beijing as they will be our primary debt holder and more deserving of the tax revenue than Washington.

I object to at least half of the spending in this bill as wasteful and non-productive. If the political class had any class…they would include an across the board tax increase to pay for it. According to the NY Times this spending bill is going to add an average of $10,500 to the tab of every American family.

If it is so damn important to have this spending as liberals tell us, why are they not willing to pay for it now, rather than to shuffle it along to their children? Answer…they don’t intend to pay for it, believing that politicians will make sure only the greedy corporations and rich folks pay. Well, just a little common sense and arithmetic will prove that impossible. But, the libs are not known for their logic and common sense, only their immediate demand for something for nothing.

I heard PO ranting about the coming catastrophe if we don’t spend nearly another trillion quickly. Wow…what an inspirational speaker…right up there with Lincoln, Churchill and Roosevelt. Folks who still have a mind of their own know that the confidence of the American people has been shaken and they are reluctant to spend money at this time. So to instill confidence in us, PO talks about a financial Armageddon unless he and congress has its way.

Since American’s can’t or won’t spend their family share of $10,500 to get us moving, congress will do it and send us the bill a few years from now. What a government…What a country. You just gotta love it.

Posted by: Jim M at February 7, 2009 1:23 PM
Comment #275172
Obviously, the longer this “spending” bill sits in congress the more it gets whittled down by those who still care about our future.

I have no doubt a number care about our future. They make the mistake of believing that they are indispensable to it, and that methods that have been proven empirically wrong.

Liberals can’t allow American’s to think…that’s too dangerous to their future.

That’s why some of the main things cut out of the bill by conservatives, by those who “care about our future” are education, food stamps (used to help feed kids, starvation being bad for brain development), and scientific research.

Polls are showing support for the bill is dropping rapidly and, if not passed soon, will fall below the percentage that still think congress is doing a good job.

Pick your polls wisely. There’s a reason that Republicans, regardless of the quality of provisions have been loading the word pork and waste onto this bill: it distracts nicely from the fact that Americans want stimulus, want new-deal style spending, and care more about that than additional tax cuts.

Among some of my liberal friends I am hearing grumbling about why they haven’t yet received their promised government check in their mailbox.

Tell them that they’ll likely see the tax cuts spread out over their paychecks for the year, rather than as a lump sum.

PO and his liberal friends have made many campaign promises and now must keep them or else face the wrath of the “entitleitis” crowd that helped elect them.

Entitleitis? An irritation of the entitle? Ironically enough, entitlement spending is low on the priorities of the Republicans. But don’t let that get in the way of a good attempt at being witty.

Since we are so deeply in debt, and congress is too weak to actually propose increasing taxes to pay for this spending we concluded that before long our tax returns will be mailed to Beijing as they will be our primary debt holder and more deserving of the tax revenue than Washington.

Shall I remind you of who left that debt on the Oval office desk, tied up with a nice neat bow? Or what happened the last time somebody raised taxes at the beginning of a severe recession (just a hint: the president’s name is the same as a brand that sucks.)?

Our problem at this point is not debt, it’s deficient demand, it’s deflationary economics. We haven’t had the unemployment numbers this high since the seventies, and we sure as hell haven’t seen such an acceleration of unemployment since the great depression. Let make the equation simple for you: people can’t afford the prices for goods as they are currently offered. Businesses, given a choice between moving some merchandise, and none at all, choose to drop prices. This, though, means that cuts must be made. Some cuts are from jobs. And some businesses fail despite their cuts. Combine that, and you get an additional plunge in American spending power.

The deflation drives down employment, the employment drives down prices.

You raise taxes because you don’t want inflation, but inflation is most definitely not our problem here. Quite the opposite.

You’re fighting a problem we no longer have: the stagflation of the seventies, the inflation of the early nineties. One part of the solution to that economic mess is no longer viable: rate cuts. In that day, we had double digit interest rates. Inflation, meanwhile, is pretty much dead. The economic collapse is pulling its guts out like a defective pool drain.

It’s not an economic Armageddon, it’s just, on the facts, the worst economic crisis, both actual and on the horizon, that we’ve had since the Great Depression. Sometimes a lack of fear means you just don’t get what’s in front of you well enough to have the good judgment to be scared.

Posted by: Stephen Daugherty at February 7, 2009 2:17 PM
Comment #275175

“the decline was almost entirely due to falling energy prices, and energy prices appear to be stabilizing over the past month or so. The core measure of producer prices (stripping out food and energy) rose a substantial 4.3% last year. Inflation is far from dead” ,Anyone agree with that?

Posted by: Rodney Brown at February 7, 2009 2:43 PM
Comment #275178

Daugherty asks me; “Shall I remind you of who left that debt on the Oval office desk, tied up with a nice neat bow?”

Apparently unable to come up with good one-liners himself, here Daugherty uses the PO jive about debt and bows. It got a good laugh among the dems, but of course, dems aren’t your normal American. They’ve talked so long about a “free lunch” and “chicken in every pot” that some of them no longer even pay their taxes.

I am certain the Daugherty is speaking about President Bush. Since a president has the power to create debt in Daugherty’s world, why is PO going to congress for money?

At his recent love fest with the dem leadership PO also received applause with his line about “stimulus means spending”. I would like to inform PO that this is only true when employing the services of a prostitute.

Here’s the liberal logic folks, stimulate Americans by pilfering from the pockets of every American family $10,500 and spend it. Then, a few years from now send them the bill for the money that they pilfered.

Those puppy-dog liberals…ya gotta love em. They’ll wag their tails for just a few scraps off the government table.

Posted by: Jim M at February 7, 2009 3:00 PM
Comment #275184

Jim M-

Apparently unable to come up with good one-liners himself, here Daugherty uses the PO jive about debt and bows. It got a good laugh among the dems, but of course, dems aren’t your normal American. They’ve talked so long about a “free lunch” and “chicken in every pot” that some of them no longer even pay their taxes.

Unable? I’m sure I could have come up with something, but it’s a good line, so why not use it? And why are you calling it jive? Is this some attempt to be funky? To be with it? What’s next, a crack about soul food?

I should mention to you that both the people you’re trying to make that bad joke off of have paid their taxes.

I am certain the Daugherty is speaking about President Bush. Since a president has the power to create debt in Daugherty’s world, why is PO going to congress for money

No, I was speaking about President Eisenhower. You know, there were three or four Republican Congresses that had the option of saying no as a first matter. Also, the president does submit budgets, does ask for money, and does play a major part in fiscal and economic planning.

As for stimulus requiring spending, I wonder how you stimulate the economy without spending anything. I mean, do we meditate for world peace or something? Stimulus means spending. Whether that’s jobs, technology, or tax cuts, you’re essentially redirecting money somewhere, in hopes that it stimulates spending and growth.

I just love how a program meant to put money directly into the pockets of Americans, in hopes of stimulating economy to see growth becomes an outright theft. Just what were your tax cuts then? You knew they were deficit spending. You knew you were robbing Peter to pay Paul!

But of course, when the Republicans do it, when they spend money they don’t have and borrow more and more in the absence of any crisis to justify it, it’s alright.

Those puppy-dog liberals…ya gotta love em. They’ll wag their tails for just a few scraps off the government table.

My, aren’t you charming. Just how much more egalitarian is your party’s notion of trickle down economics, where we can have the money for stimulus once the Rich are through with it. No sense in giving all those other people in the country money, because only the rich are good with their money. Just look at Wall Street.

I don’t want scraps. I don’t want a pork-barrel extravaganza. I want a government that is actively involved in changing this country for the better. You think being liberal is all about the money? Do you think that’s all the economy is? The whole point of the entry that starts this all off is that there’s more to the economy than just numbers and sentiments.

Posted by: Stephen Daugherty at February 7, 2009 4:31 PM
Comment #275186

Rodney Brown-
You know, it’s sort of funny if you consider it. It’s like saying, “aside from the knife in my right lung, I’m just fine.”

The CPI might exclude those costs, but what person do you know who doesn’t buy food and pay for gas?

According to this article, inflationary pressures are hitting a fifty year low. Which is to say, like I’ve been saying, all the market pressure are essentially pushing downwards.

“With the USFIG locked in a clear cyclical downswing, U.S. inflation pressures are essentially non-existent. Rather, there are continued downward pressures on U.S. consumer prices,” said Melinda Hubman, research associate at ECRI.

I think we’ve been operating on the assumptions of a growth economy for so long that we simply take for granted that prices are always pressured upwards. But if you read your Adam Smith, he’ll tell you that pressures go both ways.

Well, with loans and credit much harder to get, with savings essentially exhausted, with employers laying off people at a rate we haven’t seen since the Great Depression, and the unemployment rate lower than it’s been in ages, what gives you the idea that people can afford current consumer prices. Inflation may still exist to some extent with consumer goods, but it can’t be maintained when people can’t afford the products.

When are folks going to get what kind of situation we’re in?

Posted by: Stephen Daugherty at February 7, 2009 4:43 PM
Comment #275187

Pardon me: with the unemployment higher than it’s been in ages

Posted by: Stephen Daugherty at February 7, 2009 4:44 PM
Comment #275188

I agree that there pushing downwards SD and I agree with most of your assessments ,I think energy is a factor in the mix.

Posted by: Rodney Brown at February 7, 2009 5:10 PM
Comment #275189

Daugherty asks; “And why are you calling it jive? Is this some attempt to be funky? To be with it? What’s next, a crack about soul food?”

My, my, aren’t we sensitive? Watch some old movies from my youth in the 40’s and 50’s and you will find that word then, didn’t have any racial meaning and doesn’t now. Has it become politically incorrect to say I want a cracker with my soup?

Why is it that liberals have their nerve endings so exposed? We must speak in whispers around them being careful to guard every word or nuance for fear of offending. Daugherty, you can’t frighten or intimidate me no matter how you may try.

To answer Daugherty’s question; “When are folks going to get what kind of situation we’re in?”

When they take off their blinders and recognize that each of us has the ability to to think for ourselves and not be led around by pandering politicians who spend our money to achieve their political goals.

Congress, PO, and Daugherty say; “be afraid”, I say do not fear, a great American awakening is at the door. Have confidence in yourself. Do not rely upon government. Shun those who would enslave you with their gifts and promises. Resist the free lunch and false security. Return to sanity.

Posted by: Jim M at February 7, 2009 5:12 PM
Comment #275190

Something to Hash Over. Comparison of House and Senate economic stimulus plans.
http://biz.yahoo.com/ap/090207/congress_stimulus_highlights.html

Posted by: Rodney Brown at February 7, 2009 5:29 PM
Comment #275191

$11 billion toward a so-called “smart electricity grid” to reduce waste, A Good start!

Posted by: Rodney Brown at February 7, 2009 5:31 PM
Comment #275196

Jim M-
Oh, I was just having fun with you. You’re still wrong, though, you just might not have been aware of where you got it from! A lot of Jazz and other musical terms came from the African American community.

I just might think of some associations you didn’t know were there, because I don’t assume that America was monocultural. Who’s sensitive here?

You’ve got to realize that you’re preaching the gospel of the 1920’s. You’re pushing an economic philsophy that has now been twice discredited. Use all the scare tactics you want, people still have good reason to fear what the Republicans have to offer on the economy.

Posted by: Stephen Daugherty at February 7, 2009 6:48 PM
Comment #275199

Jim M said: “Have confidence in yourself. Do not rely upon government.”

You are of course speaking to the top 20% of the wealthiest. Your sentence makes no sense whatsoever to those living paycheck to paycheck, or now out of a job and spending their savings to make up the difference between obligations and unemployment insurance, or those whose homes are foreclosed and are now paying rent and building no future equity at all, or those in the middle class who have good paying jobs but who know that if their job is next to go, what they have saved will be gone in a heartbeat if it weren’t for government assistance like unemployment insurance, COBRA if they have children or themselves have an ongoing medical condition, and even job retraining for careers that have permanently left our shores.

If I had a family depending on me financially, and I was out of resources, I would have to rearrange my ethical priorities to insure my family was taken care of, even if that included stealing for food and housing. Given that reality, why would I CHOOSE to reject assistance from my government if it meant I wouldn’t have to steal to provide for my family?

The ability to walk in another’s shoes in discussions about economics is what separates the amateurish economic Ph.D. statisticians from the really great economists who understand that economics is as much about human values and dignity as it is about calculating probability factors and crunching raw data into statistical graphs.

Posted by: David R. Remer at February 7, 2009 7:16 PM
Comment #275202

DRR,

You are forgetting all that conservative ‘rugged individualism’. Anyone who can’t kill, skin butcher and cook his own game can rot in hell.

Posted by: Marysdude at February 7, 2009 8:13 PM
Comment #275204

Stephen,

On the whole a good article. The fact of the matter is that if we create new and more competitive industries and/or manufacturing and distributive infrastructure in the process of “stimulating” the economy we will benefit. I am not closed-minded enough to ignore the fact that the stuff we manufactured in W.W.II while saving money and rebuilding our manufacturing infrastructure (that we had let fall to pieces during the New Deal) was INTENDED to be utterly expendible. None the less the American people build the middle-class wealth effect that made our post-war recovery possible.

The Keynesians are wrong that we benefit from people digging ditches and filling them back in so long as they are paid for it (Keynes literally said that.), but they are not wrong to say government spending applied to great purposes can benefit the country and, perhaps, the overall economy.

The problem is that government is not even a whiff smarter than private industry at knowing what the focus of those great purposes should be. On the other hand they often keep digging after the grave is covered over.

Keep them from doing that and the stimulus may help.

Posted by: Lee Jamison at February 7, 2009 8:52 PM
Comment #275206

>The problem is that government is not even a whiff smarter than private industry at knowing what the focus of those great purposes should be.
Posted by: Lee Jamison at February 7, 2009 08:52 PM

Lee,

Perhaps not smarter, but normally hugely more focused, and hopefully more loyal to the America First concept…

Posted by: Marysdude at February 7, 2009 10:35 PM
Comment #275213

Lee, your last comment is wrong on two points.

First, it was not POST WWII that rescued our economy, it was WWII. Specifically, it was massive GOVERNMENT HIRING for the military giving our young men jobs, and massive GOVERNMENT CONTRACTS with the private sector which created massive numbers of jobs for WOMEN to come into the work force on government tax payer dollars, that ended the cycle of recessions of the 1930’s.

In other words, all those government spending programs by FDR and Congress during the 1930’s were simply not big enough or expended in a short enough period of time to have the effect the Government Spending and Deficit Borrowing for WWII created.

This is where Conservative dogma gets it wrong damn near each and every time by totally dismissing the massive debt and government spending by the government during WWII as the right amount of economic stimulus needed which included tapping into potential labor resources.

And on your second point of error you said: “The Keynesians are wrong that we benefit from people digging ditches and filling them back in so long as they are paid for it “

WWII was precisely what you describe. We hired men to join the military and go overseas to create massive craters, holes in the ground, with munitions large numbers of women were hired to make with tax dollars, and then, under the Marshall Plan we paid foreign citizens to fill those holes back in again. And guess what, those very acts ended our Great Depression, by putting Americans back to work on tax dollars borrowed from the future, in a massive, massive way.

The Kenesians have this one right, where a contracting economy is caused by either growing unemployment or serious economic losses in consumer spending. Where Kenesians tend to get it wrong is in applying this methodology to a contracting economy which is caused by a lack of capital or liquidity in the capital markets to fund economic growth and jobs to a ready and waiting labor force.

This is the problem with economic ideology, it tries to be a one shoe fits all occasions approach. Both the economic ideology of the Left and Right lack the flexibility to address differing causes for economic contraction with the appropriate responses. Tax cutting does not cure all economic ills. Neither does government hiring. Each however, is the appropriate response to very specific sets of economic conditions causing contraction.

Posted by: David R. Remer at February 8, 2009 5:55 AM
Comment #275224

I945 was a small Blip, This Program Helped Millions To! http://en.wikipedia.org/wiki/GI_Bill

Posted by: Rodney Brown at February 8, 2009 1:35 PM
Comment #275225


Actually, it was the war, the ability to rapidly transition from a war economy to a peacetime economy and a lack of competion caused by all those bomb craters.

Posted by: jlw at February 8, 2009 1:38 PM
Comment #275290

Also consider
All the new technologies and industries that flourished based on what we developed during the war
Radar
Sonar
Radio
Television
Computers
Air Transportation (SAFE EFFICIENT)
All these new technologies created new opportunities and new industries that helped to grow the economy and pay off the huge War Debt.
The Repubs are continually (now, that they want us to forget all the Billions wasted in Iraq) lamenting that we are robbing from the taxpayer — no
We are borrowing for investment in the future — tax cuts will not help to build NEW industries and create NEW jobs — it might help to keep the people employed at the local market and gas station, but that is about it.
The space program provided huge gains in technologies that created the new industries of microprocessors, cell phones, internet, — remember the tech bubble?? where did THAT REALLY start??
I can honestly say that I know that there has not been ONE JOB CREATED by ANY tax cut.

I have NEVER seen a business case utilize tax cuts to rationize hiring, nor expansion of the business.
Aghhhhhh!
leemings unite behind RUSH (maybe he will share his OxyCodon to help ease your pain!!)

Posted by: Russ at February 9, 2009 4:52 PM
Comment #275321

Why it is good to argue about whay and when America got out of the Great Depression; however, I do believe that My Democratic and Republican Pundits are missing the point of what really happened in America between 1933-55. For why the Government and Private Sector borrowed, spent, and made alot of money during that time. Does anyone care to tell their Grandparents of that time it was their Elected Officials who helped them buy war bonds ans save money?

No, Americans grew their own food (a perfect way to ensure safe food and reduce the need for FDA inspections); made their own clothes; and all sorts of things until the Wealth of Society known by the Youth of the 60’s and Silver Spoons of the 70’s help finance this Better World.

So why you can say that President Obamas’ Idea of reinvesting in the Infrastructure will not work or that Government Spending and Tax Cuts will not help the Children of the 21st Century battle the Political Winds of Change. In looking at the day when the Youth of the 21st Century discover that they can build a Zero Weight 100% Traction Electric car and truck that can pay them to drive it. I do believe that the American Taxpayer will no lomger have to build bridges and roads rated at 160,000 tons. For do you really believe that “We the People” are going back to walking or horse and buggy?

No, and why it will take the American Small Business and Consumer to start spending again to stop Business and Corporation from losing control I do hold out hope that given the American Spirit the Children of the 21st Century will be shown by My Peers and the Grandparents of the Great Depression how to get Their Democratic and Republican Civil, Political, and Religious Leaders back on the path of building a Sustainable Green Civilized Society.

Posted by: Henry Schlatman at February 10, 2009 1:43 AM
Comment #275323

I’d like to warn people that wars by themselves are not necessarily good for the economy, especially when you pay for them in the Bush and Johnson administration’s fashion. Even WWII was a strain on the economy. We got to consider that WWII’s economic miracle was in part due to the industrial expansion, and the suicidal self-destruction of the European economic system.

Now, WE’RE the ones suicidally destroying the basis of the economy. And nobody’s even dropping bombs on us!

We need to remake our economy.

Posted by: Stephen Daugherty at February 10, 2009 8:02 AM
Comment #275373

Stephen,
I agree with you that Americans (Especially My Peers) need to remake the economy. For why I know Americas’ Democratic and Republican Civil, Political, and Religious Leaders may debate on keeping the 20th Century Economy on life support. The one thing that I am hoping to come out of the American Recovery and Reinvestment Plan sent to President Obama is a Bold Step in bringing on the 21st Century Economy.

For do you want to invest your hard earned money on high mpg cars or an Electric/natural gas car designed to pay you to drive it?

So can you and others explain why the Democrats and Republicans in Washington want to invest the Taxpayers’ Money in keeping the Status Quo moving or do nothing at all?

Posted by: Henry Schlatman at February 11, 2009 2:49 AM
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