a better stimulus plan out there

[Calabrio]

There is a better stimulus plan out there
Neal Boortz
Monday, January 12, 2009

We now have the benefit of PEBO’s* general position on a plan to stimulate our economy. Government shall be our savior. We shall not want. More specifically, government spending. About $800 billion (probably more) will be created out of thin air and then spent by politicians and their cronies in an effort to get our economy moving. Some of PEBO’s spending ideas included “investing” in government schools and modernizing various federal government buildings in Washington and elsewhere.

The “investing in education” bit gives you your first real clue of just what Obama is proposing here. He is proposing to use the occasion of an economic crisis to provide cover for increased government spending that he’s been promising since the day he announced his candidacy. I doubt that someone can explain clearly just how investing in education is going to quickly stimulate our economy, but that spending will be there because it was promised – promised long before our crisis became apparent.

Obama’s stimulus plan is very little more than a plan to enhance and solidify the power of the Imperial Federal Government over our economy at the expense of the private sector and free markets.

Is there a better idea out there? You bet there is, and it came from the 1st Congressional District of Texas. Congressmen Louie Gohmert notes that the federal government collects about $100 billion in income taxes every month, plus another $60 billion in Social Security and Medicare taxes. If those of you who are government educated have a calculator handy, you’ll see that this adds up to about $160 billion a month. Now if you divide Obama’s proposed $800 billion stimulus plan by $160 billion, you’ll come up with five. This means that our government will collect $800 billion in income and payroll taxes from February through June.

So, Gohmert asks, instead of bureaucrats and politicians deciding how all of this money is going to be spent, why not let the people who actually worked for this cash make their own independent spending decisions for this money. How would you do that? Simple: declare a five-month tax holiday. From February through June everybody keeps their paycheck. No income tax withholding … no payroll taxes. What will the people do with this money? What, are you crazy? They’ll spend it, that’s what. Talk about stimulating the economy!

Let’s just wrap this up with a handy little chart. Politicians just love charts.

Stimulus plans' affect on national debt

Obama's Stimulus - The government prints $800 billion for government to spend, thus insuring that the money will be spent as politicians and government bureaucrats want it to be spent. Plan adds $800 billion in additional debt.

Six Month Tax Holiday - The government prints $800 billion to replace the lost tax revenue needed for ordinary government expenses while people are spending the money they earned to stimulate our economy. Plan adds $800 billion in additional debt.

Either way we add $800 billion to our deficit.

Who gets the power to chose economic winners and losers?

Obama's Stimulus - Government makes the choices of who wins and loses. Winners include teacher’s unions, government contractors, politicians and businesses favored by government and political operatives. This plan grows government.

Six Month Tax Holiday - The people who actually earned the money get to choose the economic winners and losers through their spending decisions. Winners include private sector businesses that provide quality products and services. This plan grows the private-sector economy.

Either way $800 billion gets poured into our economy!!!

Who comes out with more power?

Obama's Stimulus - Enhances the power of government and promotes the cause of a state -controlled economy.

Six Month Tax Holiday - Enhances the power of the individual taxpayer/consumer and promotes the cause of economic liberty and the free market.

Power to the people? Or to government?

Who gets the happy ending?

Obama's Stimulus - Thrills those who love government

Six Month Tax Holiday - Pleases those who love liberty

Is there a detriment to the Gohmert plan? You betcha! And the flaw is fatal. If you declare a full tax holiday people are actually going to figure out how much they earn. No more of this “take home pay” nonsense. You get your whole paycheck. Now just imagine what happens in July with the withholding starts again.

Revolt.


Copyright © 2008 Salem Web Network. All Rights Reserved.

 

[Joeychgo]

You know, I think they could have accomplished a huge stimulus while bailing out the banks.

All they had to do was add these provisions:

If a bank is to receive bailout funding, then they must:

1. Cap the interest rate on ALL mortgages currently held to 5%;
2. Rollback all late payments so those behind can catch up. Those late payments can be added on to the end of the loan;
3. Cease all forclosures not completed prior to the date the money is received;
4. Use 70% of all money granted in the bailout exclusively to issue new loans to consumers and businesses.

Im no economist, but it seems to me that would have saved alot of homes, put money in people's pockets, and cost the taxpayer no more then it already did. As it is, the banks got free money to do with as they like, which hasnt helped the housing market whatsoever.

 

[fossten]

Im no economist

...about the only useful thing in that post.

 

[foxpaws]

No income tax withholding … no payroll taxes. What will the people do with this money? What, are you crazy? They’ll spend it, that’s what. Talk about stimulating the economy!

The assumption ‘they'll spend it’ is probably incorrect.

Right now, everyone is digging trenches, stopping spending and starting to pay off, or save. Saving does not stimulate the economy, and there is no guarantee, in fact, very little hope, that people would spend the money they would be getting back from the ‘no tax plan’.

Especially since it would be coming in small chunks – a few hundred here, a few hundred there. They would be paying off credit cards or personal debt (good for personal bottom line, bad for the economy’s bottom line right now), or putting it away.

Without guaranteed spending the plan won’t work.

The only entity guaranteed to spend, unfortunately, is the government. And they are the only ones who can spend enough to start things moving again.

If you were getting extra money right now, would you be spending it on more dinners out? How about that new stereo for the car? Nope, you would be socking it away. Even the wealthy are cutting back. Trickle down won’t work without a pretty rosy outlook for the future. You have to feel good that your job is secure, that the money will keep flowing. A six month reprieve just means you get to beef up the bank account for when you get laid off. Or if you are behind in your bills, you can catch up. Or you can pay off VISA finally.

The flaw isn’t that we would find out how much we ‘really earn’ the flaw is that we won’t ‘really spend’ right now.

 

[ford nut]

Obama thinks we will spend.

http://www.boston.com/business/pers...urmoney/archives/2009/01/tax_cuts_will_b.html

Obama proposed a tax cut of $500 a year for individuals and $1,000 a year for couples. This would come as a payroll tax credit to the taxpayer. Obama wants this to be a permanent feature of the tax code in hopes that individuals will go out and spend. This credit will likely only be available to individuals earning less than $100,000, or couples earning less than $200,000.

He must have it wrong too.

 

[foxpaws]

Responses to 2008 Rebate Survey
What people did with their 2008 tax rebate stimulus check

Mostly Spend 19.9%
Mostly Save 31.9%
Mostly Pay Debt 48.2%

After hovering just above zero for the first part of the year, the personal saving rate spiked sharply in May, when the rebate program began, and through July it remained much higher than in previous months.

I know I didn't spend mine... and according to the survey 80% of the people didn't spend theirs either...

In this type of economic climate – people will probably just save, or pay down debt. I think the tax break is nice – and maybe it will help people feel better about things – but, I don’t think it will do enough to jump start the economy. And I think the Obama tax cut will just put a little in your pocket each month. It took Reagan’s tax cuts over 2 years to show any appreciable change in people’s spending habits. And they were pretty massive tax cuts.

I think the tax cuts should be just part of the plan - it takes too long for the economic benefits to start. People would need to save enough, or pay down enough of their debt to feel good about spending again. That could take a couple of years.

 

[shagdrum]

Saving does not stimulate the economy

Unless these people are saving their money under their matress, it is getting spend in (and stimulating) the economy. Where do you think the banks get the money to make loans?

If they are paying down debt, again, that money is getting spent in (and stimulating) the economy.

You really should start examining the liberal talking points you spout and applying some common sense to them before you repeat them. You are smarter then that statement of yours that I quoted...

 

[shagdrum]

Obama thinks we will spend.

http://www.boston.com/business/pers...urmoney/archives/2009/01/tax_cuts_will_b.html



He must have it wrong too.

The arguement I have heard is that the $500 "tax cut" is really welfare under a different name. This is because the the tax cut goes largely (maybe even mostly) to people who don't pay that much in taxes (if anything), or so the argument goes.

If you pay $100 for the year in taxes and get $500 back in a "tax cut" then you are really getting only a $100 dollar (100%) tax cut and $400 in welfare.

So, according to this argument, Obama is decieving by equivocating on the term "tax cut" and redefining it to include welfare.

I have not had a chance to look too much into this argument yet though, so I haven't had the chance to confirm the validity of this argument.

 

[fossten]

If the rich are bargain hunting, then they aren't consuming in the economy. Therefore, companies that produce new products and need the rich to buy them will fail or suffer greatly. This will ret ard growth and development, and prevent economies of scale. Thus, prices will not go down.

The rich need a bailout, known as a tax cut.

Obama is delusional when he says we need a "trickle up" economy. That's never happened in the history of man. The last trickle up economy was the Soviet economy.

 

[foxpaws]

Unless these people are saving their money under their matress, it is getting spend in (and stimulating) the economy. Where do you think the banks get the money to make loans?

If they are paying down debt, again, that money is getting spent in (and stimulating) the economy..

Shag, saving, without the accompanying borrowing does not stimulate the economy. No one is borrowing new money right now. No houses being sold, no cars leaving the lot, boats sitting on dry land, TVs stacking up in warehouses.

I know where the money comes from to borrow - heck right now even the government is filling the till.

If you are paying down debt, you are also not 'generating' income. The interest that you would have been paying is how the credit cards stay in business. They live on the interest. And, people are not buying on cards right now, they are moving back to cash. So the fees which are generated by the retail outlets with the card transactions are also disappearing. Many people have reverted to 'pay as you go'. Once again, nice for personal finances, not so great when trying to move the economy.

There is plenty of money out there right now - no one is taking it... Heck, GMAC just lowered its credit score requirement, by a lot, and they aren't seeing any movement.

The way the economy moves is on actual spending. Not debt reduction or savings increases.

We need a tax cut - but it won't fix the economy on it's own - and certainly not fast enough. And it needs to be across the board - the rich need it, as well as the lower income strata.The rich are trenching back as well. Luxury goods are way down. Spending at Macy's is off by double digits. while, spending at Walmart is off by just a percentage point or two...

 

[shagdrum]

Shag, saving, without the accompanying borrowing does not stimulate the economy. No one is borrowing new money right now. No houses being sold, no cars leaving the lot, boats sitting on dry land, TVs stacking up in warehouses.

You don't need to "borrow new money" (I don't even think you can), and just because people are not borrowing when it comes to personal loans does not mean that commercial loans are not still taking place. Most banks make a very large portion (if not the majority) of their money from commercial loans.

It is the big areas that are being hit, home loans and car loans, next will likely be student loans.

What we need is for the private sector to start creating wealth in certian areas where the market needs it. I cannot say what those areas are, no one can. The market will effectively determine that and correct itself.

The government cannot create wealth. Period. Only the private sector can do that. So the government needs to get out of the way and allow the private sector to work.

If you are paying down debt, you are also not 'generating' income. The interest that you would have been paying is how the credit cards stay in business. They live on the interest. And, people are not buying on cards right now, they are moving back to cash. So the fees which are generated by the retail outlets with the card transactions are also disappearing. Many people have reverted to 'pay as you go'. Once again, nice for personal finances, not so great when trying to move the economy.

Yes, and there is nothing that the government can do to effect that. This country as a whole has over extended itself on credit, we have moved from a cash basis to a credit basis and we are now seeing what that leads to in the long run; a very large and painful market correction.

The government is trying to lessen (if not avoid) the market correction, and they do not have the power or capability to do that. No government does.

Instead what they need to do is remove any and all actions of their that stand in the way of the government correction and effectively slow it down. Instead of trying to avoid the market correction, they should work to get out of it's way so it can happen as quickly as possible. The longer the correction is stalled, the more damage to the economy it will do.

The way the economy moves is on actual spending. Not debt reduction or savings increases.

Yes, spending in the economy; namely private sector spending. Government spending does not move the economy (at least not in a positive direction). Keynsian thoughts on this were proven wrong in the 1970's (stagflation?).

The economy has been moving on spending of money that people didn't have. Living off credit created an artificial market that has burst, which is the big reason we are in this mess.

We need a tax cut - but it won't fix the economy on it's own - and certainly not fast enough.

Not in isolation, no a tax cut won't fix the economy. But it will get the ball rolling in the right direction. Whereas all these stimulus bill are simply slowing down the market correction and delaying the economy fixing itself. the government cannot fix the economy. You seem to think that is can. Only the free market can fix the economy, and the best the government can do is get out of it's way (which tax cuts would help due). The more they get out of the way of the economy, the quicker the economy will turn around.

You seem to think that the govnerment can fix the economy, but you don't seem to realize that the economy is bigger and more powerful then the government. The government trying to fix the economy is like a dachshund trying to stop a moving car.

Maybe we should have a "wall of separation" between the government and the economy?

You should read this paper. It explain's why a lot of your economic understandings are just plain wrong (based in outdated, discredited keynsian thinking).

 

[shagdrum]

Here. I will post some sections of the relevant article...

...Spending-stimulus advocates claim that government can "inject" new money into the economy, increasing demand and therefore production. This raises the obvious question: Where does the government acquire the money it pumps into the economy? Congress does not have a vault of money waiting to be distributed: Therefore, every dollar Congress "injects" into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.

Spending-stimulus advocates typically respond that redistributing money from "savers" to "spenders" will lead to additional spending. That assumes that savers store their savings in their mattresses or elsewhere outside the economy. In reality, nearly all Americans either invest their savings by purchasing financial assets such as stocks and bonds (which finances business investment), or by purchasing non-financial assets such as real estate and collectibles, or they deposit it in banks (which quickly lend it to others to spend). The money is used regardless of whether people spend or save.

...Government cannot create new purchasing power out of thin air. If Congress funds new spending with taxes, it is simply redistributing existing income. If Congress instead borrows the money from domestic investors, those investors will have that much less to invest or to spend in the private economy. If Congress borrows the money from foreigners, the balance of payments will adjust by equally reducing net exports, leaving GDP unchanged. Every dollar Congress spends must first come from somewhere else...

...Most government spending has historically reduced productivity and long-term economic growth due to:

Taxes. Most government spending is financed by taxes, and high tax rates reduce incentives to work, save, and invest—resulting in a less motivated workforce as well as less business investment in new capital and technology. Few government expenditures raise productivity enough to offset the productivity lost due to taxes;

Incentives. Social spending often reduces incentives for productivity by subsidizing leisure and unemployment. Combined with taxes, it is clear that taxing Peter to subsidize Paul reduces both of their incentives to be productive, since productivity no longer determines one's income;

Displacement. Every dollar spent by politicians means one dollar less to be allocated based on market forces within the more productive private sector. For example, rather than allowing the market to allocate investments, politicians seize that money and earmark it for favored organizations with little regard for improvements to economic efficiency; and

Inefficiencies. Government provision of housing, education, and postal operations are often much less efficient than the private sector. Government also distorts existing health care and education markets by promoting third-party payers, resulting in over-consumption and insensitivity to prices and outcomes. Another example of inefficiency is when politicians earmark highway money for wasteful pork projects rather than expanding highway capacity where it is most needed.​

 

[foxpaws]

You don't need to "borrow new money" (I don't even think you can), and just because people are not borrowing when it comes to personal loans does not mean that commercial loans are not still taking place. Most banks make a very large portion (if not the majority) of their money from commercial loans.

Borrowing new money is borrowing to buy new things - instead of borrowing money to pay off old debt.

Commercial loans are way down as well - Companies aren't adding inventory or building/buying new equipment, because people aren't buying anything.

The economy isn't moving at all - at any level.

It is the big areas that are being hit, home loans and car loans, next will likely be student loans.

Isn't that what I said????

The government cannot create wealth. Period. Only the private sector can do that. So the government needs to get out of the way and allow the private sector to work.

The government cannot create 'wealth' but it can start spending. It did it during Reagan. He had a huge government stimulus package - it was called defense. He built up the military incredible amounts, even though we didn't have 'fighting' troops engaged in active (destructive) warfare anywhere on the planet. His defense budgets were huge. He created government jobs, more than any president in peace time since FDR. Not only that, government defense contracts were humongous. Bigger than some wartime eras. We built a war machine that we never used (thank goodness).

It took many years for the private sector to start seeing any benefits from the Reagan tax cuts, but government spending was a bridge that Reagan used.

War spends money overseas (as well as here). Reagan building up the military just spent money here. Similar to fixing roads or improving the power grid. And Reagan didn't need to support fighting troops overseas. Reagan built defense system after fighter jet program after new tank technology which never got shot down or driven more than around the block.

Obama's program at the core isn't that much different than what Reagan ended up doing (albeit on different programs). Government spending, mostly within the private sector, along with some build up of government employees. Tax cuts across the board.

The economy has been moving on spending of money that people didn't have. Living off credit created an artificial market that has burst, which is the big reason we are in this mess.

Reagan rose the national debt considerably (he tripled it) so, don't expect Obama's plan to be 'free' either (if Obama triples it in 8 years, it will go to 33 trillion).

I personally would rather see the government increase spending in the private sector for better energy technology, or improved roads than a new tank. I think this time the world economy will buy improved energy knowledge over the bigger, faster tank.

I don't think the government should set up it's own programs - as it did during FDR. I think that the way to do this is similar to Reagan - contracts to the private sector. This time we won't be building Star Wars, but maybe we can be winning the Energy Wars.

 

[shagdrum]

Borrowing new money is borrowing to buy new things - instead of borrowing money to pay off old debt.

Not suprisingly, you are ignoring the article I linked to which shows your talking points to be discredited and flawed...

every dollar Congress "injects" into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another​

You cannot create "new money" to borrow!

The government cannot create 'wealth' but it can start spending. It did it during Reagan. He had a huge government stimulus package - it was called defense. He built up the military incredible amounts, even though we didn't have 'fighting' troops engaged in active (destructive) warfare anywhere on the planet. His defense budgets were huge. He created government jobs, more than any president in peace time since FDR. Not only that, government defense contracts were humongous. Bigger than some wartime eras. We built a war machine that we never used (thank goodness).

Massive spending hikes in the 1930s, 1960s, and 1970s [FDR, LBJ, Nixon, Ford, Carter] all failed to increase economic growth rates. Yet in the 1980s and 1990s—when the federal government shrank by one-fifth [Reagan, Bush, Clinton] as a percentage of gross domestic product (GDP)—the U.S. economy enjoyed its greatest expansion to date.​

Don't try to mischaracterize things and claim the government grew during Reagan by citing red herrings. What matters is it's size in relations to the size of the GDP, and that shrank under Reagan.

More...

...every dollar Congress "injects" into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another...

...Government cannot create new purchasing power out of thin air. If Congress funds new spending with taxes, it is simply redistributing existing income. If Congress instead borrows the money from domestic investors, those investors will have that much less to invest or to spend in the private economy. If Congress borrows the money from foreigners, the balance of payments will adjust by equally reducing net exports, leaving GDP unchanged. Every dollar Congress spends must first come from somewhere else...​

Government spending reduces private sector spending! Can you not get that through your head?!

Government spending is dictated by political concerns and pulls money away from where it is needed in the economy to turn it around. Only the market is capable of making that determiniation.

It took many years for the private sector to start seeing any benefits from the Reagan tax cuts, but government spending was a bridge that Reagan used.

How about you stop trying to mischaracterize Reagan's record to fit your agenda.

The spending was a henderance to the economy and Reagan knew it. He went along with most of the spending (that Congress pushed through) to get other things he needed. It was a political ploy and Congress was underhanded about that as well.

If you had read anything about Reagan with any degree of intellectual honesty you would realize that.

Government spending does not provide a "bridge" or whatever mindless little euphemism you want to call the effect of government spending. Government spending holds back the economy. Period.

Public Finance Review reported that "higher total government expenditure, no matter how financed, is associated with a lower growth rate of real per capita gross state product."

A Journal of Macroeconomics study discovered that "the coefficient of the additive terms of the government-size variable indicates that a 1% increase in government size decreases the rate of economic growth by 0.143%."

Public Choice reported that "a one percent increase in government spending as a percent of GDP (from, say, 30 to 31%) would raise the unemployment rate by approximately .36 of one percent (from, say, 8 to 8.36 percent)."​

You cannot claim, with any degree of veracity, that government spending, in any way, helps the economy.

Obama's program at the core isn't that much different than what Reagan ended up doing (albeit on different programs). Government spending, mostly within the private sector, along with some build up of government employees. Tax cuts across the board.

Now you are mischaracterizing both Reagan's record and Obama's proposed program! Have you no shame in making your arguments?

Reagan never proposed any spending to boost the economy. Obama is proposing exactly that. You are making a blatant false analogy for the purposes of this debate. They had completely opposite views (and their programs/proposals reflect that) on how government spending effects the economy.

And I have not heard anything about Obama's tax cuts being "across the board". Considering his tendance to equivocate and decieve, I seriously doubt, even if he says they are "across the board" that they truely are.

 

[foxpaws]

Not suprisingly, you are ignoring the article I linked to which shows your talking points to be discredited and flawed...

No, it is just those points aren't really relevant to the comparing what Reagan did to what Obama MAY do... (we still are just speculating on what Obama might do... )

every dollar Congress "injects" into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another

New money is a term I have heard my accountant use to describe money that is being used to buy something new with, rather than to restructure old debt - I wasn't talking about congress or anything in that part shag - at that point we were referring to personal/corporate finances.. not government.

Don't try to mischaracterize things and claim the government grew during Reagan by citing red herrings. What matters is it's size in relations to the size of the GDP, and that shrank under Reagan.

But the government did grow. I don't care if it was Tip's government - it got a lot bigger -
it grew -
1980 – 590,941,000,000 budget
1988 – 1,064,481,000,000 budget (our first trillion dollar budget...)

And who knows what the GDP will be in the next 4/8 years - maybe we will see growth again at some point within that timeframe.

Reagan also added over 2 million government jobs - or someone did during that time frame.

Government spending reduces private sector spending! Can you not get that through your head?!

And what part of Reagan's spending on defense don't you understand Shag? He spent lots and lots of money too. Would all the 'conservatives' be quite happy and content if Obama said he was going to increase the defense budget 2-1/2 times (Reagan's amount - you can check the pdf link above)? Would you be happy to build tanks instead of roads?

Or, is it OK to spend on a war machine, and not on infrastructure?

I am not saying that eventually tax cuts could turn things around - but, in the meantime something else needs to be done. Reagan did it by building up the military. What is different about Obama doing it by rebuilding America?

How about you stop trying to mischaracterize Reagan's record to fit your agenda.

And I am not 'mischaracterizing' Reagan's record - it is all out there in black and white.

What is wrong with a 'Reaganisque' program - but instead of designing satellite missile defense systems, why don't we do something that will help build America, and maybe give us products that we can sell the rest of the world.

The spending was a henderance to the economy and Reagan knew it. He went along with most of the spending (that Congress pushed through) to get other things he needed. It was a political ploy and Congress was underhanded about that as well.

If you had read anything about Reagan with any degree of intellectual honesty you would realize that.

So it was bad that Reagan diverted all those funds to be given to defense contractors? And actually, during the Reagan years non-defense spending was down about 10%, not including entitlement spending.

You cannot claim, with any degree of veracity, that government spending, in any way, helps the economy.

Then shag, how do you explain the huge increases in spending during the Reagan years and the rising economic picture from 1980 - 1988? Yes, there were tax cuts (like Obama proposes), but since the government was spending money like crazy (which they were), shouldn't the economy have suffered as well?

Reagan never proposed any spending to boost the economy. Obama is proposing exactly that. You are making a blatant false analogy for the purposes of this debate. They had completely opposite views (and their programs/proposals reflect that) on how government spending effects the economy.

Reagan did not use the phrase or idea of 'boosting the economy' when he got through those huge defense budgets - but, it did occur as a side benefit - that is what happened. He added lots and lots to the bottom lines of defense contractors throughout the US. Companies like Hughes, Lockheed, Martin Marietta, Rockwell all had huge increases in jobs and profits. It was a 'work program' (but never titled that) aimed at defense. And the stockholders of those companies profited as well.

Now Obama wants to do the same thing with building/general contractors. Maybe now is the time to buy stock in KBR, Webcor, Lauren, Overaa.

I realize that conservatives put Reagan on a pedestal - but, pragmatically, he had a government spending program too. Swathed in American stars and stripes bunting and labeled as 'winning the Cold War', it still was massive domestic government spending within America's shores.

So, what would be different about 'winning the Economic War'? Should Obama add some Fusion Bomb research to make everyone happy?

 

[fossten]

If you are paying down debt, you are also not 'generating' income. The interest that you would have been paying is how the credit cards stay in business. They live on the interest. And, people are not buying on cards right now, they are moving back to cash. So the fees which are generated by the retail outlets with the card transactions are also disappearing. Many people have reverted to 'pay as you go'. Once again, nice for personal finances, not so great when trying to move the economy.

Thanks for pointing out that our economy is based on debt rather than on production.

Can you say 'house of cards?'

 

[foxpaws]

Thanks for pointing out that our economy is based on debt rather than on production.

Can you say 'house of cards?'

So, Foss - a man who pays for everything in cash - or as my accountant would say...

 

[shagdrum]

No, it is just those points aren't really relevant to the comparing what Reagan did to what Obama MAY do... (we still are just speculating on what Obama might do... )

They are very relevant to the discussion and the actions of Bush and Congress in regards to this bailout and economic crisis and the actions Obama has said he is going to take and all indicators say he is going towards. It is much more then"speculation", and you know it.

But then, if you admit that, you can't keep ignoring it, eh? How long until you disregard it as "right wing propaganda" without any proof?

New money is a term I have heard my accountant use to describe money that is being used to buy something new with, rather than to restructure old debt - I wasn't talking about congress or anything in that part shag - at that point we were referring to personal/corporate finances.. not government

.

But it is inaccurate and a misleading term. There is no such thing as "new money". You say that it is simply a term you heard your accountant say, but it is very often a misleading term used by spending stimulus advocates in the discussion of the bailout....

But the government did grow. I don't care if it was Tip's government - it got a lot bigger -
it grew -
1980 – 590,941,000,000 budget
1988 – 1,064,481,000,000 budget (our first trillion dollar budget...)

Again, I am putting that fact in context and you are working to mislead by taking it out of context. As a percentage of GDP, the government shrank. That coincides with economic growth. When the government increase as a percentage of GDP, that changes.

I am looking at historical trends to make a prediction about the future and you are trying to run a smoke screen and obfuscate things.

And who knows what the GDP will be in the next 4/8 years - maybe we will see growth again at some point within that timeframe.

More obfuscation. That is (in part) what is being predicted when it comes to economic growth.

And what part of Reagan's spending on defense don't you understand Shag? He spent lots and lots of money too. Would all the 'conservatives' be quite happy and content if Obama said he was going to increase the defense budget 2-1/2 times (Reagan's amount - you can check the pdf link above)? Would you be happy to build tanks instead of roads?

Again, you are taking facts out of context. Reagan had a purpose for increased defense spending and it wasn't to stimulate the economy. In fact, he realized that increasing defense spending would work against stimulating the economy.

Obama and his proposals work under the idea that government spending will stimulate the economy, when history has shown the exact opposite is true.

When it comes to the economy, Obama is countering himself because he is trying the "same old politics" with the "same old players" (Clinton appointees) and expecting a different result.

[Or, is it OK to spend on a war machine, and not on infrastructure?

I know you are trying to set up a loaded and leading question here, but...

Generally, yes. The government has an obligation to defend it's citizens but has no constitutional obligation or right to provide for most of what can (and will) be broadly defined as "infastructure".

And I am not 'mischaracterizing' Reagan's record - it is all out there in black and white.

Yes, you are. You are intentionally cherry picking your facts and intentionally taking them out of context to support your position.

What is wrong with a 'Reaganisque' program - but instead of designing satellite missile defense systems, why don't we do something that will help build America, and maybe give us products that we can sell the rest of the world.

You self-serving mischaracterization or Reagan is quite dishonest...

Then shag, how do you explain the huge increases in spending during the Reagan years and the rising economic picture from 1980 - 1988? Yes, there were tax cuts (like Obama proposes), but since the government was spending money like crazy (which they were), shouldn't the economy have suffered as well?

Again, ignoring the context of the situation (in full) to spin it to fit your agenda.

You really won't quite, will you. You have absolutely no shame or sense of decency or honesty when it comes to making your argument. Distort and mischaracterize of anyone to prove your point is obviously a legitimate arguing tactic, in your mind. Intellectual integrity seems to be a foreign concept for you...

You simply repeat mindless liberal talking points clearly without first examining them; apparently assuming their truth and validity as a matter of faith (and will go to any depths to defend them). But you will disregard out of hand, conservative talking point without examining them for validity or truth.

You are simply a waste of my time and the time of anyone else who disagrees with you. It is pretty clear you are not interested in the truth or capable of having an honest debate.

 

[foxpaws]

So Shag, lets look at this a bit more simply-

Obviously Reagan's building up the military during a time of peace added lots of government dollars to the private sector - right? Money that wouldn't otherwise have been available. No private entity was going to ever take on this task. This was money that went to private contractors. Money that had to come from the tax payers.

Since you were too young to remember - there were lots and lots of jobs created by that program - here in Colorado we had Martin and Rockwell adding many thousands of jobs. These were all jobs that stayed on shore, were mostly high paying, and really boosted the local economy. I had friends who were just out of college too, who got great engineering jobs with these companies - and are still with them. This happened in many parts of the country.

So what is different now - why wouldn't Obama's infrastructure plan have the same effects? Government money, infused into projects that no private entity can take on. Money that will be going to private contractors. Money that would add many jobs, and will boost local economies.

You are simply a waste of my time and the time of anyone else who disagrees with you. It is pretty clear you are not interested in the truth or capable of having an honest debate.

Why are the two programs different? That is the question I keep asking - if you can't answer that - then maybe I should complain about you not wanting an 'honest debate'. That is what this is about. What is different this time as compared to Reagan's defense program? You can blither on all you want about your sources - I want to know why 'you' Shag think Obama's program is different.

So, no wandering about talking about "Clinton appointees" or defending your fictional American political superhero, Reagan, or bad mouthing me and liberals in general (notice, I have gone to great lengths not to criticize Reagan's programs). I haven't wandered about, trying to find other areas to debate - I am just interested in the questions - why are the two programs different, and why wouldn't the outcome be the same? Just an honest opinion Shag, yours, on why you think the programs are different, and why it wouldn't work this time. I don't care at this point that you think that the country has a right to build up the military to astronomical proportions in a time of peace, and that there isn't an obligation to make bridges safe. I want to know why you think that the basics of each program are different, and what in the current time frame is different - why it won't 'work' this time.

Just the basics shag - stay on point...

 

[shagdrum]

Why are the two programs different? That is the question I keep asking - if you can't answer that - then maybe I should complain about you not wanting an 'honest debate'. That is what this is about. What is different this time as compared to Reagan's defense program? You can blither on all you want about your sources - I want to know why 'you' Shag think Obama's program is different.

I have already explained this...
Reagan's military buildup had a specific purpose; to win the cold war. There was never the idea that it would help the economy, in fact, Reagan knew it would work against the goal of stimulating the economy.

The purpose of contracting some of the jobs to private corportation was also not to "create jobs" or "stimulate the economy". In those instances, it was to find someone who could do what needed to be done more effeciently then the government. That is always the only argument for the government to contract to private companies.

Obama has proposed all these spending programs with the specific purpose "creating jobs" (nevermind that they are temporary and are not a benifit to the economy in the long run), and stimulating the economy, which is the exact opposite of Reagan.

Reagan was interested in economizing in every area except defense spending. He knew it went against his idea of spending cuts, but he prioritized national security over economic concerns. In fact he campaigned on three pillars; large increases in defense spending to deter Soviet aggression, an across-the-board 30% tax cut believing that it would help the economy grow faster (it did) and finally to have government policies that "affirn traditional, connomsense values".

The defense buildup was always separate from economic stimulus. They were never complimentary in Reagan's rhetoric or his policies. In fact, they were at odds.

Reagan's whole approach to economic stimulus was the exact opposite of Obama. Reagan had trickle down economic policies (which worked) while Obama is trying "trickle up" policies (which have historically not worked, and in fact, made things worse). Reagan did everything to get government out of the way of the economy and let the economy do its thing, which lead to large economic growth. Obama is doing everything to make the government proactive in stimulating the economy (spending more, etc.) which has historically been shown to make things worse (the Great Depression).

There. That is at least the second (maybe third?) time I have explained that and answered your question. Are you going to keep ignoring that?

You gonna find some other way to dishonestly disregard that? It isn't written by Karl Rove, so you can't use that same ad hominem fallacious reasoning you are using in this thread.

notice, I have gone to great lengths not to criticize Reagan's programs.

No, you just intentionally mischaracterize his record to dishonestly support your views.

You want to find something from the Reagan years that, when taken out of context, and distorted to present it in a certian way, looks like Obama's proposed "public works" programs.

However, you disregard the facts that counter that, and the simple fact that the Reagan programs you are citing are being taken out of context and distorted. Then try and shift the burden of proof to anyone who disagrees with your deciet.

To any honest person, it is you who needs to prove you assertion, not the other way around. It stinks of deciet, and uses the same dishonest tactics employeed by the left to smear their opposition. However, in this instance, it is aimed at Reagan's record with the goal of spinning it to support your agenda. The type of thing Michael Moore tends to do in his "documentaries".

So to recap, in just the sections of your post I responded to we have; lies (saying I didn't answer your question when I did), distortion (Reagan's record), dishonest shifting of the burden of proof (demanding that I explain why "the two programs are different", when you have not honestly shown that they are in fact similar) and moving the goalposts (demanding that I tell you what I think instead of "blithering on about my sources", even though they disprove your whole argument).

When you pull crap like this, it is obvious why all but the most dishonest people on this forum have a real problem trusting your assertions or taking you seriously. You have no credibilty here.

 

[foxpaws]

Get over yourself, Shag – lets just start with the first question - why are the two programs different?

Reagan added jobs to the private sector. Jobs that the government ‘contracted out’ to private concerns.

How are the infrastructure jobs that Obama proposing different?

Don’t get hung up on labels or reasons for the job build ups – bottom line, no politics.

Same question - why are the two programs different?

I don’t care what they are called, or what they produced, I am only interested in following the money. In both cases the money was asked for by the president, approved by congress, doled out to private contractors, spent within the United States for jobs and materials (assumptions in Obama’s case). What is different?

Quit adding all the economizing in other areas, national security concerns, trickle up, Michael Moore. I don’t care.

I am not going against Reagan’s record. He added jobs to the economy by increasing defense contracts. I have tried very hard not to add any judgment to his programs – stop adding judgment to Obama’s. We are just comparing program 1 and program 2.

Maybe we should get rid of even their names and references to the US. We could call them Leader A and Leader B from Freedonia. 25 years ago Leader A added lots of jobs by contracting with private sources to make soup bowls. He called it the Soup Bowl War. In modern day Leader B wants to add lots of jobs by contracting with private sources to make soup spoons. Leader B calls his program Rebuilding the Spoons.

What is different?

 

[shagdrum]

Reagan added jobs to the private sector. Jobs that the government ‘contracted out’ to private concerns.

How are the infrastructure jobs that Obama proposing different?

Don’t get hung up on labels or reasons for the job build ups – bottom line, no politics.

Same question - why are the two programs different?

I don’t care what they are called, or what they produced, I am only interested in following the money. In both cases the money was asked for by the president, approved by congress, doled out to private contractors, spent within the United States for jobs and materials (assumptions in Obama’s case). What is different?

You are still intentionally taking Reagans programs out of context! If you do that, then any point you might make using them is irrelevant, because they are intentionally mischaracterized.

You cannot evaluate a program without looking at why it was created (intention) and if it accomplished (or is likely to accomplish) that goal (result).

However, you are only taking Reagan's program out of context so you can substitute (by implication) the intention of Obama's programs.

But even then, you would be hard pressed to prove that the spending increase in defense did anything to help the economy, on it's own. But that isn't a problem, you just assume it to be true and expect us to prove otherwise (shifting the burden of proof).

That shows that at another level you are taking the effects of the program out of context. Any effect those programs had on the economy are mixed in with the effects of all the spending in Congress, and you cannot really distinguish between them.

What history has shown is that the distinguishing factor is government spending, As a Journal of Macroeconomics study showed, "the coefficient of the additive terms of the government-size variable indicates that a 1% increase in government size decreases the rate of economic growth by 0.143%."

History has shown that when government spending goes up , economic growth decrease. Period. End of story.

You are trying to counter that by taking a spending program of Reagan's out of context and say that it had a positive effect on economic growth with no more evidence to support that connection. The only evidence you have is coincidental, at best.

The whole argument is a non sequitor. Just because Reagan increased spending on Defense in the 1980's doesn't mean that is why the economy grew or that there was no ill effect on the economy from that program. It could have (and probably did) have an ill effect on the economy that was offset by other things that had a positive effect...say tax cuts?

Unless you can logically eliminate all other possibilities, your entire argument is an illogical non sequiter and nothing more then a red herring to obfuscate and distort the truth (something you seem to excell at).

Again, the burden of proof is not on me here, as your whole "show the difference between the two programs" (which I have answered at least twice and you refuse to acknowledge) implies. The burden of proof is on you to show that there is more then a mere coincidental connection between Reagan's defense spending and the economic growth in the 1980's.

But to answer that you would have to stop trying to be "clever", "witty" or "insightful", and instead be honest and having an honest debate. Even if you were genuinely willing to do so (which I doubt), I honestly don't think you are capable of having that honest debate.

 

[foxpaws]

That shows that at another level you are taking the effects of the program out of context. Any effect those programs had on the economy are mixed in with the effects of all the spending in Congress, and you cannot really distinguish between them.

And isn’t that what you, and the article above are doing with Obama’s stimulus plan – taking it out of context? He is proposing tax cuts along with pulling back spending in other areas. Very similar to what Reagan did.

I know that it just rocks your little boat to think that the two men could have something in common, but if you just take off your blinders you might see the similarities.

I was using the Reagan years as the closest correlation we have (although Clinton had some pretty big road/infrastructure projects early in his tenure). This isn’t like FDR, the government isn’t creating large job works programs where they are writing the checks to the workers. This is more like Reagan’s defense program where the government is writing out checks to private corporations, working on government contracts. The economic climate is similar – certainly Reagan didn’t inherit an economy that was this trashed from Carter – but, it wasn’t healthy, and it got worse before it got better in the Reagan years.

And you keep saying that it is important to look at the ‘why’ of the program. It doesn’t have to be ‘labeled’ a jobs program to have the same result as one. California alone saw over an increase of over 150,000 jobs in defense during the Reagan years (to lose them quickly in the early 90s)…

What history has shown is that the distinguishing factor is government spending, As a Journal of Macroeconomics study showed, "the coefficient of the additive terms of the government-size variable indicates that a 1% increase in government size decreases the rate of economic growth by 0.143%

So, Reagan and the congress during his tenure doubled the size of government. This obviously should have bankrupted the free enterprise system by your numbers shag… It didn’t.

Oh, got a link? I would like to see what those ‘real’ numbers are based on, especially the government’s growth numbers, how they figure that – whether it is in just budgetary numbers, inflation added, perhaps coupled with GDP. Or if it is just number of government employees or what – it is hard to tell from your formula. And maybe they would have some samples – thanks!

Just because Reagan increased spending on Defense in the 1980's doesn't mean that is why the economy grew or that there was no ill effect on the economy from that program. It could have (and probably did) have an ill effect on the economy that was offset by other things that had a positive effect...say tax cuts?

And, Obama will (probably – once again speculation) cut taxes as well. So… we have…

Tax cuts
Government spending in the private sector
Reduce other spending

Reagan’s blueprint as it were.

The burden of proof is on you to show that there is more then a mere coincidental connection between Reagan's defense spending and the economic growth in the 1980's.

So, there appears to be only coincidental data when it comes to government spending within the private sector and economic growth? Why then wouldn’t the same ‘coincidents’ be able to occur again? The ‘stars’ seem to be lining up in the same manner…

I think if you look at almost all economic data – most of the predications are speculative at best – and a majority of it follows under the umbrella of economic voodoo.

Don't try to mischaracterize things and claim the government grew during Reagan by citing red herrings. What matters is it's size in relations to the size of the GDP, and that shrank under Reagan.

Oh about that little bit… government spending vs GDP in the Reagan years- in 1980 it was 34.48% and in 1988 it was 35.37. Basically flat, but it did rise almost 1%… It didn’t shrink Shag…. And if you take into account the ‘government part’ of GDP during the Reagan years – whew. It would be nice if they took the government out of the GDP.