The Republican Thread

[Balta1701]

So the Democrats lied in order to make their plan look really unsuccessful?

Technically the GDP numbers on which the Stimulus size was based were published before the Obama Administration took office. Therefore, if you're going to argue something this silly...the Bush Administration lied in order to sabotage the economy to the next administration is the right interpretation.

[southsider2k5]

It never, ever could have.

 

It was way too small.

 

It needed to massively increase the debt load.

 

And have much fewer tax cuts.

 

After all, it worked for the Greeks!

[Balta1701]

After all, it worked for the Greeks!

The Greeks are doing exactly what you want this country to do...massive cutbacks in government spending. Their economy is not growing in response. In fact it is crashing.

 

So either there are many more complications to your story...like the fact that the Greeks don't have their own currency...which are being ignored...or your example proves me right.

[NorthSideSox72]

It never, ever could have.

 

It was way too small.

 

It needed to massively increase the debt load.

 

And have much fewer tax cuts.

I understand your beliefs on that. But you, and SS2K5, are missing the point, that you are basically saying "1 + 1 = 2!!!" followed by "No, 2 + 2 = 4!!!". Its hilarious.

 

[StrangeSox]

If you know your numbers aren't true,

 

There's philosophically a lot in that statement. It's not that you know your numbers aren't true, its that you know that these are the best numbers currently available and you take uncertainties into account, as this study did. Knowing that your numbers aren't 100% accurate (because no measurement ever is) is different from knowing that they are actually false.

 

and then make promises based on them, yes you are lying.

 

A complete lack of sophisticated, nuanced policy discussion isn't something I'd fight you on. Our political culture doesn't allow for anything more than soundbites, so it's common for politicians to overstate policy effects or underplay uncertainty in projections to maximize political impact. Still, Obama never promised a maximum of 8% unemployment.

 

Again, as NSS points out, the stimulus didn't "work" in that it didn't break the cycle, but it "worked" in that it kept UE numbers down and prevented a severe collapse. You can't take the failure of the ARRA to break our current cycle and cast off the entire field of macroeconomics with it.

 

 

 

 

[southsider2k5]

The Greeks are doing exactly what you want this country to do...massive cutbacks in government spending. Their economy is not growing in response. In fact it is crashing.

 

So either there are many more complications to your story...like the fact that the Greeks don't have their own currency...which are being ignored...or your example proves me right.

 

The Greeks have tried to spend their way to austerity. It can work in short bursts, but it doesn't work as the foundation of an economy, which is why they are collapsing. The plan to try to turn the government into the basis of our economy here will meet the same fate. It is already a big factor in why this economy can't grow itself without governmental intervention.

[StrangeSox]

I understand your beliefs on that. But you, and SS2K5, are missing the point, that you are basically saying "1 + 1 = 2!!!" followed by "No, 2 + 2 = 4!!!". Its hilarious.

 

The problem comes from taking one specific example of fiscal stimulus that was sharply criticized as too small before and during its passage, using its (predicted) failure to provide significant stimulus to abandon the entire idea of fiscal stimulus and accusing anyone who says "but it was too small in the first place!" of simply relying on hindsight.

[southsider2k5]

The problem comes from taking one specific example of fiscal stimulus that was sharply criticized as too small before and during its passage, using its (predicted) failure to provide significant stimulus to abandon the entire idea of fiscal stimulus and accusing anyone who says "but it was too small in the first place!" of simply relying on hindsight.

 

As opposed to someone saying we had to spend $2 trillion even though the numbers we were basing it on didn't mean anything? Please.

[StrangeSox]

As opposed to someone saying we had to spend $2 trillion even though the numbers we were basing it on didn't mean anything? Please.

 

Damn mathematical models predicting things! We need more "common sense" "gut feeling" economists like Moore!

 

Erring on the side of "too much stimulus" means getting close to full employment and actually seeing some crowding out. That's much more preferable than undersizing the package.

[StrangeSox]

What that comes down to is that fiscal or monetary stimulus in the early stages of an economic meltdown should never be used because the available data at the time won't be 100% accurate.

 

Even if later data and further analysis keep coming to the same conclusion--that things will be much, much worse if we do nothing--we should go with a minimalist approach or do nothing at all.

[southsider2k5]

Damn mathematical models predicting things! We need more "common sense" "gut feeling" economists like Moore!

 

Erring on the side of "too much stimulus" means getting close to full employment and actually seeing some crowding out. That's much more preferable than undersizing the package.

 

Erring on the side of too much stimulus is Greece, Spain, Italy, Portugal, etc.

[StrangeSox]

Erring on the side of too much stimulus is Greece, Spain, Italy, Portugal, etc.

 

No, for several reasons, one very important one being "monetary sovereignty" and another being drastically different debt-to-GDP ratios.

[southsider2k5]

No, for several reasons, one very important one being "monetary sovereignty" and another being drastically different debt-to-GDP ratios.

 

The step right before that is 1929 to 1940, where you spend loads of money, and it still doesn't push the economy into a real recovery, and you end up having to cut anyway because there is no economic activity.

 

 

[StrangeSox]

In there is 1937 when we enact austerity measures, the economy stalls and we rely on the largest government spending and employment program ever to finally break the cycle. And it still doesn't make the comparison to various EU states make any sense. We have negative bond rates and a much larger economic structure. The situations are just not the same.

[southsider2k5]

In there is 1937 when we enact austerity measures, the economy stalls and we rely on the largest government spending and employment program ever to finally break the cycle. And it still doesn't make the comparison to various EU states make any sense. We have negative bond rates and a much larger economic structure. The situations are just not the same.

 

We have negative bond rates because the fed has spend trillions itself, which also hasn't worked.

[StrangeSox]

it still doesn't make the comparison to various EU states make any sense

[Balta1701]

The step right before that is 1929 to 1940, where you spend loads of money, and it still doesn't push the economy into a real recovery, and you end up having to cut anyway because there is no economic activity.

And then there's 1940-1945, where we spend loads of money and it pushes the economy into a real recovery.

[Balta1701]

We have negative bond rates because the fed has spend trillions itself, which also hasn't worked.

And Bond Rates now are lower than they were when the Fed was spending that money.

[southsider2k5]

And then there's 1940-1945, where we spend loads of money and it pushes the economy into a real recovery.

 

We also killed millions of potential workers in wars.

[Rex Kickass]

The step right before that is 1929 to 1940, where you spend loads of money, and it still doesn't push the economy into a real recovery, and you end up having to cut anyway because there is no economic activity.

 

Actually, that's inaccurate, in 1929, Hoover didn't spend stimulative money to help save the economy. He cut taxes. That worked out well.

[StrangeSox]

Timely post

 

 

I'm curious about something. Conservatives are forever reminding us liberals that the New Deal didn't get us out of the Great Depression. It was World War II that got us out of the Great Depression. And roughly speaking, that's true enough.

 

So why, then, isn't that a good model for getting us out of our current slump? WWII featured five years with federal deficits above 10% of GDP, three of which were above 20% of GDP. And although WWII might have been a good thing for global freedom, all that spending was for war materiel that was completely useless to the U.S. economy. If we repeated this today, we could do better than that even if half the stimulus spending was meaningless makework.

 

So what's the deal? Did WWII rescue the American economy or not? And if it did, what's the argument for not trying it again, but without the war?

[Balta1701]

You will now be criticized for posting something from a blog.

[southsider2k5]

Timely post

 

 

That is so ironic to hear, when everyone on the left has complained about the trillion dollars worth of war being this terrible waste of money. So which is it?

[mr_genius]

[Balta1701]

That is so ironic to hear, when everyone on the left has complained about the trillion dollars worth of war being this terrible waste of money. So which is it?

Depends...are you willing to never again complain about government spending until we're back close to full employment?

 

There was a fun meme running last week saying that the best thing that could happen for the global economy is an imaginary invasion threat by aliens. It would provoke governments into large spending programs on materials, bring a lot of people back into employement, and since aliens aren't a country...no one would actually have to die.

 

Cutting back on defense spending now = fewer jobs. Cutting back on spending on education or infrastructure by the same amount = fewer jobs than if those cuts were in defense.

 

If you tell us we need fewer jobs and the government has to be cut, then we may as well cut from defense, since that'll do less economic damage than if the cuts came from elsewhere.