13 Mar 09
Originally posted by telerionDoes the type of spending matter? If you're going to spend money on projects that create new jobs, surely that will add something to the economy and given the higher propensity for lower income people to spend, it seems the multiplier would be higher than for other types of government spending.
Generally the estimated multiplier on income from govt spending is quite small. After all people are only going to consume a fraction of any transfer they receive. In these times especially, and given the nature of the fiscal policy (i.e. a transfer today implies tax hikes in the future), it seems unlikely that government spending is going to do a whole l ...[text shortened]... anything Obama can do other than appear to be trying. We may go into a depression either way.
It also seems that the tax credit plan by giving workers a little extra in their paychecks rather than a one shot large payment is more likely to be spent than saved again increasing the multiplier.
13 Mar 09
Originally posted by KazetNagorraWe've had this discussion before; the US ain't Holland. Allowing unfettered importation of goods from low wage countries that were in direct competition with some of the industries that had the most good jobs was a recipe for disaster. The contraction in employment in US manufacturing was clearly related to "free trade".
Reagan and his laughably poor economic policy is to blame for that, not free trade. Worker income in Holland has increased significantly over the past three decades.
13 Mar 09
Originally posted by no1marauderExactly the same happened here.
We've had this discussion before; the US ain't Holland. Allowing unfettered importation of goods from low wage countries that were in direct competition with some of the industries that had the most good jobs was a recipe for disaster. The contraction in employment in US manufacturing was clearly related to "free trade".
13 Mar 09
2 edits
Originally posted by no1marauderso much has been blamed on the "destructive" effects of free trade
Worker income in the US has been stagnant for about three decades due in no small part to the destructive effect of the "free trade" you so dearly love on the ability of Americans to get or maintain good paying jobs. Of course, the only way to increase consumer spending was heightened borrowing and debt. And of course, eventually the piper had to be paid.
few people discuss the "destructive" effects of technology -- all those modern computer systems and telecommunication lines allow many companies to cut back a lot on labor costs - the machines do the work, or they make the job simpler so that it can be done by someone with fewer skills (and thus lower pay) - or they cut out lots of the middlemen
the overall effect of has been a lot of economic growth and a rise in overall living standards -- BUT for those people who lose their jobs and-or find their skills to be obselete, there can be a large drop in earnings.
We complain so much about jobs that are shipped overseas - but what about those jobs that vanish completely?
But I don't think anyone wants to interfere with the development of new technologies -- and I don't think some sort of new protectionism is the answer to our trade issues -- but we do need to recognize that strong economic growth has some costs.
14 Mar 09
Originally posted by telerionI agree that the government is impotent in helping the economy recover, however, I believe there are things it can do that can hinder a recovery.
My take is simply this: there's basically nothing that Obama (or anyone else in government) can do to fix the economy (especially not in 60 days! Or even a year).
That said, Obama has to appear to do something. You can't just sit on your behind and tell people that the real economy has to sort itself out. Most people are angry at Bush as well as Repu ...[text shortened]... h yeah, one final thing for us all to remember: the stock market does not equal the economy.
Having said that, there are things government can attempt to help the economy recover so as to hang their hats upon when it does recover, that do not hinder the economy. That is what should be done. You know, things done just for show as they tell everyone how they saved them. LOL.
I also realize that Wall Street does not equal the economy, but there definately is a correlation to it.
14 Mar 09
Originally posted by Melanerpeswhither buggy whips?
so much has been blamed on the "destructive" effects of free trade
few people discuss the "destructive" effects of technology -- all those modern computer systems and telecommunication lines allow many companies to cut back a lot on labor costs - the machines do the work, or they make the job simpler so that it can be done by someone with fewer skills ...[text shortened]... ur trade issues -- but we do need to recognize that strong economic growth has some costs.
14 Mar 09
Originally posted by whodeyThis is silly, the economy depends hugely on what government does, without government the economy collapses.
I agree that the government is impotent in helping the economy recover, however, I believe there are things it can do that can hinder a recovery.
Having said that, there are things government can attempt to help the economy recover so as to hang their hats upon when it does recover, that do not hinder the economy. That is what should be done. You know, t ...[text shortened]... ealize that Wall Street does not equal the economy, but there definately is a correlation to it.
15 Mar 09
I think Obama has his priorities out of whack. The stimulus package will not do much good until banks lend more money. Everything is jammed up because people can't get loans. That is the main problem.
The fastest way to a recovery is to get banks to lend money instead of buying foreign businesses. He hasn't done anything about that and he doesn't need more than 60 days to come up with a plan. They are stalling. They obviously want to delay a recovery.
They have a recovery plan already, it is called war. They just don't want to tell us that. It's a surprise.
15 Mar 09
Originally posted by MelanerpesTechnology is destructive? Are you sure?
so much has been blamed on the "destructive" effects of free trade
few people discuss the "destructive" effects of technology -- all those modern computer systems and telecommunication lines allow many companies to cut back a lot on labor costs - the machines do the work, or they make the job simpler so that it can be done by someone with fewer skills ...[text shortened]... ur trade issues -- but we do need to recognize that strong economic growth has some costs.
Technology increases productivity and that leads to more profits for the business owner. Even if the business owner reduces the number of employees he may spend more money. Whatever he spends money on will create more jobs somewhere else. Wouldn't this equal out in the end?
15 Mar 09
Originally posted by MelanerpesIf the overall amount of work that a society needs done decreases, surely this is a good thing for that society; it's just a matter of finding a system to fairly distribute that work and money.
so much has been blamed on the "destructive" effects of free trade
few people discuss the "destructive" effects of technology -- all those modern computer systems and telecommunication lines allow many companies to cut back a lot on labor costs - the machines do the work, or they make the job simpler so that it can be done by someone with fewer skills ...[text shortened]... ur trade issues -- but we do need to recognize that strong economic growth has some costs.
15 Mar 09
Originally posted by Metal BrainThe stimulus package was an important first step because it has halted the job losses, as well as directing money towards recovery. Now it needs to be backed up by other measures, such as addressing the banking and housing issues. It's about doing a number of different things simultaneously.
I think Obama has his priorities out of whack. The stimulus package will not do much good until banks lend more money. Everything is jammed up because people can't get loans. That is the main problem.
The fastest way to a recovery is to get banks to lend money instead of buying foreign businesses. He hasn't done anything about that and he doesn't need ...[text shortened]... very plan already, it is called war. They just don't want to tell us that. It's a surprise.
15 Mar 09
Originally posted by karnachzIt's always better to do something than nothing. Theoretically, there is always full employment.
If the overall amount of work that a society needs done decreases, surely this is a good thing for that society; it's just a matter of finding a system to fairly distribute that work and money.
15 Mar 09
Originally posted by no1marauderReagan did introduce his "welfare reform" agenda during a similar timeframe as these manufacturing jobs were being lost, and this has contributed to the economic crisis. Unemployment benefits have a high utility in fixing the economic crisis because most of that money gets spent and stimulates the economy. But yes, you're right that "free trade" with countries that have inadequate protection for workers is a dreadful idea.
We've had this discussion before; the US ain't Holland. Allowing unfettered importation of goods from low wage countries that were in direct competition with some of the industries that had the most good jobs was a recipe for disaster. The contraction in employment in US manufacturing was clearly related to "free trade".
15 Mar 09
Originally posted by telerionThe declining marginal utility of money will be even more acute at this time of economic crisis. People will spend money on what they have to, whereas high income earners will be more inclined to save money to protect their buffer zone. This is one of the various reasons that Obama's progressive tax policies are a good idea; the tax cuts and other money are being directed at people who will spend much of their gains.
Generally the estimated multiplier on income from govt spending is quite small. After all people are only going to consume a fraction of any transfer they receive. In these times especially, and given the nature of the fiscal policy (i.e. a transfer today implies tax hikes in the future), it seems unlikely that government spending is going to do a whole l ...[text shortened]... anything Obama can do other than appear to be trying. We may go into a depression either way.