How Does the Stimulus Work? Rescuing the Economy

[holyworldruler]

"Money" is conceit we use to organize our economy. It can't be "wasted." Is a bridge we don't need less valuable than one we do? Yes. But in a recession with 10% unemployment, we don't face a choice between a good bridge and a bad bridge; we face a choice between no bridge and a bridge. Even a bad bridge is a better use of idle resources. That usage of idle resources also triggers consumer spending, which pulls us out of the recession.

[StupidCommentsMademe]

@holyworldruler So where did the money come from? Oh wait we print it....But if we just print money where does the value come from? Well each dollar printed makes your dollar worth a little less so technically its actually your money paying for the bridge. While this is a good theory government has its special interest and doesn't mean the best bridge builders will be hired hence crony capitalism. Why not lower the corporate tax from 1# of industrialized nations so companies will invest here.

[LibertySteve]

People who believe this video lack critical thinking skills.

Stimulating an economy to build things we don't need, wastes resources on things we don't need. And if there was a need, the market would provide. Do you need to be stimulated to eat when you're hungry!? Gov stimulus steals resources from what the public would produce for themselves, and redirects it into things we don't want/need or afford.

[2tolerant]

Government giving out money creates artificial demand.

If it is not necessary to build a bridge then said bridge won't get built. But if the government is going to pay you to build it anyway then there is an artificial demand for said bridge. What, is the *government* going to drive on the bridge they paid you to build when it completes? or are they just wasting money - *your money*, taxpayers and owners of FED notes ?

[imre1000]

Stimulus makes a BAD situation WORSE.

The US got into a trouble by producing too little and buying too much on credit. The solution is to reduce spending (recession), and start producing products that the market wants.

This creates SUSTAINTABLE jobs, and not once off projects.

Stimulus projects rely on borrowed money, so not only are the newly employed people working in un-sustainable jobs, they are getting deeper into debt.

See this video for more details: watch?v=2I0QN-FYkpw

[whoo689]

Besides, when the bridges and other public works projects are done, hasta la vista. You'll have to either lay off those workers and stop buying from those suppliers, or you'll have to shift those workers to less productive gov't jobs just so they don't get unemployed.

Very few gov't jobs actually contribute to real growth. Business growth is what drives our economy, not simply employing people. Investment and opportunity are the engine, not giving consumers a little extra cash.

[whoo689]

Who's telling you this BS that Keynesianism WORKS?? It didn't work in the Great Depression. Stimulus certainly didn't work for Japan in the 1990s and probably even SLOWED growth significantly with malinvestment. Think about the last few big economic downturns. Did we have a stimulus package during Reagan's recession? No, and we had some of the best economic growth in the 20th Century. Same for Clinton's administration. So why now? Because "it's worse"? That's no justification. that's bull.

[whoo689]

As Dr. Cox says on Scrubs: wrong wrong wrong wrong! Wrong wrong wrong wrong!

STIMULUS DOESN'T WORK!! When will you lefties learn? All that thinking that this stimulus will somehow help us get out of the recession FASTER is bs! What would've gotten us out of the recession faster is getting rid of anti-growth regulations, not bailing out bad firms and letting better firms pick up the slack, not bailing out stupid homeowners who bought too much house and letting the house market bounce back.

[whoo689]

You lefties who are pushing this stimulus nonsense have no sense of economics. Keynesianism is bullshit! It's never been proven, and it was started by an idiot "economist" who didn't know his head from his ass. Very little of what was in Keynes's first big economic book in 1936 was evidence for his views. It was just a lot of theory and complex models and formulas.

Investing in jobs, lower taxes, lowering bad regulations, and real business growth will drive growth, not stimulus.

[whoo689]

When the gov't attempts to manipulate and drive the economy in a controlled direction, almost always it fails. Let the market work and bounce back on its own!! It will in due time. It won't take forever, either. Or even 10 years. Or maybe even 5 years, if we're lucky.

Contrary to popular belief, stimulus will only slow growth. It creates malinvestment and crowds out some of the business investment. Monetary policy also ends up screwing everything up, too, in the long run.

[kimdvm]

This explains nothing about consequences, including the obvious huge inflation factor, which itself creates recession. He also is making the assumption that government will spend the money efficiently to "create jobs", which IMO is about 10% true.

[priceman420]

Funding our infrastructure pays of debts in the future and gives our currency the backing it needs in the process as well as leaving future generations with something as opposed to nothing, which is what libertarianism amount to. I'm tired of hearing that CT garbage here on youtube. People who fear monger about our government spending don't have an idea of the size of our economy in relation to our GDP.

This is a great video with valid points on the right path to take.

[burnowan]

No, you don't get it. None of this produces REAL CAPITAL. Sure you can pay someone to dig a ditch but how is that useful? Its not. Only jobs that produce something of VALUE and by value i mean that are DEMANDED.

Its kinda like this, if everyone is a corn farmer then what does it do to produce more corn? All you end up doing is working harder for less money. That is because its a mis allocation of resources.

Demand for something is how work can produce capital through free trade.

[priceman420]

Wrong. We are in a deflationary spiral. Your oversimplification about digging ditches ignores history and reality. People needed the railroads for commerce in the 19th century like people needs roads and light rail for the exchange of commerce which is there afterward offering real value lol. Yeah, Eisenhower building the highway system wasn't useful. You obviously don't know what a multiplier is or why we are in the economic state we are in. Dean Baker has predicted this crisis, correctly.

[Guitarlicks4free]

weeeeeeeeeeeeeeeeeee

everything that guy just spewed from his mouth is complete bullshit

[combatvetdoc]

10 continued: EVERYONE contributes! You make $3000 a year, you pay 10%, you make 30 billion a year, you pay 10 percent! Now THAT was easy HUH!

[combatvetdoc]

7. Make welfare TRUE workfare, if you aren't disabled, you WORK! We'll pay you more than you get on welfare, but you may be working in the fields that the illegals were working 8. Elect TRUE representatives of WE THE PEOPLE and LIMIT them to 8 years(no exceptions9. you shouldn't have to be a billionaire to run for office, set a certain amount, give them a certain amount of free air time and NO MORE PARTY"S, individuals only! and lastly #10 outlaw the IRS, establish a FLAT tax of 10%

[combatvetdoc]

Solving our financial problem is EASY! We just have MORONS representing us! 1. cut off ALL foreign aid, we're broke..sorry! 2. Get out of the UN, their worthless anyway! 3. deport EVERY illegal alien and outlaw anchor babies! 4. Close 1/2 the bases we have in other countries that no longer are necessary! 5. cut ALL government programs such as studies on cow farts! LOL 1/2 the programs are useless! 6. KICK OUT every current politician in office! They screwed it up, they deserve to get fired!!

[sugarpuddin88]

Every 15 months, the USA owes another trillion dollars against Gov expenses!

Prop up the bad guys with money!

Reward the mistakes!

Weve increased the Money Supply 70% since October!!!!!

Can you imagine?!

Bernanke refused to show up the other day before congress

Altogether, the worlds markets over the past four weeks saw $11 trillion worth of assets wiped out. This sum corresponds to virtually the entire annual gross national product of the US, or the European Union

[KhmerD0g]

hell no. the government is building golf courses and seaports. seaports so the bailed out bankers can anchor their huge yalts. golf courses hoping the japanese come here to golf?

the government should invest in manufacturing for export.

how the hell we going to pay for the bridge? print money like zimbabwe?

do u think the government knows what is best for america? look like central government planning like communism and dictator countries.