Why the New Economic Stimulus Bill Will Fail

[Saefroch]

One and two are the same thing... and neither are bad. Wow. Three is irrelevant. Oh wait... Did I just show up the Heritage Foundation?

[AtlasShruggery]

Heh heh heh.

Every nonpartisan economist agrees that the stimulus saved millions of jobs.

Two years ago the GOPers at Heritage were still crowing about the Bush Boom.

[chevy490]

@AtlasShruggery millions lol...... your a dumbass...

[AtlasShruggery]

@chevy490

Were you homeschooled, Teabagger? Judging from your grammar, apparently so. Now, take your meds, turn off Faux News and go home to your parent's basement. But, please, stay away from the other children.

[StarSpanglishBanner]

@AtlasShruggery Fucking idiot. Yup, every Keynesian economist agrees that the stimulus saved millions of jobs.

[flyleaf290]

@StarSpanglishBanner: and yet the unemployment rate sits at 9.1 the highest sense the great depression.

[flyleaf290]

the best way to fix the economy that i believe people of both parties should agree is slashing UNNECESSARY spending and simplifying the tax code, if we fix the code there will be less loopholes, therefore more people pay their taxes (more of the rich notably) meaning more income, then with the spending cuts, by say... 3 trillion (back to bush era spending from 4 trillion to 1 trillion (if my sorcess are correct and unbias perhaps wrong but even so)) and pay our intrest rates down and

[flyleaf290]

(continued) have a yearly fund for paying the deficit, and i believe with cooperation between the parties we can make compromises and necessarily cuts, but without compromise what are we as a nation? we were built from compromise without it were just like the monarchy era British, or worse.

[ShepperdW]

(continued)...People do not look at the nation as something they they all should be a part in changing, but they look at it and try to change their own economy and do not care about anybody else. In a nutshell, America needs to work their asses off and stop being lazy.

[ShepperdW]

I think we should have one year with no tax breaks or returns, and set laws where companies cannot lay off people for this reason. I know this probably wouldn't work in this power hungry world, but if we all worked together it might. That is something that America has been lacking lately.

[learninglemur]

Wages are a function of per capita capital in the economy: capital multiplies the ability of labor to produce wealth.

Stimulus spending wastes capital -- it's like eating your seed corn.

[learninglemur]

Government "stimulus" spending only makes things worse.

Since government spending is by its nature consumption spending, it's simply not possible for government to create jobs without first destroying jobs in the process, by draining capital away from already productive businesses.

For more on how stimulus spending destroys the economy, please see this article: 'The "Economic Stimulus" Myth'

[auditthepolls]

"productive businesses" are a large part of the problem.

Productivity=fewer employees=less consumer spending.

Government infrastructure spending is not concerned with profit, using shovels instead of bulldozers--feeding more families, more disposable income.

[learninglemur]

You are confusing activity with production. Without the production of goods there is nothing to buy.

To get a basic understanding of economics, there is no shorter or surer way than the book "Economics in One Lesson" by Henry Hazlitt, available free online.

[auditthepolls]

Productivity per person=output/man hours As the workforce becomes more productive, there are fewer hours worked. As American businesses tend to pocket the difference rather than share it with workers, the workers become poorer and less able to buy the goods.

After a period where the workers lived on credit as wages declined they have finally tapped out. Credit isn't the solution. Higher wages are. The stimulus can help provide that. Assuming you want a solution.

[learninglemur]

You're operating on some faulty assumptions. There is no upper limit on available work. As long as there are unmet needs or desires, there is a market for work.

Productivity gains do in fact pass from employers to workers in the form of higher wages and/or increased purchasing power.

[auditthepolls]

True there's no limit on available work, but an unmet need of a homeless person does not translate into wages. Maybe charity.

Far from leveraging labor, capital eliminates it when bosses buy machines instead of hiring, or hire overseas. And it attracts more capital. Both are bad for poor workers. Thus free market capitalism is great for the rich, and sucks for everyone else.

BTW, I also don't like the stimulus package, but nationalizing the Fed isn't on the table.

[auditthepolls]

Perhaps I should have said 'shutting down the Fed' I think the government, rather than borrowing money, should simply print it and spend it on infrastructure. With a lot of oversight from someone like Kucinich. Pure stimulus and higher standard of living without debt

[learninglemur]

Printing and spending new money is inflation. It causes prices to rise for everyone and lowers the standard of living due to monetary noise. It transfers wealth from those who get the new money last to those who get the new money first. Inflation punishes savings and rewards debt.

[auditthepolls]

All true, but the Fed is already doing that. They don't exactly spend it, they create it via loans and fractional multipliers to almost always to those who already have a lot of money.

Some inflation is good. As wealth multiplies, it piles up in the hands of the wealthy never to return to circulation. Without some inflation, Warren Buffet would soon have it all.

[learninglemur]

Warren Buffet reinvests his earnings so those dollars keep circulating. It is not necessary to increase money at the same rate as wealth grows. A gently falling price level is normal for a growing economy with a fixed money supply.

[auditthepolls]

The Fed is run by the rich for the rich. I will give you that Buffett seems to spend less on personal real estate than other plutocrats, so he recirulates more than most.

But the insurance industry is indefensible, and that's his bread and butter. [A LOT of bread and butter] The right thing for him to do would be to back single payer health care, and return the premiums [minus meager payouts]. Not holding my breath.

[learninglemur]

We should abolish the Fed and return to honest money.

The economic bust was primarily caused by the Fed -- they forced interest rates below the natural rate of interest, fueling an unsustainable credit expansion boom that resulted in tremendous malinvestment and overconsumption.

Roger W. Garrison explains how the Fed lost its way in this paper: "Interest-Rate Targeting During the Great Moderation: A Reappraisal".

[auditthepolls]

Agreed Abolish the Fed.

[learninglemur]

Inflation punishes savings and rewards debt, that's why people have chosen debt over savings.

Stimulus spending lowers real wages because capital will be consumed instead of being invested. Wages are a function of per capita capital in the economy: capital leverages labor to produce more wealth.

[smytha10]

AHHHHHHHHHHHHH CRISIS

[seekjah1]

Do we really want to listen to economist?? They have been a part of the problem over the years with their so called predictions after the fact. Its easy to predict who will win a game if the score 100-2 with 1 second left in the game.

[seekjah1]

Do not give breaks to companies that lay americans off!! Common Sense, they are why the economy is going down the drain. They have gotten money from the american people now they are laying people off. They want to give breaks to people who buy new cars over 49,000 dollars?? Who can afford a 50,000 dollar car?? Stupid elected officials they gave billions to fund the war but now when there is a chance to fund america they are complaining??? Come up with better plans not retoric?

[Tzvia48]

All the banks that got the first round of bailout money are hiring foreigners at high salaries, NOT Americans. Now, that's what I call a major theft of American's money. However, go to google and type in The Money Masters and you'll know what's really happening.

[arodspecialist]

Think about it. $1 trillion wasted on Americans ENTIRELY is better than $1 trillion wasted on fighting and bombing the hell out of Iraq trying to find weapons of mass destruction only to rebuild their infrastruture because we did not find anything. People forget Bush senior bankrolled Hussein for many reasons including price less than market for oil. Hussein refused later and invaded Kuwait prompting US retalliation for peace and personal agendas. Father and son tag team =$5 triilion wasted

[arodspecialist]

Yes, most of the money will never yield returns. Infrastructure, education, medicaid, and more are all no ROI industries and sectors. Roads can not give us interest nor can teacher or better medicare and medicaid systems, but it does place people into jobs which are critically needed for the US. Infrastruture reduces wear and tear on cars and makes thinks more efficient and are proven to reduce smog. Education is needed to get the quality teachers we are so lacking to teach our next generations

[arodspecialist]

Democrats are known for being a little liberal at times and vote for a tax increase if needed, but Obama's direction mirrors those Ronald Regan did in his early terms. Supply side economics as they teach us is meant for the government to bear the bruden of the cost in relieving crisis of now. Now is we have failing banks, loss of jobs, and a national debt which doubled to $8 under Bush (excluding financial and new bailout bills) since Clinton knocked it down from 6 to 4 trillion. CONT

[cgfmguy]

Don't be sad, for 2 out of 3 (points) ain't bad....

Mr Hederman is indeed a very credible spokesmen.

Anthony Marasco, CGFM

[13otany13ay]

Fine. Now what does the Heritage Foundation think about the latest economic crisis? Mmmmhhh... hallo? Hallo-ooh!!! Echoooo!!!

Nope, seems they took their money and ran.

[ElectusAnimus]

That made as much sense as Obama's answer to Rick Warren about abortion.