Posting in response to Marc’s well thought out argument against the Stimulus. This is an important discussion to have, not simply as an opportunity readers/listeners to hear Marc and I argue, but I believe in a grander scheme, such discussions give us a chance — going back to the “Dead Ideas” discussions we had on air last week — to ad more to our understanding than we can get from any of our elected officials or party leaders.
Marc makes several points in attacking the Stimulus plan. He asserts the Stimulus will fail because:
1. You can’t stimulate the economy and promote a political agenda at the same time.
2. Tax cuts stimulate the economy better than spending
3. This plan increases the national debt.
4. Only infrastructure jobs count as economic turnaround.
5. Even Paul Krugman Admits This Isn’t 1930
6. The New Deal didn’t pull us out of the depression, the war did.
7. Government spending reduces private spending.
Taking them one by one:
You Can’t Stimulate the Economy and Promote a Political Agenda at the Same Time
Bull. If this is true, no plan will work. Not Obama’s federal spending. Not Bush’s tax cuts for the wealthy. Both are solutions that also promote a political philosophy and agenda. Marc asks “well which is it?” To which I respond, where did you get the idea it could only be one or the other, and are you seriously telling me Bush’s Tax Cuts were free of agenda? To cast a blanket assertion that a political agenda and a plan for economic recovery are by nature mutually exclusive is not only impossible to justify, it’s factually incorrect as well as completely irrelevant (except to the whining minority part, of course). We’ve solved many problems as a country while one party or another has been promoting their political preferences, in fact, there is rarely a time when this isn’t happening. Straw man argument, and it’s already on fire. And one final point here. Marc mentions the ‘socialization of healthcare’ (earning two points for getting that word into the mix somehow, like a true conservative alarmist). The stimulus plan actually does more to slow down the implementation of universal health care. There will, quite simply, not be enough money left to do so as soon as I would like to see it down. Seems the opposite of the implementation of the Democrats “socialist” agenda though, doesn’t it? Marc also mentions that there isn’t a majority in the stimulus plan being directed at roads and bridges. There is a lot more to infrastructure than roads and bridges. Some of which we might all feel is unnecessary because we don’t use or depend upon it. To use an extreme: A federally funded movie theater could quality as infrastructure. It would create jobs, and also provide added entertainment/distraction for a depressed working class.
All in all, I find Marc’s arguments on this point a gross oversimplification of what economic recovery entails, and a weak attempt to find something sinister in the Democrat’s plan for recovery for cheap political points. Of course they have an agenda. So did (would) the Republicans. Let’s not be naive.
Tax Cuts Stimulate the Economy
Yes they do. But only if they are given to people who will spend the money, not stash it away. Those with a lower income will be more inclined to spend the money (i.e. they have no choice… gotta pay the bills!) and that spending would then stimulate the economy. In essence, simply hanging onto Bush’s tax cuts and “riding this one out” would have zero positive change, especially when compared to the effect federal spending tends to have on unemployment rates and GDP. We’d simply have more rich people with larger bank accounts and investment funds, and even fewer jobs 2-4 years from now. If tax cuts can save us all, why are we in this crisis to begin with?
This Plan Increases the National Debt
Indeed it does. But this is like saying “My car is out of gas, I need to get to work, but I’m not going in until I’ve brought down the prices of gas. I’m sure my boss will understand.” Republicans suddenly remembering the national debt (hey, what’s this?!) does not change the principles of what is or isn’t an effective economic recovery policy. In a nutshell, yes it is frightening to add billions to an already ballooning national debt, but the fact that Bush and the Neo-Cons have been spending so much in Iraq for nearly a decade does not change economic facts. If the government “tightens the belt” right now, it will further deflate the economy. This is one of the biggest mistakes FDR made. After installing the apparatus that made up the “New Deal” he saw encouraging results and tried — too quickly — to balance the budget, undermining his own plan for economic recovery. He got a pass with WWII, which allowed (nearly mandated, actually) a return to the New Deal principles in an even more emphatic way (i.e. nationalizing just about everything — which I’m not arguing for in our current situation, btw) and authored the unrestricted use the federal government as a tool to pour money back into the hands of average Americans with phone/heat/house-loan bills to pay. Republicans would like to re-write this piece of history right now and give all the credit to the wartime economy, but their memory doesn’t fit with the realities of that time. The War simply gave the New Deal it’s teeth. It allowed FDR to move away from the post-New Deal efforts to balance the budget and return to what he had originally planned (and what worked, in the end): federal spending, which created jobs.
This isn’t to say a balanced budget is without merit. But there is a time to balance the budget, and there is a time to repair the economy. If the two happen to be out of sync, you just have to suck it up. And again, Marc — or any Republican, John Boehner – suddenly remembering the national debt so quickly after Bush leaves office is intellectually dishonest. To say we can’t spend now to repair our economy because Bush’s war has so unbelievably wracked up our debt might sound nice on the TeeVee, making us feel all warm and fuzzy inside about those oh-so-responsible Republicans, but it doesn’t change the facts of what would or would not bring about economic recovery. Yes we will see a growing debt, but the alternative is an economy that continues to shrink, and a continuing surge in unemployment. All of which will also grow our debt. It’s much more intelligent at this time to repair the economy, then work toward reducing our debt, learning our lessons from FDR.
The Republicans are in a death spiral, and I can understand their desperation to reclaim relevancy. But rewriting history isn’t going to help the cause. Fixing the economy would.
Only infrastructure jobs count as economic turnaround.
Ah, no. A job is a job.
Even Paul Krugman Admits This Isn’t 1930
Yes he does. He also argues that the federal government can spend more thoroughly and quickly during a recession than a private sector currently laying off thousands of employees. Also, to be nit-picky, Krugman’s definitions of difference between today and the 1930′s are more to point out that in the 1930′s we didn’t have the additional burden of having a non-manufacturing economy, which — ironic that Marc would bring this up — makes federal spending into programs even more important, as there are so few manufacturing jobs left for us to dumb money into as there were in the 1930′s and 40′s. Rather than revise history, confuse microeconomics with macro, and over-simplify the debate, Krugman is simply arguing that the New Deal had many flaws, but anyone who argues it didn’t bring about recovery is pulling your leg to win re-election.
The New Deal Took Too Long (it was the War, not FDR)
Economic recovery is not a quick process. And as I have already state above, one the biggest mistakes FDR made was not letting the New Deal recovery apparatus do it’s thing long enough before attempting to balance the budget. The most glaring fact consistently omitted by Marc, as well as every Republican within 10 feet of a microphone recently, is that post-war, spending was reversed, and economic growth halted. Then — thanks to the previous economic growth — the national debt started to come down. What can be taken from that is a very simple fact: if growth halted, yet the economy remained stable and debt began to come down, there must have been some real meat to the economy, right? And what caused that meat? Was it magic fairy dust? Was it American’s sense of self satisfaction at the defeat of Hitler’s Germany? No (although I think that helped our national psyche a lot). It was the 15 plus years of federal spending. Again: 15 Plus Years of federal spending. One more time: MORE THAN FIFTEEN YEARS OF CONSISTENT FEDERAL SPENDING (that’s me yelling).
Marc’s rendition seems akin to the Underpants Gnome Theory of Prosperity (i.e We have the start and the end… the middle part… well we’ll just make it up.)
Government Spending Reduces Private Spending
Sometimes true, other times not. Definitely not the absolute Marc makes it out to be, and either way, completely irrelevant. The private sector is shrinking. Unless we’d like to just ride this one out (always an option, I will admit) we need a stimulator. There are times — and this is one of them — when the private sector cannot afford to bolster the economy. When that happens, the federal government is the only machine that can dump boat-loads of cash back into the system. Yes it’s our cash. Yes it’s excessive spending. Yes it’s going to lead to the Democrats getting their way on the programs they would like to see better funded. But elections have consequences, my Republican friends, and more money for Planned Parenthood or the NEA may infuriate you, even make your blood boil, but it doesn’t not change the fact that federal spending will do more to create jobs, positively effect our GDP, and get us more quickly to a point when we can again focus on our national debt than a few tax cuts for millionaires (all the Republicans have suggested at this point) will ever — or could ever — do.
To end, I’d like to get back to the idea of “Dead Ideas” a bit. I really think this is a time for us, as a country, to get past unproductive economic arguments, and failed economic ideas. I believe the Republicans in Congress right now have nothing to offer (name one suggestion they had during this debate, besides complaining about STD funding?… Yeah I didn’t catch on either). And while the Democrat’s plan isn’t perfect, it’s at least something, and it’s based on a good chunk of lessons learned, rather than campaign jargon about tax cuts. America’s attitude toward government and taxes is shifting, and this crisis is a seriously reality for million of working people. The result, simply put. is Americans want their government to do more for them. From GOP pollster Frank Luntz:
Last month, I conducted a national survey of 800 registered voters on their attitudes toward infrastructure investment…The survey’s findings were unlike any other issue I have polled in more than a decade…A near unanimous 94% of Americans are concerned about our nation’s infrastructure. And this concern cuts across all regions of the country and across urban, suburban and rural communities. Fully 84% of the public wants more money spent by the federal government — and 83% wants more spent by state governments — to improve America’s infrastructure. And here’s the kicker: 81% of Americans are personally prepared to pay 1% more in taxes for the cause.
This isn’t “soft” support for infrastructure either. It stretches from Maine to Montana, from California to Connecticut. Democrats (87%) and Republicans (74%) are prepared to, in Barack Obama’s words, put skin in the game, which tells you just how wide and deep the support is…
Fear is a factor. But we have an enormous advantage over our predecessors in 1929. We have the fact that the New Deal happened. And we have the institutions of the New Deal, though they have been badly damaged in the last decade, they are still with us. We have deposit insurance. We have Social Security. We have a government which is capable of acting as the lender of last resort, which can borrow and spend as needed to deal with this crisis.
So here in the United States the capacity to handle the crisis exists. What we need is a government that’s willing to use that capacity, that believes in it. And that’s where the collapse of the old objectivism of Alan Greenspan is such a fundamental feature of the present situation, and very timely. With the collapse of that system of ideas perhaps the way will be cleared for thinking afresh and clearly about the problems that we face and how to solve them.
Marc predicts we will see no improvement from this stimulus. I disagree, but I have to admit I cannot do so with much pride in my intellect because realistically, Marc’s prediction is an impossibility. We either see improvement or we’re all living in a dust bowl and there will be no internet for Marc to use for gloating. We’ll be too busy scrounging for grubs to remember we even had this argument. We will see improvement, and our economy will turn around. What this argument is really about is what can we do to make it happen faster. Federal spending (yes, even into those evil socialist government programs that help poor people and the unemployed looking for work and the struggling entrepreneur looking for a start-up grant), I believe, would do more for us than a tax break for Donald Trump, who probably isn’t too concerned about the economic crisis, himself.
(If you’d like to “check my work” or simply learn more, you can find reference to everything I’ve written here in several places: the journals/published articles of economist James Gailbraith and his book The Predator State, How Conservatives have abandoned the Free Market, and why Liberals Should Too, David Sirota of OpenLeft, Wiley’s Journal of Public Economic Theory, and the Economics 101 book I kept from my first year in college on my bookshelf — Marc, you’re welcome to borrow it. Proudly researched without a single reference to the WSJ.)
UPDATE: A couple of timely headlines from today’s Salt Lake Tribune that I feel emphasize my point. Here and Here. Tell me again this plan will not create jobs.
Holy Cow Jason! You are starting to write novels like me! I promise to give it a full read when I get a chance. I can tell that you put a lot of thought into this.
Thanks for the reference to David Sirota. I now know that the great depression was not that great and in fact wasn’t even a depression. In fact, according to Mr Sirota, the great depression was “short-lived recession in a year straddling 1937 and 1938.
But that was four years into Roosevelt’s term — four years marked by spectacular economic growth”. Spectacular economic growth! A short lived recesssion. Now that I know your sources, I will go back the the Wall Street Journal and suggest you do the same.
That is your entire argument, David? One line in a Sirota article? You can do better than that.
Sirota knows his stuff. Care to give me something substantial now?
No, I didn’t have that much time to respond–see your comments on Marc’s post. I didn’t whine at you…
I gave multiple supportive arguments on Marc’s post. I guess you didn’t find them substantive. And when one line in Sirota’s is as preposterous as to say that 1933-1937 was ‘spectacular economic growth’ does say alot…
Sorry short of time again.
Just giving you a hard time, David.
But again, the “other” David knows his stuff.
David, perhaps you should read the article before you start criticizing it.
He isn’t saying the depression only lasted that time, he’s saying what Rush et al have been saying about the new deal is based on the ’37-’38 recession.
See recessions can take place inside of depressions, since a recession is only 2 consequitve quarters of declining gdp, and the prior four years had been spectacular growth, then it’s possible to have a recession inside of a depression.
Now to your question on the spectacular growth wording, well, yes, it was spectacular growth. The economy was so down by 1933 that it would be hard to not have spectacular growth. That doesn’t mean that the depression was over, or that it was back to pre depression levels even, just that it was recovering. Then in ’37 FDR caved in to all of the deficit spending is bad crowd (not unlike some republicans are doing these days, not all though, some are saying 800+ billion isn’t enough) and tried to balance the budget. It was ultimatly too soon and the ’37-’38 recession resulted. All of which would have been made clear to you, if you’d read the entirety of the paragraph that you quoted from. Misreading things and running with your confusion can make you look, well, either dumb, or too eager to find something you disagree with and trounce on. Either way, the wall street journal online opeds are probably safer for you.
In case you were wondering, here’s how that article ends – “As Newsweek’s Daniel Gross reports, “One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression.”
But that’s the critical point I somehow forgot last week – the truism we must all remember in 2009: As conservatives try to obstruct a new New Deal, they’re not making any arguments that are remotely serious.”
Maybe the problem Republicans have with the recovery plan is that it won’t create the type of jobs where rich people get bonuses no matter how bad they screw things up.
If federal spending stimulates the economy, then shouldn’t we have had at least 30 consecutive years of solid growth, the way the government spends? If it does work, aren’t we creating a drug-addiction type situation where a bigger dose of spending is needed each time to get the same effect?
This is why I somewhat dread these discussions–we have moved totally off on a tangent. Let me re-iterate basics and then address the side issue.
1. Stimulative spending is at best temporary (by definition). Until the core issue is addressed (or allowed to pass) the measure may placate the masses but in reality do nothing for the long term (starter fluid in a broken engine). btw, check out some demographic information if you really want to understand the great depression as well as what is occuring today. Google ‘Harry Dent’ (he is an author)
2. What cured the great depression is speculative because we didn’t run multiple experiments side by side. And we have a government dead set on spending a trillion dollars on pork so that is water under the bridge. I claim the Reagan tax cuts helped us out of the doldrums of the late 70′s early 80′s and the Bush tax cuts out of 2000-2003. Maybe everything works!?
3. On your data Jason. Nice job but I want to point out a couple little details. One, most people generally don’t look at the 40s as part of the great depression. See my comment on Marc’s post for my view on that period. Second, employment numbers in the 30′s have a slight of hand in them. You see we got this wonderful ponzi scheme called social security during that period. The minute it was enacted, Roosevelt had the statistics boys take everyone over 65 off the unemployment roles. They weren’t unemployed, they were retired. 10% of the unemployment went away overnight (the elderly were the most hard hit by the depression. With many jobs still manual labor oriented, when layoffs came employers dumped older worker in favor of younger, more physically able workers). So in reality, unemployment basically stayed at a very high, static level through out the 30s.
Finally, in the spirit of that last bit, I propose a stimulus plan that perhaps my liberal friends will like–let’s make college mandatory. No one can have a job until they are 22 or have a college degree. That would wipe thousands off the unemployment roles and put the money into something that is a least somewhat worthwhile (forget the fact that forcing people to go to school is unproductive. It is no more unproductive than digging holes and filling them in and it prepares them for a life of tax endenturement.)
In closing, I will retract my mocking of a guy who thinks the great depression was really an economic boom with a little recession, ie, the guy that “really knows what he is talking about” as I feel comforted that none of the wackier stuff from my side will ever again be brought up and we will all remember the Bush economy as 2003 – 2007–one of the greatest booms in history! I can now go to sleep in peace.
Thanks for the comment David (I always enjoy the sparring with you).
Your claim that stimulus “do nothing in the long term” becomes increasingly hard to defend when you consider certain aspects of this particular stimulus. Such as: assistance to struggling households and a focus on building an energy efficient and resistant infrastructure (pretty long term there), extending unemployment to 6.7 million people, and COBRA/Medicaid to over 8 million people (short term action, long term economic effects… look at it as buying them time, allowing for their anticipated future contributions without them having to lose everything in order to get there), and over 20 states currently considering cuts to healtcare, K through 12 education (as well as public colleges), etc. who will not have to make the cuts as deeply with the stimulation of the stimulus plan. These all seem fairly long term to me. Perhaps we just define long term differently?
As for your ponzi scheme scenario, it holds little water. It would account for a one time drop in numbers, not the consistent downturn we can see from 33-40 (minus the 37-38 mini recession caused by an attempt to balance the budget too early on).
And you need to re-read the Sirota article. His claim isn’t that the depression was an economic boom, but that we saw “record growth” (as in a record percentage of growth) in that period. Which — by the way — happens to be a fact.
It’s way too late to get into so heady a topic, but I’m dong this for Marc as a personal favor
It’ll be brief, but I’ll do my best to follow up tomorrow.
Okay. The US government doesn’t earn money. It has no competition, so it doesn’t inspire innovation. Every fiat bill the Federal Reserve has printed devalues every other. “Creating Jobs” by increasing government projects is akin to embezzlement, because you end up paying individuals, actual flesh-and-blood humans with families, with their own money (which was forcibly taken from them to begin with). “Obama’s” Plan, as it is called, is only proposed to be temporary anyway – 2 years! – so Jason’s “Tried to balance the budget too early” argument would apply to the very stimulus plan he supports. Jason is right about Bush being a HUGE HUGE spender, but Obama will be even more so, and look where the Bush spending got us! Adding to the national debt aught not be taken so lightly – nobody ever gets ahead on debt by procrastinating or asking their children to pay it for them. The national debt, by the way, is on all of our heads, and none of us decided how to spend it or how far into debt to go. It’s definitively insane for us, as a society, to assume that we can live our lives with the same lavishness and entitlement that we have been and still somehow change our economic struggling for the better – we’ve tried spending more over and over agin, and look where we are. Obama seems to be not so much about change as he is about the same things but to a far greater extent, as evidenced by this plan. We all have different definitions for “work” when we consider wether “Obama’s stimulus plan will/will not work!” Finally, it is natural to assume that political issues are black and white, but remember this: politicians are no better and no smarter than you or I; their plans are fallible. Always seek out the grey areas, because therein can be found the non-partisan, utilitarian, long-term conscious answers that disappear when the politicians open their mouths and start making absolute statements that they will defend to the death.
THink about all of this. Let me know what your thoughts are, and I’ll be back in after I get some sleep. Let’s get a round of applause for 2:30 in the morning, everyone!
I found this. Watch it and talk about it, because I agree with it in the very general way that is my limit when I’m this tired.
I promise it’s worth the time, and it’s 100% work-safe!
http://reason.tv/roughcut/show/667.html
PS: I hope this is acceptable to the board admins.
Pingback: Rebuttal to Jason’s “Reality Based” Defense of the Stimulus | KVNU's For The People
First, indeed a big round of applause for Michael R–2:30 seems to aid in being concise.
Before I respond to Jason’s questions, a couple big picture ideas. First, I am not opposed to normal economic contraction. Public and private organizations indulge in excess spending practices during the good times and a litte retrenchment strengthens them. It is a net positive (though granted, it can be painful for individuals). I worry we are over-reacting to this situation we are in.
Next, evaluating government spending programs to ‘stimulate’ the economy without a full picture of what is going on will always be inconclusive. After 70-80 years we can look back at the depression and realize that it causes included demographic changes, technological changes, cultural changes, monetary policy missteps, monetary policy’s cousin of tax and trade policy, AND government spending. The depresion’s cause or cure can not be isolated to any one of those issues.
Jason–you argument for the long term nature of this stimulus program has two problems. First, the cry from Washington that this must happen right now to solve the ‘crisis’. Your side steps all over your contention that this is long term. Next the silliness of your examples-struggling households are going to go out and buy a new house? Extending un-employment benefits is a long term fix to anything? Again, stimulus by definition is short term.
Next, removing everyone 65 and older from unemployment roles was a PERMANENT situation. That change pretty much accounts for the total drop in unemployment during the mid to late 30s. It wasn’t until the military industrial complex cranked up in 1940 that structural unemployment really started to fall.
I understand Mr Sirota’s point. And he is doing what you are doing–picking and choosing data to support your point. I brought the one quote up to illustrate the absurdity of his approach. Are you willing to apply the same standards of analysis to the Bush years by only looking at 2003-2007?
One of my core issues with what is happening in Washington is we are busily ‘solving problems’ when we can’t even define the problem. We are passing through tremendous demographic, cultural and technological shifts. Our monetary policy can be called experimental at best. We have a ground swell of isolationism going on (left and right). To think that a pork barrel ‘stimulus’ program will solve all our problems is laughable to me. And if you guys are so entrenched in defending FDR, then go ahead and blame Hoover. The last 2-3 years of his administration we basically a beginning for what became FDR’s New Deal. Strangely similar to Bush-Obama. I don’t want to defend any of the above.
David, while you bring up several valid points, you are practicing a hefty amount of intellectual dishonesty to prop up the foundation of your arguments.
There is nothing “silly” about the notion that providing benefits to struggling households being a long term solution to economic contraction. If you give them money or reduce their expenses for existence, they contribute more to the economy. Period (and I would challenge you to find one supporting piece of economic data — historic data, not Friedman theoretics — to prove otherwise). If people can afford to, they spend. If they spend, the economy grows. Again: Period.
As for Sirota, I understand it is convenient — ney, necessary? — for you to assert he picks and chooses his data, but the data he is citing is actual recorded historical fact (in the essence that he bases his argument on a timeline, with events placed on the timeline in a chronological order no one is disputing). To sum up his argument again: New Deal, working, but slowly. FDR attempts to balance, recession returns. War builds up steam, the job creation that began with the New Deal is bolstered. Ta da! Economic recovery.
Stimulus by definition (I assume you mean simply the semantic definition of the word) is indeed short term. Stable economies are not, and for you to go to such effort to make a distinction between the two is what leads me to roll my eyes at your argument.
And as for “my side,” lets get one thing clear: I don’t care if it’s a Democrat or a Republican saying it, I’m a realist, and I prefer that we base our forward thinking policy on the recommendations of those who have proven themselves rational and prescient on the matters they advise. You may find the idea of a spending stimulus laughable. You may find the defense of FDR by liberals offensive. You may even find the harsh criticism of Bush to go to far.
None of this changes the reality of what does and does not stimulate a shrinking economy into growth. And I want to also remind you that you have not yet provided argument to the alternative, nor supporting evidence to the claim that federal spending does not produce economic growth.
The reason you have not provided such an argument? None exists.
I see where you are coming from, and I even sympathize (sort of) with your objections. They are valid objections, and should be included in the debate when it comes to the country’s economic future. But you cannot change the facts of basic economics to support your argument and expect to be in a position to provide solutions. That is where “your side” finds itself today. And to argue that some sort of action may not even be necessary is ludicrous. There are many examples, but here is the most recent from my inbox. (And if you even attempt to call WaPo liberal for reporting that there is a crisis, I will follow you around for a week laughing hysterically… sans showers/hygene).
Take all the unemployed, pay half of them to dig a hole, and pay the other half to fill it in. It’s wasteful, and it’s pointless, and it seems very ridiculous. It would still stimulate our economy effectively and efficiently.
“we will all remember the Bush economy as 2003 – 2007–one of the greatest booms in history! I can now go to sleep in peace.” David James
- I don’t see how an economy built on a house of cards can be called ‘one of the greatest booms’
- Once again I am struck by the apparent disconnect between the ‘haves’ and the rest of us.
Jason, I was heartened when I got to the point in your post when you imply you are searching for solutions. (I was a bit disheartened by the acusation of intellectual dishonesty but I will get to that later.)
Let me start where I think we have some common ground and try to define where I am coming from. Do I think government spending can help the economy long term? Yes. Do I think government spending can help the economy short term? Maybe/sometimes. Do I think we are mixing those two issues in this discussion of the political pork bill that passed the house? Definately. Now, one at a time.
Long term government spending on infrastructure projects such as roads, utilities, etc do have a positive impact on the long term economy. It is fairly easy to tell if the project will help the economy by analysing it and seeing if it has a positive return on investment. There is an entire discussion in the realm of “proper role of government” but that is a different thread. However, if we are going to do these programs and make them effective, they need to be consistent and long term. Playing politics with them weakens them.
Short term stimulus. The ‘maybe’ is simply due to the argument/example of the rebates given last year and in 2001. Anaysis shows that most people did NOT spend them. Thus short term stimulus programs are questionable. They are person/place/time dependant. For example, people who are struggling financially are reticent to go buy houses even with government aid (not to mention the fact that these programs are what got us into this mess). When people feel they have long term jobs or even careers, they spend money much more freely. Digging holes or filling them in does not inspire confidence in such individuals. I challenge your period (.) after the statement “if you give them money they will contribute to the economy”. And if the only thing you are trying to do is get money flowing in the economy then just have the GAO or someone go out and start spending money. Fill up government warehouses. Buy services with no intention of using them. Wouldn’t that be nuch faster and just as effective (not to mention just as wasteful)? Or better yet, instead of taking money and then giving it back, just don’t take it to start with.
Finally, if stable economies are long term and stimulus is not, why do you find it laughable that I try to differentiate? And not only is economics the ‘dismal’ science, it is a science based on statistics, not mathematics. I see some of your assertions of fact to in reality be assertions of probabilities. And there is a lot of room for discussion in the realm of probabilities. There are plenty of counter arguments and examples. You may want to re-read Rich’s comments on Marc’s thread. He hits the nail on the head.
Again, I will submit the argument that we don’t understand the problems we are facing. I also assert that we will emerge from this relatively quickly (months) and robustly. We can discuss whether I am right or wrong with that prediction in the future. With some hindsight, I think the discussion will be a bit different.
btw, Marie–If you join a conversation in midstream and don’t follow what is being said, you will misquote and misunderstand. I do feel sorry that you see yourself as a ‘have not’. We choose our self perceptions-no one can force us to see ourselves negatively. I think Mrs Roosevelt once made a statement along those lines…
Sorry for the delayed response, David, and I don’t entirely disagree with you on this. But you are also making a more rational argument than most who oppose the stimulus are willing to make. I think proposing a lack of action because you are making a distinction between “temporary” stimulus actions and a “long term” stable economy is senseless, as sometimes in the “dismal” science (a fitting phrase!) you have to take action that will cause an immediate effect (in this case federal spending that will be used to bolster the workforce in various line of work and industries) in order to achieve the more long term stability.
You bring up the previous stimulus, which is ironic. It was a tax rebate, and you’re right, it didn’t work. More reason the Republicans are reaching on this one. And most of their complaints are contrived (One example: how quickly the stimulus $ will be spent.) for political gain alone. It’s very frustrating.
There are many valid and constructive arguments that could be used (I have a few complaints about the Stimulus Plan myself), but Republicans aren’t using them, choosing instead an irrational “perpetual campaign” attitude toward economic planning.
The new RNC Chair himself claimed yesterday, when asked about the Stimulus plan: “Not in the history of mankind has the government ever created a job.” Ridiculous, and for lack of a better word, idiocy being offered up as insight. Americans are much smarter than the Republicans seem to believe, and this isn’t a matter I like any member of either party seeing as an opportunity for political gain rather than a time to solve a problem that is/will be effecting millions of Americans.
Also, how much of the bill is pork. Republicans are arguing the pennies of the bill without talking about the majority of the spending.
for example.
“Q Robert, this morning the President spoke about narrow differences with Republicans on the stimulus plan. When you hear some of the Republican senators on Sunday talk shows they sound like it’s not a narrow difference, they want to chuck whole sections of the bill that’s working through the Senate. Is there a gulf there between what the President is saying and what Republicans in the Senate are saying, number one? And number two, are there specific things you want out? You’ve previously been outspoken about removing provisions — there’s this STD prevention provision, for example, a lot of Republicans have been going after — are there specific things you want to keep in there or take out?
MR. GIBBS: Well, let’s focus — I watched — I didn’t watch many of the news shows; I read some transcripts; I read press releases from Senate Republicans, one last week about what they deemed unnecessary spending, which I think when you accumulated it up they added up to $699 million. The reason I’m here is because I’m not very good at math. But that amounts to 7/100ths of 1 percent of a piece of legislation that the American people desperately need to get back to work.
I know there’s a tendency to focus on that 7/100ths of 1 percent.”