A no BS, non partisan examination of the success of Obama's stimulus package

[itfitzme]

I don't/didn't have an issue with the stimulus, even though the waste factor was appalling and the actual benefit conveyed in lasting stuff like infrastructure a bad joke. It did as the OP states. Most importantly its direct aid to state govt kept not just govt workers but also doc and nurses working.

But that does not support more spending now. The real estate bubble was caused by too much demand for debt, and the result was too much debt. Some was written off, and the value of trading houses took a tumble. But instead of the taxpayer getting the the depressed asset that underlay the debt, we just propped up the traders, and they kept the assets. Spending more now on stimulus just creates more TBills, which was what got us in the mess to begin with.

Arguably, however, I think there's a good faith argument, that even conservatives can accept, that we are reducing govt spending/gnp too rapidly, and modestly boosting revenues to allow us to prop up demand for goods that are consumed by workers who permanently lost jobs and who now will have to take much lower paying jobs as unemployment insurance runs out.

"The real estate bubble was caused by too much demand for debt"

I am assuming you don't mean the Federal Debt.

Yeah, there is an interesting paradox. The money supply is completely dependent upon debt. No borrowing, no debt, no money supply, no economy.

When the real estate bubble collapsed, it sent the economy into a cascade of deleveraging. It was a classical balance sheet recession.

So, what is the right amount?

What I meant was that we created more Tbills under W than we did at anytime previously, but Greenspan kept rates low, so the Tbills didn't pay squat. The chinese wanted a better paying investment for their trade surplus dollars. And it was assumed that US housing market debt was safe. I left that out because I didn't want to enrage the partisian right.

So, yes, I agree the recession was a classical case of deleveraging as biz and consumers struggled to pay off debt. And, imo, we still are, which is why growth would be non-existent but for the Fed shoving a trillion or so into lending. Those dollars have to go somewhere, and they are going into stocks and those banks offering no interest loans for 18 mos.

What I attempted to say was that the OP is wrong to the extent it argues that another stimulus is a good thing. Along with all other debt, we are deleveraging the amout of deficit spending as a % of gnp. Perhaps to quickly, perhaps not. People can differ, and frankly so long as the Fed is willing to carry the water for growth at the expense of inflation, I'm fine with the sequester, and would have preferred not to increase defense spending too.

But, if we're deleveraging any NEW debt is not a good thing unless an entity's balance sheet looks really good, and the federal deficit balance sheet is very ugly.

I am simply not sure whether an additional stimulous would be right or not.

It is unfortunate that we lost so much in the crash. It took better than two decades to get from an employment to pop rate of 58.5% to 63.5%. Now we are back to that the level it was in 1978, most of the loss during the recession. 5% doesn't seem like much but it is about 7.5 million jobs. That is a lot of lost productivity. And getting that back is the real issue. It is pretty obvious, when looking at the trajectory of the GDP, that a) it is far below where it might otherwise be.

Just for the heck of it, here is RGDP per cap.

It is pretty clear where it might otherwise have been just drawing a line from the peak before the recession. I estimate about $5000 per cap and twice that per worker.

Problem is, it does take two decades to get that back. There is a rate at which the economy can grow. I haven't seen any theory on what it is but empirically it's pretty easy to get to.

It isn't, though, an issue of the debt. The federal debt itself is meaningless in any direct terms. The debt itself is just a number that reflects previous flows and private sector savings. At some point, revenues will have to increase with the increasing interest payments. Even then, it isn't very meaningfull. If the gov doesn't carry it, then businesses or households do. IMO, I believe it should be in the business sector paying interest of passbook savings.

 

[chikenwing]

When the money is paid back with interest, you will have the total equation. It is only then that you can debate it's merits.

Bush's tax cuts were more expensive than the Recovery Act. When will see that money back?

Who's money??,when you see post like this one,ya know your dealing with a hack.

SPENDING

 

[Quantum Windbag]

Every single first world country on earth is a hybrid public/private economy. The private sector can't do everything and when you're talking about cities you do need a public sector.

fact...

The extreme conservative movement is a movement of deep country folk that don't have a clue.

What, exactly, is it that the private sector cannot do? Please be specific, and keep in mind that every single time you come up with an example I will find an example of the private sector actually doing what you say they can't, and doing it better, than the public sector.

 

[Quantum Windbag]

Obama could of given that 800 billion dollars back to every citizen in the country and they could of used to pay bills, buy a car, etc etc and STIMULATE the economy that way, but instead he took it and we have no frikken idea where it went and how it was spent and we STILL have over 7% unemployment after 5 frikken years of this failure

the Op is determined to make Obama out to be some brilliant hero when nearly 60% who disapprove of him disagree

petty pathetic if you ask me

If you knew how the stimulus worked you would know the money generated demand. A ripple effect. It wasn't zero sum.

Feel free to provide actual examples, not charts that claim the money is exempt exempt from the laws that restrain everything else in the universe.

 

[The T]

I thought this thread title said no B.S.

Can we put this is the "fib forum" ?

More like the shithead forum.

 

[Quantum Windbag]

If you knew how the stimulus worked you would know the money generated demand. A ripple effect. It wasn't zero sum.

Another idiot whoi believes in the multiplier effect.

You apparently don't understand how our economy works. Consumer spending creates economic stimulus.

Fine, what does that have to do with the fact that you claim is that government spending does the same thing, or the implicit claim that government spending leads to consumer spending, especially when you factor in all the evidence that consumer spending declined during the stimulus period?

 

[The T]

Obama could of given that 800 billion dollars back to every citizen in the country and they could of used to pay bills, buy a car, etc etc and STIMULATE the economy that way, but instead he took it and we have no frikken idea where it went and how it was spent and we STILL have over 7% unemployment after 5 frikken years of this failure

the Op is determined to make Obama out to be some brilliant hero when nearly 60% who disapprove of him disagree

petty pathetic if you ask me

If you knew how the stimulus worked you would know the money generated demand. A ripple effect. It wasn't zero sum.

WHAT is the ZERO SUM GAME, Billy? YOU don't have a clue, do you?

HINT? Our system ISN'T...you and Statists believe it is, and are making it so BY policy, and too much spending BY government.

 

[bendog]

Actually, the wiki article isn't bad in that economists differ, and one can posit a % between 4 and 7% with plenty of support, so the actual number is not really relevant to serious discussion and is more a benchmark concept.

More relevant is the fact that we have long term unemployed, who did have good jobs prior to the great recession, and these people most likely will never obtain the job levels they had before. It may be a deplacement like the manufacturing jobs that were lost in the late 70s and 80s. I don't really see either party honestly facing that issue.

 

[francoHFW]

The real estate bubble happened when Fannie and Freddie's share of the market went from 75 per cent to 25, and new scam private lenders, ''regulated' by Booosh's corrupt cronies, insured and sold garbage around the world, rated A Plus. END of story, Pub dupes.

Any success of his economy was based on this BS bubble, his huge deficit spending, and the middle class, ruined by voodoo, borrowing and spending rather than saving. The GOP IS A LYING , CHEATING, SNARLING MESS, AND the hater dupes are their ignorant chumps. But at least you're in the white party, jackasses. lol

 

[Truthmatters]

so when does the DEAR LEADER give back that 800 Billion TO US TAXPAYERS he stole from us that supposedly stopped all this free falling?

And another lie from him how this theft of almost a trillion dollars would bring UNEMPLOYMENT below 7%

OVER 7% now for five frikken years

sheeesh, another joke he played on us

Funny how the unemployment rate was over 7% during Reagan's first five frikken years and he was a god to Conservatives.

Excuse me, we are talking TODAY...not 20 something years ago

and history matters along with holding you to what you have backed in the past.

your hypocrisy is showing

 

[TheGreatGatsby]

I thought this thread title said no B.S.

Can we put this is the "fib forum" ?

Not that it would have ever worked; but it would have helped if the OP wasn't total BS in the first place.

 

[Quantum Windbag]

Many of you believe The Recovery Act was a failure simply because it fell short of expectations, but that does not mean it was a failure - not by a long shot. Here is a non partisan article that examines the pros and cons of the stimulus and why, for the most part, it was a success. A success that indisputably saved our economy.



PROS:











CONS:



Was the Obama Stimulus a Success or a Failure? - NPQ - Nonprofit Quarterly

So essentially what this article is saying that even though the stimulus fell short of expectations, it was still a success. Why? Because it turned our economy free fall (that began with Bush) into JOB GROWTH within months. It is the reason we are even in a recovery. What was the biggest flaw in it? IT WAS TOO SMALL which is actually just more proof that government can and does create jobs. It is also further proof Republicanism is ruining our country. They are reason it was too small!

Is the unemployment rate still high? Of course, how do we fix it? More DEMAND side economic policies like The Recovery Act. Supply side has proven to be a failure. Tax cuts do more harm than good.

The whole notion of a free-fall and a depression and all that crap is just a manufactured talking point.

The truth is that nobody really knows what would have happened had there been no so-called stimulus.

Academia likes to justify themselves by putting out all kinds of theories and models. But just like the AGW crowd, they can't produce a model that can predict the temperature of the hair on their butts, much less a model for hurricanes (does anyone recall how the global warmers warned how Katrina "was just the start".....and it was....the start of a very calm several years). The academics in economics can't do any better.

Why ?

Because they can't model a very complex system like ours (or they won't) because of the number of variables involved.

This isn't hard to figure out. The economy was in a free fall starting in Bush's final months. We were losing 100,000s jobs a month. We knew where the economy was headed. The stimulus took the economy from a free fall to growth within the course of 5 months. That's how we know it worked.

You should be able to provide actual examples of what the economy did without the stimulus. You could do that by comparing the "free Fall" to other economic crises and showing how much slower the economy recovers without a stimulus. The problem you have is that, if you actually do that, the data shows that the economy recovers faster without a stimulus, and the data actually shows that the economy is still stuck in 1st gear with it.

 

[Stephanie]

I thought this thread title said no B.S.

Can we put this is the "fib forum" ?

More like the shithead forum.

all of his are that he post trying to make excuses for Obama and make him some hero instead of the LIAR and failure he has been to us and our country...Too bad for him almost 60% of the people see's Obama for what he is...that 30 percent is where Billy fall's, hard core cult members...

we can serf the net and come up with links that says the stimulus was a failure...

 

[itfitzme]

Excuse me, we are talking TODAY...not 20 something years ago

A seven percent rate of unemployment is understood to be on the high side of natural rate of unemployment. 5% is standard, 7% on the high side.

During the Carter admin, the gov attempted to drive the 7% rate down to five. It was a big mistake and caused inflation. The trade of is always the unemployment rate vs inflation.

At this point, complaints about the unemployment rate specifically are ill advised.

_____________

"Natural rate of employment is the rate of unemployment at which the economy is said to be in practically full employment situation with regard "

"The natural rate and the Phillips curve"

Natural rate of unemployment - Wikipedia, the free encyclopedia

"Many estimates suggest that the long-run normal level of the unemployment rate--the level that the unemployment rate would be expected to converge to in the next 5 to 6 years in the absence of shocks to the economy--is in a range between 5 and 6 percent. Policymakers' judgments about the long-run normal rate of unemployment in the Summary of Economic Projections are generally in this range as well. For example, in the most recent projections, FOMC participants' estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 5.8 percent."

FRB: What is the lowest level of unemployment that the U.S. economy can sustain?

I don't care about all that crap...Obama promised with his 800 billion dollars he stole from us taxpayers and called a stimulus it would DROP unemployment to below 7%
get real we heard from Democrats how 6% was devastating under Bush..

wiki is now our sources for unemployment...lovely

A) What is your preference, Conservopedia, Investopedia, a standard macro econ text? You seem to be a bit objectively clueless. It's just a definition of "natural unemployment." You go look it up anywhere your little heart desires, it's all the same.

B) Yes, wiki is a go to source. It is a better source than any other encylopedia, has a lower error rate.

C) Yeah, you should give a crap about all that. I really don't give a crap what Democrats, Republicans, conservatives, "liberals", or you want to believe. The economy really don't give a crap what you want to believe any more than gravity does. The facts are the facts and the natural unemployment rate is from 5-7%. If you believed that it would be anything other than that, it's your own personal ignorance that is the problem. I've given you the fundamental and objective definitions which you seem to simply want to ignore.

D) If you are going to believe everything you hear, then I've got a bridge in Brookland to sell you. Apparently, actual objective sources and definitions are beyond your comprehension as you believe everything you read on the television.

D) It isn't "stealing", idiot. That is simply your over emotional and personal subjective opinion and not an objective observation. But, you apparenlty can't get beyond a simple definition of "natural unemployment" or the value that takes on from empirical evidence. I am quite sure you will never get beyond that.

Try growing up. Geez....

 

[Truthmatters]

93% of Economists Agree Obama Stimulus Helped Economy ? I Acknowledge Class Warfare Exists

 

[Truthmatters]

can we have you all admit the stim worked now?

 

[Quantum Windbag]

Here is the real dollars per capita for the federal budget.



The blue line is revenue or receipt.

At best, assuming that the bump during the Bush admin was caused by the Bush era tax cuts, then the may have had some effect.

But, at best, it was no better than the level in 2000.

Then there is the problem that spending was also increased starting in 2001 (abouts).

Then there is the issue that it subsequently fell after the max, right into a recession of major proportions. And all of the gains, if they can be called that, were lost to a massive recession that devistated revenues even as spending went to all time highs.

It's just not there.

I'm not sure what we are arguing. If you took my posts to mean that I thought the recession was a result of W's deficits, either I was unclear or you misread. I do think the credit bubble was a direct result of Greenspan not regulating lenders and keeping rates low, while W increased govt spending by about 1.2 trillion. The chinese demand for debt was not satisfied by TBills, and that led, indirectly, to demand for US real estate debt obligations.

While I'm not a fan of Obama, it is true that he increased spending "only" by around 700 billion, despite the recession.

The debt increase is, as I think you say, the result of funding that 1.2 trillion when "the bottom fell out" of revenues. However, I would disagree if you contend any real econ gain was made during the W years.

Regardless, my original pt was intended to argue that, with 17 trillion in debt and a ration of around 75% (or 100%) debt gnp, there's no good arugment for another budget stimulus.

You really need to check your math, or your baseline assumptions.

Tell you what, explain to me how TARP, demerits aside, a one time loan which was repaid, counts as deficit spending debt for Bush and baseline spending for Obama.

 

[Stephanie]

can we have you all admit the stim worked now?

you and Billy can admit it if you want...

 

[itfitzme]

Here is the real dollars per capita for the federal budget.



The blue line is revenue or receipt.

At best, assuming that the bump during the Bush admin was caused by the Bush era tax cuts, then the may have had some effect.

But, at best, it was no better than the level in 2000.

Then there is the problem that spending was also increased starting in 2001 (abouts).

Then there is the issue that it subsequently fell after the max, right into a recession of major proportions. And all of the gains, if they can be called that, were lost to a massive recession that devistated revenues even as spending went to all time highs.

It's just not there.

Government needs to STOP spending...stop spending the futures of children yet to be born into slavery.

There is no such thing as "spending the futures of children". It is neither possible to eat future food or occupy future houses. Everything that is to be consumed in the future will be made in the future.

Your comment is a complete non-sequiter. Worse, it has no basis in reality.

Your fantacies have no relevance.

 

[Stephanie]

93% of Economists Agree Obama Stimulus Helped Economy ? I Acknowledge Class Warfare Exists

why didn't they just make 100% it agree?