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

[itfitzme]

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 an interesting point.

Most people don't know what economic stimulus is (at the practical or theoretical level) - nor do they know how it is designed to protect against the demand shortfalls that lead to spiraling job loss.

Let's construct a hypothetical universe so we can see spiraling job loss in action:
Let's imagine the elderly parents of middle class consumers get sick. Let's further imagine that because of this sickness those aforementioned middle consumers have to help mom and dad with medical expenses, which means that they can no longer afford to eat at the local restaurant, which means the local restaurant owner has to layoff waiters and cooks, which means that the waiters and cooks can no longer afford to go to the shoe store, which means the shoe store owner has to layoff his workers, which means those workers can no longer afford to go to the movie theater, which means the movie theater owner has to layoff his employees, which means his employees can't afford to go to the ice cream parlor, which means the ice cream parlor owner has to layoff his employees who now can't afford to buy new clothes, which means that the owner of the clothing store has to lay off his workers, etc., etc. job loss ad infinitum . . .

In this imaginary world we are allowed to go back in time. So we go back to the point where middle-class consumers are having trouble paying for their parent's healthcare and we create a "demand-side" stimulus program to helps old people with some of their health costs. Call it MedicaSecurity. As a result of MedicaSecurity, middle class families are less burdened with the high cost of parental health care, and, as a result, they now have more spending money. This means they can go the restaurant, which means the restaurant owner doesn't have to layoff restaurant workers, which means the restaurant workers can still afford to go out to the movie theater, which means the movie theater owner doesn't have to layoff his movie theater workers, which means the movie theater workers can still afford to go to the bakery, which means the bakery owner doesn't have to layoff his bakery workers, which means the bakery workers can still afford to go to the clothing store, and on and until the economy grows ever upward on the heals of glorious spending . . . which jump starts the economy . . . and leads to increased revenue . . . which allows us pay for MedicaSecurity... and then some.

Problem solved.

Wait if people keep more of their own money in their pockets they create jobs ?

So, he presents an example of how job losses occur and you erroneously turn that into job creation? If I explained how a hole in your gas tank will cause fuel to leak, would you then conclude that plugging the hole will fill up the fuel tank?

No. Keeping money in your pocket or under the matress doesn't create jobs. In fact, simply spending that money on consumer goods at Walmart doesn't necessarily create jobs. It may even eliminate jobs.

In the hypothetical universe, described above, spending additional income on the medical bills that have burdened the exceptionally large number of elderly and middle class families stops the loss of jobs and the economy from spiralling into a recession.

Job creation is well understood and experienced over and over again, from town to town in the US, throughout the history of the US.

A company decides to build a factory building computer input devices mice. Or, the government gives a contract to a local ship builder. The company employees 5,000 workers who have additional spendable income. They eat lunch, go out to restaurants, move out of their parents home, rent better apartments, purchase new homes, buy additonal clothing, etc. Support businesses open up, lunch cafes, coffee shops, home improvement supply stores. Demand for carpenters increases along with retail stores that sell clothing, houshold appliances, and other consumer products. Demand for carpenters, electricians, watresses goes up, employing more people. A local auto dealer opens up, selling used and new cars, employing sales people. The economy improves.

This has been documented and demonstrated both in general terms as well as im detailed empirical studies. It has been proven that the government spending multiplier associated with military contacts is about 1.5. That is, for every dollar spent by the gov on local contracts, the total economic output goes up by one and a half dollars.

This same effect is true of all types of spending given the spending is at thd right time, in the right markets. If, in fact, the demand is for health care for the elderly and capital gains taxes are lowered, that money spent on mature stocks like IBM and Hewlett Packard, then no job creation occures. Indeed, the direct economic effect is even negative as middle class families remain buddened by the enormous costs of healthcare.

 

[Quantum Windbag]

I really don't understand why the cons here would be so against demand side economics like The Recovery Act. It is the most effective use of stimulus. Let's put the idea of tax cuts for the wealthy a rest. It doesn't work. Trickle down economics is the biggest political lie there is.

More matter of fact statements from the one-variable economist ?

Okay, let's put the tax cut issue aside for now. How about you tell me why demand side economic policies shouldn't be utilized?

Because it is absurd to believe that taking money from one part of the economy and spending it on things that people don't need, or want, is more of an economic benefit than allowing the market to maintain its own supply and demand dynamic. Even Keynes didn't believe that claptrap, which is why he advocated spending targeted to a particular problem area, and that the spending drop to levels that allowed the government to pay off the debt as soon as the recovery kicked in.

That said, if Keynes was alive today, and understood the fact that the market dynamic has changed from a top down structure that favors large companies that are able to predict market variables to a market where new products can destroy an entire market the same way Google Maps destroyed the entire home GPS market, he would be forced to admit that the demand side spending would only work if the government had an infallible method of predicting which product that no one knows about is going to be in demand.

 

[Faun]

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.

Articles debating the successes or failures of President Obama’s stimulus package should be of interest to NPQ Newswire readers, given that nonprofits were among the most important intermediaries for and deliverers of stimulus programs. In the upcoming issue of Foreign Policy, TIME Magazine’s Michael Grunwald suggests that the stimulus was “certainly a political failure,” but “there is voluminous evidence that the stimulus did provide real stimulus, helping to stop a terrifying free-fall, avert a second Depression, and end a brutal recession.” Grunwald’s long article addresses the pros and cons of the stimulus, some of which is presented below.

PROS:













CONS:

The jobless rate is still over eight percent, the longest run of unemployment over eight percent since the Depression.

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.

Today--Obama is going to stand in front of the Senate with people who have already received 99 weeks of unemployment insurance--asking for another extension for unemployment benefits.

Obama--therefore is admitting that his policies over the last 5 years have been an abject FAILURE as far as job creation. This while just a couple of months ago he was touting the "economic recovery"--that doesn't exist for middle class Americans that are still unemployed and or underemployed.--Which represents a whopping 25 million people in this country.

Unemployment stats have dropped simply because many Americans have just given up on even looking for jobs--therefore they're not counted in the statistics which drives the unemployment numbers down. --and Obama brags about that unemployment number--because Americans are basically stupid to what he is doing.

His stimulus for green energy was a total flop with about everything he did going bankrupt after we paid billions of taxpayer dollars into it. Then to find out that many of these green firms where giving millions in donations to Obama and democrats.

The problem with this administration and democrats is they're adding 40,000 new regulations just this year. When employers have to pay more to meet all of the regulations--new jobs get put on the back burner. Democrats still haven't figured that out. They continue this onslaught of killing job growth in this country through new regulations. The worst is going to be when the employer mandate Obamacare--aka ACA mandate hits employers right between the eyes. Of course Democrats wisely postponed this after the mid-term elections. When employers can't afford something the first thing they do is cut employees and or their hours--in order to keep their business open. LAW OF ECONOMIC REALITY.

The worst unemployment is with the youth in this country--that go to college and cannot find work after they graduate.

Welcome to your hope and change!

While it's true that the public sector is struggling (which should make righties happy), the private sector is doing just fine. Factoring out the Great Recession, average annual growth in the private sector shakes up like ...

Clinton ..... 2,608,000
Carter ....... 2,258,750
Obama ..... 2,003,750
Reagan .... 1,836,000
Bush43 ....... 565,000
Bush41 ....... 372,500

Bureau of Labor Statistics Data

These figures do not factor in population growth.

 

[Quantum Windbag]

Here is an interesting point.

Most people don't know what economic stimulus is (at the practical or theoretical level) - nor do they know how it is designed to protect against the demand shortfalls that lead to spiraling job loss.

Let's construct a hypothetical universe so we can see spiraling job loss in action:
Let's imagine the elderly parents of middle class consumers get sick. Let's further imagine that because of this sickness those aforementioned middle consumers have to help mom and dad with medical expenses, which means that they can no longer afford to eat at the local restaurant, which means the local restaurant owner has to layoff waiters and cooks, which means that the waiters and cooks can no longer afford to go to the shoe store, which means the shoe store owner has to layoff his workers, which means those workers can no longer afford to go to the movie theater, which means the movie theater owner has to layoff his employees, which means his employees can't afford to go to the ice cream parlor, which means the ice cream parlor owner has to layoff his employees who now can't afford to buy new clothes, which means that the owner of the clothing store has to lay off his workers, etc., etc. job loss ad infinitum . . .

In this imaginary world we are allowed to go back in time. So we go back to the point where middle-class consumers are having trouble paying for their parent's healthcare and we create a "demand-side" stimulus program to helps old people with some of their health costs. Call it MedicaSecurity. As a result of MedicaSecurity, middle class families are less burdened with the high cost of parental health care, and, as a result, they now have more spending money. This means they can go the restaurant, which means the restaurant owner doesn't have to layoff restaurant workers, which means the restaurant workers can still afford to go out to the movie theater, which means the movie theater owner doesn't have to layoff his movie theater workers, which means the movie theater workers can still afford to go to the bakery, which means the bakery owner doesn't have to layoff his bakery workers, which means the bakery workers can still afford to go to the clothing store, and on and until the economy grows ever upward on the heals of glorious spending . . . which jump starts the economy . . . and leads to increased revenue . . . which allows us pay for MedicaSecurity... and then some.

Problem solved.

Wait if people keep more of their own money in their pockets they create jobs ?

So, he presents an example of how job losses occur and you erroneously turn that into job creation? If I explained how a hole in your gas tank will cause fuel to leak, would you then conclude that plugging the hole will fill up the fuel tank?

No. Keeping money in your pocket or under the matress doesn't create jobs. In fact, simply spending that money on consumer goods at Walmart doesn't necessarily create jobs. It may even eliminate jobs.

In the hypothetical universe, described above, spending additional income on the medical bills that have burdened the exceptionally large number of elderly and middle class families stops the loss of jobs and the economy from spiralling into a recession.

Job creation is well understood and experienced over and over again, from town to town in the US, throughout the history of the US.

A company decides to build a factory building computer input devices mice. Or, the government gives a contract to a local ship builder. The company employees 5,000 workers who have additional spendable income. They eat lunch, go out to restaurants, move out of their parents home, rent better apartments, purchase new homes, buy additonal clothing, etc. Support businesses open up, lunch cafes, coffee shops, home improvement supply stores. Demand for carpenters increases along with retail stores that sell clothing, houshold appliances, and other consumer products. Demand for carpenters, electricians, watresses goes up, employing more people. A local auto dealer opens up, selling used and new cars, employing sales people. The economy improves.

This has been documented and demonstrated both in general terms as well as im detailed empirical studies. It has been proven that the government spending multiplier associated with military contacts is about 1.5. That is, for every dollar spent by the gov on local contracts, the total economic output goes up by one and a half dollars.

This same effect is true of all types of spending given the spending is at thd right time, in the right markets. If, in fact, the demand is for health care for the elderly and capital gains taxes are lowered, that money spent on mature stocks like IBM and Hewlett Packard, then no job creation occures. Indeed, the direct economic effect is even negative as middle class families remain buddened by the enormous costs of healthcare.

Yes, trickle down government works because it uses magic money, but trickle down economics doesn't because the money isn't magic. The fact that y real woprld data proves that government spending doesn't produce the promised benefits, but real world spending actually does, is irrelevant` because crony capitalism is all that counts to the idiots.

 

[itfitzme]

More matter of fact statements from the one-variable economist ?

Okay, let's put the tax cut issue aside for now. How about you tell me why demand side economic policies shouldn't be utilized?

Artificially bolstering demand through debt is unsustainable. If it's short and targeted then it can be effective. 5 years of paying someone to not work is neither short nor targeted.

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

 

[Spoonman]

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?

for one, you do realize clinton cut taxes more than bush.

you also realize bush's tax cuts showed a much greater creation of jobs than obamas stimulus.

 

[itfitzme]

More matter of fact statements from the one-variable economist ?

Okay, let's put the tax cut issue aside for now. How about you tell me why demand side economic policies shouldn't be utilized?

Artificially bolstering demand through debt is unsustainable. If it's short and targeted then it can be effective. 5 years of paying someone to not work is neither short nor targeted.

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

To even begin to approach an understanding of what may be specific and targeted programs requires, at the very least, umderstanding specifically how the economy and the money supply functions. Vauge and sweeping generalizations are meaningless.

 

[asterism]

Okay, let's put the tax cut issue aside for now. How about you tell me why demand side economic policies shouldn't be utilized?

Artificially bolstering demand through debt is unsustainable. If it's short and targeted then it can be effective. 5 years of paying someone to not work is neither short nor targeted.

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

Ok, I'll be more clear. Artificially bolstering demand through net increases in liabilities is unsustainable.

 

[itfitzme]

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?

for one, you do realize clinton cut taxes more than bush.

you also realize bush's tax cuts showed a much greater creation of jobs than obamas stimulus.

Contrary to your statement, the Bush era tax cuts did not show any job creation for numerous reasons.

One reason is, and the biggest reason that every tax cut showed no economic growth, is simply that the Bush Era tax cuts were simultaneously combined with massive increases in government spending. Specifically, real dolars per capita descressionary spending. This is the single greatest problem in trying to determine the specific effects of fiscal policies and fiscal multipliers. Causality can not be readily shown when multiple causal factors are not controlled and isolated.

A second issue us that, beginning in 2000, the employment to population ratio fell from its peak to its worst in 2010 when employment finally stabilized at the end of the recessionary peak unemployment.

While it did make some gains from 2005, all of that was lost when the economy tanked.

Unless you intentionally disregard a huge swath of the data, the Bush Era tax cuts were followed by huge job losses as the deceases in capital gains taxes and other tax reductions fueled the demand for mortgage backed securities. This in turn stimulated a housing bubble that was grounded in speculation. Additionally, the sale of credit default swaps created systematic failure of the banking and finance markets.

While the process that began the economic decline started in 2000.

Unfortunately, the demonstratable fact are that the policies, including tax cuts,did absolutely nothing to produce stable economic growth and, im the final analysis, contributed to an economic collapse of massive proportions.

 

[bendog]

Artificially bolstering demand through debt is unsustainable. If it's short and targeted then it can be effective. 5 years of paying someone to not work is neither short nor targeted.

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

Ok, I'll be more clear. Artificially bolstering demand through net increases in liabilities is unsustainable.

Well, I think Ifitsme is correct that a private sector job is created with debt, as is the UI benefit. However, there is a distinction. The UI benefit has a stimulus effect when the recipient spends the benefit. The private sector job has that same stimulus. But, it also has an econ effect in that the work created something. For example, a pool got cleaned. Someone swims and gets exercise; they buy a new bathing suit or sun screeen.

Moreover, in general the gop has an argument that the longer a person remains a long term unemployed statistic, the more likely it becomes he’ll never be employed.

HOWEVER, public debt is measured by debt/gnp. I just don’t see how in the current econ environment how the loss in gnp, caused by the decline in consumer demand from people on UI having less money to spend because they took low paying jobs, would not offset any lower amount of public debt from not paying the UI.

In short, we need more growth. Not extending UI would decrease demand.

 

[itfitzme]

Artificially bolstering demand through debt is unsustainable. If it's short and targeted then it can be effective. 5 years of paying someone to not work is neither short nor targeted.

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

Ok, I'll be more clear. Artificially bolstering demand through net increases in liabilities is unsustainable.

That's not any better.

 

[jasonnfree]

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?

Yes Comrade, any money government does not take is government spending because all money is the people's money.

Also, you're contradicting the field of economics which says tax cuts grow revenue.

You're not exactly on a roll, Billy Boy...

I think he's on to something though. reagan cut taxes and the debt increased so reagan the great had to increase taxes. Maybe you don't remember?

 

[Spoonman]

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

for one, you do realize clinton cut taxes more than bush.

you also realize bush's tax cuts showed a much greater creation of jobs than obamas stimulus.

Contrary to your statement, the Bush era tax cuts did not show any job creation for numerous reasons.

One reason is, and the biggest reason that every tax cut showed no economic growth, is simply that the Bush Era tax cuts were simultaneously combined with massive increases in government spending. Specifically, real dolars per capita descressionary spending. This is the single greatest problem in trying to determine the specific effects of fiscal policies and fiscal multipliers. Causality can not be readily shown when multiple causal factors are not controlled and isolated.

A second issue us that, beginning in 2000, the employment to population ratio fell from its peak to its worst in 2010 when employment finally stabilized at the end of the recessionary peak unemployment.

While it did make some gains from 2005, all of that was lost when the economy tanked.

Unless you intentionally disregard a huge swath of the data, the Bush Era tax cuts were followed by huge job losses as the deceases in capital gains taxes and other tax reductions fueled the demand for mortgage backed securities. This in turn stimulated a housing bubble that was grounded in speculation. Additionally, the sale of credit default swaps created systematic failure of the banking and finance markets.

While the process that began the economic decline started in 2000.

Unfortunately, the demonstratable fact are that the policies, including tax cuts,did absolutely nothing to produce stable economic growth and, im the final analysis, contributed to an economic collapse of massive proportions.

were more jobs created under bush? yes or no? the answer is yes. by a long shot. Private sector vs public. Bush wins private by a long shot. private sector jobs are created by individuals and corporations investing capital in their businesses. obama's stimulus was a failure for creating private sector jobs. creating public sector jobs is not sustainable unless borrowing and the debt incurred increases. that is what the stumulus led to. and now we're back in the whole because we can no longer continue to borrow at insane rates. under bush, the economy continued to grow until democrats gained control of congress and confidence fell as well as obstructionism in congress blocked future progress

 

[Quantum Windbag]

Has Billy(withanIQof)000 ever explained why he thinks the article is non partisan?

 

[kaz]

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

Yes Comrade, any money government does not take is government spending because all money is the people's money.

Also, you're contradicting the field of economics which says tax cuts grow revenue.

You're not exactly on a roll, Billy Boy...

I think he's on to something though. reagan cut taxes and the debt increased so reagan the great had to increase taxes. Maybe you don't remember?

Reagan cut taxes and under his administration tax receipts doubled. Government spending went unchecked, and before you blame that on Reagan, far more of it was domestic. I remember fine, I just don't have the selective, self serving memory that liberals do.

 

[asterism]

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

Ok, I'll be more clear. Artificially bolstering demand through net increases in liabilities is unsustainable.

Well, I think Ifitsme is correct that a private sector job is created with debt, as is the UI benefit. However, there is a distinction. The UI benefit has a stimulus effect when the recipient spends the benefit. The private sector job has that same stimulus. But, it also has an econ effect in that the work created something. For example, a pool got cleaned. Someone swims and gets exercise; they buy a new bathing suit or sun screeen.

Moreover, in general the gop has an argument that the longer a person remains a long term unemployed statistic, the more likely it becomes he’ll never be employed.

HOWEVER, public debt is measured by debt/gnp. I just don’t see how in the current econ environment how the loss in gnp, caused by the decline in consumer demand from people on UI having less money to spend because they took low paying jobs, would not offset any lower amount of public debt from not paying the UI.

In short, we need more growth. Not extending UI would decrease demand.

I agree.

Also as a matter of policy this isn't extended Unemployment Insurance, it's welfare. That's fine if the priority is to provide people in need with basic subsistence, but don't call it something else for marketing purposes. Anyone unemployed for 5 years has something else going on beyond a shitty economic climate.

 

[asterism]

Actually, unemployment insurance does not "pay someone to not work" either hypothetically, in implementation, or in factual outcome.

I believe you if you say that you would sit around doing nothing while collecting unpemloyment insurance and lying to the employment development department. Beyond that, you have created a fantacy with no basis in reality.

Also, all demand and supply, all of the money supply, all economic output exists because of borrowing. Every single dollar in the economy exists because it was borrowed. Every dollar is exactly accounted for by debt.

So saying "Artificially bolstering demand through debt" is completely meaningless on the outset because there is no "not debt".

Ok, I'll be more clear. Artificially bolstering demand through net increases in liabilities is unsustainable.

That's not any better.

Yes it is. While you're correct that all economic output exists because of borrowing, that's only half of the equation. If it is borrowed against an asset then it's just changing forms. If it's borrowed against nothing then it's a liability that is created. If it's borrowed and near instantly repaid with proceeds from the activity an asset is created.

So artificially bolstering demand through net increases in liabilities is unsustainable. It may work temporarily and at certain levels, but it will not work for a long period of time and it won't work beyond our nation's ability to pay for both the maintenance and the liability itself.

 

[bendog]

Ok, I'll be more clear. Artificially bolstering demand through net increases in liabilities is unsustainable.

Well, I think Ifitsme is correct that a private sector job is created with debt, as is the UI benefit. However, there is a distinction. The UI benefit has a stimulus effect when the recipient spends the benefit. The private sector job has that same stimulus. But, it also has an econ effect in that the work created something. For example, a pool got cleaned. Someone swims and gets exercise; they buy a new bathing suit or sun screeen.

Moreover, in general the gop has an argument that the longer a person remains a long term unemployed statistic, the more likely it becomes he’ll never be employed.

HOWEVER, public debt is measured by debt/gnp. I just don’t see how in the current econ environment how the loss in gnp, caused by the decline in consumer demand from people on UI having less money to spend because they took low paying jobs, would not offset any lower amount of public debt from not paying the UI.

In short, we need more growth. Not extending UI would decrease demand.

I agree.

Also as a matter of policy this isn't extended Unemployment Insurance, it's welfare. That's fine if the priority is to provide people in need with basic subsistence, but don't call it something else for marketing purposes. Anyone unemployed for 5 years has something else going on beyond a shitty economic climate.

I'm not disagreeing, but I believe a lot of these people have had some kind of job dangled for them, but they pay is lousy and/or it's part time. Early social secuity and the low paying job are actually worth holding out for, in their view. The only moral judgment I'd make is the UI is a stimulus, and people should act in their own econ self-interest.

 

[The T]

Team Obama said in ’09 stimulus would have unemployment below 6% by 2012

Obamanomics 101 – The Stimulus Package Will Keep Unemployment Under 8%

That's pretty fuckin' stupid, even for a rightard.

You're quoting Sean Higgins, not Barack Obama. Which, of course, you have to do since Obama never made the promise you attributed to him.

Okay, on January 10, 2009, Obama's top economic advisers released a report saying that the unemployment rate would remain below 8 percent throughout the year should the $787 billion stimulus package win congressional approval. By May of 2009, the unemployment rate was at 9.4%, indicating that the package failed to remedy a worsening economic situation. Obama touted support of this supposed finding in this video (which was also released 10 days before his inauguration):

[ame="http://www.youtube.com/watch?v=6DFFoQBO-Zg"]Obama Touts Report That Stimulus Will Keep Unemployment Below 8 Percent - YouTube[/ame]

By such video, and by touting this report, he acknowledges the supposition that the plan would keep the unemployment rate below 8%. He remained tacit in his statements but the promise was made.

It indeed was.

 

[OODA_Loop]

Wait if people keep more of their own money in their pockets they create jobs ?

So, he presents an example of how job losses occur and you erroneously turn that into job creation?

He presented an example about how taking money out of peoples' pocket destroys jobs.

The inverse is true as well.