Why we want stimulus now and worry about deficits later

[Papageorgio]

The more stimulus the more debt, the more debt, the more money printed to offset the debt, the more money printed to offset the debt, the more the dollar devalues, the more the dollar devalues, the less value our money has, the less value money has the higher prices go, the higher the prices are the less spending power the consumer has, the less spending power the consumer has, the less spending the consumer does, the less spending the consumer does, the less jobs needed and guess where we are headed.

 

[saveliberty]

Debt is accelerating faster than GDP. Seems like the only way to change that is spend less.

 

[Papageorgio]

Debt is accelerating faster than GDP. Seems like the only way to change that is spend less.

Hell, that is to obvious, government spending is hurting us, short term spending cuts and short term tax increases are an answer but, the nuts have us believe otherwise.

 

[Skull Pilot]

Bam Bam?

Read it again, he was talking about Clinton.

Immie

Clinton wasn't that smart either. if he was he wouldn't have been caught diddling an intern.

Democrats diddle a lot and brag about it
Republicans diddle a lot and lie about it

Blow Job Billy lied

[youtube]KiIP_KDQmXs[/youtube]

 

[ilia25]

The more stimulus the more debt, the more debt, the more money printed to offset the debt

Stop telling these fairy tales. US never printed money to offset the debt, and it is not going to start tomorrow.

 

[Uncensored2008]

Clinton wasn't that smart either. if he was he wouldn't have been caught diddling an intern.

I disagree.

Clinton could tell a thousand different lies to a thousand different people, and keep track of them all.

That takes some serious brain power.

I don't lie, because I'll forget who I told what, and get caught. I've learned that it's easier to tell the truth. I still forget what I tell people, but the next time around I say the same thing, so it doesn't matter.

 

[hortysir]

The more stimulus the more debt, the more debt, the more money printed to offset the debt

Stop telling these fairy tales. US never printed money to offset the debt, and it is not going to start tomorrow.

Google "Quantitative Easing".

Then come back and apologize and admit that you were wrong.

 

[ilia25]

The more stimulus the more debt, the more debt, the more money printed to offset the debt

Stop telling these fairy tales. US never printed money to offset the debt, and it is not going to start tomorrow.

Google "Quantitative Easing".

Then come back and apologize and admit that you were wrong.

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

 

[Uncensored2008]

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

{Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.}

S&P downgrades U.S. credit rating for first time - The Washington Post

Mission accomplished!

Heckuvajob, Barry.

 

[saveliberty]

Stop telling these fairy tales. US never printed money to offset the debt, and it is not going to start tomorrow.

Google "Quantitative Easing".

Then come back and apologize and admit that you were wrong.

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

...and that is accomplished by printing money. What a bunch troll crap.

 

[ilia25]

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

{Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.}

Mission accomplished!

Heckuvajob, Barry.

Can you read? US got downgraded because a bunch of tea-baggers in the Congress were insisting on the US government refusing to pay its bills!

 

[ilia25]

Google "Quantitative Easing".

Then come back and apologize and admit that you were wrong.

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

...and that is accomplished by printing money. What a bunch troll crap.

Well, you are too brainwashed to know that the government has to print money all the time just to keep the economy going.

 

[saveliberty]

Can you read? US got downgraded because a bunch of tea-baggers in the Congress were insisting that the US government has to stop paying its bills!

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41).

S&P Downgrades U.S. Debt Rating — Press Release - MarketBeat - WSJ

 

[saveliberty]

Apology?

QE is used to encourage the business investment by making investment in the government debt less attractive. And to prevent deflation.

...and that is accomplished by printing money. What a bunch troll crap.

Well, you are too brainwashed to know that the government has to print money all the time just to keep the economy going.

A central bank implements quantitative easing by purchasing financial assets from banks and other private sector businesses with new electronically created money.

Quantitative easing - Wikipedia, the free encyclopedia

 

[Listening]

Let's go back to the OP.

It says we need more "stimuls" because we have idle capacity that is costing us GDP (in the forms of jobs and goods).

Fair enough.

Government stimulus does not work. That wasn't even debated here. It was just the same Light Beer Commercial you get on every thread.

If the government could stimulate without doing things like taking over businesses that would be great. But they can't seem to stop and the more they "stimulate" the deeper into trouble we seem to fall.

In this case we just gave away money.

We need to invest in something that will pay returns.

Maybe Obama's advisors could tell us how to cheat on our taxes (they all seem to think they can do it). We could use that money to stimulate the economy !!!

 

[Oddball]

Let's go back to the OP.

It says we need more "stimuls" because we have idle capacity that is costing us GDP (in the forms of jobs and goods).

Fair enough.

Given the Boiking's open hostility to producers, what's in it for them to utilize that idle capacity?

 

[Papageorgio]

The more stimulus the more debt, the more debt, the more money printed to offset the debt

Stop telling these fairy tales. US never printed money to offset the debt, and it is not going to start tomorrow.

We are already doing it, the reserve is printing more, the more that is printed and let into circulation devalues the dollar, drops the debt percentage and causes inflation.

 

[Skull Pilot]

Let's go back to the OP.

It says we need more "stimuls" because we have idle capacity that is costing us GDP (in the forms of jobs and goods).

Fair enough.

Given the Boiking's open hostility to producers, what's in it for them to utilize that idle capacity?

And if there's no market to move what's produced then what's the point?

We are already seeing the we have too much inventory sitting around. Tying up even more money in inventory is bad business but then again dimwitcraps don't seem to understand that.

 

[editec]

FYI

six principal tenets central to Keynesianism.

1. A Keynesian believes that aggregate demand is influenced by a host of economic decisions—both public and private—and sometimes behaves erratically

2. According to Keynesian theory, changes in aggregate demand, whether anticipated or unanticipated, have their greatest short-run effect on real output and employment, not on prices. This idea is portrayed, for example, in phillips curves that show inflation rising only slowly when unemployment falls. Keynesians believe that what is true about the short run cannot necessarily be inferred from what must happen in the long run, and we live in the short run. They often quote Keynes’s famous statement, “In the long run, we are all dead,” to make the point.

3. Keynesians believe that prices, and especially wages, respond slowly to changes in supply and demand, resulting in periodic shortages and surpluses, especially of labor. Even Milton Friedman acknowledged that “under any conceivable institutional arrangements, and certainly under those that now prevail in the United States, there is only a limited amount of flexibility in prices and wages.”1 In current parlance, that would certainly be called a Keynesian position.

4. Keynesians do not think that the typical level of unemployment is ideal—partly because unemployment is subject to the caprice of aggregate demand, and partly because they believe that prices adjust only gradually.

5. Many, but not all, Keynesians advocate activist stabilization policy to reduce the amplitude of the business cycle, which they rank among the most important of all economic problems. Here, however, even some conservative Keynesians part company by doubting either the efficacy of stabilization policy or the wisdom of attempting it.

6. Finally, and even less unanimously, some Keynesians are more concerned about combating unemployment than about conquering inflation. They have concluded from the evidence that the costs of low inflation are small. However, there are plenty of anti-inflation Keynesians. Most of the world’s current and past central bankers, for example, merit this title whether they like it or not. Needless to say, views on the relative importance of unemployment and inflation heavily influence the policy advice that economists give and that policymakers accept. Keynesians typically advocate more aggressively expansionist policies than non-Keynesians.

source

The above source is a great site for those of us who are not economists but who are seeking a better understanding about the REAL debates happening in the world of economics.

 

[Londoner]

we need more stimulus to help the economy closing the gap (which basically means creating more jobs) -- because it will also reduce the deficits.

Indeed. Look at the UNPRECEDENTED economic growth in the 50s and 60s. This was a time when government was vigorously investing in infrastructure along with pouring money into the middle class through a variety of programs and entitlements. The multiplier effect of these things created the most powerful economy America has ever had.

The greatest benefit of the postwar economy was the sheer amount of money the government put in middle class wallets. The reason this is a good thing can be explained with one word: demand. When demand is strong - when there is surplus or disposable income sitting inside the bank accounts of the middle class consumer - the capitalist has an incentive to invest and add jobs so that he can capture that money. The reason the economy is so weak right now is because the middle class is overspent and underpaid - and their entitlements have been stripped so that the mega-wealthy can have even bigger tax breaks (which tax breaks will not turn into investments/jobs because there is no demand).

AGAIN: The capitalist will not invest in new production, nor will he add one job until there is money lying in middle class wallets to capture. Keep in mind: there are two models that put money in middle class wallets - 1) the postwar model, which consists of high wages/benefits/entitlements and 2) the Reagan model, which replaced high wages with credit cards (-which is why we saw household debt skyrocket with the rise and solidification of the Reagan era).

Starting with Reagan, American shifted from stimulating middle class consumption to giving tax breaks to the wealthy. The theory was that if more money ended up in the wallets of the wealthy, there would be more investment in the domestic economy and more job growth. Tragically, the opposite happened. We saw investment and job growth shift overwhelmingly to China. It was a ruse. The Reagan model - through a process called globalization - merely gave capital more mobility so that it could bypass American labor for sweatshop labor. On the Reagan model, the benefits flow overwhelmingly to a narrow group of Americans (who benefit wildly from ultra-low labor costs... not to mention the lax environmental standards in 3rd world countries. Capital makes a higher return when it can pollute rivers and skies because polluting rivers and skies is cheaper than investing in advanced technological production methods).

You got to hand it to the Reagan system. It was ingenious. They managed to sustain consumption for 30 years by expanding credit markets. They created a brilliant universe of borrowing so that Americans could increasingly leverage their own future earnings. And what choice did they have? Once they freed capital to invest in 3rd world labor markets and thereby ended the high wage system for American workers, they needed another means to sustain domestic consumption. Credit was the only answer, and the Reagan Revolution expanded consumer debt better than any system before it.

Unfortunately, you can't borrow forever. Eventually, you bump into your borrowed-against future. Eventually, credit markets crash and consumers go bankrupt.

We are lying in that bed.

Silly Ronnie. You can't replace high wages with credit cards.

America got Punk'd by a "B" rate actor who simply made one group of Americans wealthy at the expense of an entire nation. He also told us not to worry about Mideast oil because it would satisfy global demand for over a 100 years without any problem. We swallowed the Reagan poison and now we are in the final stages of death. Nobody gets it. The game is over.